INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:The Product

<< INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:Foreign exchange info

FOREIGN NATIONAL ENVIRONMENTS:Political systems in the world, Political risks in international markets >>

International Marketing MKT630

Lesson # 9

INTERNATIONAL MARKETING INFORMATION REQUIREMENTS

Firm Specific International Environment

The Competition:

A firm needs information about its competition in international markets on a continuous basis to make

appropriate decisions. Some key areas in which information is needed about competition are in the

following;

Relative market shares of competitors

New product moves of the competitors

Pricing & cost structure of the competing firms

Image & brand reputation of competitors in the markets / segments

Quality: Its attributes and positioning relative to competitors.

Competitors' strengths: favorite tactics and strategies.

The Product:

A firm also needs information regarding its product / lines to make product related decisions. Some of

the key aspects of a product related information requirements are given as follows;

Analysis of the users of product, including purchase behavior, usage processes, factors affecting

purchase and use decisions etc.

Who are the end-user industries and what are their behaviors?

Industrial & consumer buyers and influencers and their roles.

Characteristics of the buyers: Size, age, gender, segment growth rates etc.

Purchasing power and intentions of the buyers.

Customer response to new products, price, promotion distribution etc.

Switching behavior of the customers.

Role of credit in purchasing a product.

Future needs of the buyers / users.

Impact of cultural differences on purchase and use of products.

Marketing Mix:

Marketing mix related information is essentially needed by marketers to decide and implement

marketing strategies. Since international marketing often involves sending products and materials to a

distant markets, aspects of logistics also becomes more important. The key areas of marketing mix for

which information is needing by international marketers are given as follows;

Channels of distribution: their shape, functions, evolution & performance.

Relative pricing, elasticities, and tactics of competitors.

Advertising & promotion: choices available in international markets and their impacts on

customers.

Service quality perceptions in various international markets and relative positioning of competing

brands/products.

International and domestic logistics networks, their configuration and future change.

International Marketing MKT630

FIRM-Specific Historical Data:

While managers need information about their markets, suppliers, environments and external publics,

they also need to know about their own firms. A firm's history hold clues for its future. Historical

information can inform what and how a firm has been able to achieve certain things in past and that hold

clues as to what the firm can achieve in future. Historical firm data may also inform on trends in sales

and profits in various markets, which again hold clues for the future of the firm in these and other

markets.

Categories of information an international marketing manager may need regarding his or her own firm

are give as follows;

Sales trends by product and product line, sales force, and international market / customer.

Trends by country and region (sales, profits, technology diffusion etc.)

Contribution margins and profitability of products in various international markets.

Marketing mix used and marketing response functions across countries and regions.

International Marketing MKT630

Lesson # 10

FOREIGN NATIONAL ENVIRONMENTS

Political Environments

Foreign National Environment:

An international marketer needs information about foreign countries' environments that may affect the

business in any way, positively or negatively. Some of the key aspects of a foreign market environment

that may affect international marketer's business are give below;

Political context: national leaders, national goals of leaders and governments, ideologies of the

foreign political institutions and leaders, key institutions in forming and implementing

regulations.

Economic growth prospects, levels of economic affluence (GDP, GNP), level and extent of

industrialization, business cycle stage.

Per capita income levels, purchasing power of the population, disposable incomes.

End-user industry growth trends. Industrial demands are mostly derived demands and industrial

buyers by materials and machinery to fulfill the end user demands.

Government: political and business orientation, legislation, regulation, standards, barriers to

trade.

Political systems in the world:

There are different political systems today in various countries around the globe. The basic political

ideologies that are existing are given below;

Basic political ideologies

Democracy

· Freedom Of Opinion, Expression, Elected Representation With Limited Terms For Elected

Political offices, individual's rights, liberties & social freedom, independent & fair courts,

non-political bureaucracy etc.

Quasi democracy

· Partly free - (example is an appointed governor in HK but elected parliament)

Totalitarianism

· Decision making is restricted to one or a few individuals

Political risks in international markets:

A marketer's firm faces numerous political risks in international markets. Major political risks in

international markets are given below;

· Direct interference in a foreign company's business - expropriation, confiscation, nationalization

· Campaigns against foreign goods (from governments or people / publics)

International Marketing MKT630

Kidnappings, terrorist threats & other forms of violence targeted against foreign firms or foreigners.

Civil wars have the potential to disrupt businesses in many foreign countries

Change in policies, regulations too often and non-consistent affect businesses in any country

Change in governments may also result into changing national priorities.

Monetary & fiscal policies - inflation, currency devaluation, increased taxation, and currency

controls etc. Also affect businesses of international marketers.

· Government as business competitor when government becomes involved in a business in its own

country then it has access to large resources, may implement such regulations that my favor its

businesses and may become a formidable competitor.

· Multilateral investment guarantee agency (miga) - a subsidiary of the World Bank provides insurance

against some political risks. International marketers may use such multilateral agency guarantees to

protect itself from political risks in international markets

International Marketing MKT630

Lesson # 11

FOREIGN NATIONAL ENVIRONMENTS

Legal Environments

Differences in legal systems:

Businesses are affected by legal environments of countries in many ways. Legal environments are not

just based on different laws and regulations concerning businesses, these are also defined by the factors

like rule of law, access to legal systems by foreigners, litigations systems etc.

National legal systems vary on the following aspects;

The rule of law

Some country have strong rule of law in that laws are applied strictly, quickly and fairly,

while in others laws are not applied for various reasons, such as corruption, strong

nationalism, weak legal institutions etc.

The role of lawyers

A firm depends on lawyers to access courts to seek justice or to defend in case of any

litigation against. International business firms are affected by the role of lawyers in foreign

countries. In some countries there are few lawyers and it is difficult of very costly to engage a

good lawyer. In some countries lawyers may be corrupt or biased in favor of locals.

Access to legal system

Access to legal system also varies from country to country, especially for foreign entities. In

some countries foreigners can easily access courts to seek remedies while in other countries

there may be restrictions.

The burden of proof

In some countries the burden of proof, in case of any litigation, is on the defendant, while in

other countries the applicant / plaintiff has to first prove that there is a case for the court to

proceed against someone. It may become difficult for foreigners to get proofs in certain

situations.

The right to judicial review

Various countries have different legal provisions for appeals and review of lower court or

earlier judgments. These provisions may also vary for foreign entities.

And the laws

Laws relevant to businesses (including foreign firms) also vary from country to country.

Types of legal systems:

Business environments in foreign countries also vary with the types of legal systems. Various types of

legal systems are described in the following;

· Common law

Law based on cumulative wisdom of judges' decisions on individual cases over time. Relevant

judgments of upper courts have bearings on lower court decisions.

· Statutory law

Laws enacted by legislative actions, i.e., through parliamentary proceedings

Table of Contents: