Marketing Issues, Changes in the Political System - Essay Example

Marketing Chapter 4 According to chapter 4, the political and legal environment of the home country from which an organization or a business comes from that is seeking to enter international business has the potential to impede the ability of the business or organization to effectively and efficiently compete. As highlighted in the chapter, there are policies and legalities that can affect how a business operate by either preventing the business or organization to exercise its international business rights such as intellectual properties or imposition of policies and legalities that favor domestic businesses and are costly for foreign businesses and organizations. Among such legalities is the lack of intellectual property rights in China, which are disadvantageous for international businesses and organizations operating in China, whose ability to control distribution and the capacity to enjoy the position of being intellectual property owner is hindered if not limited. Presently, an international organization such as Google is finding it difficult to effectively compete in China when it does not have control and rights over its intellectual property rights. Other than that, home country legal and political environment has the potential to disadvantage businesses seeking to internationalize when the government of the said country politically interferes with business environment by distorting trade for political reasons. Alternatively, when the said government gives or gets economic sanctions, embargos, import controls and export controls, it makes it unfeasible, difficult and costly for businesses in that country to operate on the global market. For example, the United States has often sanctioned various countries such as Zimbabwe, Cuba and Iraq among others that contravene her foreign policies and as a result, various industries and organizations in the United States exporting to the sanctioned countries suffers loses amounting to billions of dollars every year as a result. On the other hand, businesses seeking to internationalize in the sanctioned countries such as local businesses in Zimbabwe may find it difficult to competitively trade and export in the international market, and as a result failing to expand on a global level and consequently, preventing the sustainable competitive advantage of these local businesses. On a legal perspective, there are legalities such as regulation of international business behavior where countries set ethical boundaries to govern their international marketing activities as emphasized in chapter 4. Among legalities that can impede the ability for businesses to competitively operate in international business includes anti-trust laws, bribery and corruption laws. In addition, legal differences between the home country and the host country pose legal risks for international businesses. Changes in the political system and political policies in the home country such as development of stringent tax laws generate a risk for businesses operating in the international market as indicated in chapter 4. Conclusively, the political and legal environment can be made favorable for businesses by home countries being signatories to international trade treaties and agreements and by developing mutual relationships among governments. Understanding the political environment of the home country and how it compares or varies with the host country in international business is crucial in reducing the varied legal and political risks such as ownership risks, operating risks and transfer risks as discussed in chapter 4. Chapter 8 According to chapter 8, channel distribution and logistics plays a significant role in ensuring that the products and services produced reaches the intended end user or target market at the right time, at the right place, in the right form and at the right cost. When operating in the international market, an international enterprise can decide to supply its products and services directly to the end users, utilize intermediaries or alternatively utilize outside distributions system. As highlighted in the chapter, international logistics entails how an enterprise designs and manages the system, which controls the inflow and outflow of materials of international enterprises. This can be achieved through just in time delivery, electronic data interchange, early supplier involvement and efficient customer response systems that can be facilitated using systems concept, total cost concept that increases the after tax profits in global market and trade off concept that balances costs. The channel distribution is important for international enterprises in entering new markets and can effectively be used in enhancing an enterprise’s competitive advantage over its competitors. For instance, an international business such as Coca Cola that has a global distribution channel has a greater competitive advantage in ensuring global presence compared to a new soft drink company that is seeking to enter new foreign markets. Developing a new channel of distribution is not only costly for companies entering the market first but it makes it easy for late market comers to cut its capital costs by enjoying the benefits of an already established channel of distribution. To enhance the effectiveness of a distribution channel and logistics in international trade, enterprises can determine the storage to be used in terms of availability, adequacy and cost and select the mode of transporting the products to destination points based on the feasibility, availability, flexibility, time taken by each mode of transport such as air, water and land transport. According to chapter 8, the design of the distribution channel that entails the number of levels of types of intermediates and the number of institutions of each channel type is crucial for international marketing and it is influenced by the characteristics of the target market in terms of psychographics, demographics and the needs of the customers, distribution culture in terms of the channel structures that exists and the relationships that exists between channel members and competition. In addition, capital, distribution channels maintenance costs, nature of the products and the objectives of the enterprise in terms of profitability, expansion strategies and market shares. Other than that, the design of the distribution channel that an enterprise seeks to adopt or develop to market and supply their products and services is influenced by continuity, perceived distances from producer to consumer, communication channels and more importantly, coverage where numerous intermediaries are used for distribution channels meant for intensive uses, few intermediaries are used for distribution channels meant for selective uses and where a single intermediary is used when the channel of distribution is used for exclusive uses only. As highlighted in chapter 8, intermediaries plays a crucial role in ensuring distribution objectives are efficiently achieved. For this reason, the process of selecting a reliable and effective intermediary is important in deciding how one distributes their products and services in the international market and performance and professionalism should be used as the criteria for selecting a suitable intermediary. When operating using intermediaries, designing distributor agreements are important in spelling out the terms and conditions of the