Night Hawks Tapes

Archive for October, 2009

In today’s global economy, marketers must also monitor the economic environment of other nations. Just as in the United States, a recession in Europe or Japan changes buying habits. Changes in foreign currency rates compared to the U.S. dollar also affect marketing decisions. The strong dollar and the problems in Asia hurt companies such as BP/Mobil, whose foreign sales fell nearly 20 percent in just two years, and international insurance provider Aflac, whose U.S. sales increased 29 percent while foreign revenues fell 7 percent.2°
For the most part, however, U.S. companies have posted higher revenue gains in overseas operations. Technology companies are the biggest beneficiaries of U.S. expansion into the international arena. Combined, Lucent Technologies, Dell Computer, and Seagate Technology accounted for well over $12 billion in sales from outside the United States.
In 1990, when Beijing opened the huge China market to foreign business, direct selling took off rapidly, growing to over $2 billion annually.
Amway revenues soared to almost $200 million a year. Mary Kay waited
the mid-1990s to enter this market and quickly hit the $25 million mark. And Avon generates about $75 million each year. Combined, these three companies alone have $180 million invested in this single foreign market. But the Chinese government was not as happy as the foreign companies were with this rapid and enormous success. In 1998, the Chinese State Counsel ordered all direct-sales operations to cease immediately. Companies from North America and Europe were understandably shaken by the news. Losing their investments and being locked out of such a promising market was more than disappointing. It also meant that 20,000 Chinese working for these firms would be unemployed—immediately! Several months later, the order was rescinded after pressure from diplomats and corporate representatives convinced Chinese authorities of the benefits of allowing direct marketing activities to continue there.