Running head: THE GLOBAL MARKET FORCES

The Global Market Forces

Student’s Name

Institutional Affiliation
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The Global Market Forces

The global business environment affects fundamentally the marketing decisions. In the

rapidly changing global business environment, marketers must constantly align marketing

decisions with the realities in the environment. The global market forces affecting availability of

goods in the market and the pricing model depend to a large extent on the status of the

international environment (Ashill & Jobber, 2014). When the environment supports high

production levels, marketers are forced to review their pricing decisions downwards and vice

versa. A sound knowledge of the international market is central to making effective marketing

decisions for marketing executives (Czinkota & Ronkainen 2013). Multinational companies must

constantly monitor the international environment to understand the ever-changing forces and

make sound decisions that will propel the organization ahead of its competitors. These factors

include political, social, economic, and technological factors that have the capacity to

fundamentally alter the marketing decisions.

Global market forces refer to factors in the international market economy that have the

potential to influence product pricing and availability. Market forces alter the level of demand in

the global market with marketers having to reduce prices when demand drops (Birnleitner &

Student, 2013). Alternatively, marketers may be forced to develop new innovative marketing

strategies that will sustain prices above the prevailing market rates (Ashill & Jobber, 2014).

Conversely, when market forces push the level of demand high by reducing the amount of goods

supplied in the economy, marketers can vary pricing decisions by scaling up or maintaining at

the existing level as a competitive strategy (Aithal, 2017). However, the market forces are fully

dependent on the business environment. The political environment is fraught with opportunities

as well as risks that marketers must evaluate on a continuous basis.

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The world market is subject to international regulations such as the mandatory labor

legislations that directly affect the cost of goods produced. Marketing executives must evaluate

the impact such decisions have on the overall marketing objective and determine how to respond

(Aithal, 2017). For example, if the original objective of the marketing plan was to achieve a

return on investment of 12% by the end of the year, it would be prudent to evaluate the extent to

which such laws impact this objective and relevant decisions to guarantee the realization of this

goal. Appropriate decisions may include cutting down of certain marketing expenses or

increasing product prices (Ashill & Jobber, 2014). Global markets are subject to international

conflicts including civil wars which damage company infrastructures, limit access to markets and

increase security costs.

These environmental factors will inevitably affect other global market forces such as the

availability of products and services in the international market. The economic environment

includes the rate of inflation, fluctuations in currency exchange rates, and prevailing interest

rates (International Business –An Overview, n.d). These factors not only affect the availability of

goods and services in the market, but also impact directly on important marketing decisions such

as product pricing and promotion. Increased inflation and interest rates pushes the production

costs up affecting how marketers price and promote the finished product (Aithal, 2017). Equally

important is the level of income for the target market. A global environment with increased

purchasing power inevitably leads to higher prices. In times of recession and diminishing

disposable income, the global marketers must also respond to the environment to remain

competitive.

In the technological environment, marketers must be conversant with changing

technologies to ensure that they remain competitive. A technological analysis helps marketers to
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remain updated with the emerging innovations that can influence customer experiences

(International Business –An Overview, n.d). In the tourism sector and airline services, changing

technologies can create marketing opportunities. Emerging technologies provide better customer

care services and can be an important source of competitive edge when integrated in the

marketing plan (Ashill & Jobber, 2014). Marketers are investing heavily in technology to ensure

they remain in contact with global customers around the clock. The use of global media

platforms including social media channels are essential ways of remaining in close contact with

customers and sharing marketing decisions consistent with their expectations and the

expectations of the organization.

Global forces and marketers affect individuals, society, and business communities. Over

the past few decades, the level of international trade has increased significantly with records

showing a global trade level of $16.3 trillion during 2011 (Czinkota & Ronkainen 2013). The

rate of growth is projected to continue growing into the foreseeable future. Consequently,

countries are affected directly by international trade and decision that marketing executive’s

take. Linkages in global trade and marketing alternatives have created opportunities as well as

threats to individuals and companies (Ashill & Jobber, 2014). It has become nearly impossible to

differentiate between domestic economic policies from events taking place in the international

markets. Factors such as fluctuating exchange rates and financial flows affect domestic economy

yet policy makers have limited control, if any, over such occurrence.

The international interdependence which has been at the center of creating international

wealth is also responsible for increasing vulnerability of individuals and businesses to global

market forces (Aithal, 2017). Whether actively participating or not, everyone is affected by the

occurrences in the international markets as the consequences of decisions taken by international

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trade players will eventually impact local domestic policies (Birnleitner & Student, 2013). For

example, reduction in production of oil in Kuwait is likely to affect other domestic policies in the

United States creating opportunities for some businesses and individuals and threats for others.

