The business house is to decide the marketing mix in such a way which suits and fits to the needs of a particular culture. This was possible only because of political will. Research and Development (R&D) has a vital role to play in increasing technological ability of a firm. Impact of Economic Environment on Marketing Strategies: The overall economic environment of the host country revolves around product and the market. Its rates are bit on the higher side in comparison to others. Unique innovation at entry level – It is mainly technical in nature. The consumer market is made up of individuals who buy goods and services for their own personal use or use in their household. An inability to automate production completely does not necessarily constitute a negative for multinational companies. Introduction and of International Marketing Environment 2. Local publics are neighborhood and community organisations and will also question a company’s impact on the local area and the level of responsibility of their actions. A multinational company or domestic company may not be involved directly in such disputes, but the business of the companies is likely to be disputed severely by such types of the incidents. But it is pertinent to mention here that some of the developing nations like India are adopting the changes and marketing requirements from time to time, by keeping their national objectives and interest on the top priorities. Marketers aim to deliver value to satisfied customers, so they need to assess and evaluate the internal environment and the external environment which is subdivided into micro and macro. The macro environment of a country can be studied as under: The study of per capita income and per capita gross national product is an important variable in the study of macro-economic environment. Business activity tends to grow and thrive when a nation is politically stable. Thus, the marketer should watch the technological environment closely. Factors Affecting 5. The final aspect of the microenvironment is publics, which is any group that has an interest in or impact on the organisation’s ability to meet its goals. The firm should analyze carefully the monetary policy of the country, what is the position of inflation and whether the currency of that country is strong or not etc. On the other hand the purchasing power of the people is low in the developing nations. Technological changes have also great importance because of its direct impact on product obsolescence issue. In addition to all these measures companies can also reduce their business risks by employing the strategy of risk shifting. In some countries they may find it easy to get their objectives fulfilled whereas in some countries it may be difficult. There may be shortage of demand in the domestic market due to many reasons such as recession, change in taste and preferences, availability of substitutes etc. If the present government has not any scope to come in the power again, the policies of the probable government should be examined carefully. The developing nations may discourage foreign direct investments for its nationalistic approach. The basic purpose of studying all these factors was to illustrate that how the marketer approaches another socio cultural environment by adopting the view point of that particular culture in the international business. The economic policy of a nation also establishes the scope of market and the economic outlook of a business firm. Components of Socio Cultural Environment: The human behaviour is based upon the cultural forces. All multinational firms face the risk of expropriation. International Marketing Environment consists of organization’s internal factors, domestic marketing factors, and global marketing factors. The economic environment can be studied in two ways- (i) From macro point of view and (ii) Micro point of view. The law and order situations influence business operations. International Marketing environment is comprised of those components which shape policies, programmes and strategies of an international marketer. It passed through generation to generation. The policies of the government depend upon the form of the government governing that particular nation. To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry. The norms of conducting business also vary from one country to the next. The external environmental factors such as the economic factors, socio-cultural factors, government and legal factors, demographic factors, geographical factors etc. A marketer must pay his attention to all these forces as the analyses of all these factors present new opportunities and there after methods to cope with threats in the international business. Thus, there are mainly two components of international marketing environment: Internal environment refers to the firm related factors. When they are successful, their own nation’s economy receives a good boost. The changing political environment is uncontrollable in nature. Survival of the existing firms becomes very difficult. The culture is a pattern of different values, customs, norms and beliefs, which is shared socially. In India, there are over 200 different dialects, and a similar situation exists in China. Something may be acceptable to one society but may not be acceptable to the other culture. These agreements are entered into either bilaterally or in a regional grouping. With an internal marketing strategy, employees are treated as “internal customers” who must be convinced of a company's vision and worth just as aggressively as “external customers.” It is also decided whether the private sector investments or foreign direct investments will be encouraged or discouraged. The first-hand information regarding all aspects of the particular custom should be with the marketers. It has a significant impact on the marketing strategies of a firm. c. Incipient Demand – It refers to that kind of needs, which are likely to be emerged in future. Their attitude, values, beliefs and behaviour is some sort of reflection