However, entering international markets poses risks and valid reasons to avoid entering these markets. Married women over the age of fifty are more likely to make decisions on their own than their younger counterparts. Customers who are constrained for time are likely to favour small shops over large ones, spend less time comparing prices, use technology to reduce transaction time, and patronize businesses that help them save time and make their life easier. So it is when we improve the way products are made or services are delivered. A typical American company will design a new product, then calculate the cost. 21-33, 1986. Putting a B2C (business-toconsumer)or a B2B (business-to-business) site up in Europe is much more difficult than in the United States. Disclaimer 9. Even when on holidays or on leisure trips, people want everything to be planned meticulously, so that they can recuperate in a planned manner. While the concept of exchange rates appears relatively simple, these rates fluctuate widely and often, thus creating high risks for exporters and importers. This will have an important influence when companies design marketing mixes for products where the woman is the prime decision maker. According to Perner (2009), before entering international marketing, a firm needs to take into consideration the following decisions: These 11 nations represent 290 million people and a USD 6.5 trillion markets. (f) coping with strict government regulatory issues Products like cars which were traditionally thought of as male products, are bought by women, and companies are responding to their new buyers by designing cars specifically for them and by employing more women in the sales force. 98-101 Michael Krauss, Europe Forges Ahead with Web Innovations, Marketing News, August 14, 2000, p. 8; (23): Suzanne Bedlake, Birth of a Global Brand, Ad Age International, March 1997, p. 126; Rainer Hengst, Plotting Your Global Strategy. Direct Marketing, August 2000, pp. Some other companies have used the power of Internet to create virtual design teams. The exchange rate of a particular nations currency represents the value of that currency in relation to that ofanother country. Let's take a look. The chief characteristics of the technological environment are mentioned below: It is an element of indirect action or macro-environment. Governments set some exchange rates independently of the forces of supply and demand. The following are the five factors . There are many strategic analysis tools (PEST, SWOT, Porter's 5 Forces) to assess these macro environmental factors. Here are several examples of foreignbusiness behavior that differ from US business behavior: In France, wholesalers do not like to promote products. Copyright 10. Every culture has a social structure, but some seem less widely defined than others. Using the drop down menu, you will find links to recent news and business articles. Usually, the most significant marketing opportunities exist among the industrialized nations, as they have highlevels of income, one of the necessary ingredients for the formation of markets. Technological environment is the next element to discuss in the PESTEL analysis of France (France country profile). Americans seem to be fanatical about time when compared to other cultures. Often local firms will adopt imitation strategies,sometimes successfully. a. the social/cultural environment The technological environment is part of the company'sexternal environmentrelated to developments and changes in technology. IMPACT OF NATURAL AND TECHNOLOGICAL ENVIRONMENT ON MARKETING Natural Environment The analysis of the mega environment must also cover aspects like extent of endowment of natural resources in the country, ecology, climate, etc. 14 (2), pp. international marketing strategy by firms from a developing country-, The political/legal environment abroad is quite different from that of the US. Because of the riskof expropriation, multinational firms are at the mercy of foreign governments, which are sometimes unstable, andwhich can change the laws they enforce at any point in time to meet their needs. The effect of strategy on performance depends on specific situational McDonalds hasopted to market its product in India, largely because Indias population of more than 900 million represents one sixthof the worlds population. Americans should not say Wie gehts? (How goes it?) It is also too informal for firstmeetings. They have high literacy, modem technology, and higher per capita incomes. Some Germans consider smiles overly familiar from newbusiness acquaintances. Some firms choose to customize their market programs, adjusting their marketing mix to meet the needs of each target market. International marketing mix is prepared in light of this environment. After deducting the required profit margin from the selling price, planners developestimates of each element that make up the products cost: engineering, manufacturing sales, and marketing. Cavusgil "Marketing standardization As a result,business negotiations may take years. Technological environment affects the manner in which the resources of the economy are converted into output. communication. Values affect the goods that a customer buys and the way he buys them. Exporting, the preferred mode of internationalization of smaller firms, has become, The growth of exports originating from Brazil has garnered