1. The International Marketing Environment
Global Marketing & Communications
Christine Sorensen

2. Learning Objectives
To consider the Marketing Environment on a global scale
To be aware of the legal differences between countries that affect international marketing
To consider the effects of protectionism on world trade
To be aware of different types of trade barriers
To understand how the political environment can assist or close foreign markets
To consider the strategic implications of regional market groups and international agreements

3. The International Marketing Environment
Social/cultural
Language
religion
aesthetics
values &attributes
social organisation
material culture
Legal
Local domestic laws
International law
Home domestic law
Political
Operational restrictions
Discriminatory restrictions
Physical actions
Technological
Satellite communications
ISDN WWW
Internet
The electronic superhighway
Economic
Developed economies
Emerging economies
Less developed
economies
Currency movements
Environmental
influences on international marketing

5. REGIONAL BREAKDOWN OF GLOBAL POPULATION
Other Asia
Africa
India
China
Latin America
Europe
North America
Source: United Nations
1995
2050

6. World’s megacities By 2010, 50% of people were living in urban areas
By 2015, the top 5 largest cities will be:
Tokyo-Japan million
Bombay- India million
Lagos- Nigeria million
Dhaka-Bangladesh million
Sao Paulo-Brazil million
Source: United Nations

7. Economic Environment World has varying levels of - Big impact on -
Economic conditions
Economic development
GNP per capita
Big impact on -
Market development
Pricing
Competition

8. World economies
Developed triad Economies (Japan, USA, Western Europe).
account for 80% of world trade
Increasing competition for top economic power rankings from China and S Korea
Emerging Economies
BRIC (Brasil, Russia, India, China ?)
MIKT (Mexico, Indonesia, South Korea and Turkey),
huge and growing consumer demand
government directed economic reforms
‘dual economy’
Less Developed Countries (LDCs)
low GDP, limited manufacturing base
infrastructure weaknesses
heavy reliance on one product/one trading partner

10. The Emerging Economies
Countries emerging from the ranks of LDC’s
Key growth markets - China, Mexico, Brazil, Chile, India, Hungary, Poland, Turkey, Czech Republic, South Africa, Russia.
Growth in consumer demand

11. Similarities in these countries
Economic reform
Lowering restrictions on foreign investment
Increasing privatisation
Dual economies
High inflation (but getting under control)
New opportunities for international marketing firms

12. Less developed countries(LDC’s)
Includes underdeveloped and developing countries
Main features
low GDP per capita
limited manufacturing activity
poor infrastructure
heavily reliant on one product e.g.
Colombia (coffee), Cuba (sugar) Mali (cotton)
Nigeria (oil), Jamaica (base metal ores)

13. Dual Economy – Coping with the economic disparity
The poor population of developing countries constitutes a huge market

14. Legal Environment Three dimensions:
3 dimensions in the legal environment:
local domestic law:
different in every country
international law:
issues include piracy, treaties, patents etc
domestic laws in the home country:
export controls, plus duty to abide by national laws in all activities

15. Legal factors can affect:
Contracts
Advertising
The product - packaging - safety
The target market
Trade marks and brand names
Patents and piracy
Green issues
Red tape

16. Source: Keegan and Green (2008: 455)
Legal factors influence marketing communication– an Example (Saudi Arabia)
No commercial television advertising was allowed prior to May 1986.
Non-censored films cannot be advertised
Women may appear only in those commercials that relate to family affairs, and their appearance must be in a decent manner that ensures feminine dignity
Women must wear a long suitable dress that fully covers her body except face and palms
Source: Keegan and Green (2008: 455)

17. Political environment
Consider the political regime and its attitude to business and level of risk
‘A risk due to a sudden or gradual change in the local political environment that is disadvantageous or counter productive to foreign firms and markets’

18. Political issues
Political parties
Nationalism
Political risk

19. Goals of protectionism
Protect local jobs
Protect infant industries
Encourage investment in home market
Encourage import substitution
Prevent dumping
Promote political objectives

20. Barriers to World Trade
850 ways of reducing imports have been identified - (Onkvisit & Shaw)
Many countries overtly protect their manufactured goods
There are also many covert barriers

21. Tariff and Non-Tariff Barriers to Trade
Specific country
Purpose
Time length
Import restraints
Tariff rates
Production, distribution and consumption
Tariffs
Market entry barriers
Government participation in trade
Customs and entry procedures
Product requirements
Quotas
Financial control
Other policies and requirements
Non-tariff barriers
Source: Onkvisit and Shaw (1988) Marketing Barriers in International Trade, Business Horizons, June

22. Tariff barriers Direct taxes and charges imposed on imports
Most common forms:-
Specific:- charges imposed on particular products either by weight or volume
Ad valorem:- straight % of the import price
Discriminatory: tariff charged against goods from a specific country

23. Non-Tariff Barriers Increasing….
Increased government participation (subsidies)
Customs entry procedures (red tape)
Quotas
Product requirements
Financial control exchange
Market limitation

24. 3 Areas Of Initiative To Encourage Free Trade:
Need for international capital – IBRD
(International Bank for Reconstruction & Development)
International liquidity: IMF
(International Monetary Fund)
Liberalisation of trade & tariffs :GATT/WTO
(World Trade Organisation)

25. Technological Environment
Shrinking communications
The Internet and WWW
The Dual technology/cultural paradox

26. The International Marketing Environment
Social/cultural
Language
religion
aesthetics
values &attributes
social organisation
material culture
Legal
Local domestic laws
International law
Home domestic law
Political
Operational restrictions
Discriminatory restrictions
Physical actions
Technological
Satellite communications
ISDN WWW
Internet
The electronic superhighway
Economic
Developed economies
Emerging economies
Less developed
economies
Currency movements
Environmental
influences on international marketing

27. References
Czinkota and Ronkainen (2002), International Marketing, Thomson South-Western.
De Mooij (2003), Global Marketing and Advertising, Understanding Global Paradoxes, Sage.
Keegan and Green (2008), Global Marketing, Prentice Hall.
Kotler and Armstrong (2006), Principles of Marketing, Prentice Hall.