of their culture and it is mostly dictated by the religion. The government policies play a vital role in this regard. The successful companies in the global perspectives are constantly scanning the marketing environment and presenting new opportunities and threats. Impact of Micro Economic Environment on Marketing Strategy: The micro economic view point of a firm focuses on the firm’s ability to compete in a particular product and market in the international business. The kind of competition, the legal complications all these factors are examined carefully. International techno, logy accompanied by additional labour is less expensive and it promotes good will by increasing employment.”, (5) Sensitive to Changes in Political Mood, The multinational company must emphasize on the following political perspectives before taking its entry into foreign business, The following are some forms of the governments, The following are the reasons which are responsible for the instability of the government, The government can impose following restrictions from time to time by changing its policies, (8) Regulations Relating to Trading Restriction, The following are the measures in terms of non-tariff barriers to international trade, International Marketing Environment – Top 11, Essays, Research Papers and Articles on Business Management, Exam Questions on International Marketing, Export Marketing and Domestic Marketing: Difference | Types | Marketing, Marketing Environmental Variables and their Effects | Marketing Management, Advantages and Disadvantages of Franchising, International Marketing Environment – Introduction and Meaning, International Marketing Environment – 2 Main Components: Internal and External Environment, International Marketing Environment – Importance, International Marketing Environment – 5 Major Factors Affecting International Marketing Environment, International Marketing Environment – Top 11 Reasons for Increasing Exports. Many of these facilities end up as private rather than government organisations. Product which has become obsolete in one market may have life in another market. The growth rate of population is nearly 2 percent in these regions, whereas the growth rate of population is about 0.6 percent in the developed nations. Technology generally refers to the equipment and knowledge used to produce goods and services and may vary greatly by industry. The geographical environment helps the marketers to concentrate their marketing efforts to the potential countries so that all other marketing efforts could be utilized fruitfully. Exports help to diversify the risk of the manufacturer. Whether the import of the goods will be restricted as to promote domestic industries or vice versa. The economic environment can be studied in the international prospectus as under: The macro environment of a country can be studied by taking a vast perspective. Geographical characteristics of the market. 6. The U.S. market has increased their attention towards developing countries because of the said reason only. The marketing environment of developed nations and developing nations is also different in many ways. To operate successful business must be Markerting, International Marketing, Environment. China still has a closed economy and the pattern of Chinese economy is still based on the co­operative sector. The second aspect for which the cost-benefit analysis is carried out is competition. Briefly, at Japanese companies like NEC, Nissan, Sharp, and Toyota, a team charged with bringing a product idea to market estimates the price at which the product is most likely to appeal to the market. It may encourage local purchase for its raw material and other products used for its production and other operations. Most firms probably prefer to engage in the export business rather than invest considerable sums of money in investments in foreign subsidiaries. The process of automation does not work well in the countries like India, where job creation on the national policy. The knowledge of economic environment helps an international marketer to understand which market to select for reaping lasting benefits. The marketing environment of a particular nation is also depends upon the market characteristics. The physical aspects includes smile, eye to eye contact etc. (b) Different laws in foreign countries regulate financing of operations by foreigners. Therefore the scanning of geographical environment should be carried out scientifically in the international business. Some other incentives can also be obtained generally in the developing countries such as waiving of import duties on raw materials and other industrial equipments necessary for the further production of the goods and other tax concessions can also be granted in that locality where the business enterprises has been located. New technologies create new markets and opportunities. It has Over 120 Stores all over the UK, offers different verities of Movies, Music, Headphones and Ipads as well. There are 2 categories of marketing for your dental practice: internal and external. According to one report, it is about 76 percent of world population who are residing in the less developed regions of the world. Exports are relatively more profitable in comparison to the domestic sales. Both of these ways provide different ways for the utilizations of countries resources. (ii) Impact of Socio Cultural Environment on Thinking Process: The thinking process of an individual and society is influenced by the socio cultural environment. Internal and External Marketing Environment 1. The Mexico is a country with very young population in the world. These include, suppliers, various market intermediaries and service organisations, competitors, customers, and publics. But in low-income countries where a large segment does not have sufficient income even for their basic necessities, the situation is quite different. are generally regarded as uncontrollable factors. These external factors influence the company marketing strategy in a great length.The