International Marketing Environment
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Topic 3 The International Marketing Environment
Imanuel Hutagalung Semester 2
The Economic Environment Free Trade the least restrictive and loosest form of integration among nations; goods and services are freely traded among member countries No discriminatory taxes, quotas, tariffs or other barriers are allowed Formed only on certain classes of goods and services
The Economic Environment Free Trade Advantages:
increasing sales in more than domestic markets permits significant economies of scale increase in products of all kinds increase competition, prices of goods in importing countries fall while profit increase in the exporting countries.
Free Trade Disadvantages:
Benefits are not universal, only for individual consumers Manufacturers in importing country lose business; unemployment may rise as a result Government often resist suggestions of reductions in barriers to trade
The Economic Environment
Tariffs: taxes imposed on goods moving across national boundaries • •
To raise the price of imported goods To protect domestic manufacturers from competition, generate revenue for government
Non-tariffs: 1. Quotas physical limits on the quantity of goods imported into a country, protect domestic industries, prices tend to increase. The most expensive models, highest profit margins. 2. Voluntary export restrictions agreement made by exporters in one country to limit their sales to another.
The Economic Environment 3. Exchange control and import license: a government monopoly of all dealings in foreign exchange 4. International/regional trade cooperation and tariff reduction GATT The free trade area (ex: NAFTA, AFTA) The custom union, the common market The economical union (ex: EU-European Union)
The Cultural and Social Environment
Marketing is concerned with the satisfaction of human needs and wants Special importance aspects: • Family socio economics groupings (A, B, C1, C2, D, E) • Social Organization • Religion • Education • Language The self-reference criterion: cultural prejudice Bribery
The Political and Legal Environment
The political environment in a country:
Host country political environment •
•
attitude towards business enterprise, both national and foreign laws and regulations governing the conduct of business need to be aware of those areas of the laws that are likely to affect the marketing decisions know when to call in specialist legal advise when it is needed.
Host country sovereignty and security Improvement in living standards of host country citizens Host country political ideology Home country political environment
Financial Environment
Avoiding Risk. Three types of financial risks: • The Commercial Risk/Credit Risk • •
•
payment default by the buyer lack of reliable financial information.
Political Risk • • •
exchange payment delays no import license war, revolution, civil disturbances
Foreign Exchange Risk Creating Opportunities •
•
The international marketer can assist in making finance available to potential customers at competitive interest rate
International Institutions and the Department of Trade and Industry
IMF: International Monetary Fund The World Bank GATT: The General Agreement on Tariffs and Trade ICC: The International Chamber of Commerce UNCTAD: United Nation Conference on Trade and Development ISO: International Standards Organization ICC: International Chamber of Commerce
Presentation
Company Background Target Market Product Specifications Pricing Strategy Product Distribution Promotion STEEPLE Analysis
Imanuel Hutagalung Semester 2
The Economic Environment Free Trade the least restrictive and loosest form of integration among nations; goods and services are freely traded among member countries No discriminatory taxes, quotas, tariffs or other barriers are allowed Formed only on certain classes of goods and services
The Economic Environment Free Trade Advantages:
increasing sales in more than domestic markets permits significant economies of scale increase in products of all kinds increase competition, prices of goods in importing countries fall while profit increase in the exporting countries.
Free Trade Disadvantages:
Benefits are not universal, only for individual consumers Manufacturers in importing country lose business; unemployment may rise as a result Government often resist suggestions of reductions in barriers to trade
The Economic Environment
Tariffs: taxes imposed on goods moving across national boundaries • •
To raise the price of imported goods To protect domestic manufacturers from competition, generate revenue for government
Non-tariffs: 1. Quotas physical limits on the quantity of goods imported into a country, protect domestic industries, prices tend to increase. The most expensive models, highest profit margins. 2. Voluntary export restrictions agreement made by exporters in one country to limit their sales to another.
The Economic Environment 3. Exchange control and import license: a government monopoly of all dealings in foreign exchange 4. International/regional trade cooperation and tariff reduction GATT The free trade area (ex: NAFTA, AFTA) The custom union, the common market The economical union (ex: EU-European Union)
The Cultural and Social Environment
Marketing is concerned with the satisfaction of human needs and wants Special importance aspects: • Family socio economics groupings (A, B, C1, C2, D, E) • Social Organization • Religion • Education • Language The self-reference criterion: cultural prejudice Bribery
The Political and Legal Environment
The political environment in a country:
Host country political environment •
•
attitude towards business enterprise, both national and foreign laws and regulations governing the conduct of business need to be aware of those areas of the laws that are likely to affect the marketing decisions know when to call in specialist legal advise when it is needed.
Host country sovereignty and security Improvement in living standards of host country citizens Host country political ideology Home country political environment
Financial Environment
Avoiding Risk. Three types of financial risks: • The Commercial Risk/Credit Risk • •
•
payment default by the buyer lack of reliable financial information.
Political Risk • • •
exchange payment delays no import license war, revolution, civil disturbances
Foreign Exchange Risk Creating Opportunities •
•
The international marketer can assist in making finance available to potential customers at competitive interest rate
International Institutions and the Department of Trade and Industry
IMF: International Monetary Fund The World Bank GATT: The General Agreement on Tariffs and Trade ICC: The International Chamber of Commerce UNCTAD: United Nation Conference on Trade and Development ISO: International Standards Organization ICC: International Chamber of Commerce
Presentation
Company Background Target Market Product Specifications Pricing Strategy Product Distribution Promotion STEEPLE Analysis
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