Page 55 - International Marketing

NPP

BRILLIANT'S International Marketing Environment 57

Legal Environment
In global marketing, a company is not just bounded by the laws of its
home country but also by its host country and by the growing body of
international law. This can affect many aspects of a marketing strategy,
for instance advertising in the form of media restrictions and the
acceptability of particular creative appeals. Product acceptability in a
country can be affected by minor regulations on such things as packaging
and by more major changes in legislation. In the USA, for instance, the
MG sports car was withdrawn when the increasing difficulty of complying
with safety legislation changes made exporting to that market unprofitable.
Legal environment in international marketing is more complicated than
domestic since it has three dimensions: (i) local domestic law
(ii) international law and (iii) domestic laws in the firm’s home base.
(i) Local Domestic Laws: These are all different in different regions.
It requires a detailed study of local domestic laws with the use of
experts on the separate legal systems and laws pertaining in
each market targeted.
(ii) International Laws: There are a number of “international laws”
that can affect the organization’s activity in international marketing.
Some are international laws covering piracy and hijacking, others
are more international conventions and agreements and includes
IMF, WTO treaties, patents and trademarks, legislations and
harmonization of legal systems within regional economic
groupings e.g. the European Union.
(iii) Domestic laws in the home country: It is important for two
reasons. First, there are export controls which limit the free export
of certain goods and services to particular market places and
second, there is the duty of the organization to act and abide by
its national laws in all its activities whether domestic or
international markets.
The laws will affect the marketing mix in terms of products, price,
distribution and promotional activities quite dramatically. In many mature
markets they face quite specific and sometimes burdensome regulations.
In Germany, environmental laws means a firm is responsible for the retrieval
and disposal of the packaging waste it creates and must produce packaging
which is recyclable, whereas in many emerging market there may be
limited patent and trademark protection, still evolving judicial systems,
non tariff barriers and an instability through an ever evolving reform
programme.