Page 234 - Foundations of Marketing

Reaching Global Markets | Chapter 8 201

by elected or appointed officials. A country’s legal and regulatory infrastructure is a direct
reflection of the political climate in the country. In some countries, this political climate is
determined by the people via elections, whereas in other countries leaders are appointed or
have assumed leadership based on certain powers. Although laws and regulations have direct
effects on a firm’s operations in a country, political forces are indirect and often not clearly
known in all countries. For example, although China has opened to international investment
in recent years, government censorship prevents Facebook, the world’s largest online social
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media network, from interacting with consumers. China is an example of state-directed capi-
talism. The government owns a majority of or has a partial stake in many businesses. State-
backed firms accounted for one-third of the emerging world’s foreign direct investment in the
last decade. An issue with state-owned enterprises versus private ones is the nature of compe-
tition. State-backed companies do not have as many competitors because the government is
supporting them. Unless state-owned firms work hard to remain competitive, costs for these
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companies will most likely increase.
A nation’s political system, laws, regulatory bodies, special-interest groups, and courts all
have a great impact on international marketing. A government’s policies toward public and pri-
vate enterprise, consumers, and foreign firms influence marketing across national boundaries.
Some countries have established import barriers, such as tariffs. An import tariff is any duty
levied by a nation on goods bought outside its borders and brought into the country. Because
they raise the prices of foreign goods, tariffs impede free trade between nations. Tariffs are
import tariff A duty levied by a
usually designed either to raise revenue for a country or to protect domestic products. In the
nation on goods bought outside
United States, tariff revenues account for less than 2 percent of total federal revenues, down its borders and brought into the
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from about 50 percent of total federal revenues in the early 1900s. country
Nontariff trade restrictions include quotas and embargoes. A quota is a limit on the amount
quota A limit on the amount
of goods an importing country will accept for certain product categories in a specific period
of goods an importing country
of time. The United States maintains tariff-rate quotas on imported raw cane sugar, refined will accept for certain product
and specialty sugar, and sugar-containing products. The goal is to allow countries to export categories in a specific period
specific products to the United States at a relatively low tariff while acknowledging higher of time
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tariffs above predetermined quantities. An embargo is a government’s suspension of trade embargo A government’s sus-
in a particular product or with a given country. Embargoes are generally directed at specific pension of trade in a particular
goods or countries and are established for political, health, or religious reasons. An embargo product or with a given country

Emerging Trends

Google Jumps into Chinese Market with Mobile App Ads

Google is making its way back into China with an innova- as mobile devices are being used in many global
tive advertising tool called AdMob. After pulling out of the markets.
search engine market due to censorship issues, Google is Yet even with these positive attributes, barriers for
now advertising through mobile devices to target custom- Google remain. The pressing issue of censorship still
ers in China. This advertising tool sends ads to users who looms over Google. In the past, Google ran into politi-
play games, view videos, and use other apps on their cal barriers with the Chinese government over censoring
smartphones or tablet computers. users’ search engine results. Could these same censorship
So what is AdMob’s advantage over competitors issues be translated to mobile ads? Google also faces
in the market? Its ads are compatible with the major- competitive issues as its main Chinese search engine
ity of smartphones across the board. Mobile ads are rival, Baidu, has begun to challenge Google’s niche in the
also gaining traction due to the personalized aspect it smartphone industry. However, as the market heads in the
provides for customers and its way of reaching users on direction of mobile ads, leave it to Google to try and be the
the go. Another benefit of this approach is its versatility, pioneer.
a

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