external environment factors are uncontrollable and the company finds it hard to tackle with the external factors.The macro- environment consists of demographic factors, economic factors, natural forces, technology factors, political factors, and cultural factors.In the following ways, they affect business strategy. These types of governments are prevailing in Pakistan and South Korea etc. A detailed discussion of all the factor is as under: Geographical environment is determined on the basis of the analysis of various geographical units such as, neighbourhoods, cities regions, states and nations etc. also changes. The government policies can affect the business environment internally as well as externally. The demand factor can be explained briefly as under: a. Therefore the multinational companies do have an advantage of competitiveness over the other firm, which is considered to be always useful for the business firm. The internal marketing environment consists of all factors that are internal to the organisation like: The External Environment must be monitored continuously to review the marketing strategy accordingly. Content Filtration 6. Inventories will be low and currency will be converted rapidly. The developing nations are emerging as an important market in the international business. All the activities relating to production and distribution are centrally control by the government of that country. It is the will and attitude of the government, which tends to change from time to time. It is helpful to determine the, success or failure of a product. It is therefore essential for the firms to consider the critical aspects first as to take any decisions regarding the product and market effectively in the international business. The consumption pattern of a country also determines its economic environment. The foreign firms have their own interest in doing business in a particular country. Another reason for doing exports may be the social responsibility. Marketers who intend to market their products overseas may be very sensitive to foreign cultures. USA and UK. The national government tends to utilize its internal political resources for the fulfillment of its international objectives. It is evident in the history that nationalistic approach of a nation is always damaging to the international business. The political environment may have the following types- (1) Foreign (2) Domestic and (3) International political environment. marketing environment forces. Macro environment factors which consist of external forces. It is pertinent to mention here that a company must pay its special attention towards election time. The raw material used to make that product is left on the market forces. An analysis of demand is also considered in this view point. However, the Japanese do not. Production Indicators – It includes the production of different articles such as automobiles, coal production, paper production and electricity production etc. Day by day there is rise in the export activities of a nation. It may be a mountain range, a river, an ocean etc. It depends upon the positive relationships among the nations that how they are prepared to respond to the changes. It also more or less depends upon the political structure of that country and how frequently the government of that country is accepting the different changes in the market. Hence, it is participating in a number of RTAs which include Free Trade Agreements (FTAs); Preferential Trade Agreements (PTAs); Comprehensive Economic Cooperation Agreements (CECAs); etc. It depends, how a particular culture perceive regarding the particular appeal. In high risk nations the marketing environment is always different in comparison to low risk countries. the long run period. 2. are the basis for examining the geographical environment in the international business. Iraq and USA were having deep rooted grievances with each other, which was converted into the direct confrontation. The domestic marketing environment consist of factors like growth prospects including the competition, government policies etc. (b) Poor transportation systems increase production and physical distribution costs. Plagiarism Prevention 5. It may be either for betterment or for the worse. Xerography hurt carbon-paper industry, computer hurt typewriter industry, and examples are so on. Sometime local sourcing may be compulsory. The government policies play an important role in the formation political environment. (ii) International disputes – International disputes can draw the attention of the third party into the conflict. Failure to consider cultural differences is one of the primary reasons for marketing failures overseas. All these researches give a marketer an opportunity to set his products as per the current desired standard. Legal environments are not just based on different laws and regulations concerning businesses, these are also defined by the factors like rule of law, access to legal systems by foreigners, litigations systems etc. It varies from market to market and product to product. The following points highlight the importance of understanding international marketing environment: 1. International Marketing environment opportunities vary among the nations. Marketers generally cannot control the elements of the external environment. The resources they do have. (f) Countries also regulate /restrict remittances to foreign countries and repatriation of profits. Disclaimer 8. These types of dictators also hold elections as to adopt a civilian posters. In such type of model the government functioning is carried out through bureaucratic setup. If a country’s exchange rate is low compared to other countries, that country’s consumers must pay higher prices on imported goods. Marketing services agencies are companies that offer services such as conducting marketing research, advertising, and consulting. The other form of restriction is non-tariff. The interpretation regarding the same object may be different in different cultures. The following are some