International and Strategic Marketing
In international environment, there are several external forces that affect the strategies of an organization. These factors usually influence directly or indirectly on the capabilities of an organizations’ operation. When we consider an entire country there are several factors that combine to create a complete environment. A marketing environment can be divided five different environments that we will be discussing throughout this paper. These five environments are helpful to set a platform for the research and to pre-determine how the research is going to be conducted.
• Demographics Environment • Political /Legal Environment • Economic Environment • Socio-Cultural Environment • Technological Environment These environments vary from country to country and organizations need to analyze each targeted country from these aspects before starting a marketing research. The paper will compare these factors in different countries with China. As we know the China has the largest population in the world and from marketing prospect the country has so much to offer that need to be studied deeply in order to grasp a correct picture (Kotler, 2006). Demographics Environment
The demographics environment is the most important environment from research prospect. Organizations that plan to research on a particular region or in some country, they first
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Demographics differentiate people among different gender, age, their level of education, cultures, behavior, attitude, and other similar characteristics. All over the world, the growth rate of popular is a big concern; the population of the world is growing at a massive rate exponentially. This however, from marketers and researchers point of view is a good thing, because they are able to better understand the environment and likewise can analyze and categorize people in number of demographics segments.
Practically it has been observed that people from similar age groups have similar beliefs and priorities (Geography, n. d). Age demographics are a very helpful technique to different people in a country. Generally age demographics are divided into six groups • Preschool • School-age children • Teenagers • Young adults • Middle age adults • Old adults Education is also important factor that different people within a country. It categorizes people in terms of literacy rate which often results in different socio-economic classes.
For every country there are 5 groups in which people can be divided with respect to their literacy. • Illiterates • High school • Intermediates • College degree • Professional degree The reason that education is also a prime concern about the market researchers is the fact that the demand and buying behavior of people vary with different educational groups. People in similar educational group may opt for a similar brand but this is not firm rule, because the buying behavior also depends on other factors as well.
Branded products are more consumed in the region where literacy rate is high, whereas the low literacy or illiterate people within a country are more attracted towards inexpensive products. Gender demographics also contributes to the factor, as this has been a debate worldwide that men’s choice, reactions, decision making process and various other activities differ greatly to women. Similarly when an organization is planning to research for a product that is specifically targeted for female gender, then the population of men in a country would not be of that much of importance to the organization (Gernet, 1996)
. As far as China is concern, the demographic variable is a substantial factor to research prospective because the population of china is the largest population of the world and the gender demographics has almost equal ratio which means the largest men and largest women population. China literacy rate is although but the ratio is very low when it comes to high school educational group. Due to high population and less high-class education people in china are more attracted to cheap products.
However from the production point of view, China produces products in all varieties so that it can cater every market easily. People in China are willing to control the growth rate and as a result the growth rate of China is less than some of the other Asian countries but still with the highest population and with average death rate of above 65, majority of the population of China lie under the category of adult. Political /Legal Environment or Politico-legal Environment Often people study political and legal environment separately but from an organizational prospect these two are interrelated.
When we consider a politico-legal environment, every country has three levels in this category of environment that can be understood easily. The politico-legal environment comprises the general political climate that is present in a particular country. The current government, its beliefs, policies and its future plan all lie in this category. The three factors that make a politico-legal environment are: • Bureaucrats • Legislatives • Executives The bureaucrats are ones who run the government. This also includes the opposition that is present in minorities.
Country’s policies are all set up by these bureaucrats to ensure that the country will progress economically and morally. The beliefs of the bureaucrats are of greater concern in this regard because the policies that are setup by them are implemented throughout the country and its trade, affairs and all other matters are all concerned with it. Legislatives are the people who are responsible for creation of law and they justify if the law is appropriate or not. Legislature is a very important pillar from country’s point of view, because it holds a huge responsibility.
Thirdly the executives are the people who run the state. The businessman, working people and others who contribute in the economy of the country lie in this category. When conducting a marketing research, the thing that needs to be determined on the prior note is the variation in policy of a particular country. Country that has strong motives and their policies are set on one set of beliefs are considered as stable countries. The research in these kinds of markets can be conducted with ease, as no very much variation would occur when we move from end of the country to another.
China from politico-legal point of view has enjoyed a good position. The policies of the countries are all developed in the favor of the country. In 1970s when the country was not in a very good economic situation, the government decided to stop the import of oil. This policy although seemed not in favor of the people of China completely, as people were discouraged to use their own fueled vehicles and bicycles were the main source of personal transport. But on the longer term the policy helped the people, as they were not oil dependent country and their economy flourished with a boom.
The politico-legal environment in China is quite stable and the changes in policies are normally reactions to the global calls otherwise the country’s progress is a clear evidence that the political and legal environment has always favored the country to increase its presence in the global market (China, n. d). Economic Environment Marketing research is also important for an economic environment and economic condition of a country as it helps us in analyzing the economy of the country better plus one can also predict how the economy will be going in the next few months and what trends it would be following.