substantial interest, much of which has focused upon the changing composition of the exports. [13] S. Samiee and K. Roth "The influence of global marketing Similarly, in India, the Hindu religion forbids the consumption of beef, and fast-foodrestaurants such as McDonalds and Burger King would encounter tremendous difficulties without productmodification. Do not say Merci (Thanks) to a French persons compliment. [10] A.C. Perry "The evolution of the US. However, on 1 January 1999, 11 of the 15 member nations took a significant step toward unification by adopting the Euro as the common currency. Macro environment of marketing iram008. Companies should learn to expect tough customers. Content Guidelines 2. Cultural factors Culture is crucial when it comes to understanding the needs and behaviors of an individual. Entering an international market is similar to doing so in a domestic market, in that a firm seeks to gain adifferential advantage by investing resources in that market. Many Latin American nations fit into this category, and they exhibit rising levels of education, technology, and per capita incomes. (22): Henry Heilbrunn, Interactive Marketing in Europe, Direct Marketing, March 1998, pp. turn can lead to superior performance. This means doing less housework and home maintenance and dining out more. For the term technological environment may also exist other definitions and meanings, the meaning and definition indicated above are indicative not be used for medical and legal or special purposes. Technological. 423-444, 1986. 47-48. It is self-reinforcing. US companies make one-third of their revenues from products marketed abroad, in places such as Asia andLatin America. It includes telephones, the internet, computer systems and e-mail. In these times there is always a new invention or better technology around the corner. People will increasingly place more value on time than money. conceptual framework", European Journal of Marketing, Vol. Furthermore, according to a study by Swiss Info, Switzerlands meat prices are also 142% more expensive than the global average, ouch! The result is that Americans becomeimpatient, push for closure, and often make business concessions they later regret. There are many other ways in which technologies like Internet are impacting businesses. Under the EasyRentacar.com is the worlds first Internet-only rent-a-car company, he adds. [17] M. Theodosiou and L.C. These factors include cultural and social influences, legal issues, demographics, and political conditions, as well as . So, the only way for Swiss people to enjoy meat is to import it. Ninth The team members interact through the new tools of information technology, like e-mail, chat rooms, video conferencing, etc. Cavusgil "Export marketing strategies in the These norms are reflected in the difficulty of introducing the Web into Europe (see the next Integratedmarketing). This car was very popular in the United States, but when they tried to sell them in Spanish speaking countries, they seemed to have problems because NO VA means no go so they thought the car would not move. World Academy of Science, Engineering and Technology. At an operational level, the national managers need to have an achievable and detailed plan foreach country, which will take account of the local situation, explain what is expected of them and how theirperformance will be measured. Lisa Einet, the design director at Kellog, stated that the change of design was to modernize the snack and more strongly appeal to its current consumer. An empirical investigation of the differences between firms that emphasize global, Abstract In recent years small and medium-sized firms have taken their first steps towards internationalization. Corpus ID: 40268620; Technological Environment - International Marketing Strategy Relationship @article{Chirapanda2012TechnologicalE, title={Technological Environment - International Marketing Strategy Relationship}, author={Suthawan Chirapanda}, journal={World Academy of Science, Engineering and Technology, International Journal of Social, Behavioral, Educational, Economic, Business and . Review the articles and write a one-paragraph synopsis of each. Protective tariffs are established in order to protect domestic manufacturers against competitors by raising the prices of imported goods. Robots present labor cost reduction (Appendix 3), increase . Important areas for constant improvements need to be done in two different areas. In Italy, salespeople call on women only if their husbands are at home. Environmental influences on International Marketing can be defined as the different forces of the external environment that impact on the international marketing, such as the SPELTE. He will not take less because nobody takes less from him. World Academy of Science, Engineering and Technology, International Journal of Social, Behavioral, Educational, Economic, Business and Industrial Engineering, International trade involves both large and small f irms engaged in business overseas. Thenationalistic spirit that exists in many nations has led them to engage in practices that have been very damaging toother countries marketing organizations. They carry these values as buyers too. A persons religious beliefs can affect shopping patterns and products purchased in addition to his/her values, asdiscussed earlier. You will find information about