forms of the governments: These types of governments are formed through regular elections. (e) Many countries also have different laws and regulations that affect ownership of businesses by foreigners. India views Regional Trading Arrangements (RTA’s) as ‘building blocks’ towards the overall objective of trade liberalisation. The economic environment of a country defines the marketing opportunities in the foreign, business. country influences international marketing, to the great extent. In international business an enterprises must ensure that it fully abides by the local laws and other regulations. Thus it is necessary to measure the consumption pattern of different societies, cultures and nations. The company enters in the market by introducing its new innovations. What makes a business strategy which is successful in one market a failure in another market is often the differences in the business environment.nte In other words, the differences in the business environment may call for changes in the business strategies, i.e., there should be adaptation of the business strategy to suit the environment of the market. The eating habits of one society or culture are changing in comparison to another society or culture. A number of cultural differences can cause marketers problems in attempting to market their products overseas. Public – Any group … Thus the government policies tend to change slowly. 9 billion by 2025. c. High quality product – It is generally unique and much superior in quality to other existing brands. It is presumed that a marketer should make his product a part of customary action of an individual. The necessities of one country or economy may be luxurious in other economy. The ability of a firm to do international business depends on a number of internal factors like the mission and objectives of the firm; the organisational and management structure and nature; internal relationship between employees, shareholders and Board of Directors, etc. The people of the developed nations do have good purchasing power. Americans spend large amounts of money on soap, deodorant, and mouthwash because of the value placed on personal cleanliness. (iii) Impact of Socio Cultural Environment on Communication Process: The socio cultural context of a nation and way in which the information is processed, both in combination develop a summary of communication process in a particular country. Impact of Socio Cultural Environment on Different Aspects: The socio cultural forces play a vital role in the international decision making process of marketing. There are variations in the levels of income and living standards, interpersonal distribution of income, economic organisation, and occupational structure and so on. Another aspect of microenvironment is the customers. b. The ownership can also be shared by way of joint venture. The internal factors that affect a business are such factors as employees, competitors, customers, suppliers and the culture of the organization.These are factors which business can control. Due to the advancements in technology and research, there is rise in the production level of a firm and hence its productivity. Thus it can be said that. (i) Countries also have their own taxation requirements, systems and laws. OPIC is United States based government agency and provide several types of assistances and having political risk insurance as its primary business. Thus the above model must be studied from critical point of view while taking any decision in the international business. The same perception should be kept in mind by the marketers in the international marketing. The multinational companies mostly do have all the required features to dominate over the single industry business or small national competitors. The most important general trade agreement is called, simply enough, the General Agreement on Tariffs and Trade (GATT). Terms of Service 7. The government can impose following restrictions from time to time by changing its policies: When the countries do have a problem of balance of trade then it may impose restrictions on the free use of foreign exchange. ii. Image Guidelines 4. They can be defined as the actors in the firm’s immediate environment which directly influence the firm’s decisions and operations. (e) Lack of data processing facilities makes the tasks of planning, implementing, and controlling marketing strategy more difficult. Copyright 10. The government policies tend to change in the short run or in. The economic system of a country is based upon one of the following system- (i) Capitalistic approach (ii) Socialistic system or state owned system and (iii) Mixed economy. It was 6.1 billion 2000 and will exceed 7. The people in a society organize different activities, consistent with other expectation and cultural values. The business firms tend to complain about the bureaucracy of United States for its functioning. For example, in Egypt, the country’s national colour of green is considered unacceptable for packaging, because religious leaders once wore it. The level of development in a country and the nature of its economy will indicate the type of products that may be marketed in it and the marketing strategy that may be employed in it. The distinct environmental elements influencing the international marketing tactics of MNCs are more stringent in instances when companies … The successful x business firms are continuously updating their products with the latest technology and requirements in the, It is difficult to survive for those companies, which fails to see changes as an opportunity in the international business. (c) International standards – The government can enforce certain international standards in the foreign business. A company’s marketing environment consists of all the factors and forces outside marketing that affect management’s ability to develop and maintain successful transactions with its target customers – Kotler and Armstrong. The Capitalistic system is prevailing in the United States. Sometimes the governments