Environmental Factors Affecting Globalization

Topics: Marketing, International trade, Marketing plan Pages: 5 (1334 words) Published: January 12, 2011
Environmental Factors
Angela Mackey
MKT 421
January 4, 2011
Harry Caldwell

Environmental Factors
Marketing in the world today is affected by so many factors in the environment. The factors include political and legal issues, which are the most important. Some other environmental factors that have a major effect on the marketing world are social, cultural economics, technological, and competitive. These factors surround the basis of the decisions made within marketing. Most organizations in the world today start out to function as domestic organizations. Domestic organizations aim to sell within their own country. According to love to know (2006-2010) the four P's of marketing- product, price, place and promotion- are often easier for companies to determine within the domestic market (Business, para. 1). Operating in a global market means that the organization has begun to offer their goods and services worldwide to expand the market and increase sales. Globalization presents a huge opportunity for success for many organizations. Domestic and global marketing helps to promote the organizations success and continue the expansion of the business by redesigning marketing plan to fit certain aspects. Toyota Corporation is an organization affected by these environmental factors because of the choice to operate domestically and globally. Global Economic Interdependence

Marketing in the world today is highly dependent on global economic interdependence. Organizations that conduct domestic and global marketing are the automobile industries such as the Toyota Corporation. The Toyota Corporation uses its economic interdependence to help increase the sales revenue. The increase occurs because of the purchasing of vehicle parts and materials from other countries. The purchase from other countries is a key component that increases the countries market share. The effect of trade practices and agreements plays a large role in Toyota’s strategies and operations within the boundaries of the countries. Toyota has many factors they must consider different tariffs, taxes, trade barriers and agreements when pricing and selling products globally. The World Trade Organization is an organization that helps to ensure and promote world trade by reducing tariffs and their international trade barriers. Demographics and Physical Infrastructure

Demographics and physical infrastructure are very important factors that affect the marketing decisions of the organization. Demographics relate to race, gender, age, ethnicity or the income guidelines of a particular target market. Physical Infrastructure relates to the setting in which marketers are promoting the organization. These settings include roads, schools, bridges, offices buildings, and other various developments. The two factors are important because they help to determine what target market to advertise for. Once this is in place the marketing plan and marketing strategy can be put into place. Cultural Differences

Cultural differences are very important in every organization whether it functions domestically or globally. Cultural differences can be the barrier between the failure and the success of a business. Each country has its own folkways, norms, and taboos. When designing global marketing strategies, companies must understand how culture affects consumer reactions in each of its world markets (Armstrong & Kotler, 2009). The organization has to conduct several studies to understand the way the customers in other countries may be affected by the organizations promoting the sale of their product or service. This factor is very important in marketing globally because it is very easy to offend other countries unintentionally. In the end this leads to unwanted publicity and legal issues for the organization.

Social Responsibility and Ethics versus Legal Obligations
Social responsibility and ethics plays an important role in marketing decisions. When making and promoting a...

References: Armstrong, G. & Kotler, P. (2009). Marketing: An introduction (9th ed.). Upper Saddle River, NJ: Pearson Education.
Kotler, P. & Keller, K. L. (2009). Marketing management (13th ed.). Upper Saddle River, NJ:
LoveTo Know. (2006-2010). Lovetoknow. Retrieved from http://www.business. lovetoknow.com
Toyota. (2010). Toyota. Retrieved from http://www.toyota.com/about/our_values/
Toyota. (2010). Toyota. Retrieved from http://www.toyota.com/about/philanthrophy/guidelines/
Toyota. (1995-2011). Toyota. Retrieved from http://www.toyota-global.com/company/
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