Australian Marketing Environment Assessment - Research Paper Example

? International marketing environment assessment Executive Summary This report involves an in-depth analysis of the international marketing environment in Australia. In order to give this study a robust shape, the international marketing environment of Australia has been assessed from various aspects that influence international marketing there. The factors are economic, social, cultural, financial, technological, legal and political forces. Having done a thorough study of these factors, it can be said that these factors facilitate international trade, business and marketing significantly. The international marketing environment in Australia is very flexible which encourages foreign companies to formulate effective marketing strategies and implement the same in the country. Facilitating international business and marketing has been the underlying strategy of Australia that is directed towards strengthening the country’s economy and the country has been able to achieve that this far. The study of these factors has also enabled the researcher to determine the major challenges for international marketers as well as major prospects for international marketers in the country. The study concludes that although the Australian marketing environment is associated with certain drawbacks, the benefits and opportunities that it provides to the global marketers outweighs all drawbacks and constraints and makes marketing in Australia a prospective decision. Table of Contents 1. Introduction 4 2.International marketing environment in Australia 5 2.1.Political forces 5 2.2.Economic forces 6 2.3.Financial forces 7 2.4.Social forces 8 2.5.Cultural forces 8 2.6.Technological forces 9 2.7. Legal forces 9 3. Current challenges for international marketers 10 4. Opportunities for international marketers 10 5. Conclusion 11 Reference List 12 1. Introduction International direct marketing can be defined as the use of consumer-direct distribution channels in order to reach and deliver products and services to customers without the help of marketing middlemen (Kotler and Keller, 2006). This approach provides marketers with a more direct response from consumers. Alongside that, marketers who practice direct marketing can target niche markets efficiently as well as sell a product without the time taking process of getting it into traditional channels (Wilkinson, McAlister and Widmier, 2007). International marketing is the process of marketing on a global scale by integrating or taking commercial advantage of operational differences that can be identified globally as well as the similarities and opportunities present all over the world in order to fulfil objectives as far as expanding internationally is concerned (Baack, Harris and Baack, 2013). The authors have explained that international marketing involves the activity of franchising, exporting and merging or a complete direct entry of a marketing organization into a foreign country. Following this, a company needs to develop a marketing mix specific to the country of expansion as a part of its international marketing strategy (Buckley, 2002). It can be as straightforward as implementing an existing marketing strategy, product mix and tools for export and alongside that, the company can formulate highly complex relationship strategy that includes localization, pricing, regional product offerings, production and distribution. Globalization and international marketing caters to meet the needs and requirements of the targeted foreign country whereby a company can export its value, thereby achieving optimization and efficiency in economies of scale and scope as well as facilitating inter-firm and firm learning (Felzensztein et al., 2013). The abovementioned theories explain the importance of international marketing as far as a company’s growth and success strategy is concerned. For a company planning to expand internationally, a detailed judgement of the market prospects along with a thorough evaluation of the PESTEL environment of the target country is pivotal. This is primarily because these assessments are necessary in order to validate marketing decisions as far as implementing the concept of sustainable business development is concerned. The relevance of such assessments lies in the fact that it helps the management to take account of the changes in the marketing environment into their formulated strategies. In addition to that, a complex research of marketing environment helps a company to reduce the negative impacts of marketing environmental changes and enables them to use these changes as a means for achieving competitive advantage against their peers in the foreign market (Zvirblis, Krutkiene and Vitkunas, 2011). 2. International marketing environment in Australia Australia is ranked as the 15th richest country in the world in terms of per capita income. It is also one of the oldest functioning democracies in the world. Being the 9th biggest economy in the world, its economy is considered very open and innovative. The last few decades have witnessed an unprecedented growth in terms of productivity gains accompanied by low inflation and interest rates. The foreign and trade policies in Australia promote its security and long term prosperity in a global context. The country’s economy is associated with high susceptibility to the impact of climate change. Being a stable, safe and prosperous country, Australia seems to be an increasingly popular hub for international business and business operations (Market line, 2012). 