International trade, which is the exchange of goods and services between countries, has a significant impact on the global economy. It is influenced by global events and affects prices, supply, and demand. This practice has been present since ancient times and can be traced back to the Roman Empire. After World War II, international trade was greatly affected by the division between Eastern and Western nations. The United States took a leading role in establishing a charter for the International Trade Organization (ITO), along with other countries, recognizing the potential for worldwide prosperity through international trade.
The main goal of the International Trade Organization (ITO) was to address diverse global issues such as commercial policies, domestic business practices, commodity agreements, economic development, and international business. It effectively implemented a trade agreement and created a constitution for the United Nations to oversee this new charter. Furthermore, it contributed to the establishment of the International Monetary Fund (IMF) and World Bank. Nonetheless, due to concerns regarding its bureaucratic power and size, the ITO ultimately did not endure.
The World Trade Organization (WTO) was established in 1995 as the successor to the General Agreement on Tariffs and Trades (GATT), which was created alongside the International Trade Organization (ITO). The WTO aims to support producers, exporters, and importers in effectively conducting their business operations (“World trade organization,” 2012).
The influence of government policies and regulations on international marketing is substantial, as companies unaware of international laws and restrictions may experience negative consequences such as trading tariffs, regulations, embargoes, and sanctions. These factors encompass the import/export of goods, as well as the manufacturing and distribution of products across borders. This article evaluates how economic and cultural factors in the international marketing environment impact marketing operations.
Economic structure of a country includes the average income of its population, which affects a consumer’s purchasing power and ability to buy, a major concern for an international marketer. The number of people in a particular market can also determine demand for a particular products or brand. Also the average age of consumers in the present and projected in the future can determine future needs of a particular market with regards to a specific product. World markets can be divided into four tiers of consumers, based on measures of income and range from low-income to mostly high-income families.
When marketing products, it is important for marketers to assess the consumption patterns of their target market. This assessment involves considering income and economic data to customize marketing strategies and distribution channels. Additionally, the country’s infrastructure plays a critical role in determining whether business operations are feasible. Factors such as transportation, energy, and communications must be evaluated to determine profitability. Furthermore, the economy has an impact on social development, which in turn affects demand for particular products and services.
In Zimbabwe, a country that is considered one of the most impoverished in the world, the majority of people do not have access to the internet. This creates challenges for companies that depend on online marketing to connect with their intended audience. The passage defines Culture as an all-encompassing collection of acquired behaviors that distinguish individuals within a particular society. Therefore, it is reasonable to argue that an individual’s culture is shaped by their environment, customs, traditions, and geographical location since these elements constitute the basis of culture.
The key elements of culture include language, religion, values and attitudes, manners and customs, material elements, aesthetics, education, and social institutions (Czinkita & Ronkainen, 2010, pp. 56). These elements significantly influence international marketers as they help identify suitable countries for business partnerships, predict product acceptance or rejection, guide marketing strategies and campaign development, and address language barriers.
Language and culture play a crucial role in international marketing, exerting a significant influence. It is important to acknowledge that seemingly innocuous words in one country might be interpreted as offensive in another due to linguistic homonyms and contextual variations. Moreover, non-verbal signals employed in advertising can offend specific groups while remaining neutral to others. Religion also holds importance in determining the appropriate timing of advertisements, the portrayal of women, product selection for promotion, and cultural norms surrounding clothing and behavior. Hence, it is imperative to take these factors into account for achieving success in cross-cultural marketing.
Marketers must be aware of the political and financial risks associated with international marketing. They should also take into account the varying political landscapes in different regions of the target country. Failing to recognize the political implications of global business can lead to failure and severe penalties, which may even result in company closure.
Finding countries with a secure and friendly political atmosphere is difficult for marketers. Political Risk, as defined in the text, refers to potential losses when investing in a country due to changes in its political framework or policies. These changes include tax regulations, tariffs, asset expropriation, and limitations on profit repatriation (Czinkita & Ronkainen, 2010, pp. 134).
Political risk is a crucial concern in the business world as it includes potential conflicts or political shifts that might pose a threat to a company’s assets or its employees’ safety. Being well-versed in the political environment, encompassing international terrorism, ethical dilemmas, government officials’ bribery and corruption, as well as corporate governance, is essential for marketers who aim to succeed and reduce risks. This requires understanding the strategic marketing planning process, strategies for entering foreign markets, and considerations for expanding into new markets.
The global strategic planning process is divided into four stages. First, there is the assessment and adjustment of the core strategy. This involves understanding the needs and wants of the targeted end-users and ensuring that the planning is done on a global scale to avoid inconsistent performance in the worldwide market. Additionally, there is market analysis to evaluate product demand and performance, as well as internal organizational analysis to determine the necessary resources to meet these demands.
During the formulation of the global strategy, the marketing manager considers market competitors and target countries. In this stage, there are three strategic options to choose from: focus, cost leadership, and differentiation. Within the focus strategy, the marketer decides between a low-cost or differentiation approach. Meanwhile, in a cost-leadership strategy, the marketer aims to offer a competitor’s product at a lower price.
In conclusion, a differentiation strategy emphasizes the importance of distinguishing key qualities and uniqueness from competitors. The development of a global marketing program involves making decisions in four main areas: the degree of standardization in the product offering, the marketing program, the location and extent of value-adding activities, and the competitive moves to be made. These four areas are crucial in determining the product offering and marketing approach in developing a marketing strategy.
During the implementation stage, all the previous steps of analyzing, developing, researching, and planning come together. This final step is crucial and can be problematic if sufficient research and strategic planning were not carried out. This is when a company’s organizational structure, culture, and globalization are put to the test. Without proper planning, many companies fail during this stage.
References
Czinkita, M. , and Ronkainen, I. (2010). International marketing. Cengage Learning. World trade organization. (2012, September 1). Retrieved from http://www.wto.org/
