Environmental Impact On International Marketing Essay

Question:

Research on Theory and Concept in General

1.Legal impact
2.Social impact
3.Culture/Tradition/Belief/Religion impact
4.Political impact
5.Local regulations impact
6.Industry impact
7.Technology impact
8.Financial/economic impact
9.Consumer Behavior impact
10.Climate/seasonal impact

Answer:

The world has become more globalized and there are so many organizations, which are going towards international marketing. International marketing has a major impact on the people’ lives and generates new opportunities and challenges. International marketing is the process of decision making for the marketing strategies on the basis of possible markets outside the home industry of the company. International marketing management means creating marketing strategies for expanding the business operations in foreign country. In expanding the business in international market, there are some factors, which are impacting international marketing management. Here is the discussion about these factors and their impacts.

1.Legal Impact

Laws

There are some specific laws in some nations, which have great impact on the ability of an organization to operate the business in them and forbid it completely. There is an example of Thailand that has specific laws and regulations, saying that no foreign organization or person can have over 49% of the business in the country (Anastasia, 2015). So, it must be aware about the laws, if it is conducting manufacturing operations in the foreign country and wants to expand the business in the country.

Licensing and Permits

In any foreign country, there may be possibility that organization can operate the business after taking an expensive permit of license of business in the country to produce and sell the products. The government of that country needs these things as a manner of ensuring a significant percentage of income from the company’s sales in home nation (Czinkota and Ronkainen, 2013). For example, Pepsi’s permitted and license to Heineken to pack and sell product in Netherlands.

2.Social Impact

There are so many factors, which impact a business entering in the foreign country. These factors are like; level of education, demographics and age, all contribute to the marketing activities of an individual organization in a specific country. Demographics and age play an important role in international marketing management like, it plays in domestic marketing (Fletcher and Crawford, 2013). The firms have to focus on these factors. The organization will market the products by paying attention on the age groups, for example; if the organization is marketing laptops, then it will not promote them to the senior citizens, because most of the senior citizens are computer illiterate. It indicates that it is very important to understand the significance of age and other demographic characteristics on the targeting country, where one organization is planning to sell the products and services. Moreover, the organizations have to consider the income levels of the people. It can be analyzed by looking at the economy of that country (Czinkota and Ronkainen, 2013).

3.Cultural Impact

Culture is an important aspect in international marketing management. It is very important to consider the cultural differences, as it affects behavior of consumers. The organization should understand the cultural dissimilarities in foreign country.

Regional Aspects

There are so many times, countries to which the organization will like to offer its products, has major regional differences, which must be considered at the time of marketing. An example of this country is Canada. The country has a large population, which speaks French and they are very different than English communities, which are found in rest of the nation (Griffin and Pustay, 2012).

Language

When the company does international marketing, it requires paying attention on the language. An example of this is when Coca-Cola was translated into Chinese language. The organizations need to consider the regional language of the host country to eliminate the issues in communication. They need to consider different components of language, such as; verbal and non-verbal part.

P4.olitical Impact

In today’s business world, it is very important to consider the political aspects, which impact the international marketing management. The organizations may face some political risks and instability in the market of foreign country.

Political instability

Political instability in a foreign nation can impact the ability of organization to market or advertise the products or services host country also. For example, if an organization is investing funds in marketing and selling the products in the nation, like; Egypt, then that business will face the risk of declined customer base if a war occurs due to political instability in that nation (Hollensen, 2007).

Currency Risks

In international marketing, there are always the risks, when an organization operates business in the currencies of a foreign nation, to which the organization is offering its products and services. If the company has its own money tied up in foreign currency and some economic occurrences fall, the company can lose millions in this process. For instance, in the duration of 24 September 2012 to October 2, 2012, Rial of Iran decreased approximately 60%. This type of happenings can affect the business (Czinkota and Ronkainen, 2013).

5.Local regulation impact

There may be differences between laws and regulations between home and host countries. Like; there are some countries, like; Brazil, France, Indonesia etc. there are some laws, which restrict imports to United States. In many countries, shortages of local regulations can raise issues for the organizations, like lack of intellectual property rights in China country. Before determining about the target country, the organizations need to compare the laws and regulations of both the countries. Relations between government and nations have significant impact on the business operations of international organizations. The governments of United States with South Africa, like; US organizations to stop their business operations in the new country (Hollensen, 2007).

Along with this, the companies must be aware about the trade regulations, consumer protection laws and trade restrictions. It is important to make the international marketing efforts. For example, L’Oreal is the well-known brand in the cosmetic industry, which should expurgate packaging and marketing of the goods and products to fulfill with the regulations, which are present in the Middle East locations.

