Question 1

As the world has become more globalised, it will inevitably bring more opportunities and
challenges to businesses. Free trade areas bring countries that develop coalition and are
obliged by their mutual agreement to reduce import and export barriers under a free trade
policy with little to no tariffs, quotas to their exchange operations. In addition, Free trade
agreements bring regional to cooperate between two or more countries and encourages trade
relations among the members that require to follow the rules and standards and incentives are
to be given in mutual trade. For example, Pacific Alliance, which consist of countries like
Chile, Colombia, Mexico and Peru, and trade agreements in two countries like Australia-
China Free trade agreement. Growth of regional free trade areas and agreements have led to
growth of trade and failure to participate will lead to declining of nations and businesses’
economies. Furthermore, technological advancement has been and will continue to change
business operations by providing businesses to both receive and supply produced good across
the globe with the use of internet, as it provides and increase global linkage with the use of
teleconferencing, telecommunications, gathering and sharing data and information, for
example, manager communicates to foreign business partners through use of Zoom, a
telecommunication applications, or, newspaper to be virtually distributed rather than door-to-
door.
Question 2
Country of origin effect are defined as a country with any sort of influence it has on
manufacture, assembly, or design to consumers’ both positive or negative perception of a
product developed from that specific country. For example, in Russia, product’s country of
origin is vital because it depicts quality of a product to them, and it is as important than a
brand name.
It is relevant to international marketers because, competing in an international market are
continuing to be a challenge as customers are aware of the origin of the country and that the
place of manufacture will affect the company’s reputation, product or brand image.
There are different type of influences and will be discussed in the following. firstly, there are
stereotypes consumers that judged based on origin, for example, Brazilians love and prefer
Japanese consumer electronics. Secondly, consumers opinion will influence their perception
depending on the brand’s origin and where it is located it is being manufactured or made, for
example, consumer continue to love a luxury car brand from Germany, called Volkswagen,
will tend to ignore where its being produced. Lastly, the discrimination against foreign
products will differs by demographic factors, for example, senior citizens and people with
low literacy rate or limited education will tend to avoid products that originate from abroad.
Question 3

To succeed foreign market like China, international marketer should conduct thorough
research on the consumer behaviour, country’s political and legal system. International
marketer will need to research on what drives Chinese consumers’ behaviours, attitudes that
influence and contribute to their buying behaviour, also, discover any similarities that exists
or achievable by marketing efforts, find new partners, distributors, or agents, to develop and
penetrate products into the Chinese market. When it comes to foreign market, they adopted
different culture and code of conduct and varies from countries to countries, for example,
countries like United States working hours are 9 am to 5 pm, whereas Spain are 9 to 1:30pm
and 4:30 pm to. There will be language barriers if international marketers are not skilled
enough to eliminate miscommunication, For example, Mercedes-Benz, a luxury car brand,
"Benz" translated into rush to death in Chinese. The cost of conducting international market
research will inevitably increase, thus, it is crucial to choose the right expertise, target market,
properly define company's goals.
Furthermore, there are governmental actions to be aware of like, embargoes, export controls,
import controls and regulation of international business behaviour to follow. International
marketer research whether there’s any embargoes or trade sanctions placed against China, to
distort any free flow of trade in goods, services or ideas. Also, any export controls by China
to safeguard their economic interest. And import controls that are placed on international
marketers through tariffs, quota systems that result in quantitative restraints or voluntary
restraints agreements. Lastly, regulations implemented to ensure and govern international
businesses behaviour is operated within legal, moral and ethical behaviour that considered
appropriate.
International marketer also can reduce risk of market entry by implementing either of the
following strategies, as follows. Firstly, partnering with export intermediaries like distributors
who will purchase the product and provide full marketing services. Secondly, agents who
operates on commissions basis but will not handle goods or, direct exporting where they take
responsibilities of its products that are sold to foreign customers or local representatives.
thirdly, integrated distribution where other marketers will make investment to sell its product
to foreign market. Lastly, by franchising where franchisor would grant another business
entity the right to do business in a given manners.
Question 4
It is important to conduct research on foreign country’s political environment as it may lead
to undesirable or misleading outcomes. Political risk is a risk of loss when the ‘after-event’
decisions made by government has caused changes in a country’s political structure or
policies like taxes, tariffs when investing in a country. For example, company may suffered
from an increased credit risk if government changes policies to companies. There are 3 major
political risk in the following. Firstly, there is ownership risk where companies’ operation are
at risk due to the exposes of property loss and government expropriation in another nation.
Secondly, operating risk where interference caused by ongoing operations that include
foreign exchange risk where currency’s exchange rate are fluctuating. Lastly, transfer risk are
risks are that being exposed by the transfer of funds to political risk across borders.
To manage and reduce risks, international marketers can conduct the following approaches.
Firstly, they should identify the risk, secondly, assesses and measure the risk by generating
financial model and integrated risk, thirdly, manage and monitor risk through responding by
avoiding, insure or mitigating and lastly, communicate such risks by reporting and making
appropriate decision.