Page 56 - International Marketing

NPP

58 International Marketing BRILLIANT'S

Piracy in markets with limited trade mark and patent protection is
another challenge. Political squabbles, bureaucratic delays, infrastructure
headaches and unethical business practices create many obstacles.
Foreign companies are often viewed with suspicion. However, some firms
are innovative in overcoming difficulties in foreign markets.
Thus, it is important for a firm to know the legal environment in each
of its markets in international marketing.
Economic Environment
There are varying economic conditions and level of economic
development and GNP per capita. Thus, it is important to understand the
economic developments and how they impinge on the marketing strategy
both at international level in terms of world trading infrastructure such as
world institutions and trade agreements, at a regional level in terms of
regional trade integration and at a country/market level. Firms need to be
aware of the economic policies of countries and the direction in which a
particular market is developing economically in order to make an
assessment as to whether they can profitably satisfy market demand and
compete with firms already in the market.
One of the key challenges facing companies trying to develop an
integrated strategy across a number of international markets is the divergent
levels of economic development they have to deal with.
The Economist “Big Max” index is a useful illustration of the impact
this has on firms. This index gives a guide to the comparative purchasing
power across countries by examining their economies in terms of how
many minutes somebody needs to work to buy a ‘Big Mac’.
(i) The Developed Triad Economics: The triad economies of NAFTA
countries, European Union and Japan account for 80% of world trade. For
many firms this constitutes much of what is termed as the global market.
It is in this triangle that the global consumer with similar life styles, needs
and desires emanates from. However, emerging markets are now becoming
more economically powerful and moving up the ranks such that by the
year 2020 it is projected that China, South Korea and Taiwan will be amongst
the top tier of national economies.
(ii) The Emerging Economies: Most of the countries which were
seen only a few years ago as “lesser developed countries” (LDC’s) now
show a healthy economic advancement and fall under the umbrella of
emerging markets. Countries such as Indonesia, China, Mexico, Brazil,
Chile, Hungary, Poland, Turkey, South Africa are all viewed as key growth
markets.