Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–1 Chapter 16 Analysis of the International Marketing Environment

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–2 What is international marketing? Various definitions exist—the simplest definition is: Taking the marketing mix to one or more foreign countries. International marketing is the process of planning and conducting transactions across national borders to create exchanges that satisfy the objectives of individuals and organisations.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–3 International marketing key points International marketing is a planned activity. Transactions conducted across international borders. Involves mutually satisfying exchanges. Each activity has a predetermined objective. Conducted between organisation's and/or people.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–4 Rationale for going international Different organisations have different reasons for expanding their marketing operations into overseas markets. Some of the reasons include: Organisation’s experience. Demand for product. Excess capacity. Many others can be found in the text: Ch 16, page 7.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–5 Differences between domestic and international markets Insert Fig 16.1 page 9 (Grigoriou, N)

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–6 International environmental analysis Political and legal environment. Cultural environment. Financial environment. Economic environment. Competitive environment. Trade barriers.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–7 The legal environment Marketers will be concerned with: Contracts for supply and delivery of goods/services. Registrations and enforcement of trademarks, brand names and labelling. Patents. Marketing communications. Pricing. Product safety, acceptability and environmental issues.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–8 Legal considerations and the marketing mix Product – Performance, safety, packaging and warranty. Price – Regulated by laws similar to the Trade Practices Act Placement – Relates to contractual agreements between parties. Promotion – Censorship in the media.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–9 Legal considerations and the marketing mix Common law – Based on tradition and common practice and relies on precedent. Code law (civil law) – Based on a comprehensive set of written rules divided into commercial, civil and criminal (sub-categories). Islamic law – Rules by which the Muslim world is governed, forming a relationship between ‘Man’ and ‘God’.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–10 The political environment An assessment of a nation’s political environment should include and analysis of: Type of government – Parliamentary, absolutist, other (between extremes of democracy and dictatorship). Political interference – Domestication, expropriation or confiscation.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–11 The political environment Government regulations – The boundaries within which international marketers operate overseas, which are subject to change. Managing the overseas political environment: – Risk avoidance and retention. – Political risk insurance. – Diversification or risk spreading.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–12 The cultural environment Considerations include: Language – Verbal, body and written. Religion – Value systems and consumers’ behaviour. Education – Formal education, social skills and communication skills.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–13 The cultural environment Aesthetics – The shape, form, size, number and colour of a product are its aesthetics. Context – Low-context cultures (explicit communication style). – High-context cultures (implicit communication style). Business customs – Knowledge of a nations customs (e.g. does one kiss, bow or shake hands?).

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–14 Financial environment Currency exchange controls – Limits on legal uses of a currency and transactions. Convertibility of currency – Currency that is freely convertible. Exchange rates – The rate at which one currency can be converted into another. Interest rates – Determine the cost of borrowing money and income from money invested in a foreign country.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–15 The economic environment A nation’s economy is a strong indication of not just the wealth of that nation but also the wealth of its citizens (a very important point for international marketers). Measurement of economic performance: Unemployment. Gross national product (GNP). Living standards. Population. Infrastructure. Resources.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–16 The economic environment Types of economic systems – Market allocation. – Command allocation. – Mixed allocation. Types of economic structures – Agricultural economies. – Industrial economies. – Service economies.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–17 The competitive environment Competition in an overseas market should be looked at from two perspectives, macro and micro. Three types of competitive structures: 1Monopoly. 2Oligopoly. 3Monopolistic. Types of competition – Brand, industry, form and generic competition.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–18 International trade barriers Why governments impose trade barriers: Protection of local industries. Preservation of foreign currencies. Revenue-raising to fund domestic infrastructure. Advancement of political ideologies. Reduction of unemployment. Protection of infant industries.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing by Nicholas Grigoriou Slides prepared by: Joe Rosagrata 16–19 Types of international barriers Tariff barriers (two broad types) 1Protective tariff. 2Revenue tariff. Product level trade barriers – Specific tariff. – Ad valorem tariff. – Composite tariff. Non-tariff barriers are government measures other than tariffs that restrict imports.