Privacy Policy 9. At a basic level of understanding how internal organizations respond to environments, consider the theory of Open Systems, which the organizational theorists Katz and Kahn Katz, D. & Kahn R. L. (1966). Their strategies will be affected however. International marketing environment is a set of controllable (internal) and uncontrollable (external) forces or factors that affect international marketing. The age mix can be further subdivided, for example for marketers, the most populous age groups decide the international marketing environment. HMV’s opened its first store at Oxford Street on 20th July 1921. How the business activities may be carried out in such political setup and what different risk factors may be there should be evaluated before taking any decision of such kind. The final aspect of the microenvironment is publics, which is any group that has an interest in or impact on the organisation’s ability to meet its goals. Italy and France and somewhere in the world multiparty system with one or two party dominance is prevailing. The concept of internal marketing differs from the concept of external marketing in a variety of ways as shown in Table 11.1. Public – Any group … The developed nations are also looking these markets as a big potential market for their product. It is explained on the basis of age classification, sex classification, educational level, marital status, household patterns, religion based classification and nationality etc. Similarly, purple is unacceptable in Hispanic nations because it is associated with death. The study of all relevant aspects in this regard is necessary in the international business. However, the Japanese do not. Communication would be difficult because 165 people would speak Mandarin, 86 English, 83 Hindi, 64, Spanish, 58 Russian, 37 Arabic and rest would speak one of over 200 other languages. Because it is difficult to know that from which part of the world a firm will enter the market. (c) Maintenance standards vary from one nation to the next. The environmental differences influence the international marketing decisions of a firm. These factors affect market conditions. It can boost local partners, who can give opportunities by providing valuable political links. Internal and External Marketing Environment 1. Market potential in the home country. It is presumed that a marketer should make his product a part of customary action of an individual. “Therefore the multinational companies have to change their attitude in this regard and should weigh the impact of automation carefully in a cheap labour and highly unemployment area. If company’s involvement is there in all these matters, it is always harmful for the company. iii. Wal-Mart would need to take into account local customs and practices in the United Kingdom such as bank holidays and other local festivals etc. USA and UK. The norms of conducting business also vary from one country to the next. The trading forces operating in a marketing place over which a business has no direct control, but which shape the manner in which the business … The people of the developed nations do have good purchasing power. On the other hand if recession is there in the economy, the adverse impact is observed in all sectors of the economy. This type of culture is prevailing mostly in France, Spain, Asia, Japan and in middle east Arab nations. Finally the financial strengths of the firms are examined. are the basis for examining the geographical environment in the international business. Whether it is natural resources or human resources, such type of attitude of the people may cause unrest among different groups in the society, which is harmful for the international business. (2) By Providing Employment Opportunities to the Nationals: Sometime a big mistake of such kind is done by the multinational companies that the people of less developed nations are poor by their choice. The physical aspects of communication play an important role in international marketing. Many of these facilities end up as private rather than government organisations. The macro environment includes culture, political issues, technology, the natural environment, economic issues and demographic factors amongst others. The household pattern of a family do have its big impact on the buying patterns. “The economic interest of multinational companies differs widely from the economic interest of those nations where the MNCs do business. For example, Americans believe that suntans are attractive, youthful, and healthy. The local contents boost the economy in two ways- (i) By encouraging demand for the domestic products (ii) By investing in local production facilities by the company can boost the local economy. There are fewer restrictions on the entry of the new firms in domestic market. The international marketer tries to understand economic environmental variables of the global markets for identifying the right marketing opportunities for the enterprise. Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies, and financial intermediaries. The nature of the population is considered to be a basic requirement of the study. Most firms probably prefer to engage in the export business rather than invest considerable sums of money in investments in foreign subsidiaries. The most common form of restriction of trade is the tariff, a tax placed on imported goods. The following are some of the measurers to reduce the political risks in the international business: A company can stimulate local economy in a number of ways. Exports help to diversify the risk of the manufacturer. The external environmental factors such as the economic factors, socio-cultural factors, government and legal factors, demographic factors, geographical factors etc. Micro Environment – It involves all forces which directly affect the organisation. The changing political environment is uncontrollable in nature. Important external environmental factors that affect the growth of the company is the industry and market, competitors and the economic climate. For example, many Communist nations desire self-sufficiency. In these kinds of circumstances foreign firms find it difficult to accommodate with these forced laws. An inability to automate production completely does not necessarily constitute a negative for multinational companies. It also more or less depends upon the political structure of that country and how frequently the government of that country is accepting the different changes in the market. The resources they do have. Media publics include newspapers and magazines that can publish articles of interest regarding the company and editorials that may influence customers’ opinions. The manufacturers should distinguish carefully among the regions, in which they are planning to operate and to select those markets where they have favourable environment to operate and also have a comparative advantages of business in the international marketing. Related Articles: Differences between External and Internal Source of Recruitment Difference between Internal and External Sources of Recruitment The economic environment of a country defines the marketing opportunities in the foreign, business. If the population of a country is growing very rapidity, it does not mean that the market is also growing. The government policies play a vital role in this regard. A nation’s economic situation represents its current and potential capacity to produce goods and services. (d) Poor communication facilities hinder advertising through the mass media. Up-to-date knowledge about the state of technological environment is essential for the firms associated with international marketing. One type of human nature belongs to those who urge to stand alone and other type of human being urge to stand together. In high risk nations the marketing environment is always different in comparison to low risk countries. After 1991 the new Indian government started a reform programmes in this context. Copyright 10. The language can be seen as the essence of the culture without which no other aspect of culture can be truly understood. (ii) Impact of Socio Cultural Environment on Thinking Process: The thinking process of an individual and society is influenced by the socio cultural environment. The world population is growing at an alarming rate. In Italy, salespeople call on women only if their husbands are at home. For example, research and development have input as to the features a product can perform and accounting approves the financial side of marketing plans. Product which has become obsolete in one market may have life in another market. Third, a comparison is made of two cultural composites. Advancements in technology helps a manufacturer to produce quality products at reasonable prices. Each group do have their own preferences and choices. There may be the following categories of a product, which are considered in the analysis of competition: a. The age groups of a particular zone, educational qualification, household system, sex, marital status and background etc. The following are the reasons which are responsible for the instability of the government: (a) Public unrests like riots, strikes etc. many marketing objectives have been thwarted or changed as a result of the recession. It provides clues as regards their age, sex, income, and capacity to incur … Such types of circumstances and social unrest always should be discouraged from international business point of view. External Influences on Marketing Objectives. The scanning of demographic environment pertaining to the gender groups should be considered while deciding marketing strategy for the product and a particular market. It is pertinent to mention here that a clear cut idea of the economic environment of a particular host country is always useful to form an appropriate marketing strategy in the international business. 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