Environmental Forces in Global Marketing in Australia - Term Paper Example

ENVIRONMENTAL FORCES IN GLOBAL MARKETING IN AUSTRALIA Contents Executive summary 2 Introduction 2 Assessment of global marketing environment in Australia 3 Economic factors 4 Financial factors 5 Political and legal factors 5 Cultural factors 6 Challenges affecting global marketers in Australia 6 Market needs and their satisfaction 6 Marketing ethics 6 Economic and financial constraints 7 Opportunities to global marketers 7 Diversification 7 Conclusion 9 Executive summary The global economy is becoming increasingly integrated and liberalized due to the effects of globalisation. Global markets have become more common as business organisations seek to enlarge their market shares by tapping into the international markets. Australia being a developed country has played a significant part of this global phenomenon and is a key player in how it has taken shape. Marketing in Australia has undergone transformation over the last few years to what it is today. Being a business and trade hub, the country has had its fair share of challenges and forces that influence its marketing endeavours both locally and globally. From a global perspective, the general environment in the country has played a huge role in determining how international marketers in the country carry out their practice. In all environmental factors, there are key aspects that effect international marketing in Australia. The key factors in this aspect lay in economic, environmental, financial, cultural, political and legal practices. Each of these factors has elements that play out differently in determining the overall effect. Australia is not unique to the global market. A majority of forces shaping the current global marketing status is also being felt in other countries. This is because countries have become more interdependent and hence and the action of one country affects its counterparts. Introduction The global economy and market is becoming increasingly competitive as players seek to widen their market shares beyond their borders. As a result international or global marketing has become a necessary phenomenon not only in Australia but the world over as marketers seek to appeal to a larger market; there are key aspects that come into play, hence determining the framework that global marketing follows (Mühlbacher, Leihs, Dahringer, 2006, p. 4). Marketing in Australia takes several forms that are influenced by the global market. Being a huge economy, it is a lucrative hub for business and international companies seeking to invest in the country. The Australian economy also has substantial global and international ventures in other countries that make the country to be part and parcel of international marketing. Australia is also an importer and exporter of essential commodities that are part of the economy and satisfy demand and supply bath locally and internationally. In this view, the country has to engage marketers consistently and on a regular basis in order to compete with other world economies for markets. Apart from the business attractions that make Australia a lucrative business region, Australia also has other attractions in terms of tourism and culture. It has a unique blend of natural resources and cultures that attract people from all over the world. Further, the unique landscapes, flora and fauna are often used as marketing points for the industry in the country. All these aspects play a role in determining the way global marketing is affected by Australian policies as a country. In this report, environmental forces affecting global marketing practices in Australia will be discussed. From this, critical challenges affecting global marketing in Australia will be deduced and evaluated as well. Opportunities that exist for global marketers will also be discussed in the report. Assessment of global marketing environment in Australia Australia is a strong contender in the global market and economy as well. There are several factors that affect and shape the way marketers in Australia contribute to global marketing practices. Some of these forces are within the Australian economy and revolve around economic, financial, cultural, political, and legal factors. Economic factors The Australian economy has some of the best orientations in the world in terms of volumes, magnitude and size. The agricultural, mining and tourism sectors are some of the key drivers in the economy. Apart from meeting local demand, the country also exports some commodities like textiles, minerals, agricultural products. Australia exports goods worth around AUD 250 billion per year which accounts for approximately 25% of the country’s GDP. Exports have continued to grow in the country over the last decade though a slowdown has been experienced in the last five years. The decline has been associated with a highly competitive global market coupled with hard global economic times (Departmnent of Primary Industries, 2013). With such a significant percentage in earnings for the country, there is need to meet global marketing challenges and opportunities in this perspective. This calls for improved management skills and enhancement of quality and competiveness to appeal to the international markets. Marketers have realised this economic force and industries in the country are employing strategies to capture opportunities when they emerge in a highly sophisticated and dynamic international platform. Conquering international markets is imperative of application of marketing decisions and strategies to enter new markets and improve on the existing ones (Tang, 2011, p. 3). The export business is highly dependent on international marketing and the strategies that marketers employ. Their success is measurable through the performance of exports that the country chives every year. Hard economic times have led to organisations reducing their marketing budgets as production prices go up internationally. Innovativeness and creativity to adopt strategies that are less cost intensive and have been cited as the new trend in realising marketing objectives for Australian international marketers. Financial factors The global financial crisis of 2007 and 2008 was a major set back for the Australian economy. This saw the Australian dollar weaken and cost of production go up. As a result exports became expensive as prices of commodity demand in the international market fell. Credit lending institutions were also sceptical and strict in extending credit to facilitate operations (Australian Trade Commission, 2013). As a result, organisations were forced to cut on marketing costs and other overheads. This had the overall effect of affecting marketers in their strategies due to reduced spending power. Marketing is an expensive but necessary practice. When financial support is unforthcoming, the result is reduced sales and profitability. The status of the economy and government strategies affects the financial portfolios of major organisations. This in turn affects the global marketing practices that organisations are willing to finance. Political and legal factors Political and legal factors in Australia revolve around laws and regulations set for the practice of international marketing. Marketing in general is guided by ethics and regulations that are set by authorities in Australia. The Australian Trades practices act has regulations and bodies that ensure international marketers follow set guidelines. For instance, global marketers are expected to practice fair trading and consumer protection even