INTERNATIONAL MARKETING | PASON, RICA P| BSBA-MKTG 4E

1. What are the environmental forces that affect the company’s ability to serve its
customers?

The marketing environmental factors can be classified into Microenvironment and Macro-
environment.

Microenvironment
The company’s microenvironment consists of actors close to the company that combine to form its
value delivery network. It includes the company’s internal environment, which influences the
marketing decision.

The Company: All departments in the company share the responsibility of understanding the
needs of the customer and creating value for them

Suppliers: Supplies form an important link in the overall customers’ values creation cycle.
Supply shortage, labor strike, increased cost of supplier goods and other factors can impact
sales in sort run and influence customer satisfaction in the long run

Marketing intermediaries: They help the company promote, sell and distribute goods to the
end consumers. Partnering with the right intermediary and supporting them in making sale is
critical for success of the business

Competitors: to be successful, your product should provide greater satisfaction to the

consumer than your competitors’

Publics: A group that has an actual or potential interest in or impact on an organization’s

ability to achieve its objectives. These can be classified as financial, government, media,
and citizen-action, local, general and internal. Marketing plans can be designed focusing
on these major publics and its customer markets.

Customers: Customers are the most important actors in the marketing environment. The
customer market could be any/all of the following - consumer, business, reseller, government
or international. Each market type has a specific use case which the seller must research
well.

Macro-environment
The macro-environment consists of larger societal forces that affect the entire microenvironment.
The PESTLE analysis in a framework used to scan the organization’s external busi ness environment.

Political: They refer to the political environment and its stability. It accounts for various
government policies and its involvement in the trading agreement.
Taxation Policy, Trade regulations, Governmental stability, Unemployment Policy, Political
stability

Economic: The economic environment like the growth rate, employment rations, inflation,
exchange rate, cost of living etc. can impact the organization and its consumers
Interest rate, Inflation rate, Growth in spending power, Rate of people in a pensionable age,
Recession or Boom, Customer liquidations, Balances of Sharing

Socio-cultural: The impact your product has on the market needs to be understood.
Anything harmful to the society must be eliminated to show that your company is socially
responsible.
 Values, beliefs, language, Religion, Education, literacy, time orientation, lifestyle.

Technological: With the changes in information and mobile techno logy the organization
should adapt and welcome the new inventions.
Internet, E-commerce, Social Media, Electronic Media, Research and Development,
Rate of technological change.

Legal: Legal factors such as national employment laws, international trade regulations and
restrictions, monopolies and mergers’ rules, and consumer protection need to be followed
while marketing.
Employment law, Health safety, product safety, advertising regulation, product labeling,
labor laws.

Environmental: These factors include limited natural resources, waste disposal and adverse
impact of production on environment.
Competitive advantage, Waste disposal, Energy consumption, Pollution monitoring.

2. Describe the importance of geography and understanding the international marketing.

Geography is a study of the physical characteristics of a particular region of the earth.

Involved in this study are climate, topography, and population. The interaction of the physical
characteristics is one of the principal determinants of a country’s customs, products, industries,
needs, and methods of satisfying those needs. Marketing is concerned with satisfying the needs of
people.

International marketing seeks out the whole world as its marketplace. Therefore, for an
international marketer to know how to satisfy the needs of the international market, he must be
familiar enough with geography to know what the various causal factors of the people’s needs are.
He must know that various climates and topographies do exist and that they are vital in shaping the
marketing plans that an international marketer must make.

3. Examine the effects of topography and climate on product population and economic
growth

Climate and Topology affect the product population in a way that the packaging must be
developed which can withstand temperature variations, which affect shelf life. Packaging plus
containers must be developed which maintain quality in transportation and warehouses. Directions
must be developed which match the country's water.

Climatic conditions, such as altitude, humidity, and temperature, can have an effect on
products. Within even a single national market, climate can be sufficiently diverse to require major
adjustments.

Topographical issues and geographic hurdles can have a deep effect on the distribution
channels of the product and a country's economy.