Similarly, marketers in the international business environment have to grapple with important

basic human values (Steimer, 2019). Decisions taken regarding the quality of products they

market into the international markets may fall below acceptable quality standards posing safety

concerns (Steimer, 2019). The challenge for major players in the international market is to ensure

that products supplied in the global markets meet expectations of the target market.

Companies such as General Electric (GE) have integrated their leadership in

environmental business to advance their international marketing strategies. GE is renowned for

its leadership in the energy sector. In 2010, the company rolled out its Environment and

Sustainability Challenge. With global concern about environmental matters, the company sought

to align its international marketing strategies with the global movement toward sustainable

energy (Czinkota & Ronkainen 2013). The company asked its global customers to come up with

an innovative suggestion about how to create a power grid consistent with the environmental

protection principles. The company amassed over 4,000 suggestions from over 150 countries

worldwide. The sustainability challenge christened ‘Ecomagination Challenge’ was in line with

emerging global issues such as sustainable manufacturing and clean energy. International

marketers are concerned about integrating these principles in marketing programs as customers

and government regulatory agencies increase their expectations from multinational companies in

respect of these elements (Czinkota & Ronkainen 2013). During the first phase of the challenge,

the company handed out over $55 million to twenty individuals and organizations that came up

with the most novel ideas.

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The second phase of the ‘Ecomagination Challenge’ invited its customers across the

globe to send suggestions on “Powering Your Home” staying in sync with the theme in the first

phase. The company targeted innovations on how to integrate clean energy concepts in homes.

Winners would share out a budgeted $200 million package by suggesting ways of harnessing

solar, hydro, wind, and biomass power (Czinkota & Ronkainen 2013). The company used the

challenge to look for product innovation using public relations campaign. The company was able

to project its global image and brand through an effective marketing program.

The strategy adopted by GE in the Ecomagination Challenge can create opportunities for

the company products in new markets through increased market awareness created during the

challenge. As more people talk about the product and share ideas online, the value and awareness

of the brand is bound to increase. This creates business opportunities for the company. However,

the international market is affected by conflicting cultural and political factors that may make the

campaign less effective. Despite the increasing public discourse about clean energy and climate

change, many players in the international markets including in the United States are not

supportive of the idea of investing in clean energies. The political and social environments that

impact such global marketing strategies may vary significantly requiring customization of the

marketing strategy with the beliefs and expectations in the local community. While the strategy

may attract new customers in the global market and potentially deliver the framework for new

innovative product line, it may not be effective in delivering the marketing message to a

substantial section of the market. Cultural competency is as important as are environmental

concerns.
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References

Aithal, P. S. (2017). Impact of Domestic, Foreign, and Global Environments on International

Business Decisions of Multinational Firms: A Systematic Study. International Journal of

Management, Technology, and Social Sciences (IJMTS), 2(2), 93-104. Retrieved from

https://www.researchgate.net/publication/322138637_Impact_of_Domestic_Foreign_and

_Global_Environments_on_International_Business_Decisions_of_Multinational_Firms_

A_Systematic_Study

Ashill, N. J., & Jobber, D. (2014). The effects of the external environment on marketing

decision-maker uncertainty. Journal of Marketing Management, 30(3-4), 268-294.

Retrieved from

https://www.researchgate.net/publication/263605826_The_effects_of_the_external_envir

onment_on_marketing_decision-maker_uncertainty

Birnleitner, H., & Student, D. (2013). Influence of macro-environmental factors to the process of

integrating a foreign business entity. In Proceedings from Industry, science and policy

makers for sustainable future: the 14th Management International Conference (pp. 21-

23). Retrieved from http://www.fm-kp.si/zalozba/ISBN/978-961-266-148-

9/papers/MIC1119.pdf

Czinkota, M. R., & Ronkainen, I. A. (2013). International marketing. Cengage Learning.

International Business –An Overview. (n.d)International Business Environment. Pondi.

Retrieved from http://www.pondiuni.edu.in/storage/dde/downloads/ibiii_ibe.pdf

Steimer, S. (2019). Ethical Nonprofit Marketers Tell Stories with Empathy. American Marketing

Association. Retrieved from https://www.ama.org/marketing-news/ethical-nonprofit-

marketers-tell-stories-with-empathy/