International Marketing Practices

Chapter 1: Get Started in International Marketing The importance of global trade cannot be overstated. International trade fosters peace by incentivizing collaboration between countries to develop, manufacture, and deliver goods and services [1]. Trade promotes production where efficiencies are highest, often making products more affordable and raising the standard of living for the parties involved [2]. Global trade has helped elevate hundreds of millions of people out of extreme poverty [3]. Trade bolsters the United States economy by providing U.S. companies access to large and fast-growing markets, supporting well-paying jobs, expanding the variety of products available for purchase by consumer and businesses, and boosting economic growth overall. In fact, exports support 6 million U.S. manufacturing jobs, many of which are at small to medium sized firms [4]. Of the more than 300,000 U.S. companies that export products, 98% are small to medium sized businesses, and they represent one-third of trade by value [5]. The forest products sector has been dramatically changed by globalization trends. As Chapter 2 will show, the international trade of forest products has expanded rapidly in the last four decades. In fact, in the 1980-2017 period, global exports of forest products have more than tripled [6]. The United States, the largest producer and consumer of forest products [7], increased its exports of forest products by 260% during the same period [8]. In 2017, the forest products industry contributed $34.4 billion to the U.S. export base — $9.8 billion of solid and engineered wood products and $24.6 billion of pulp and paper products [9]. Exports are increasingly important for American forest products firms. In 2015, for example, more than one- third of all appearance-based hardwood lumber went to overseas markets [10]. Foreign direct investment has also grown exponentially in the forest products industry, with companies investing in distribution infrastructure, manufacturing facilities, and even forestland. For example, Canadian companies have acquired 4.4 billion board feet in sawmill capacity in the Southern U.S. in the 2000-2017 period [11]; Arauco, a Chilean company, has invested in composite panel manufacturing facilities in Arkansas, Oregon, North Carolina, South Carolina, and Michigan [12]; and Weyerhaeuser invested substantially in timberland and manufacturing facilities in Brazil and Uruguay, although it recently divested of all of its forestland holdings outside North America [13]. Reasons for Entering Foreign Markets There are many reasons why a U.S. business may be interested in starting international operations. Overseas, destinations present an opportunity for larger, fast-growing markets. In fact, 95% of the world’s consumers live outside the United States, and markets outside the U.S. represent 92% of global economic growth [14]. The world has experienced rapid expansion of the middle class in the last decade,