Environmental Factors In International Marketing
International marketing like marketing in a home environment is greatly influenced by certain environmental factors like economic, political, legal, cultural etc. Such environmental factors are very important in considering the influence on the successful marketing operations. In deciding to sell abroad an organisation will need to learn a great many new things. Alternative marketing abroad involve no new marketing principles, the company will need to acquire maintain very good knowledge of the ever changing international marketing environment.
Kotler warns on the need to research the international market thus;
The company also has to know research specific foreign market. American companies that are effective marketers domestically have often forgotten their marketing. Principles when going abroad often resulting from ethnocentric point of view instead of the foreign consumers point of view.
Economic Environmental Factors
Marketing is an economic activity and is therefore affected by the economic environment in which it is conducted. International marketing has two fold economic environmental factors; (i) The Global economy and (ii) The individual economies of countries.
It is reasonable to speak of the world economy because the nations of the world do relate to each other economically. Many other elements of the international relations – (political, diplomatically, military and cultural) are intertwined with economic considerations. It is also critical for the business firm as business operations are made possible the economic relations.
The existence of internal economy is here examined to see how it aide and constraints international marketing. We shall being this examination by examining international trade, a major element in international economic relations.
Grading between groups has been going on for thousands of years. Much earlier trade was economically motivated, carried on through barter or commercial transactions. However, a large part of the exchange of goods historically occurred through military conquest. “To the victory belong the spoil”. Numerous examples can be cited from ancient history as well as modern. The predominant pattern of international trade today, however is the voluntary exchange of goods and services.
To understand international trade in today’s world it is useful to begin with the mercantilism era, which existed from 1500 to 1750. The development in this period laid the foundation for the modern practice of international trade. An important political development was rise of nations state and the national unity among the people in many European countries during this time. Groups formed relationships on a national basis as they do today. This marked a significant change from earlier relationship patterns, which were on a tribal , religious, imperial or feudal basis.
Mercantilism, placing the economic interests of the nation for most created large internal markets. A key socio economic development was the rise of the commercial or capitalist class. Previously, the nobility, the industrialists and traders assumed a large and increasingly respected role. Mercantilism can best be understood by looking at some of its major policies, nationalism, bullionism and favourable balance of trade.
Nationalism has the positive element that created a larger unity and loyalty to replace the fragmented rivalries of tribe and religion. To political leaders, nationalism implied that trade was for the national interest and thus should be conducted by the nation rather than by private companies or at the very least, there should be strong national control over it. A particular ideology common to all nations, it is the belief among individuals of one nation that they are different from and/or better than individuals of other nations.
This respectable form of nationalism is called patriotism. The excessive form is called chauvinism. Originally, a unifying force in the formation of nation states, nationalism had a good image. Today, it is considered a deviation force, hindering regional and international cooperation. When the residents of one country see themselves as “we” group and all other nations as they group there is an implicit feeling that “they” are somewhat of a threat to us.
The existence of nationalism has several implications for the international marketer. First, the marketing program. Its task is to sell products, not carry the flag. Second, the firm as a foreigner in all of its international markets, may be a victim of local nationalism or xenophobia. A possible strategy to avoid this might be to develop as national an image as possible on branding and promotional mix. Indeed one of the challenges facing the international marketer is finding how best to adopt to the demands of local nationalism without diminishing the international strength of the firm.