4. Explain how changes in the demographic environment affects marketing decisions?

Demography is the study of the characteristics of human populations. Today's demographic

environment shows a changing age structure, shifting family profiles, geographic population shifts, a
better educated and more white-collar population, and increasing diversity. The economic
environment consists of factors that affect buying power and patterns.
 The economic environment is characterized by more consumer concern for value in shifting
consumer spending patterns. Today's squeezed consumers are seeking greater value -- just the right
combination of good quality and service at a fair price. The distribution of income also is shifting. The
rich have grown richer, the middle class has shrunk, and the poor have remained for, leading to a
two-tiered market. Many companies now tailor their marketing offers to two different markets -- the
affluent and the less affluent.

5. What are the key methods in tracking & identifying opportunity in the macro-
environment?

The marketing environment is constantly changing and providing new opportunities and
decreasing the demand for some existing products. Marketers have to continuously monitor the
environment identify the shifts in demand and make their organization adapt to the changing
environment.

The changes that are occurring in societies are termed as fads, trends and megatrends.
Marketers have to take notice of trends and megatrends as spotted by external consultants and
publications and they also have to look for them. These trends and megatrends are non-
controllable in the hands of business organizations and they can only respond to them.

Kotler recommends that the firms monitor six major areas in the environment:

a. Demographic Environment
Population Growth, Population Age Mix, Ethnic Markets

b. Economic Environment
Markets for consumer goods and capital goods require people to consume and also
purchasing power with them. The total demand and demand for different categories of
goods and services depend on current income, savings, credit availability, existing debt of
households and firms and prices of items.

c. Natural Environment
Shortage of raw materials, increased energy costs, increased pollution levels,
changing role of Governments in environmental protection.

d. Technological Environment
ACCELERATING Pace of Technological Change, Unlimited Opportunities for
Innovation

e. Political/Legal Environment
Legislation Regulating Business - It has three main purposes: to protect companies
from unfair competition, to protect consumers from unfair business practices, and to protect
the interests of society from unbridled business behavior.

f. Social/Cultural Environment
People's view of Themselves, People's view of Others, People's view of Society,
People's view of Nature, People's view of the Universe

6. Explain how changes in the socio-cultural environment affect marketing decisions?

Social and cultural factors are important to consider while creating and implementing a
marketing strategy of a company. These often-linked but somewhat different factors have diverse
effects on the decisions of consumers and buyers. Sociocultural factors are customs, lifestyles and
values that characterize a society. More specifically, cultural aspects include aesthetics, education,
language, law and politics, religion, social organizations, technology and material culture, values
and attitudes. Social factors include reference groups, family, role and status in the society. Small -
business owners should be aware of and understand these factors' connection with buying habits.

Education and Language

The average level of education in a society affects the interests and sophistication of consumers. For
example, in a community in which a high percentage of potential customers have some form of
post-secondary education, small-business owners might use more details and explanations while
advertising and promoting products.

Social Organization
As part of the culture, social organization is the way a society organizes itself, how it considers
kinship, status system, social institutions and interest groups. For example, the role of women in a
society, whether they are the decision-makers in shopping.

Reference Group and Family

Because people are social beings, each person has people around him who influence his decisions
in some way.
Role and Status in Society
A person's role in society and social status affects her buying decisions. Each person plays a dual
role in society depending on the group to which she belongs.

7. Why is it necessary for international marketers to study political environment? How can
foreign politics affect marketing decisions?

Firms should track their political environment. Change in the political factors can affect
business strategy because of the following reasons:
The stability of a political system can affect the appeal of a particular local market.

 Governments view business organizations as a critical vehicle for social reform.

 Governments pass legislation, which impacts the relationship between the firm and its
customers, suppliers, and other companies.
 The government is liable for protecting the public interest.
 Government actions influence the economic environment.
 Government is a major consumer of goods and services.

Politics are a crucial factor in the conduct of international trade. Characteristics such as
political stability, the attitude of political leaders to foreigners and foreign trade, or the degree of
state intervention in the economy will affect a company’s ability to enter a foreign market and turn
a profit.

Government actions can influence the operation of market mechanisms positively or

negatively. If the international political context in the target market changes continuously, it is
imperative that the international marketer fully understand the political situation (current and
potential).
An unstable government or an environment of political conflict will increase the risks faced by
international marketers. Inefficient governments can cause expensive delays (especially at customs
posts) and difficulties in financial settlements. Weak governments can court popularity or try to make
themselves seem strong by taking highly visible and restrictive measures against foreigners,
especially foreign business people. Most types of political risks arise out of the following sources: