Marketing Mix

THE CHANGING WORLD CONTEXT – THE ORIGINS AND PROFILE OF THE EUROPEAN UNION

Balance in economics in the world is changing.

Britain, Germany, France, Spain… are colonies that in the 21st century produce essential things. Furthermore, they have a very nice logistics system and distribution.

There is a centralization of communication and networking.  

The balance of economic path in Europe is going less important. Europe goes behind many other country sources in the world. In Asia is becoming much more important. This was used as an argument in the Brexit process.

Economy in the UE is not graving, meanwhile in Chine is a 10% up in GBP. There’s been a massive expansion.

The major countries in terms of population:

1. China – 1.388 bill.
2. India – 1.343 bill.
3. USA – 327 bill.
4. Indonesia – 264 bill.
5. Brazil – 211 bill.
6. Pakistan – 197 bill.
7. Nigeria – 191 bill.
8. Bangladesh – 151 bill.
9. Russia – 143 bill.
10. Mexico – 130 bill.

18 countries in Europe have a falling population: Italy, Poland, Romania, Moldavia, Portugal, Bosnia, Greece, Croatia, Estonia… And part of the problem is the migration from the centre of Europe to the west side.

In terms of demography, the population is getting older, and young population are not being replaced. Japan is the best example of it.

Major countries in terms of size of economy (GBP):

1. USA – 18.568 mil.
2. China – 11.199.145 mil.
3. Japan – 4.393.384 mil.
4. Germany – 3.466 mil.
5. UK – 2.618.886 mil.
6. France – 2.465.454 mil.
7. India – 2.263.523 mil.
8. Italy – 1.849 mil.
9. Brazil – 1.296.187 mil.
10. Canada – 1.529.760 mil.

Germany has exported more values than the USA.

Only 4 countries appear in both lists: China, India, USA and Brazil.

There is big differences between, for example, Germany, Japan and India.

Analysing market we will look at demography because there are differences between different segments of population.

Development of nuclear industry in the UK is because of the inversion of China.

There is a big plan of capital and investors: Europe is very open. Many countries still choose to invest in Europe. One of the main reasons is for the security and the stable economy and politics. For the stability, good investment rules.

For example, Bangladesh would not be that case: is not stable even if it is on the list.

A business needs to adjust its business model to these phenomena: client conditions, political stability…

Demography and migration.  

Migration has been a common phenomena happening in the EU but with big differences between the countries.

It happened with Lithuania. In 2004 only three countries were prepared to welcome Lithuania when they entered: Sweden, Ireland and UK. This fact left the country in a very bad position, which provoked a high number of population migrating to other countries. The same happened with Poland. The majority of them they were young people. This is why in the emerging countries of the EU you may found a large number of young people who just migrated due to find a stable life and job.

The EU.

South America and Southeast of Asia se Europe as very good possible option to invest in.

After the nationalisms and the conflicts that occurred in Europe (2nd World War), European politics realized that mistakes were being repeated again, and another World War or civil wars are totally unimaginable for countries as they cause too much instability. This is why the decided to achieve political, economical and international treats, and if there is anything that can be done to facilitate the treats, the European Parliament can do it.

Since the financial conflict there have been massive cuts in incomes .
Most of the people still wants to be at the EU and to continue using the euro €.

If there is a conflict between national and European lay, the court justice has the right to set aside the national law. It happens quite often.

THE EUROPEAN SINGLE MARKET. EU COMPETITION RULES. ECONOMIC AND MONETARY UNION AND THE DEVELOPMENT OF THE EURO.

¿What is a single market?

The Single Market refers to the EU as one territory without any internal borders or other obstacles to the free movement of goods and services. A functioning Singles Market stimulates competition and trade, improves efficiency, raises quality, and helps cut prices. The European Singles Market is one of the EU’s greatest achievements. It has fuelled economic growth and made the everyday life of European businesses and consumers easier.

It is the example of countries as Norway, Island or Switzerland.

Non-tariff barriers: trade barriers that restricts imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. There are different safety standards.

A country can say to another one that their products does not have something “legal” do they are not able to sell it anymore.

The problem with this kind of barriers is that you can not sort it but go through it in order to get the Single Market.

The major obstacles to the singles markets are: different legal systems, different tax regimes, different currencies, no common media, few common advertising standards, and traditional business practices.

The major general impacts were: more competition, price reductions, more consumer choice, specialisation, more labelling and greater purchasing power of consumers.

Plan Single Markets 1985-1992

In the mid-80s there was a plan to improve the single markets: it was about the elimination of board controls at the airports and ports.
There raced lots of issues about movements of goods and about taxes.
Every country needs to have a valuable tax and have different ones.

9 million jobs were created during this period.

There also had place an airline liberalization as was the case of “Sabina”.

There was also a telecom regulation now with the EU previously with national public service monopolies: telephones were used to be controlled by huge public companies. The public monopoly was very resistant to open the market. The market took off everywhere.  

There were market liberalisation measures including the creation of the GSM standard.

The results was a slow decline of landline services, a rapid spread of mobile phones everywhere, a rapid growth of texting, a cheaper calls within the EU and new market opportunities.

The Single Currency (the Euro)

With the crisis of 2007 the Eurozone was in crisis: the scheme was to divide responsibilities of macro economy themes between the European and the national Institutions.

The military objective was to centralize the European bank.  

The European Central Bank (ECB) controls monetary policy and interest rates. But national governments are still in charge of fiscal and budgetary policy, subject to some EU coordination. This is now changing.

Advantages of a single currency:
- Reduced transaction costs
- Reduced exchange rate risks
- Price transparency across borders (but taxes stay different): after the military union, goods will be priced in € and not in other coins. It is illegal for countries to insist in buying goods in their own country.