Chapter 3 - Pearson Learning Solutions

92 PART 2 • THE GLOBAL MARKETING ENVIRONMENTYour Bosoms. This coffee has carefully selected high quality beans and roasted by our all theexperience.” The intended message: Drinking our coffee provides a relaxing break and “takes aload off your chest.” Casual wear and sports apparel are also emblazoned with fracturedmessages. Japanese retailers do not seem at all concerned that the messages are syntacticallysuspect. As one shopkeeper explained, the point is that a message in English, French, or Germancan convey hipness and help sell a product. “I don’t expect people to read it,” she said. 14WESTERN, CENTRAL, AND EASTERN EUROPEThe countries of Western Europe are among the most prosperous in the world. Despite the factthat there are significant differences in income between the north and the south and obviousdifferences in language and culture, the once-varied societies of Western Europe have grownremarkably alike. Still, enough differences remain that many observers view Western Europe interms of three tiers. Many Britons view themselves as somewhat apart from the rest of the continent;Euro-skepticism is widespread, and the country still has problems seeing eye-to-eye withhistoric rivals Germany and France. Meanwhile, across the English Channel, Portugal, Italy,Greece, and Spain have struggled mightily to overcome the stigma of being called “Club Med”nations and other derogatory nicknames by their northern neighbors. 15 Still, as they enter the firstdecade of the twenty-first century, the governments of Western Europe are achieving hithertounprecedented levels of economic integration.The European Union (EU)The origins of the European Union (EU) can be traced back to the 1958 Treaty of Rome. The sixoriginal members of the European Community (EC), as the group was called then, were Belgium,France, Holland, Italy, Luxembourg, and West Germany. In 1973, Great Britain, Denmark, andIreland were admitted, followed by Greece in 1981, and Spain and Portugal in 1986. Beginning in1987, the 12 countries that were EC members set about the difficult task of creating a genuine singlemarket in goods, services, and capital; in other words, an economic union. Adopting the SingleEuropean Act by the end of 1992 was a major EC achievement; the Council of Ministers adoptedmore than 200 pieces of legislation and regulations to make the single market a reality.The objective of the EU member countries is to harmonize national laws and regulations sothat goods, services, people, and eventually money can flow freely across national boundaries.December 31, 1992, marked the dawn of the new economic era in Europe. Finland, Sweden, andAustria officially joined on January 1, 1995. (In November 1994, voters in Norway rejected amembership proposal.) Evidence that this is more than a free trade area, customs union, orcommon market is the fact that citizens of member countries are now able to freely cross borderswithin the union. The EU is encouraging the development of a community-wide labor pool; it isalso attempting to shake up Europe’s cartel mentality by handing down rules of competitionpatterned after U.S. antitrust law. Improvements to highway and rail networks are now beingcoordinated as well. Further EU enlargement is the big story in this region today. Cyprus, theCzech Republic, Estonia, Hungary, Poland, Latvia, Lithuania, Malta, the Slovak Republic, andSlovenia became full EU members on May 1, 2004. Bulgaria and Romania joined in 2007.Today, the 27 nations of the EU represent 490 million people and a combined GNI of nearly$15 trillion (see Table 3-10). The map in Figure 3-7 shows the EU member nations.During the two decades between 1979 and 1999, the European Monetary System (EMS) was animportant foundation of Western European commerce. The EMS was based on the Europeancurrency unit (ECU), a unit of account comprised of a hypothetical basket of “weighted” currencies.The ECU did not take the form of an actual currency; it existed physically in the form of checks andelectronically in computers. Some companies priced their raw materials and products in ECU,thereby saving the time and cost of exchange transactions. The 1991 Maastricht Treaty set the stagefor the transition from the EMS to an economic and monetary union (EMU) that includes a14 Howard W. French, “To Grandparents, English Word Trend Isn’t ’Naisu,’” The New York Times (October 23, 2002), p. A4.15 Thomas Kamm, “Snobbery: The Latest Hitch in Unifying Europe,” The Wall Street Journal (November 6, 1996),p. A17; Kyle Pope, “More Than Water Divides UK, Europe,” The Wall Street Journal (June 30, 1995), p. A12.000200010270740623Global Marketing, Sixth Edition, by Warren J. Keegan and Mark C. Green. Copyright © 2011 by Warren J. Keegan. Published by Prentice Hall.