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2. Economic Environment The economic environment consists of factors that affect consumerpurchasing power and spending patterns. Nat ions vary great ly in theirlevels and distribution of income. Some countries have subsistenceeconomies they consume most of their own agricultural and industrialoutput. These countries offer few market opportunities. At the otherextreme are industrial economies, which constitute rich markets for manydifferent kinds of goods. Marketers must pay close attention to majortrends and consumer spending patterns both across and within theirworld markets.Marketers should pay attention to income distribution as well as averageincome. Income distribution in the still very poor. At the top are upper-class consumers, whose spending patterns are not affected by currenteconomic events and who are a major market for luxury goods. There is acomfortable middle class that is some what careful about its spending butcan still afford the good life some of the time. The working class muststick close to the basics of food, clothing, and shelter and must try hardto save. Finally, the poor class must count their pennies when makingeven the most basic purchases. Over the past three decades, the richhave grown richer, the middle class has shrunk, and the poor haveremained poor. 3. Natural Environment The natural environment involves the natural resources that are neededas inputs by marketers or that are affected by marketing activities.Marketers should be aware of several trends in the natural environment.The first involves growing shortages of raw materials. Air and water mayseem to be infinite resources, but some group see long-run dangers. Airpollution chokes many of the worlds large cities and water shortages arealready a big problem in some parts of the world. Renewable resources,such as forests and food, also have to be used wisely. Nonrenewableresources, such as oil, coal, and various minerals, pose a seriousproblem. Firms making resources, such as oil, coal, and various minerals,pose a serious problem. Firms making products that require these scarceresources face large cost increases, even if the materials do remainavailable.A second environmental trend is increased pollution. Industry will almostalways damage the quality of the natural environment. Consider thedisposal of chemical and nuclear wastes; the dangerous mercury levels in

G L O B A L M A R K E T I N G | the ocean; the quantity of chemical pollutants in the soil and food supply;and the littering of the environment with non- biodegradable bottles,plastics, and other packaging materials. 4. Technological Environment The technological environment is perhaps the most dramatic force nowshaping our destiny. Technology has released such wonders asantibiotics, organ transplants, computers, and the Internet. It also hasreleased such horrors as nuclear missiles, chemical weapons, and assaultrifles. It has released such mixed blessing as the automobile, television,and credit cards. New technologies create new markets and opportunities.However, every new technology replaces an older technology. Transistorshurt the vacuum-tube industry, xerography hurt the carbon-paperbusiness, the auto hurt the railroads, and compact disks hurt phonographrecords. When old industries fought or ignored new technologies, theirbusinesses declined. Thus, marketers should watch the technologicalenvironment closely. Companies that do not keep up with technologicalchange soon will find their products outdated. And they will miss newproduct and market opportunities. 4. Political Environment Marketing decisions are strongly affected by developments in the politicalenvironment. The political environment consists of laws, governmentagencies, and pressure groups that influence and limit variousorganizations and individuals in a given society. Even the most liberaladvocates of free-market economies agree that the system works bestwith at least some regulation. Well-conceived regulation can encouragecompetition and ensure fair markets for goods and services. Thus,governments develop public policy to guide commerce-sets of laws andregulations that limit business for the good of society as a whole. Almostevery marketing activity is subject to a wide range of laws andregulations. Legislation affecting business around the world has increasedsteadily over the years. The States has many laws covering issues suchas competition, fair trade practices, environmental protect ion, productsafety, truth in advertising, packaging and labeling, pricing, and otherimportant areas. The European Commission has been active inestablishing a new framework of laws covering competitive behavior,product standards, product liability, and commercial transact ions for thenations of the European Union. Several countries have gone father thanthe United States in passing strong consumerism legislation. For example,Norway bans several forms of sales Promotion trading stamps, contests,premiums as being inappropriate or unfair ways of promoting products.Thailand requires food processors selling national brands to market low-price brands also, so that low-income consumers can find economy

10 G L O B A L M A R K E T I N G

brands on the shelves. In India, food companies must obtain specialapproval to launch brands that duplicate those already existing on themarket. 5. Cultural Environment The cultural environment is made up of institutions and other forces thataffect a societys basic values, percept ions, preferences, and behaviors.People grow up in a particular society that shapes their basic beliefs andvalues. They absorb a world view that defines their relationships withothers. People in a given society hold many beliefs and values. Their corebeliefs and values have a high degree of persistence. For example, mostIndians believe in working, getting married, giving to charity, and beinghonest. These beliefs shape more-specific attitudes and behaviors foundin everyday life. Core beliefs and values are passed on from parents tochildren and are reinforced by schools, churches, business, andgovernment.The notion of various environmental forces to global company is shown infigure.