2.1. Political forces Australia is a country that follows liberal-capitalistic democracy. The state has a significant presence in the economy that keeps interfering substantially by playing different roles. As an example, the parliament might formulate policies such as to set up importation taxes which are aimed to protect the national economy. Alongside that, it might pass environmental protection laws which are directed towards protecting the country’s natural heritage. This affects the international business in some way or the other because when tax rates keep fluctuating, it has a severe impact on the economy, thereby affecting the exchange rates as well as the currency rate (Market line, 2012). Moreover, investors are constantly monitoring the situation in the Australian market as the rising debt might force the government to intervene in the market which might affect the country’s economy (Mckenna, 2013). 2.2. Economic forces Australia is a major international financial hub and an imperative component in the global financial system. The year 2006 saw the merging of the Australian Stock exchange and the Sydney Futures exchange to form the 8th largest listed exchange in the world. The country is known to have one of the highest proportions of shareholders in the world. Share market plays a crucial role in many aspects of international business. The fact that there are significant numbers of people who invest in shares in Australia, international business receives huge promotions. Australia’s economic prosperity is associated with the amount of trade conducted in the country. The factors which facilitate successful trade are stable institutions and strong infrastructure. Besides that, the country has skilled workforce, rich resources and a good agricultural base, which are essential factors contributing towards the success of an international business. The goods and services tax (GST) is charged at 10 percent and the corporate tax at 30 percent (Data monitor, 2009). The Australian economy is very strong in the service sector which contributed about 31 percent of GDP generated by the country in the mid-nineties. A quarter of the country’s employment is provided by the goods-producing industries, whereas the rest is provided by the service industries. Another major contributor to the country’s economic prosperity is the business services and property industry. 2.3. Financial forces The Australian economy has been able to tackle the recent financial crisis very efficiently and come out in a better shape than many other countries, thereby keeping the financial system very stable. Australia’s financial sector had experienced minor distress as compared to those of other countries owing to the financial regulations that prevail in the country. The banking sector was in a comparatively good condition throughout the recent period. The banks remained by and large profitable. However, they did experience deterioration in the loan quality. Australia’s strong fiscal position had enabled the government to take counter-cyclical measures to support growth whilst being affected by the crisis. The monetary policy was formulated in such a way that it cut rates aggressively at the pinnacle of the crisis (BIS, 2011). The exchange rate for Australian dollar has appreciated over the last 10 years in spite of the rising foreign debt and current account deficits. This is primarily because of the resource boom and high commodity prices. Other factors that can be attributed to this appreciation are Australia’s increased financial inflows and high interest rates (Ravimohan, 2010).   (Source: Mckenna, 2013) 2.4. Social forces Australia is officially dedicated to racial and ethnic inclusiveness. As far as the nation’s history is concerned, the country has always emphasized on incorporating diverse cultural groups into the prevailing British Australian traditions. The country represents a collectivism of assorted people belonging to a relatively young society. However, the divisions that can be witnessed in the country’s society are in terms of public life which arises from social differences in social class, ethnicity, race and gender. Although the impact of environmental disparity is highly noticeable in the customary cultures of native Australians, it has not been able to influence the immigrant cultures. Variations in climate can be attributed to the differences that are observed in the lifestyle of Australians. English has been the dominant language, since colonization, with the majority of the population being multi-lingual (Market line, 2012). 2.5. Cultural forces Cosmopolitan is the word that best describes the culture that prevails in Australia. The factor that had a significant contribution towards shaping the national culture of the country is the early small female population relative to that of men, which had laid the foundations for a prevalent ideology of mate ship. The contribution of New Zealand and Australian troops in the First World War has been characterized as the event that led to the rebirth of the nation. Typical Australian values are characterized by: Democracy and the rule of law. Respect for the individual and for all. Equality of men, women and of opportunity. Freedom of religion, secular government, speech and of association. (Qrmfn, 2008). 2.6. Technological forces The implementation of e-commerce in the Australian economy has reduced costs of production and improved the quality of the products manufactured by different industries. This is one of the highlights of the country’s international business. Australia is one of the world’s most linked countries generating significant revenues from B2B e-commerce. International businesses who invest in new technology and whose focus lies on IT and e-commerce are mostly likely to succeed in the global market. Information and communications technology plays a crucial role in strengthening Australia’s economy and ensuring consistent growth and innovation. Australia’s most high budgeted businesses are based on these technologies. Many business publications and reports have stated that with such a prudent technology background, Australia has been able to strengthen its international business sector. Implementation of technologies has boosted the international competitiveness of Australian businesses (Shrestha, 2013). 