A Key Challenge for International Marketers Is to Develop a Good Understanding of the International Business Environment. Identify the Key Environmental Actors That Are of Importance to the Success of International

Topics: Marketing, International trade, Advertising Pages: 5 (1395 words) Published: April 13, 2010
International Business Environment
There are numerous environmental factors that a company must consider when operating outside its domestic market which have a significant impact on international marketing decisions and are imperative for success. The key environmental factors are outlined below: Doole and Lowe (2004) stated the key problem faced by international marketers is dealing successfully with the multi-dimensionality and complexities of the international environment. By understanding the environment, companies can implement a successful marketing strategy enabling them to make relevant decisions regarding entry modes and the marketing mix. {draw:frame}

Adapted from Bennett and Blythe, 2002
The Political/Regulatory Environment
It’s a government’s duty to protect the home market from competition; therefore, international companies must understand that host country governments my limit marketing certain products and activities to protect domestic industry i.e. nationalism. According to Hollensen (2007, pg 198) “Managers must continually monitor the (host country) government, its policies and it stability to determine the potential change that could aversely affect operations of the company.” As these were necessary requirements for entry, adaptation was essential; yet some firms still insist on entering using a standardisation strategy and do not succeed. This will be highlighted later. The Economic Environment

Disparities in economic development will directly affect the entry mode and marketing mix of a company in the IBE. Interest, exchange and inflation rates will impact both the demand and supply of a product. For example, high inflation rates may result in a demand for cheaper imported goods, therefore a company hoping to enter an international market will benefit by offering lower prices via exporting. The Technological Environment

Technology can be seen as a major driving force in international marketing and the move towards a global market place. Technology can be viewed as information technology, i.e. the internet, or as an intellectual property. The technological environment facilitates a larger scope of operations in the IBE. This growth has allowed companies to enter the international environment using a standardised strategy. *The Social/Cultural* Environment

The social environment may be the key environment which will impact international marketing decisions and marketers must be aware of its impact to ensure correct execution of marketing plans. Marketing blunders due to social ignorance is very dangerous and the repercussions can be lasting. Many aspects make-up the social environment; four will be discussed in detail. {draw:frame}

Adapted from Doole and Lowe 2004
Aesthetics illustrates a country’s perceptions and acceptance for unfamiliar territory. It highlights the need for visual aids such as colour and brand names to be sympathetic in order to be accepted into a new culture. This can be demonstrated by the perception of the Cadbury’s brand by UK and Taiwanese consumers. In the UK, Cadbury was professed as being a classy, feminine brand, in Taiwan it was perceived as being low in quality and class. The observation of the colour purple was also tested; the UK perceived it as stylish and sophisticated, and Taiwan perceived it as old and sad. Therefore the emotions associated with the colour purple transferred to give a different meaning of the brand. This shows the need for international marketers to understand that when entering a new environment, it is necessary to adapt the marketing mix accordingly in order to ensure perception is fully understood. Therefore, for the Taiwanese market, Cadbury would be required to rebrand by introducing a new colour, which may affect Cadbury’s ability to present a consistent brand image. Also, the context of marketing material is heavily regulated due to religious beliefs; for instance, in Saudi Arabia,...

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Doole, I and Lowe, R. (2004). International Marketing Strategy: Analysis, Development and Implementation. Fourth Edition. London: Thomson
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Hill, C.W.L. (2007), International Business: Competing in the Global Marketplace: Sixth Edition. New York: McGraw-Hill Irwin
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Pickton, D and Broderick, A. (2005). Integrated Marketing Communications. Second Edition. Essex: Pearson Education Limited
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