However, in America, beer commercials seem to be the norm and can be seen whenever you turn on the television or on ads online. But these restrictions vary with East-West relations. Often local firms will adopt imitation strategies, sometimes successfully. General Motors’ “Body by Fisher” slogan became “Corpse by Fisher” when translated into Japanese. Knowing little tips like this can help companies from having business deals fall through. Japanese marketers have developed an approach to managing product costs that has given them a competitive advantage over US competitors. The result is that Americans become impatient, push for closure, and often make business concessions they later regret. (d) shipping across borders in Europe Coming back to the topic, Global Factors are related to the world economy. The Future of Marketing is About Connection and Content. The interesting thing is being too early is just as detrimental as being late. To understand the trends and events in the market and successfully analysing the data to produce a product of customers need. Most firms probably prefer to engage in the export business rather than invest considerable sums of money in investments in foreign subsidiaries. International marketing environment consists of global forces, such as economic, social, cultural, legal, and geographical and ecological forces, that affect international marketing decisions. The buyer is not essential to the suppliers business, as the supplier’s good is the core ingredient of the finished product of buyer. 23-24. In Ireland, the evening meal is called tea, not dinner. “You call it an Internet cafe, but it’s much more. If there is any element used in production process or product that is harmful to society should be avoided since it is a social responsibility of an organization. Table 6 provides some illustrations of cultural difference around the world. Its present and future existence, profits, image, and positioning depend on its internal and external environment. These factors are largely uncontrollable, although marketers can influence some of them. While I was studying abroad in Switzerland, I experienced the effects of tariffs when trying to purchase meats such as beef. The international business environment is growing at a fast pace. Borders seem to be more symbolic now than they are barriers to trade like they were years ago. Macroeconomic factors and microeconomic factors concurrently plays a vital role in establishing a successful business as it provides important means for professionals to operate the business in an efficient and effective way to generate sound revenue. • the registration and enforcement of trademarks, brand names, and labeling Countries with high levels of international trade have stronger and more stable economies, better standards of living and steadier growth. From this first important judgement, all else follows. For example, in the US, the two-wage earner family has led to the development of a more affluent set of consumers. Demographic factors include structure of the population, division according to sex, age group, income group, material status, and profession, etc. For Ex: A manager who deals with international marketing has to design his marketing mix and marketing mix strategies in accordance with these forces. Still, with 14 different languages and distinctive national customs, it is unlikely that the European Union (EU) will ever become the “United States of Europe”. In making the decision to customize or standardize, there is a wide range of possibilities for adapting a firm’s product, price, promotion, and distribution strategies. International Marketing Environment Environment analysis for international marketing. 24. 68-69. For example, If the retail seller holds a reputable name in the market then their reputation can impact the marketing of company’s product. For country specific information, page down to Country News in any of the regional sections. However, salespeople who set definite appointments for sales calls in the Middle East and Latin America will have a lot of time on their hands, as business people from both of these cultures are far less bound by time constraints. In German, “Let Hertz Put You in the Driver’s Seat” means “Let Hertz Make You a Chauffeur”. Inside, people from around the world peck away at their email, communicating with friends and acquaintances from more than a hundred countries–for just ITL 6,000 (about USD 3) per half hour. Red is a positive color in Denmark, but represents witchcraft and death in many African countries. Importance of Marketing Environment Every business, no matter how big or small, operates within the marketing environment. It provides clues as regards their age, sex, income, and capacity to incur … It is the task of the marketing-oriented organisation to link the resources of the organisation to the requirements of customers. (21): Dom DelPrete, “Winning Strategies Lead to Global Marketing Success,” Marketing News, August 18, 1997 pp. These nations have low standards of living, literacy rates are low, and technology is very limited. 13-20. These forces include wholesaler, retailers etc. Foreigners should politely take their leave. 