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The environment consists of controllable and uncontrollable factors. The environment provides threats, opportunities, and challenges. The international marketing environment includes all the forces that may affect international marketing decisions. The forces can be internal and external. International marketing decisions are affected by many forces which include cultural, legal, geographical and ecological forces.
Culture, values, and beliefs affect consumer buying perception. The socio-cultural factors affect international business. The international organisations should understand the buying behaviours of consumers all across the world. The preferences of consumers are different in every country and the organisation needs to understand the cultural differences. For example, McDonald understands that Indians consumers do not prefer beef or pork so to survive in the Indian market they come up with vegetarian burgers. One of the most important things is that the whole cooking process is transparent as vegetarian people prefer separate sections for the veg burgers. So a company needs to understand the socio-cultural factors of a country.
Legal procedures of home and host countries also affect the company. Product acceptability, advertising, and various other promotional methods do not comply with other countries. The firm should understand the legal restrictions of other countries. The legal environment of the host country is more complex than the home country. International law affects the operations of the business. European Union and world trade organisation are the legal bodies that control the organisations.
The political environment includes the international and national political factors that can affect the decision making of the organisation. The political environment is associated with government interventions and the freedom they allow to a company. The change in the international government also affects the international strategy of the firm. The firms which are operating in the international market should understand the nature of politics in the country. The major political factors are licensing and permits, taxes, tariffs, and currency risks. Tariffs are imposed by the countries to protest the interest of the domestics companies and this can influence the international strategy of many organisations.
The purchasing power of people is also a major factor in the international market. Marketers should closely understand the spending power of consumers in the country. The economic conditions and economic resources are very crucial factors in marketing. The organisation should pay close attention to analyse the economic conditions of the country. Moreover, marketers should integrate these factors while developing marketing programs. Firms should understand the economic policies of the host country. Currency fluctuations also affect the profitability of the firm. The major factor is that the firm should understand whether the particular market is developing economically or not. The assessment will be useful as it helps to identify the factors that are the most suitable for the firm.
Marketers should understand the changes in technology and they should adopt the latest technology to survive in a dynamic environment. Technology is a major force because it provides various opportunities for companies. However, technological changes cause a change in marketing systems and consumption patterns of the consumers. Marketers should gain knowledge about the competitors and the technology they are using to manufacture their products and services. Technological factors sometimes create problems for small companies that are not able to adopt the new technology.
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