I6.ndustry Impact

Entering in international markets can be difficult for the organizations. There are so many factors, which the organizations should consider in the perspective industry, like; competitors, price, local production, etc. Along with this, they should go ahead by looking at the industry trends. First, the organization should consider the major players in the industry, because they can resist the entry in foreign country (Papadopoulos and Heslop, 2014). Local production can affect the marketing of products by influencing both acceptance and price. Whether a foreign market is accessible for the organization, it depends on that the organization can offer the products at competitive price in comparison to other local players. Thus, these are the industrial factors, which can impact the entrance of the organization in a foreign market.

7.Technological Impact

In today’s business world, technology factors play an important role in international marketing management. It has positive impact on the organization to enter in the new country. Organizations can use different technology innovation in the advertising and promotional activities. They can use the technologies for different purposes, such as; production and manufacturing, management of the organization, advertising, communication process etc.

While entering in to foreign country, the organizations are using new technologies to operate business effectively and differently. For example, Dell is able to offer its products and services directly to its customers as Internet makes it able to make contact with the customers without having any expense (Wild, Wild and Han, 2014). By using internet, Dell is earning higher profits by catering the most profitable customers in foreign country. It can be recommended that the less developed countries should emphasize more on developing technologies and applied research with existing technology.

8.Financial/Economic Impact

The wealth of a country is a major factor when an organization determines its possible target countries and how to advertise and sell the products in these countries. For example, the per capita income of Eritreans is less than $800 per year. It is possibly not good to sell $1000 side-by-side dryers and washers.

Moreover, the organizations need to consider the mode of financial transactions and banking (Papadopoulos and Heslop, 2014). It has to consider that how the organization will get payment for its products and services, which it sells internationally. Sometimes, businesses get this issue for granted, which they can buy the products globally and make payment by using debit cards, credit cards, online payments and cash transfer. But it cannot be done in every case. This type of financial aspects can impact the international marketing strategy of the business. Another element in economic aspect is inflation, because it majorly influences the buying habits of consumers and their purchasing ability (Usunier, 2009).

9.Consumer Behavior Impact

Consumer habits

Consumer behavior has a significant impact on the international marketing management. Personality and culture are the major factors, which combine to develop the consumer behavior in every area of the world or country. When an organization wishes to market a product or service to the foreign country, then it needs to determine the society, like; whether the society is individualistic, i.e. culture with free thinking or collective, where the a group has impact on the purchasing decisions (Johnson, Lenartowicz and Apud, 2006). The organizations have to consider the psychological and societal factors, which affect the purchasing decisions in the nation, where organization is going to market and sell its products.

Consumer taste

Expanding the business in international markets may be very difficult for some of the organization because of the consumer tastes in the countries. It can be for the food organizations which are impacted by the eating habits of the countries. For instance, McDonalds had to completely change its image when it went to marketing its products in a nation like; India which looks at beef products as becoming off limits (Hill, 2008). They introduced their vegetarian choices in their menu. There are so many international fast food organizations, like; Wendy’s, KFC etc. which had to introduce the rice dishes to expand its business in Asian industry.

10.Climate Impact (Environmental)

In international marketing management, the environmental factors play an important role. It has both positive and negative impact on the marketing strategy in the global market. Climate changes can impact the production and manufacturing process of organization. The organizations have to be aware about the places, which are impacted by natural disasters, like; earthquakes and typhoons. When these kinds of events occur, they can decline the customer base in that country and affect their purchasing power, which will majorly influence its business (Hoppner and Griffith, 2015).

The organizations need to consider the environmental and community factors. The organization should develop the green and eco-friendly approach in the operations. The customers in the foreign countries are very concerned towards environment. Changing environment and climate have large impact on the production and marketing process of the organization in international market.

Thus, these are the major factors, which have huge impact on international marketing management. International marketers are facing various factors in the international business environment, which may have intense impact on the marketing processes and activities. The organizations need to consider these factors, which are affecting the home and host country and entire international business.

References

Anastasia, 2015, Factors to Consider for International Marketing, Retrieved from

Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.

Fletcher, R. and Crawford, H., 2013. International marketing: an Asia-Pacific perspective. Pearson Higher Education AU.

Griffin, R.W. and Pustay, M.W., 2012. International business. Pearson Higher Ed.

Hollensen, S, 2007, Global Marketing: A Decision-Oriented Approach. London: Prentice Hall.

Hoppner, J.J. and Griffith, D.A., 2015. Looking back to move forward: a review of the evolution of research in international marketing channels. Journal of Retailing, 91(4), pp.610-626.

Hill, C., 2008. International business: Competing in the global market place. Strategic Direction, 24(9).

Johnson, J.P., Lenartowicz, T. and Apud, S., 2006. Cross-cultural competence in international business: Toward a definition and a model. Journal of International Business Studies, 37(4), pp.525-543.

Papadopoulos, N. and Heslop, L.A., 2014. Product-country images: Impact and role in international marketing. Routledge.

Usunier, J. C, 2009, Marketing Across Cultures. London: Prentice Hall.

Wild, J.J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.

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