International marketing Environment

E. Tariffs

Tariffs have long been used to balance trade between countries and to protect national companies from losing business to foreign competitors. This can be a big factor when it comes to international trade and marketing your company’s products or services for sale. An example of this is China’s 105.4% tariff on chicken that is shipped from the USA; it is easy to see how a high tariff like this can push a country’s citizens toward buying domestically raised chicken.

F. Currency risks

There are always risks when doing business in the currency of a foreign country that you are marketing your product or services to. If you have your money tied up in a foreign currency and economic events fall just right, your company could stand to lose millions.

G. Other Political Risks and Restrictions

  • Investment restrictions:Many countries have strict requirements on who can own businesses and do other business-related investments in their country. Your marketing department needs to be aware of these things. For instance in Malaysia, if you are an agricultural business and you want to buy land to produce fruits and vegetables to sell there, any land purchase over $163,000 is subject to approval by the government and may come with other restrictions too.
  • Operational restrictions:Just how much operational control you will have over your overseas business remains to be seen, and that is a concern for some. Because of some of the restrictions that have been discussed and other requirements for doing business in a foreign country, chances are your business will need an international management team. This will affect the operational control of your business and has to be factored into any marketing decisions that your company makes.
  • Discriminatory restrictions:Discriminatory practices in a foreign country may inhibit or prohibit marketing your goods and services to that country too. The USA has imposed import quotas on Japan in protest at non-tariff barriers which they view as being imposed unfairly on US exporters. They have also imposed bans on imports from Libya and Iran in the past. Such barriers tend to be such things as special taxes and tariffs, compulsory subcontracting, or loss of financial freedom.

5. Technological environment

Technology is a major driving force both in international marketing and in the move towards a more global marketplace. The impact of technological advances can be seen in all aspects of the marketing process. The ability to gather data on markets, management control capabilities and the practicalities of carrying out the business function internationally have been revolutionized in recent years with the advances in electronic communications. Satellite communications, the Internet and the World Wide Web, client–server technologies, ISDN and cable as well as email, faxes and advanced telephone networks have all led to dramatic shrinkage in worldwide communications. Shrinking communications means, increasingly, that in the international marketplace information is power.

The technological changes result in changes in consumption pattern and marketing systems. A new technology may improve our lives in one area while creating environmental and social problem in another area. The marketers should monitor the following trends in technology: the pace of change, the opportunities for innovation, varying research and development budgets, and increased regulation. He should watch the trends in technology and adopt the latest technology so as to stay alive in the field.

For more notes on International Business Management click on the link below :

International Business Management

International marketing Environment

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