Globalization, Marketing Decisions and Trade Policy - Essay Example

?Marketing Decisions Table of Contents Table of Contents 2 Marketing Decisions, Demographics & Culture Diversity 3 Environmental, Social Responsibility, Ethics, Legal Obligation & Marketing Decisions 4 Politics, Foreign Corrupt Practices Act & Market Decision Making 6 Technology & Marketing decisions 6 Globalization, Marketing Decisions & Trade Policy Globalization has had a significant impact on the international markets. Some of the advantages of increased globalization are reduction in costs, access to cheap raw materials, reduction of complexity of problems and improved communication (SmallBiz Connect, 2013).The emerging concept of free trade has been gaining popularity among the marketers of the world. Most of the countries have relaxed their trade policies and removed the trade barriers (SmallBiz Connect, 2013). This has resulted in the establishment of various free trade agreements among different countries and led to the creation of the World Trade Organization (WTO) and GATT (General Agreement on Tariff and Trade). GATT is a worldwide agreement and helps in facilitating free trade between the member countries by restricting the trade barriers like import duties, subsidies and tariff protection (Barrett, Donaldson, Kiwiets, & Pearson, 2009). The main objective of WTO would be to implement these policies and agreement. Implementation of these policies has led to the betterment of the consumers and allows the price of the commodities to be set as per the actual supply and demand. Free trade practices are essential for the developing economies as it helps in production of commodities at a lower cost than the developed countries and the revenue generated from the exports permits their economy to grow rapidly (SmallBiz Connect, 2013).The developed economy can have access to technical expertise and technology from the developed countries which help in improving their production process (SmallBiz Connect, 2013). Marketing Decisions, Demographics & Culture Diversity Presently, the cultural global economy is complex, disjunctive and overlapping. The complexity of globalization is directly related to the fundamental disjuncture between the culture, economy and politics (Ardalan, 2009). The cultural economy is deeply influenced by the linguistic, political context, historical, religion and sub national grouping. Marketing decisions are deeply influenced by the global cultural flows between the countries. These cultural flows are managed by the media organizations and use the latest technologies to shape the community and the consumers (Ardalan, 2009). However, cultural flow is not associated with a singular type of organization and has deep influence on all types of organizations. The culture influences the consumer purchasing behaviour deeply. Apart from values, languages, beliefs the purchasing behaviour is also influenced by the subculture, demographic characteristics, geographic locations, ethnic and national background. Marketing decisions like advertising and promotions have to be in parallel with cultural values and beliefs of a particular region. The advertisements and the promotion have to be designed as per the cultural appeal of the consumers. As per a survey conducted by Stanford University, Welch grape juice can reduce the risk of heart disease however the advertisement with the preventive messages appealed only to the Asian Americans and not to the Americans (Stanford Business, 2013). Thus it is essential for the marketers to have a thorough cultural knowledge for product design, packaging and advertisements. In order to understand the market demand and supply the marketer needs to understand the market demographics to perform market segmentation. Market demographics include the age, occupation, sex, marital status etc (Lamb, Hair& McDaniel, 2011). Through the market demographics the marketer can understand the needs and wants of various segments of population. The derived data is used to develop an exquisite product design (Lamb, Hair& McDaniel, 2011). Environmental, Social Responsibility, Ethics, Legal Obligation & Marketing Decisions Presently, sustainability accounting has gained popularity among organizations in different countries. It helps in identifying the importance of traditional methods of accounting, financial decisions and its impact on the environment, community and economy. Every marketing and financial decision taken by the organizations has a definite impact on the above mentioned components. The disclosure of financial information by the companies signifies the company’s significant contribution to the environment and community. Environmental reporting has been associated with superior corporate performance and the efficiency of the economy depends upon the success of the companies (Taylor, Tower, Der Zahn, & Neilson, 2008). Thus, management of the companies is focused on developing new economic model which has positive social impacts on the economy. There are two positive outcome of environmental reporting. Firstly, it helps in evaluating the environmental and social risks faced by the economy. Secondly, it helps in assessment of the social and environmental