Marketing research also helps in knowing different factors that are important on impacting the economic condition. Every country wants to prosper and one can only prosper if they know what they want to do in the upcoming years. Once a country has identified what they would like to do then the next step is more important of implementing the plans and market research helps in this regard because market research helps in telling you about the practicality of anything.
For instance, if you want to expand your economy and for this reason you want more industries however, the economic condition in the country is such that you cannot open more industries as the current industries in the country are not operating at their full capacity plus these industries are also not earning profits. So, by conducting market research you would be able to analyze whether something is sensible or not. When we talk about China, marketing research is as important for the economic condition of China as for any other country.
In fact one has to emphasize more on marketing research in a country like China that is growing at a rapid pace. And they should analyze what are the factors that are important and have large influence on the current economic condition so that if at any time the economic condition of the country worsens, they could emphasize on these strengths because of which the country today is prospering. Socio-Cultural Environment Socio-Cultural environments include a set of beliefs, norms and values that vary among people in different countries.
From individual to a group and then to a society, relationships and accustoms are very important to analyze when a marketer starts to research on a particular country. The cultural values of a country are the heritage that usually are followed from past many years and therefore the research in this regard gets even interesting when a marketer gets to know about the richness of the culture and the core values that persists within a society. The original of social cultures are usually from forefathers but these cultures and moral values are also taught in schools, religious places, and other institutions and even on the billboards.
It is very important for an organization to value and respect the beliefs of a society the same way that the society does. There are some norms and accustoms that often change with time, but the change is often a reaction to some event. Therefore marketers not only determine the current accustoms while research but they also analyze the change pattern so that if in future these values are going to be changed they could be predicted well before (Consumer, n. d).
Cultures within sub cultures also exists, although this increases the effort for research but if the research is conducted in a systematic way this results in a better and accurate data. A person at one time is usually associated with different social groups at the same time, and therefore the research gets interesting when the subcultures helps in determining the target markets. With such a high population numbers, the social communities in china are huge in numbers as well. The rural area accustoms of China are totally different from the urban areas.
The culture is rich and the norms and beliefs are very old. Chinese people are very much attached to their cultures and even in the urban areas their beliefs, attitude towards their work makes a positive statement about their attachment to their cultural values. Technological Environment The technological environment also plays an important role in the research of any company. In current scenario when everyday a new technology brings revolution in the market, the importance of this technological environment cannot be overcome.
In order to cope up with the current scenario of technological advancements company needs to do research in this environment to keep them aligned with the current technology. Thus they require research in the upcoming technologies to draw results that what advantage they can get with the adaption of the new technology and how beneficial it would be for them in future. Whenever the change comes in the technological environment it has a dramatic effect on company’s progress.
For instance a company could be thoroughly committed to one technology and the change may lead to investments not only on the equipment but also on the training of the staff for operating the equipment. However, if a company spending on this new technology is not aware of the fact that whether this investment is profitable or not, or if it is profitable what will be the ratio. Hence the research in this environment will let the company know in advance which technology is beneficial for them and which is not.
This is why most of the managers in the organization are concerned about whether they should spend money on the latest technology equipment or not, but in such case this kind of research is very helpful for the organization. When we talk of China from technological point of view, it has maintained a leading position here as well. China in this field has emerged as rival for all the technologically advanced countries. It is also said that by 2020 China is going to be the leader in this industry. No matter whatever the technology is China is always first to take the initiative to bring revolution in the industry.
Apart from technological advancement, China has always focused on cost effectiveness in its equipment which results in its success in this industry. Moreover Chinese people are keen learner that’s what the reason whatever the technology is demanded in the market they are one to introduce it with a cost effective solution. Whether it is cell phones or personal computers China has done well in all the equipments and still it has much space to do more in this field. Conclusion These five environments are of prime concern when planning a marketing research.
Regardless of the fact that the research is going to be a qualitative or quantitative research these environmental factors needs to be considered while the research is conducted. Often people predict the research answers through simplifying the results that have been taken before, but it is always advisable to review and refresh the research as with the passage of time things change and so that the environment which results in a change on macro level. References China, n. d. , China’s Political Situations, retrieved August 12, 2010 from http://www. state. gov/r/pa/ei/bgn/18902. htm#political Consumer, n. d. , China consumer market, retrieved August 12, 2010 from http://www. chinaknowledge. com/marcom/Book-ChinaConsumer. aspx? subchap=1&content=3 Geography, n. d. , The Geography of China, retrieved August 12, 2010 from http://www. laits. utexas. edu/orkelm/kelmpub/geographychic. pdf Gernet, 1996.
A History of Chinese Civilization. 2. New York: Cambridge University Press. Perry, Elizabeth. Rebels and Revolutionaries in Northern China, 1845–1945 Kotler, Phillip 2006, Principles of Marketing (Version 12/E). Pearson Education Inc. New Jersey