14-15. Main domestic factors include:Demographic factors: Demographic forces do impact the different market segments, which includes region, country, age, educational level, ethnicity, lifestyle, cultural norms and values. In Brazil and Portugal, business people like to entertain foreigners in their homes. US firms tend to build products, figure how much it costs to build the product, and then ask whether the product can be sold at a profitable price. The creation of the single European market in 1992 was expected to change the way marketing is done worldwide. McDonald’s has opted to market its product in India, largely because India’s population of more than 900 million represents one sixth of the world’s population. b. the political/legal environment Americans are not prepared for this, and they panic because they think something has gone wrong. This approach also encourages managers to worry less about product costs and more about the role it should play in gaining market share. It is important to stress that there is a need for realism in this, as only too frequently corporate plans are determined more by the desire for short-term credibility with shareholders than with the likelihood that they will be achieved. Regional trading blocs represent a group of nations that join together and formally agree to reduce trade barriers among themselves. • In France, wine is served with most meals, but in America, milk, tea, water, and soft drinks are popular. We use cookies to ensure that we give you the best experience on our website. The technology and materials used in production of goods and services helps in smoothing the process of business. This car was very popular in the United States, but when they tried to sell them in Spanish speaking countries, they seemed to have problems because NO VA means ‘no go’ so they thought the car would not move. 120-129; Normandy Madden, “OM’s Buick Rides Luxury into China,” Advertising Age, June 24,1999, p. 16; Carolyn Edy, “The Olympics of Marketing,” American Demographics, June 1999, p. 47. The situation analysis concerns a thorough examination of the facto… Some firms choose to customize their market programs, adjusting their marketing mix to meet the needs of each target market. ... As a business owner, it's important to consider these cultural aspects before you go global. Here you will find a As a result, business negotiations may take years. Americans seem to be fanatical about time when compared to other cultures. Since 80 per cent of Indians are Hindu, McDonald’s will use a nonbeef meat substitute for its traditional hamburger. • distribution, including strength in supply chain, number of outlets; However, on 1 January 1999, 11 of the 15 member nations took a significant step toward unification by adopting the Euro as the common currency. This is done within the framework of opportunities and threats in the external environment. The satisfaction of general public is a duty of organization. All this has led to the birth and growth of international marketing. July 1998, pp. That is, it is more difficult to move upward in a social structure that is rigid. But in other cultures, it is considered unacceptable for women to work outside the home. All multinational firms face the risk of expropriation. Once a firm has decided to enter a particular foreign market, it must decide upon the best way to enter that market. Putting a B2C (business-toconsumer) or a B2B (business-to-business) site up in Europe is much more difficult than in the United States. As this whole new frontier opened up, businesses realized there was a brand new opportunity out there for them to generate even more income. Political and Legal Factors:The organization should take into consideration the political and legal development relating to market and organization during decision-making process. Marketers who intend to market their products overseas may be very sensitive to foreign cultures. Furthermore, according to a study by Swiss Info, Switzerland’s meat prices are also 142% more expensive than the global average, ouch! Importance of Marketing Environment 1) Essential for planning It is necessary for the management of the company to understand the Importance of Marketing Environment astutely as it helps in planning of the business operations such as planning the nature and features of the new products and services to be launched in the market. However, in many expropriations there has been payment, and it is often equitable. These 11 nations represent 290 million people and a USD 6.5 trillion markets. Culture: Culture is the shared norms and values of any organization. In the Economy section, you will find an International Calendar of Economic Events. Consider how the following examples could be used in development of international marketing programs: • In Russia, it is acceptable for men to greet each other with a kiss, but this custom is not acceptable in the US. Globalization and technological advances triggered a period of marked growth over the course of the 19th century. The term aesthetics is used to refer to the concepts of beauty and good taste. This is about 400 thin-screen computers in this very cool environment with a little coffee on the side.”. It is important for marketers to learn about these customs and taboos so that they will know what is acceptable and what is not for their marketing programs. The most common form of restriction of trade is the tariff, a tax placed on imported goods. The exchange rate of a particular nation’s currency represents the value of that currency in relation to that of another country. It meant the birth of a market that was larger than the United States, and the introduction of European Currency Units (Euros) in place of the individual currencies of member nations. The changes were minimal, such as a change of font and subtle changes to the layout. They are related to internal situation of the company dealing with international trade. The governmental regulations and tax policies are also taken into consideration. Economic Factors:The organization production and decision making process of customer also affected by the economic environment. • Lack of data processing facilities makes the tasks of planning, implementing, and controlling marketing strategy more difficult. The objectives of this section is to help students …. Maxwell House advertised itself as the “great American coffee” in Germany. • Poor communication facilities hinder advertising through the mass media. (g) recruiting and retaining people in markets that prohibit or curtail stock options and other economic incentives (22). Microeconomics solely focuses on  marketing