Companies decide to expaunsuccessful because thenot change their marketinSome people feel one couand competitive conditionmessage that works in oncountries are very differevariations to their marketiTo overcome global markweve created Global Maryour way through the ma 1. Do The Research! With any kind of marketinresearch when developingimportant when a businestargeted audience is mucResearching the demografigure out if there will beimportant. Make sure thefigure out for that countryway to target them. 2. Recognize Cultural D Countries differ in manyand education. These diff marketing strategies. Thrtraditions, tastes and pref ideas can accommodate tthe cultural differences incampaigns will be considethe credibility of that com 3. Develop a Unique MaBehavior of a Certain S This secret also includes sconsumers whose purcha GLOBAL MARKE nd their organizations globally and arfail to realize one very important thig efforts to adapt to those of anotherntrys values, beliefs, culture, economare not very different from another.country can fail miserably in anothet from each other. Companies need tng approach when doing business intting struggles and conquer your cometing: 5 Steps to Succession to helpketing process.g there should always first be some kiyour marketing strategies. This is ess is expanding internationally becausedifferent than

their home land audiehics and also doing some kind of resdemand for your product or service ie is a want or need for your product awho your audience is and what will b ifferences. ays including language, religion, socirences have significant impact on a bugh ones research they also need toerences are of other countries, so theithe country and be effective. If oneo account then most likely their markred meaningless or offensive and coulany. rketing Mix to Appeal to the Purcgment in a Given Country. ome research. One needs to identifying behavior differs from others in an TING: 5 STEPS TO SUCCESSIO G L O B A L M A R K E T I N G | g. They docountry.ic conditionsBut abecausemakernationally.etition,ou guidend of eciallytheirce.arch tos verynd thene the bestl structureusinesssfind whatr marketingoes not takeetingd damage asing roups of important N

12 G L O B A L M A R K E T I N G way. These segments can be found though the geographies, demographics,social-cultural factors and psychological factors. The segment that wouldbest benefit the company is the one that then needs to have a uniquemarketing mix that will appeal to those purchasing behaviors. The marketingmix will include a firms choice about product attributes, communicationstrategy, distribution strategy and pricing strategy that they will offer theirtargeted segment. 4. Identify Market Segments that Transcend National Borders. In order to do this, a company needs to find the similarities among theconsumers in a certain segment. Such similarities like values, age, andlifestyle choices which need to translate into similar purchasing behaviors.Once these similarities are found, a company can then view the globalmarketplace as a single entity and sell a standardized product worldwideusing their same basic marketing mix to help them position and sell thatproduct in a variety of national markets.

5. Decide if standardized advertising will work for your company. If a companys advertisements legally and ethically can be viewed in theirhome land country but also in other countries, then standardized advertisingis a great idea. If the advertisements are not offensive and abide by thatcountrys laws then most likely using the same ads instead of developingnew ones for different countries is going to be a significant cost saver. Also,there is concern that creative talent is limited and that one large marketingeffort has better results than 40 or 50 smaller efforts.On the other hand, cultural diversity makes it exceptionally hard to developa single advertising theme that will be successful worldwide. Also,advertising regulations might block implementation of standardizedadvertising. Laws vary from country to country and so what might beacceptable in one country is breaking the law in another. Differentiatingbetween the two and then deciding what will work for your company mightsave you money or avoid a lawsuit.

First and fundamentallparts of the worldopportunities beyondpopulation growths inan additional incentiveeconomies, such as Kand Grupo Modelo,around the world.Second, there is a stryears ago, the worldsMotors, Ford, and Chrand DaimlerChrysler (among others, standmarket. Similarly, perwhich dominated the Pis crowded with Dell aNEC from Japan, Acerthe United States, bumade by U.S. compPanasonic, and MagnaRCA and Zenith televiwith a truly all-Americcountries and exporte(known for its Haaginstitutions owned andnewly created compaMetropolitan PLC andThird, another profounthe Internet and eleopened the gates for cnational boundaries. Mface-to-face retail,demographic and ptraditionally sell throucommerce. Furthermoby the retail channel. WHY GLOBAL M y, domestic-market saturation in theorced many companies to look f their national boundaries. The edeveloping countries also, gave thoto venture abroad. Now companies f reas Samsung and Hyundai and Meave made inroads into the develoong competition around the world.greatest automobile manufacturerssler. Today, companies like Toyota,a recent merger of Daimler-Benz aut as competitive nameplates in thonal computer was almost synonymC business worldwide. Today, the cond Compaq from the United States,rom Taiwan, and so on. Color TVs wetoday it is almost impossible to fianies. Instead, foreign brands suox are in most homes in the Unitedion are made overseas. Nike is an shoe brand, but its shoes are all mto the United States. Burger Kingen-Dazs ice cream brand) are tmanaged across the Atlantic Oceany as a result of the merger of Buinness PLC.d change in the last decade is the ptronic commerce, or e-commerce.ompanies to sell direct-to-consumersany argue that e-commerce is lessut it could actually provide msychographic information. Manufah the retail channel may benefit thee, customer information no longer isost important, the data allow for the A

RKETING IS IMPERATIVE G L O B A L M A R K E T I N G | industrializedr marketingonomic ande companiesom emergingxicos Cemexped marketsbout twentywere GeneralHonda, BMW,nd Chrysler),e automobileus with IBM,puter marketToshiba ande invented ind a color TVh as Sony,States. Even.S. companyde in foreignand Pillsburyo Americanby Diageo, aitains Grandroliferation of The Interneteasily acrossintimate thanre targetedcturers thatmost from eheld hostagedevelopment