9a. the global marketing environment

7/31/2019 9a. the Global Marketing Environment

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The GlobalMarketingEnvironment

ByPadmashree,Bharath,Dr. Marakkar.K.A MBA,

M.TECH, LLB,PHD,FRCS,M.PHIL


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Marketing Environment

Marketing Environment - consists of the actorsand forces outside marketing that affectmarketing managements ability to develop andmaintain successful relationships with its targetcustomers.

Includes: Microenvironment - forces close to the company that

affect its ability to serve its customers.

Macroenvironment - larger societal forces that affectthe whole microenvironment.


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Environment

Company

Demographic

Economic

Natural

Technological

Political

CulturalCompany

Customers

Intermediaries

Suppliers

Competitors

Publics


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Macroenvironment

Demographic

Technological

Cultural Economic

Political LegalForces that Shape

Opportunitiesand Pose Threats

to a Company


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Environment

IncreasingLegislationDesigned

to Protect Groups

ChangingGovernment

AgencyEnforcement

IncreasingEmphasis

on Ethics andSociallyResponsible

Actions

Some Trends in the Political EnvironmentInclude :


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Marketing Environment

Environmental Management Perspective Taking a proactive approach to

managing the microenvironment andthe macroenvironment by takingaggressive (rather than passive)actions to affect the publics and forcesin the marketing environment.

How? Hire lobbyists , run

advertorials, file law suits andcomplaints, and form agreements.


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The Political/Legal Environment

The political/legal environment encompasses factors andtrends related to governmental activities and specific lawsand regulations that affect marketing practice.

PoliticalLegal

Environment

GlobalTrends

LegislationRegulation


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Global Political Trends

In todays world economy, international political eventsgreatly affect marketing activities. For example theimpact of the war on terrorism on the travel and securityindustries.

A second important political trend is movement toward

free trade and away from protectionism. Studies showthat countries with the freest trade have the highest GDPgrowth.


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Political-Legal Environment

Attitudes Toward International Buying

Government Bureaucracy

Political Stability

Monetary Regulations

M


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Most contro

ls o

The legal environment


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Political Environment - Individual Governme

Structure of Government :Ideology Communism Socialism Capitalism

Political Parties Single-party-dominant countries Dual-party systems Multi-party systems

Government Policies and Regulations: Designed to promote acountrys interests in the international arena regarding

national security, developing new industries, protectingdeclining industries. creating employment, etc.


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Consequences Of Political Actions 1.

Indigenization/Domestication Nationalization (Acceptable according to international law

if: satisfies public purpose & includes compensation) Expropriation (prompt, effective, fair compensation) Confiscation (no compensation) Local content/local buying/local hiring laws Discriminatory taxes Discriminatory pricing of resourcesIK


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Consequences Of Political Actions 2.

Threat of equity dilution Joint-venture pressure Import/Export restrictions Profit repatriation restrictions Selective boycotts Price controls Terrorism Etc.IK


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POLITICAL-RISK INDICATORS.

ECONOMIC - GDP, Inflation, Capital flight- Foreign debt, Food output- Commodity dependence...

POLITICAL- Wars or involvement in foreign conflicts...

- Relations with neighbors- Degree of authoritarianism (use of coercion to retain power)- Legitimacy of government/Mechanisms for transfer of power - Military or political control- Politically motivated violence

SOCIETAL

- Urbanization,,- Corruption, nepotism- Social Unrest (ethnic, language, religious fundamentalism)- Xenophobia, Extreme nationalism


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Political Risk Assessment.

Risk Assessment Techniques- Grand Tour (include AmCham)- Old Hand- Delphi Technique- Quantitative Methods- Commercial servicesIK


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Risk Reduction Strategies. Local Partners Invaluable Status Critical Technologies Frequent Tech. transfers Critical Parts from Home Country Vertical Integration Local Borrowing Minimizing Fixed Investments

Political Risk Insurance Etc.


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3. Terrorism and the World Economy

According to an IMF study, the September 11, 2001 terroristattacks resulted in short-term lost economic output worth anestimated as $47billion, the stock market lost $1.7 trillion. Inaddition, 125,000 workers were laid off for 30 days.

Terrorist activities disrupt international movement of suppliesand merchandise and financial flows.

Terrorists are active in many countries and often target largefirms to get money for profit, weapons, payrolls, bribes,expenses, etc. Piracy has historically been practiced in mostof the worlds seas. During 2008, Somali pirates captured 42ships and received $30million in ransom . Have already

captured about 40 ships in 2009.


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International Legal Environment - 1

Types of Legal Systems:Common LawCode (written) LawCivil LawCommercial LawIslamic Law

International Law (the law of nations) comes fromthree main sources: Customs, International treaties,Court decisions


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International Legal Environment - 2

U. S. Laws- The Sherman Antitrust Act (1890)- The Clayton Act (1914)- Foreign Corrupt Practices Act (FCPA), 1977: prohibits the

payment of any money or anything of value to a foreign official, political party, or any candidate for political office for

purposes of obtaining, retaining, or directing business. FCPA does not prohibit so called facilitating or grease payments. It also does not prohibit bribery payments tonongovernmental personnel.

Local laws governing business practices Competition, fraud, consumer protection, labor rights,

routine business practices, etc.

Regulations and Regulatory


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Regulations and Regulatory Agencies

Most legislation in the United States is enforcedthrough regulations developed by a variety of agencies,and marketers must often work with regulatoryauthorities at the federal, state, and local levels.

The


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TheFuture

The only certainty about the future is thatit will be uncertain, and change willoccur at an increasing rate.

It will also be more complex. Businesses and consumers now mustoperate in an era of terrorism and lack of

trust.

Summar


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Summar y

After studying this chapter, you should be able to: Understand the nature of the marketing environment and why itis important to marketers. Describe the major components of the social environment and

how trends in the social environment affect marketing. Understand how the economic environment affects marketing. See how the political/legal environment offers opportunities and

threats to marketers. Appreciate the importance of the technological environment to

marketers. Understand differences in the competitive environment. Know how changes in the institutional environment affect

marketers.

9a. the global marketing environment

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