International market

environment
 Meaning
• Environment consists of forces. Environment is made of such controllable
and uncontrollable forces. It is the environment that determines favourable
or unfavourable conditions, and hence, provides either opportunities or
threats and challenges. Degree of one’s success, to a large extent, depends
on effect of marketing environment and ability of the firm to respond
effectively. International marketing environment covers all the relevant
global forces influencing international marketing decisions.
• These forces may be internal (such as resource ability and management
attitudes), may be domestic (such as government policy toward international
business and facilities), and global (such as overall international business
environment of relevant part of the world). However, discussion of global
forces is more relevant as they are major considerations in international
marketing.
• Global marketer have to keep constant watch on the changes taking places
in international market environment.
 Features of IME
1. Influencing Factors: WTO, IMF, World bank, UNCTAD.
2. Flexible charter: its changes suddenly due to certain major
events in different countries.
3. Effect on business enterprises.
4. No control of IME
 Components of IME
• Economic Environment.
• Political and legal Environment
• Cultural Environment.
• Social Environment.
• Demographic Environment.
• Competitive Environment
• Technological Environment.
 Economic Environment
Refers to the host country economic factor. The companies have
to study the home country market and also the host countries
economy, government policies, GDP, Inflation.
After the world war 2 economic/ financial institution were
started collectively by countries for mutual benefits. Such
institutions are called international economic financial
institutions.
1. International Bank for Reconstruction and development IBRD
also known as World Bank.
2. International Monetary Fund (IMF).
3. International Development Association (IDA).
4. International Finance Corporation (IFC).
 Features of IEI
• Started collectively by member countries of UN.
• Provide Financial assistance to needy nations.
With interest for long period on time.
• Positive contribution in economic and industrial
development of developing countries.
• Huge organisation structure for the conduct of
their operations.
• Raise fund from different sources
 World bank
• International Bank for Reconstruction and development IBRD also known as World
Bank.
• It was establish in 1945 under the Bretton woods Agreement of 1944. it is the sister
institution of IMF.
• IMF was started for providing short term assistance to member countries to correct
the BOP.
• World bank was establish to provide long term financial assistance.
• They also provide after facilities i.e roads, bridges, electricity generation, dams,
ports, production units. As well as technical and constancy.
• India is one of the founder member of world bank .
• India is one of the major borrower of world bank. For railways, rural development,
irrigation facilities, ports.
• World bank also helped India to solve amicably its river water dispute with Pakistan.
• Bullet train project
 World bank has four affiliates.
• International Development Association (IDA) establish in
1960.
• The international Finance Corporation (IFC) establish in
1956.
• The Multilateral investment guarantee Agency (MIGA)
establish in 1988.
• International Centre for the Settlement of Investment
Disputes (ICSID).
• World Bank is owned by the government of 188 countries
its capital is contributed by the member countries
government.
 Objectives of World bank
• To mobilise resources in the international
markets.
• To provide long term loans to creditworthy
countries.
• To provide technical assistance.
• To assist the member countries in building up the
basic infrastructure.
• Provide a better fuller and more productive life to
the mass of the underprivileged in poor countries.
Function / Activities of world bank
• To assist in reconstruction and development of
territories of its members countries.
• To promote private foreign investment by
means of guarantees on participation in loans
and other investments.
• To promote long range balanced growth of
international trade.
• To arrange the loans made or guaranteed by it
im relation to international loans.
 Organisation of IBRD
• The IBRD has 189 member governments, and the other institutions have between 153 and 184 members.[2] The
institutions of the World Bank Group are all run by a Board of Governors meeting once a year.[13] Each member
country appoints a governor, generally its Minister of Finance. On a daily basis the World Bank Group is run by a
Board of 25 Executive Directors to whom the governors have delegated certain powers. Each Director represents
either one country (for the largest countries), or a group of countries. Executive Directors are appointed by their
respective governments or the constituencies.[13]
• The agencies of the World Bank are each governed by their Articles of Agreement that serve as the legal and
institutional foundation for all of their work.[13]
• The activities of the IFC and MIGA include investment in the private sector and providing insurance respectively.
• Presidency[edit]
• Traditionally, the Bank President has always been a U.S. citizen nominated by the President of the United States,
the largest shareholder in the bank. The nominee is subject to confirmation by the Board of Governors, to serve
for a five-year, renewable term.[13]
• Current president[edit]
• On April 5, 2019, David Malpass was selected as the 13th World Bank Group President; his term began on April
9, 2019.
• Managing Director[edit]
• Managing Director of The World Bank is responsible for organizational strategy; budget and strategic planning;
information technology; shared services; Corporate Procurement; General Services and Corporate Security; the
Sanctions System; and the Conflict Resolution and Internal Justice System. The present MD Shaolin Yang
assumed the office after Sri Mulyani resigned from the post to take the charge as finance minister of Indonesia.[
 IMF
• Bank which is intended to help the member
countries by providing short term loans to tide
over their temporarily difficulties in their balance
of payment.
• The capital of the fund is contributed by member
countries in the form of quotas. The fund raises
additional funds by selling its gold reserves to its
members. Funds are also borrowed from the
government, central banks and private financial
insitutions.
 Objectives of IMF
• To promote international economics and monetary
cooperation
• To promote exchange rate stability
• To help members with temporary BOP.
• To promote growth of multilateralism in trade.
• To help the Balance of payments equilibrium
• To facilitate the expansion of balanced growth of
international trade by providing international liquidity
• To establish and maintain currency convertibility.
• To lend confidence to members by making the fund
resources available to them.
 Functions and services of IMF
• The fund provide short term loans to its member.
• The fund has established a code of economic
behaviour for its members.
• It renders technical advice to its members on fiscal
policies.
• It conduct research studies.
• It renders technical experts to member countries.
• It conduct short training courses.
• International Monetary and Financial Committee Board of Governors Joint IMF-World
Bank Development Committee1
•
• ExecutiveBoard Independent Evaluation Office
•
• Managing Director
Deputy Managing Directors
•
• Investment Office-Staff Retirement Plan Office of Budget & Planning Office of Internal
Audit and Inspection Office of Risk Management
• Area
Departments African Department Asia and Pacific Department
Regional Office for Asia and the Pacific European Department Offices in Europe Middle East
and Central Asia Department Western Hemisphere Department Functional and Special
Services Departments Communications Department Finance Department Fiscal Affairs
Department Capacity Development The Africa Training Institute (ATI) Joint Vienna Institute
Middle East Center for Economics and Finance (in Kuwait) Singapore Training Institute
 India and IMF
• India is one of the founder members of IMF.
• India secured large scale financial assistance
from IMF.
• India got membership of IBRD.
 International Finance corporation
(IFC)
• IFC was established in July 1956 in order to
provide finance to private sector in developing
countries. It focuses exclusively on investing in
the private sector in developing countries.
 Objectives of IFC
• IFC provides equity and loan capital for private enterprises in association with private investors
and encourages the development of local capital markets and stimulates the international flow
of private capital. It supports joint venture which provides opportunities to combine domestic
knowledge of market and other conditions with the technical and managerial experience
available in the industrial nations.
• The principal objectives of IFC are as follows.
• 1. It makes investments in productive private enterprises in association with private investors. It
concentrates on areas where sufficient private capital is not forthcoming on reasonable terms
and conditions.
• 2. It acts as a clearing house for bringing together investment opportunities, private capital and
the experienced management.
• 3. It stimulates the International flow of capital.
• 4. It assists the development of capital markets in less developed countries.
• 5. It encourages private sector activity in developing countries through three types of activities.
• private sector project financing
• helping companies in the developing world to mobilize financing in the international financial
markets and
• providing guidance and technical assistance to business and governments.
International Economic Integration
• It means grouping of countries for mutual
benefits.
• It is purely voluntary in character.
• The motivation for economic integration is to
promote trade of the group and share the
benefits equally.
 Forms of Economic Integration
• Free Trade Area
• Customs Union
• Common Market
• Economic union- e.g EU is best as the have
one currency EURO
 Political and Legal Environment
• Political environment influence economic
environment as political changes and changes in the
policies of government affect economic environment.
• It refers to influence by three political institution.
• 1. Legislature
• 2. Executive
• 3. Judiciary
• In shaping, directing , developing and controlling
marketing business environment.
 Factors influencing political environment