business relationship and ensuring high quality performance during distribution. Digital distribution through ecommerce is gaining prominence in modern society as a cost effective and efficient way of marketing and distributing products and services to end users. Chapter 9 As discussed in Chapter 9, the product variables differ from product to products in terms of quality, branding, packaging, positioning and aesthetics. Each product produced, marketed and delivered to target market is meant to meet the needs, expectations, tastes and preferences of the end users and in so doing, benefit the producer in terms of increased sales volume, profitability, competitiveness and market share. Products are regularly modified in order to improve their quality in order to better meet the changing needs, preferences and expectations of the target market. The characteristics of products meant for international markets are further modified to suit the needs, expectations and preferences of consumers by adapting the products to the regions and countries. For example, the American established coffee-brewing company Starbucks had to adapt its coffee products to meet the needs and preferences of its target market in China. In order to attract and retain the Chinese market that is predominantly tea drinking market, Starbucks introduced innovative and new variety of its coffees that contained popular Chinese ingredients. The decision to adapt products is determined by the characteristics of the host country, product characteristics, market environment and organizational objectives. Product adaptation is influenced by consumer’s cultural and mental factors such as consumption patterns, psychosocial patterns and cultural criteria. As highlighted in chapter 9, the product characteristics include product constituents that should meet the tastes and preferences of the domestic market by being sensitive to their needs, norms and beliefs. For example, when introducing their product offering in India, McDonald’s had to change their product constituents to meet the tastes and preferences of its target market in India by eliminating dairy products from its products. The other component of product characteristics is product branding, which should not only be important in preventing product counterfeiting but also respectful of local market. To ensure the branding does not offend the target local market, an enterprise seeking to enter new foreign market should pay attention to translation, trans- culture and transliteration. Product packaging form part of the product characteristics and is important in not only offering safety for the product content and for promotion purposes but also it can be used to display the ingredients of the product contained therein. for instance, most of juice packets are not only used to keep the juice fresh, but also, the packaging is used to illustrate the ingredients, energy content, number of calories and net weight. Among other components of product characteristics are product appearance in terms of color, size and design, method of usage, product quality and product service. Products marketed in the international markets are prone to product counterfeiting, which violates intellectual property rights such as breaching product trademark, patents and copyrights. Product counterfeiting results in loss of billions of dollars as the market and profits for real product are slashed by distribution and sale of counterfeit ones. In order to safeguard against product counterfeiting, an enterprise in international trade should secure intellectual property rights by registering trademarks, masking works and buying patents. Enterprises can also enforce products rights through legislative actions, international trade agreements, joint private sector action and through individual organizational measures. Chapter 13 According to Chapter 13, communication’s plays an important role in influencing how decisions are made, issues are resolved and more importantly, how products and services are promoted and presented to the target market. The process of communication entails encoding, decoding, interpreting decoded message, reflecting and offering feedback. To be successful in marketing a product or service in an international market, it is crucial to develop a marketing communication strategy by first, assessing the marketing communication opportunities, second, analyzing marketing communication resources, third, setting marketing communications objectives, fourth, developing evaluative alternate strategies and fifth, assigning specific marketing communication responsibilities as emphasized in Chapter 13. Effective communication is one where the intended message is sent by the sender, received by the intended receiver in the right form, is interpreted or understood correctly, is reacted to as expected and the receiver sends back a feedback accordingly without the interference of communication barriers such as noise. By developing an effective marketing communication strategy, an enterprise is better placed in selecting the appropriate promotional mix. Promotional mix entails advertising, sales promotion, personal selling, sponsorship and publicity all of which are meant to help create product and service awareness, inform the target market about the products and services offerings of the enterprise and educate on how to use service and product offerings. As highlighted in Chapter 13, there are two types of promotional mix strategies namely push strategies that entails personal selling and pull strategies that entails communication to significant number of target audiences over long channels of distribution. Communication tools are means used to promote and communicate the product and service offerings which includes trade journals, trade directories, direct marketing, trade fairs and exhibitions, missions, personal selling and the internet. The internet as a communication tool has gained prominence in modern society owing to its affordability and its vast global network presence, which enables international businesses to reach as many people as possible wherever and whenever they are. Presently, thousands of brands and international companies have relied on the internet to promote its products and services. Among clear examples of how effective the internet can be in product and service promotion is the old spice advert that generated a global buzz. There are varied obstacles that hinder effective communication and promotion of products and services in the international market, which includes cultural factors, economic factors, ethnic factors, regulatory factors and demographic factors. Therefore, Chapter 13 emphasizes that it is imperative for businesses operating or seeking to enter international market to plan their promotional campaigns by establishing the target audience, highlighting specific, measurable, attainable and realistic campaign goals and objectives, developing a campaign budget, developing a media strategy and message, establishing suitable campaign approach and enhancing the effectiveness of the promotion campaign. International sports companies such as Nike and Adidas capitalize on international sports events such as the World Cup to create and increase brand awareness and brand equity respectively by sponsoring the event. In international sports events such as the World Olympics are some of the examples that cash in on sponsorship as a way of promoting product offerings. Read More