responsibilities need to be undertaken by the company. Although, there is no standardized definition of business ethics certain ethical values are followed by the organizations. These business ethics usually revolve around the moral judgment of a particular course of action. The right and wrong of a particular action is determined. Ethical conduct by the managers is reflected in the marketing decisions which also determine the brand image of the company. When the management of the company has social responsibility on their shoulders, it helps in identification and assessment of the environmental situation and understands the importance of environmental and social values. Marketing decision has to be made after the evaluation and assessment of social environment. The government of various countries has introduced legal obligations for business entities against environment and community protection. For example the environment protection act introduced by government of various countries obliges the companies to undertake several environment and community protection measures (Environment.fi, 2012). Registering under the Intellectual Property Rights gives the business entity the legal right to obtain ownership for their work (Queensland Government, 2013). This prevents plagiarism and unethical conduct in the society Therefore it is mandatory for the organizations to abide by the environmental laws and regulations for the betterment of the society and the economy. Politics, Foreign Corrupt Practices Act & Market Decision Making Politics has a significance influence on the marketing decisions and purchasing behaviour of the consumers. It is observed that the relationship between the cultural economy and globalization is unidirectional in which the politics of the different economies plays a pivotal role. The cultural, technological and communicative flow is directly controlled by the politics of the country. We have observed that the trade practices and the agreement are deeply influenced by the government of various nations and also has a significant impact on the marketing decisions made by the companies. For example the Foreign Corrupt Practices Act enacted in the year 1977 is applicable to the business entities of United States of America (Vanasco, 1999). The act lays emphasis on how corruption can be evaded by the companies by adhering to GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) principles, payment to public officials, parties and candidates in time and avoiding bribery in any kind of transactions (Vanasco, 1999). This act was formulated to curb down the bribery occurring in the business entities and promote ethical conduct. The uniqueness of the act is that USA is one of the first countries to enact a legislation which has an impact on the foreign trade and code of ethics. Technology & Marketing decisions Globalization has also improvised the technological environment of the companies worldwide. Internet has not only become instrumental in facilitating communication with the consumers, government and media but also helped in innovative packaging of the product. Technology has allowed the company management to store consumer information in their database which also has helped in improvisation of technological process of the company. Technology has improved the promotional strategy like advertising, personal selling, public relation, direct marketing etc. Customization and personalization of the official websites has helped in smooth interaction between the departments of the company and communication with the consumers, suppliers etc. The brochures and applications which are available through electronic mode have helped in improving the relationship between the management and the stakeholders of the company. 3D simulations and virtual reality tours have allowed the management of the company not to create a real exhibition or show space to demonstrate the functioning of the products. References Ardalan, K. (2009). Globalization and culture: Four paradigmatic views. International Journal of Social Economics, 36(5), 513-534. Barrett, J., Donaldson, W., Kiwiets, E., & Pearson, M. (2009). Marketing. Cape Town: Pearson South Africa. Environment.fi. (2012). Legal obligations for businesses. Retrieved from http://www.ymparisto.fi/default.asp?node=18314&lan=en Lamb, C.W., Hair, J.F., & McDaniel, C.D. (2011). Essentials of marketing. London: Cengage Learning. Queensland Government. (2013). Legal requirements. Retrieved from http://www.business.qld.gov.au/business/starting/legal-obligations/meeting-legal-obligations/legal-requirements SmallBiz Connect. (2013). International market opportunities. Retrieved from http://toolkit.smallbiz.nsw.gov.au/part/21/105/487 Stanford Business. (2013). When does culture matter in marketing? Retrieved from http://www.gsb.stanford.edu/news/research/mktg_aaker_cultureinfluences.shtml Taylor, G., Tower, G., Der Zahn, M.V., & Neilson, J. (2008). Corporate governance determinants on Australian resource companies’ financial instrument disclosure practices. Asian Review of Accounting, 16(1), 56-73. Vanasco, R. R. (1999). The Foreign Corrupt Practices Act: An international perspective. Managerial Auditing Journal, 14(4), 01-105. Read More