of the countries may impose certain restrictions to enter in the market. It is for the marketing managers in an organization to make such efforts regularly for scanning the international marketing environment forces. v. Substantial amount of capital investment. : The cost-benefit analysis emphasize on the analysis of market, competition and financial strengths of a company. The legal environment of different nations do have complexity and different dimensions. It is based partly upon genetic characteristics and partly upon sociological features. Conclusion Understanding, Adapting and Manipulating the Environmental Factors are the basis of a Successful Marketing in Business Internal Factors as well as the External Factors are too Important The difference between Domestic and International Marketing is the Extent of Variation in External Factors. An international firm must resort to systematic study of international marketing environment to collect the inputs of marketing decision making. Finally the financial strengths of the firms are examined. This is the essence of nationalism. for the above purpose. The Sandi Arabia and Jordan do have its monarchies. There are different types of customer markets including consumer markets, business markets, government markets, international markets, and reseller markets. (3) In Japan, businesspeople have mastered the tactic of silence in negotiations. To plan effectively international marketing strategies, the international marketer should be well-informed about the competitive situation in the international markets. The population of any country can be divided on the basis of following subgroups of educational qualifications- (i) Illiterates groups (ii) High school dropouts (iii) High school certificates (iv) College degrees and (v) Other professional degrees. The company must decide its course of action after analyzing the market opportunities and thereafter the threats and problems in the international business. It changes in accordance with the situation to situation, time to time and place to place. (b) Crises in the government like majority and opposition by the rival group. But for other religions, religious holidays do not serve as popular times for purchasing products. It is evident that the developing countries are establishing themselves as a potential markets. The environment prevailing in the particular location helps a marketer to decide the marketing mix in the international business. Many Latin American nations fit into this category and they exhibit rising levels of education, technology, and per capita incomes. The company must state it clearly that it is none of their business. A country can be classified in two ways, on the basis of cultural influences on communication process. The Impact of Higher Growth Rate of Population on Marketing Strategy: The higher growth rate of population do have a big impact on the international business scenario. A marketer should examine those economic indicators very carefully, which are relevant to their business decisions. For example the purchasing power of the consumers of two nations may be different. The term aesthetics is used to refer to the concepts of beauty and good taste. Marketers must change style as per the requirements of the market. The internal environment of the company includes all departments, such as management, finance, research and development, purchasing, operations and accounting. The age factor is an important factor in deciding marketing strategy in the international business. Similarly, purple is unacceptable in Hispanic nations because it is associated with death. It has provided a big opportunity to the business houses to do business there. The government may impose excessive taxes on the companies operating in the international business. What they perceive about the foreign companies? The brand name of Tommy Hilfiger is more inclusive than the exclusive strategy. The challenge in each case is not only technical but also commercial that means manufacture a product that can be afforded by mass crowd. Micro environment of business includes various internal environment factors of business firm that affects the performance and decision making of an organization. A detailed discussion of all the factor is as, The geographical environment can be determined by the, The world market can be subdivided on the basis of following market. Subscribe Now and Get the latest updates in your inbox. The successful x business firms are continuously updating their products with the latest technology and requirements in the changing marketing environment globally. It is important for the firm to make opportunity analysis to determine whether it is worthwhile to take entry into foreign market or not. The above decisions lead to the conclusion that political environment of a country affect the international marketing activities. It can be explained with the help of following case of a U.S. based company. All these have to be considered while entering in the international market. The following are some of the important components which are studied and cared in the international marketing, (1) Language – The Media of Communication, Impact of Socio Cultural Environment on Different Aspects, The impact of socio cultural environment on different aspects can be studied as, The following are some factors which are responsible for the political instability, The social unrest may be caused by the following types of the, tterment or for the worse. Is defined in terms of investment international marketing environment internal and external are enforced to attract foreign investment in their household China... Shown in Table 11.1 reliable in the different party systems are prevailing in and... Should evaluate the political prospect of a nation also establishes the scope of market, competitors, distribution channels suppliers... Formed through regular elections factors and the market in the foreign based firms is having a rich economy they! 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