• Democracy
• Authoritarianism
• Communism
Political risk and political instability
• Large scale corruption and bribery
• Social unrest
• Attitude of nationals
• Policies of the host government
• Poor law and order
 Legal system
• Common law
• Civil law
• Theocratic law
 Anti- Dumping law
• The term dumping is used in relation to selling
goods in foreign markets.
• An anti-dumping duty is a protectionist tariff
that a domestic government imposes on
foreign imports that it believes are priced
below fair market value. Dumping is a process
where a company exports a product at a price
lower than the price it normally charges in its
own home market
 Objectives of Dumping
• To make easy entry in foreign markets
• To sell surplus production in foreign countries
• To develop trade relations with foreign
countries
 Import License
• Is a trade license or permission required for import
of certain goods into the country from outside.
• Its is defined as permit that allows an importer to
bring in a specified quantity of certain goods
during a specified period.
• Purpose of import license:
• To restrict the outflow of foreign currency
• To control entry of dangerous items.
• To restrict the inflow of foreign goods
 Cultural environment
• Is the sum of values, rituals, symbols , beliefs and
thought processes that are learned shared by a group
of people, and transmitted from generation to
generation.
• Element of culture:
• 1. language
• 2. Religion
• 3. Values and Attitudes
• 4. Manners and Customs
• 5. Aesthetics and education
 Marketing Research
• The systematic gathering recording and
analysing of data about problem relating to
the marketing of goods and services.
• It deals with foreign markets which are
attractive and profitable provided products
and marketing activities are adjusted as per
the needs and expectations of foreign markets
and buyers.
 Objectives of International marketing
Research
• To explore promising foreign markets.
• To study the needs of foreign buyers.
• To adjust domestic products as per the needs and
expectations of foreign buyers.
• To study critically pricing structure market competition and
distribution network in foreign markets.
• To design suitable marketing mix.
• To explore profitable foreign markets.
• To promote large scale export of company products.
• To earn high profits by making domestic products attractive
as well as agreeable to foreign buyers.
 Need of Conducting international
marketing Research
• Selection of target market.
• Selection of suitable products for global
marketing
• Appropriate market entry.
• Appropriate product packaging
• Appropriate product positioning.
• Promotional campaign.
• Misc. Aspects suggesting need of marketing
research.
Steps in International Marketing Research

• Step I – Determining Research objectives.

• Step II- Determining Areas of Study.
• Step III- Collection of Data.
• Steps IV- Processing, Analysis and
Interpretation of Data.
• Steps V- Presentation of Research Finding/
Report.
Scope of International Marketing Research

• Research of industry, Market characteristics

and trends.
• Product Research.
• Distribution Research.
• Pricing Research
• Promotion Research
 IT in Marketing Research
• Introduction of social media in marketing
research.
• Data collection improvements.
• Effective data analysis.
• Creating new research roles.
• Large data informs research.
 Internet Technology
• Online surveys and buyer panels.
• Online focus group.
• Web visitor tracking.
• Advertising measurement.
• Customer identification systems.
• E-mail marketing lists.
• Observational research.
International Marketing Mix