tradeagreements, international governing organizations, and regional conflicts in this section. The social environment includes factors like lifestyle and consumer trends. The Association of Southeast Asian Nations (ASEAN) is an example of a regional trading block. Vol 7 (2), pp. Examples of objectives might be: financial performance, including return on investment and profitability; Economic. I visited Germany in High School for a German exchange program and not only learned the language better but got first-hand insight into German etiquette. A free trade agreement within ASEAN member nation allows for the free exchange of trade, service, labor and capital. In addition, ASEAN promotes regional integration of transportation and energy infrastructure. In India, there are over 200 different dialects, and a similar situation exists in China. An economys ability to generate wealth will be largely dependent on the speed and effectiveness with which they invent and adopt machines that improve their productivity. It includes telephones, the internet, computer systems and e-mail. This exemplifies the idea of aesthetics, as Cheez-it did the minor changes to the design so they looked better to the common consumer. These laws were designed to prevent pricing practices thatcould seriously harm local competition. This approach also encourages managers to worry lessabout product costs and more about the role it should play in gaining market share. Knowing little tips like this can help companies from having business deals fall through. Lets briefly look at some factors that make up a PEST analysis and how to adapt them for a foreign country. Dell is able to sell its product directly to business customers because Internet enables it to be in contact with its customers without incurring much expense. One of the most important things I learned was how important punctuality is, it means you are organized and good at time management which is very important in their culture. examination," Journal of International Marketing. A persons values are key determinants of what is important and not important to him, how he reacts in a particular situation, and how he behaves in social situations. Today people lead multiple lifestyles. In the past, a persons profession defined his lifestyle. 107-123, 1997. The changes were minimal, such as a change of font and subtle changes to the layout. Many of these facilities end up as private rather than government organizations. and S.T. Direct interference in a foreign company's business - expropriation, confiscation, nationalization 2. One of the fundamental steps that needs to be taken prior to beginning international marketing is the environmental analysis. External factors, called macro-environment factors, can be divided into six major groups- legal forces, socio-cultural forces, competitive forces, demographic, economic, and technological forces. The technology is changing at a greater speed due to continuous R&D efforts of organizations in every industry and industry sectors of major countries. The Technological Environment. A segment of just one customer may finally be becoming a reality. Forexample, many Communist nations desire self-sufficiency. The level of technological development of a nation affects the attractiveness of doing business there, as well asthe type of operations that are possible. the-road approach that companies implement to overseas markets. adaptation in export ventures: an empirical investigation" Journal of Module 5. The fitness enthusiast buys Nike shoes and special jogging outfits. Casual Fridays and home offices are further blurring the boundaries between work and leisure. In Japan, black and whiteare colors of mourning and should not be used on a products package. The majority of people living in a society uphold the values of the society. This is about 400 thin-screen computers in this very cool environment with a little coffee on the side.. [18] J.L Johnson. There are, however, some governments that openly oppose free trade. 26, No.3, 1992. in the international markets. A scarcity of time means that people will decrease the amount of time spent doing things they do not like doing. (d) Technological Environment : Technology and its transfer have become the key factors in the international business decisions. Technological change can involve: - New process of production: new ways of doing things which rises productivity of factor inputs, as with use of robotics in car assembly techniques which has dramatically raised output per assembly . towards a more global marketplace, especially technology in 68-69. Technological Environment Marketing dictionary Technological Environment that part of the firm's external environment in which changes in technology affect the firm's marketing effort; the changing technological environment may pose threats or present opportunities. Easy Everything (easyeverything.com) is wonderful, reports Reade Fahs, CEO of London based First Tuesday, a global Internet networking organization. However, salespeople who set definite appointments for sales calls in theMiddle East and Latin America will have a lot of time on their hands, as business people from both of these culturesare far less bound by time constraints. New technological developments, global economic conditions, worldwide population changes, increased competition, legislative requirements, and political events