environmental forces that determine the level of price, supply and demand in an economy. Protective tariffs are established in order to protect domestic manufacturers against competitors by raising the prices of imported goods. c. the technological environment Americans spend large amounts of money on soap, deodorant, and mouthwash because of the value placed on personal cleanliness. IDC predicts that global spending on cognitive systems will reach $31.3 billion by 2019: China's marketing community will lead the way. Social Environment. In Italy, salespeople call on women only if their husbands are at home. Many of the products that they sell are targeted to a global audience using a consistent marketing mix and they need to understand the importance of international… A nod means “no” in Bulgaria and shaking the head side-to-side means “yes”. The developing nations, on the other hand, have growing population bases, and although they currently import limited goods and services, the long-run potential for growth in these nations exists. In Quebec, a canned fish manufacturer tried to promote a product by showing a woman dressed in shorts, golfing with her husband, and planning to serve canned fish for dinner. A great number of economists assures that international marketing can be an on-going historical process, this process leads to the increasing integration of the production of goods, services, ideas, culture, communication and environmental air pollution on the world-wide level, imparting area of populations and labor. The likely beef substitute will be lamb, a very popular meat in India. • company image, including quality and added value (or service). As the degree of economic development increases, so does the sophistication of the marketing effort focused on the countries. Natural Factors:The organisation must take into account the renewal of the natural resources of the earth such as agricultural product, forest, marine resources etc. 47-48. Americans usually smile as they shake hands. Technological Factors:The organization must consider the technological factors as the knowledge and skills used in production of goods. These nations do not usually try to strictly regulate imports or discriminate against foreign-based firms. Progress toward European unification has been slow-many doubt that complete unification will ever be achieved. If the estimated cost is too high, the product will be taken back to the drawing board. Still, the challenges of European Internet marketing are legion. • new product introductions and diffusion; The study of demographic factors is of vital importance for marketers. The phrase, “Beauty is in the eye of the beholder” is a very appropriate description of the differences in aesthetics that exist between cultures. Almost all the countries in the Western hemisphere have entered into one or more regional trade agreements. (f) coping with strict government regulatory issues This environment regulates organizational activities in such a way that it becomes favorable for the entrepreneurs to identify the threats and opportunities lying ahead. An individual’s values arise from his/her moral or religious beliefs and are learned through experiences. Therefore, they restrict trade with non-Communist nations. Customs unions maintain common tariffs and rates for nonmember countries. 2. The organizations production can also be affected by the non renewable resources which includes coal, oil mineral. The nationalistic spirit that exists in many nations has led them to engage in practices that have been very damaging to other countries’ marketing organizations. Every culture has a social structure, but some seem less widely defined than others. • Maintenance standards vary from one nation to the next. It is important to clearly identify the different stakeholder groups, understand their expectations, and evaluate their power, because the stakeholders provide the broad guidelines within which the firm operates. Among the many complexities facing pan-European websites are the following: (a) developing a site for multiple languages 26, No.3, 1992. EasyJet.com bills itself as the “Web’s favorite airline” and markets itself as it discount airline with steep incentives for buyers to transact online. International Marketing environment is comprised of those components which shape policies, programmes and strategies of an international marketer. 98-101 Michael Krauss, “Europe Forges Ahead with Web Innovations,” Marketing News, August 14, 2000, p. 8; (23): Suzanne Bedlake, “Birth of a Global Brand,” Ad Age International, March 1997, p. 126; Rainer Hengst, “Plotting Your Global Strategy.” Direct Marketing, August 2000, pp. The business environment is one of the most dynamic aspects of the business. One of the most important things I learned was how important punctuality is, it means you are organized and good at time management which is very important in their culture. International markets offer organizations market expansion and profit opportunities. Exports boost the economic development of a country, raise living standards and reduce poverty. At an operational level, the national managers need to have an achievable and detailed plan for each country, which will take account of the local situation, explain what is expected of them and how their performance will be measured. A typical American company will design a new product, then calculate the cost. However, there are some differences, many of which are centered on environmental factors which affect international marketing: (a) the economic environment, (b) the competitive environment, (c) the cultural environment, (d) the political/legal environment, and (e) technological environment and the ethical environment. To many of these cultures, setting a deadline such as “I have to know next week” is considered pushy and rude. 7, November 1973, p.67. I visited Germany in High School for a German exchange program and not only learned the language better but got first-hand insight into German etiquette. 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. Such agreements are designed to facilitate trade through the establishment of a free trade area, customs union or customs market. However, entering international markets poses risks and valid reasons to avoid entering these markets. Scott Beaumont, President Google Greater China, Google. There was nearly a 20% decrease in price simply by crossing the border into Germany or Austria, and sometimes the tariff applied in Switzerland was double the original price according to a study by the World Trade Organization. When a firm chooses to market its products internationally, it must decide whether to adjust its domestic marketing program. For example, foreign governments can intervene in marketing programs in the following ways: Similarly, purple is unacceptable in Hispanic nations because it is associated with death. Marketers in developed nations cannot take many technological advances for granted. 53-55; Erica Rasmusson, “Global Warning,” Sales and Marketing Management, Nov. 2000, p. 17. Just over the Ponte Vechio, the old bridge joining the Uffizi art gallery with Pallazo Pitti, there is a small storefront with 20 personal computers. This task is not as easy as it sounds as various features of a culture can create an illusion of similarity. Women do not participate in household buying decisions in countries in which religion serves as opposition to women’s rights movements. For example, in America we place a very high value on material well-being, and are much more likely to purchase status symbols than people in India. However, most industrialized nations also have stable population bases, and market saturation for many products already exists. Michael Plogell and Felix Hofer, “No-nos in Europe,” Promo, April 2000, pp. Americans should not say “Wie gehts?” (“How goes it?”) It is also too informal for first meetings. Do not say “Merci” (“Thanks”) to a French person’s compliment. For example, in Canada, labels must be in both English and French. Importance of International Marketing 1. There are many reasons why US firms choose to engage in international marketing. Global marketing occurs when marketing managers use a global plan to effectively market their goods and services on an international basis. Most nations desire to become self-reliant and to raise their status in the eyes of the rest of the world. If your products are differentiated and the differentiation is possible only in … All Rights Reserved. She believed the font simply looked more appealing to the consumer they were aiming to attract. This is the essence of nationalism. Italians wave goodbye as Americans beckon someone–with palm up and fingers moving back and forth; but in Asia, waving with the palm down is not interpreted as goodbye, but rather, “come here”. Usually, the most significant marketing opportunities exist among the industrialized nations, as they have high levels of income, one of the necessary ingredients for the formation of markets. These include: (a) language, (b) color, (c) customs and taboos, (d) values, (e) aesthetics, (f) time, (g) business norms, (h) religion, and (i) social structures. One of the potentially interesting results of trade agreements like ASEAN or NAFTA is that many products previously restricted by dumping laws, laws designed to keep out foreign products, would be allowed to be marketed. (2): Theodore Levitt. For instance, the impact of net- exports on nation’s capital account or effect of unemployment rate on GDP.The macro and micro economics is considered as the study of two diverse divisions of economy. The marketing environment is continuously changing, as it consists of a number of unpredictable forces which surround the company. In addition, ASEAN promotes regional integration of transportation and energy infrastructure. When it is time to go, the host may feel constrained to insist that the foreigner stay. Punctuality and deadlines are routine business practices in the US. In 2018, Chinese innovation and imagination in marketing will increasingly benefit from Chinas’ sophisticated digital ecosystem that combines data, technology, and content to enable better customer insight and new opportunities. AI will advance more sophisticated attribution modeling, better audience targeting, better messaging, better creativity and experiences, customizing them according to time, location and event. 60-62. A vibrant international trade environment benefits all parties. These norms are reflected in the difficulty of introducing the Web into Europe (see the next “Integrated marketing”). The practice of dumping involves a company selling products in overseas markets at very low prices, one intention being to steal business from local competitors. Others use a standardized marketing mix. (8): Eileen Cassidy Imbach, “US Commercial Centers: The Future of Doing Business Abroad,” Business America, November, 1994, pp.25-26. Use the Country News menu to select the specific countries discussed and to look for additional information about the articles you have chosen. In Thailand, it is considered unacceptable to touch a person’s head, or pass something over it. Social and Cultural Factors:The impact of organization’s services and products on the society must be taken into consideration. If companies are going to sell their products internationally, they need to think about what their name means in the countries where they want to sell them. US companies make one-third of their revenues from products marketed abroad, in places such as Asia and Latin America. Factors of International Marketing Environment. Travel news is found in the Business Fare section of Marketplace. This environment affects international marketing mix in several ways. These activities violated cultural norms. 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