internationally. This is mainly because products from Australia are associated with the reputation of a county as a whole and merely the responsible organisation (Singh, Carasco, Svensson, Wood, Callaghan, 2005, p. 91). In light of this, Australian global marketers are expected to act under Australian laws and regulations set by international bodies such as the European Union Legislation. Cultural factors In this context, organisational culture of firms in Australia determines the way global marketers in the country carry out their strategies. Differ organisations have different cultures which also determine the way these organisations are run. The decision to indulge in international marketing and the strategies to adopt is with leaders and the organisational culture that influences such decisions. Therefore an organisation that has a culture of international marketing strategies will influence individual marketers as they have to follow norms and practices unique to that organisation (De Mooij, 2009, p. 7). Challenges affecting global marketers in Australia The challenges facing global marketers in Australia are not unique to the country alone. They are also faced by other marketers all over the world. The current situation in the global market is that it is technology driven and the digital platform has continued to evolve at fast rate. Market needs and their satisfaction No one is in a better position to know the situation of the consumer than a marketer. In this view, marketers are constantly facing the challenge of iterations and fast action to make sure that diverse needs of consumers in the global market are met according to their expectations. As such market research and development has become more common as players in the market seek to understand the consumer better in on a global perspective (Gillian, Weerawardena, Liesch, 2012, p. 543). Marketing ethics As competition in the global marketing platform intensifies, marketers are finding it more challenging to keep up with ethics and laws that govern marketing. For instance, there have been several court tassels revolving around marketing strategies that have gone against set laws and ethics. International marketers also have to be aware. Economic and financial constraints In addition, the global financial crisis that the world is recovering from offered significant challenges to Australia in the global marketing platform. Exporters in Australia have seen the demand fall as a result of financial and economic constraints globally. This has been facilitated by the difficulty of obtaining credit to facilitate market operations in terms of production and product promotion (Morrish, Lee, 2012, p. 2). The financial situation has not only affected Australia but a majority of counties in the world, though there is a need to expand the current international markets. Marketer are often faced with the challenge of unfavourable exchange rates, high overhead costs of production, and inefficiencies that inconvenience marketing strategies. Opportunities to global marketers Diversification The global financial crisis led to a decrease in the value of the Australian dollar. This has increased the opportunities for international marketers to sell their products overseas at low prices and compete with emerging economies that have low production costs like China and India. Beyond the crisis, marketing has been offered a lifeline and a chance to showcase Australian products at competitive prices to the world. The global downturn can be managed using appropriate business strategies and risk management practices that will facilitate capturing opportunities (Gillian, Weerawardena, Liesch, 2012, 555). As competition intensifies and economic times harden, loyalty is paramount to marketing. Appealing to loyal markets offers an opportunity to showcase new products and meet specific requirements for overseas markets. All this points to diversification of current marketing strategies and specifically meeting market demands. Technology The technological platform offers a great opportunity for marketers in Australia. The e-marketing concept has been termed as the new revolution in global marketing. Online trade shows and fairs are becoming a cost effective way to approach the internal market and is proving to be viable and sustainable in the current global market situation. With an increasingly globalised world, there comes the opportunity of new markets and new products that are in demand. This means that Australian marketers should brace themselves for market research and development to facilitate creation of unique markets that the country controls and has an advantage over other emerging entrants. In terms of technology, marketers should take advantage of emerging trends like marketing clouds which have the potential to enable them swift through digital information and content on global markets they intend to operate in (Australian Governmnt, The Treasury, 2012). In this view, the digital marketing platform is evolving at a fast rate with technological acceleration in terms of smartphones and computing. This is a chance for marketers to connect with the world at a faster, cost effective and convenient way. Therefore, all marketers in Australia should utilise the digital strategy to integrate their customers wherever they may be in the world (Uncles, East, Lomax, 2013, p. 119). Conclusion The Australian economy is highly dependent on the international markets in terms of exports and tourism. It is one of the major drivers of economic growth and stability in the country. Therefore, international marketing is very crucial in the country in ensuring that the global market is aware of Australian products and the value they bring to the international scale. Global marketers in Australia have a responsibility of ensuring that this goal is reached and the country maintains a high portfolio in supplying goods and services to the world. However, there are factors that come into paly both locally and internationally. The status of the economy in Australia is the cost influential factor in determining what strategies are appropriate for application on a global scale. This is coupled with financial aspects in the country and stability of the AUD. Legal factors as well as political atmosphere in the country determines to some extent the practices applied. This comes with challenges and opportunities that marketers should alleviate and take advantage of. Diversification and use of technology in marketing strategies have been identified as valuable ways of increasing market share and building on existing ones. References Australian Governmnt, The Treasury. (2012, October 5). Challenges and opportunities for the Australian economy. Retrieved November 22, 2013, from http://www.treasury.gov.au/PublicationsAndMedia/Speeches/2012/Challenges-and-opportunities-for-the-Aust-economy Australian Trade Commission. (2013). Global financial crisis. Retrieved November 22, 2013, from http://www.austrade.gov.au/About-Austrade/News/News-topics/Global-financial-crisis Departmnent of Primary Industries. (2013). Challenges and Opportunities in the Australian Pear Value Chain. 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Y.-M,2011, An empirical study on the factors influencing international marketing strategy development among successf ul exporters in Australia, Southern Cross University ePublications, Queensland Uncles, M.D., East, R. & Lomax, W. 2013, "Good customers: The value of customers by mode of acquisition", Australasian Marketing Journal, vol. 21, no. 2, pp. 119. Read More