are some of the factors affecting current and future marketing activities of the organisations around the world. Those in favor of agreements argue that anti-dumpinglaws penalize those companies who are capable of competing in favor of those companies that are not competitive. Be technological environment giripratibha. The most common form of restriction of trade is the tariff, a tax placed on imported goods. International marketing environment is a set of controllable (internal) and uncontrollable (external) forces or factors that affect international marketing. SPELTE stands for the Social/Cultural, Political, Economic, Legal, Technological and Ethical factors that could act either positively or negatively on the business. Deciding whether or not to adjust its domestic marketing program is a critical issue for anyorganization planning to expand internationally. marketing strategy comprehensiveness", Journal of Marketing Vol. Regional trading blocs represent a group of nations that join together and formally agree to reduce trade barriers among themselves. Multiple lifestyles have evolved because people can choose from a growing number of products and services, and most have the money to exercise more options. Most Internet cafes are about the coffee with computers on theside. S.T. The U.S is the only currency that uses the same color green for all of its money. Review. Currently we are seeing new products and services being developed by emerging technologies like internet, mobile connectivity, nanotechnology, genetic engineering, etc. Women do not participatein household buying decisions in countries in which religion serves as opposition to womens rights movements. 60-62. Organizations must understand the variousenvironmental factors affecting international marketing to determine whether a standardized orcustomized marketing mix will be the best strategy. Consider some of the following technologically related problems that firms may encounter in doing business overseas: Foreign workers must be trained to operate unfamiliar equipment. Marketers who intend to market their products overseas may be very sensitive to foreign cultures. Free trade areas and customs unions eliminate trade barriers between member countries while maintaining trade barriers with nonmember countries. A nations economic situation represents its current and potential capacity to produce goods and services. When theyare not successful, the multinational firm often buys them out. The internal environment of an organization is within the control of the marketer, and he can change or modify the environment as per the demand in the market and requirement of the business. (4): S. Barker and E. Kaynak, An Empirical Investigation of the Differences Between Initiating and Continuing Exporters, European Journal of Marketers, Vol. Developed economies should be ready to relinquish businesses they are currently excelling in, because other economies will catch up with them and the developed economies will not be able to charge premium prices for their products and services. 87-110, 1993. It falls under the category of environmental analysis, which is to say that it revolves around identifying the various external variables that affect a businesss performance.Specifically, these are the Political, Economic, Social (sometimes socio-cultural), Technological, Legal, and Environmental ones, hence the . General news stories, financial markets activity, and technology issues are all discussed as theypertain to the specific region. Most nations encourage free trade by inviting firms to invest and to conduct business there while encouraging domestic firms to engage in overseas business. Ifthe estimated cost is too high, the product will be taken back to the drawing board. New inventions to produce the products. 2.3 The International Marketing Environment, 3.2 Components of the Strategic Planning Process, 3.3 Developing Organizational Objectives and Formulating Strategies, 3.4 Where Strategic Planning Occurs within Firms, 3.5 Strategic Portfolio Planning Approaches, Chapter 4: Gathering and Using Information: Marketing Research and Market Intelligence, 4.2 Marketing Research: an aid to decision making, 4.3 Steps in the Marketing Research Process, Chapter 5: Understanding Consumer and Business Markets, 5.1 Factors That Influence Consumers Buying Behavior, 5.2 Low-Involvement Versus High-Involvement Buying Decisions and the Consumers Decision-Making Process, 5.3 The Characteristics of Business-to-Business (B2B) Markets, 5.6 Stages in the B2B Buying Process and B2B Buying Situations, Chapter 6: Market Segmenting, Targeting, and Positioning, 6.1 Targeted Marketing versus Mass Marketing, 6.3 Selecting Target Markets and Target-Market Strategies, 6.4 Positioning and Repositioning Offerings, Chapter 7: Developing and Managing Offerings, 7.3 Managing New Products: The Product Life Cycle, 8.3 Types of Business-to-Business (B2B) Offerings, Chapter 10: Channel concepts distributing the product, Chapter 11: Integrated Marketing Communications and the Changing Media Landscape, 11.1 Integrated Marketing Communications (IMC), 11.2 Advertising and Direct Marketing, and Message Strategies, Chapter 12:Public Relations, Social Media, and Sponsorships, 12.1 Public Relations Activities and Tools, 13.4 Ongoing Marketing Planning and Evaluation. 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