2.7. Legal forces Australia is a country which has always been associated with a robust legal framework. The legal framework gives priority to intelligence cooperation, other legal frameworks and law enforcement agencies, countering terrorist financing, transport security and preventing terrorists’ access to nuclear materials. The country has a practical and sound framework of institutions and financial regulations that offers a friendly environment as far as conducting business globally or regionally is concerned. This provides foreign investors an assurance that they can rely on the legal framework for making huge investments in the country’s economy. Australia’s business law is very flexible for investors and businessmen from other countries. The governance framework associated with the business related regulations and insolvency management is very robust (Market line, 2012). 3. Current challenges for international marketers Australia’s economy has been associated with a global instability in the recent times. Although the immediate crises have passed, underlying problems still prevail. High level of public indebtedness has reduced the capacity of government to intervene in the onset of further crisis. In addition to that, the challenge of nuclear proliferation has also proved detrimental to the country’s economy. Despite the recent positive nuclear weapons reduction agreements, the problem hasn't gone away. This is a global problem and that has affected the country’s international business significantly. Cyber revolution, alongside providing benefits to the country’s economy, has also been a source of problems such as, the creation of new weapons, which are used for carrying out cyber attacks that threatens the security of corporations and the country as a whole. The continuing global democratic deficit is also another problem which affects international marketing in Australia (Market line, 2012). 4. Opportunities for international marketers The political system in Australia is very strong and flexible that facilitates internal trade and business. The country is known to have a strong democratic setup that is uniform in all levels. They have always maintained a good relationship with foreign countries which is also a factor that will inspire international marketers belonging from those countries into investing in Australia. Australia shares common strategic interests and political values with other friendly countries, thereby promoting effective internal business. Australia’s service sector contributes significantly towards the welfare of its economy and thus, the industries belonging to this sector will definitely influence foreign investors to expand their line of business into the country. The telecommunications sector and the IT sector in Australia have witnessed a rapid growth over the last decade. Therefore, this sector will also lure international marketers into expanding in the country as telecommunication and IT are one of the major factors that plays a crucial role in the marketing campaigns designed by companies (Market line, 2012). 5. Conclusion Having done an international marketing environment assessment of Australia, by considering the economic, political, cultural, social, technological, legal and financial forces that contribute to the country’s economy, it can be said that the country offers a flexible environment for international marketers. This in turn facilitates effective marketing of foreign company products and services. The forces described above are in complete alignment with the country’s strategy for enhancing the prospects of global marketing that would influence foreign country marketers into marketing their products in the country and henceforth, will strengthen the country’s economy. Although the international marketing environment in Australia is associated with certain negativities, the benefits provided by the market in Australia still outweigh the negativities. Thus, the international marketing environment is very prospective for international marketers. Reference List Baack, D. W., Harris, E. G. and Baack, D., 2013. International Marketing. London: Sage publications. BIS., 2011. Malcolm Edey: General economic and financial environment in Australia. [pdf] BIS. Available at: [Accessed 25 November 2013]. Buckley, P., 2002. International business versus international marketing. International Marketing Review, 19(1), pp. 16-20. Data monitor., 2009. Australia: In-depth PESTLE Insights. Country Analysis Report, pp. 1-91. Felzensztein, C., Stringer, C., Benson-Rea, M. and Freeman, S., 2013. International marketing strategies in industrial clusters: Insights from the Southern Hemisphere. Journal of Business Research, pp. 1-10. Kotler, P. and Keller, K., 2006. Marketing Management. 12th edition. New Jersey: Prentice-Hall. Market line., 2012. Pestle Analysis. Country Analysis Report, pp. 13-31. Mckenna, G., 2013. CHART OF THE DAY: Why Australia's Debt Ceiling Debate Is Stupid. [online] Available at: [Accessed 26 November 2013]. Qrmfn., 2008. Australian Culture. [online] Available at: ure/DOC_QRMFN_OKIT_Australian_Culture_15Dec2008.pdf> [Accessed 25 November 2013]. Ravimohan, A., 2010. Appreciation of Australia’s real exchange rate: Causes and effects. [pdf] RBA. Available at: [Accessed 26 November 2013]. Shrestha, K. S., 2013. Pest Analysis for Australia. [online] Available at: [Accessed 25 November 2013]. Wilkinson, T. J., McAlister, A. and Widmier, S., 2007. Reaching the international consumer-An assessment of the international direct marketing environment. Direct Marketing: An International Journal, 1(1), pp. 17-37. Zvirblis, A., Krutkiene, I. and Vitkunas, R., 2011. Research and assessment of the marketing environment of new construction companies. [pdf] VTA Available at: [Accessed 25 November 2013]. Read More