International Marketing Environment Issues - Essay Example

? International Marketing Environment Introduction The study of international marketing environment holds importance since in the present times, the power and influences of globalization have increased to great extents, particularly in regard to businesses and international trades. Thus, international marketing has become a necessity for organizations to survive the global competition. Trading blocs have grown in larger numbers with increasing tensions with the need for globalization trying to resolve such issues. With the changing demographics of the world, social changes have also taken place affecting the economy of the world in general. Thus, the understanding of the environment of international marketing is significant in order to successfully achieve business goals (“Understanding the Global Marketing Environment”, n.d., pp.4-5). The Role of Government in International Trade The government has a significant role in international businesses, where the government promotes the activities of the trades and businesses. Various financial and non financial types of assistance are provided by the government that helps the country and its businesses to attract the FDI. This, in turn, enables the countries to fight their competitive countries. Foreign businesses are more attractive with the increasing liberalization in trade across different countries, deregulations and privatizations leading to greater opportunities of international businesses. Thus, governments have the opportunities to “open up their borders to international trade and investment, standardize their systems and procedures, adopt internationally acceptable values and attitudes, and encourage the development of democratic institutions” (Aswathappa, 2010, p.10). Economic integration is attracted to a country when the country intends to develop financially and structurally. The various stages of integrations include free trade agreements, customs union, common market, and economic union. The free trade agreements regulate the initial integrations of trade between countries. External trade policies are controlled and regulated by the customs union. The common market decides on the movement of people across countries for the purpose of trades. The economic union contains all the elements of the other stages and regulated the monetary and fiscal policies of the international trades (Landers, 2012). Thus, it can be understood that these stages of economic integrations have significant impacts on the process of international trades between different countries. Economic and Cultural Elements of International Marketing Environment Economic and cultural factors are essential for the understanding of international marketing since these factors largely determine the marketing environment of the businesses and trades. Economic elements are significant since they have effects on the demands of any product being marketed in foreign markets. These elements include the size and composition of the target population, size and structure of the foreign market, level of competition, the sources of competition, rates of inflation, the restrictions on imports, tax systems, and other factors. These factors determine the demands and the rising level of trades across countries, thus, making it clear that economic elements affect international marketing environments. Cultural differences are also important in this regard since much of the social and ethnic issues result from such differences affecting global trades. Understanding of these factors is essential since they not only affect businesses but also support the marketer of the businesses in successfully gaining the target group in the foreign markets. Thus, elements like behaviors, values and beliefs are needed to be considered effectively (“Impact of Economic and Cultural Elements On International Marketing”, 2012). Political and Financial Risks with International Marketing The financial risks that are mostly involved in international trades include foreign exchange risks, exposure of the operating income to the changing rates which might lead to varying values of assets and liabilities in domestic currencies, and affect the operating income resulting from the international trade. The political risks associated with international marketing involve changes in the actions of the government, legislative policies, changes in tax structure, restrictions on foreign currency, feeble political stability, hostile relations between countries, corruption, internet security, national conflicts, and other similar factors. These risks badly affect the efforts of international business and marketing since these risks reduce the size of the market, control on the transportation profits, impact on the capacity of production, labor unrest, etc. Hence, it is essential to evaluate the political and financial risks such that the international business of any organization may be successful after dealing with these risks (“Political and Financial Risk in International Marketing”, 2012). Strategic Marketing in International Trades and Businesses When organizations tend to enter foreign markets for the purpose of international trade and marketing, proper strategic planning is necessary such that the entry may be successful. Companies may directly enter a foreign country or may take the help of any agent. The marketing mix needs to be effectively analyzed including the product support, price support, promotion or selling support, inventory support, distribution support, service support, and financial support. Different strategies available for entry into foreign markets include exporting, piggybacking, countertrade, foreign productions, joint ventures, and export processing zones. Exporting allows marketing of products from one country to another, thus, creating international trade. Piggybacking allows organizations to take assistance from others in cases where they are less effective in the field of exporting. Countertrade is a form of barter method constituting an indirect method of exporting and is not covered under GATT. Licensing, joint ventures, contract manufactures, ownership and participation in the export processing zones are other means of foreign production leading to international trades and businesses enabling companies to enter foreign markets (“Market Entry Strategies”, n.d.). Thus, while considering planning for entry into new and foreign markets, these strategies may be taken into concern and suitable to the needs of the product of marketing, one of the methods may be selected. Conclusion From the above study, it can be concluded that the environment of international marketing involves several factors of politics, finances as well as the strategic planning for successful entry into new markets. Thus, when an organization plans for expansion across different countries, the role of the government, the economic and cultural factors, as well as the risks need to be considered such that measures may be planned accordingly. Choosing the right strategy to enter the foreign market also enables attracting the target group successfully. References Aswathappa, K. (2010). International Business 4E. India: Tata McGraw-Hill Education. Impact of Economic and Cultural Elements On International Marketing (2012). Livewebtutors.com. Retrieved on October 31, 2012 from: http://www.livewebtutors.com/blog/2012/01/30/impact-of-economic-and-cultural-elements-on-international-marketing/ Landers, J. (2012). What Are the Stages of Economic Development of an Integrated Region? Ehow.com. Retrieved on October 31, 2012 from: http://www.ehow.com/info_8565312_stages-economic-development-integrated-region.html Market Entry Strategies (n.d.). In FAO. (Chapter 7). Retrieved on October 31, 2012 from: http://www.fao.org/docrep/W5973E/w5973e0b.htm Political and Financial Risk in International Marketing (2012). Livewebtutors.com. Retrieved on October 31, 2012 from: http://www.livewebtutors.com/blog/2012/01/30/political-and-financial-risk-in-international-marketing/ Understanding the Global Marketing Environment (n.d.). In OUP. (Part One). Retrieved on October 31, 2012 from: http://www.oup.com/uk/orc/bin/9780199239429/leecarter2e_ch01.pdf Read More