1) Global Marketing

The process of conceptualizing and then conveying a final product or service worldwide with the hopes of
reaching the international marketing community. Proper global marketing has the ability to catapult a
company to the next level, if they do it correctly. Different strategies are implemented based on the
region the company is marketing to.

For example, the menu at McDonald's varies based on the location of the restaurant. The company
focuses on marketing popular items within the country. Global marketing is especially important to
companies that provide products or services that have a universal demand such as automobiles and food.

2) 5 reason global marketing is needed

Build more brand and shareholder value,

Add revenue sources and growth markets,

Reduce dependence on your home market,

Leverage existing corporate technology, supply chains, know-how and intellectual property,

Award more franchises in the home country by being global.

Economies of scale in production and distribution

Lower marketing costs

Power and scope

Consistency in brand image

Ability to leverage good ideas quickly and efficiently

Uniformity of marketing practices

 Helps to establish relationships outside of the "political arena"

Helps to encourage ancillary industries to be set up to cater for the needs of the global player

3) Economic factors

a) A comparative analysis of the industrial infrastructure in different countries

David Richardo pointed out that it still possible to produce profitably what one is best at even if someone
else is better and this theory is well known as comparative advantages.

Measures a product are cost of production not in monetary terms but in terms of for gone opportunity to
produce something else. In essence the theory of comparative advantages says it pays for countries to
engage in international trade exporting in which they are efficient and to import goods that they are
relatively inefficient at producing

b) An assessment of the economic infrastructure in these countries

Concept of Economic Advancement

Economic advancement is characterized by such factors as relatively small allocation of labour

Force to agriculture: energy available in large amounts at low cost; high level of output and
Income; high level of per capita consumption; relatively low rates of population growth etc

 The international marketer must study each country's economy.

 Two economic factors reflect the country's attractiveness as a market: the country's industrial
structure and its income distribution.
 The country's industrial structure shapes its product and service needs, income levels, and
employment levels.
 Subsistence economies are those where the vast majority of people engage in simple agriculture.
 Raw material exporting economies are countries that are rich in one or more natural resources,
but poor in other ways.
 Industrializing economies are those where manufacturing accounts10% to 20% of the country's
economy.
 Industrialized economies are major exporters of manufactured goods and investment funds.
 The second economic factor is the country's income distribution.
Countries with subsistence economies may consist mostly of households with very low family incomes.
Industrialized nations may have low-, medium-, and high-income households.
In many cases, poorer countries may have small but wealthy segments of upper-income consumers.
Even in low-income and developing countries, people may find ways to buy products that are important
to them.

Economic factors are just some of the "environmental uncontrollable" which marketers must consider
when deciding to market globally. The global economy can be traced back hundreds of years when
traders from the east and west came together to exchange goods. Through the legacy of mercantilism up
to the current GATT Round, marketers have had to contend with changes and developments in the
economic environment, including the growth of regional economic blocs, all aimed at increasing
cooperation between the grouped nations.

Markets differ widely in their size and state of development worldwide. It would be too easy to classify
these markets as "rich" or "poor", "developed" or "less developed", although this is often done for ease of
analysis. Countries show great within country differences also and marketers have to be aware in
assessing market potential that they do not use general descriptions of nations as criteria of whether to,
or whether not to, open trade negotiations.

The economic environment consists of factors that affect consumer purchasing power and spending
patterns. Nations vary greatly in their levels and distribution of income. Some countries have
subsistence economies they consume most of their own agricultural and industrial output. These
countries offer few market opportunities. At the other extreme are industrial economies, which constitute
rich markets for many different kinds of goods. Marketers must pay close attention to major trends and
consumer spending patterns both across and within their world markets.

Marketers should pay attention to income distribution as well as average income. Income distribution in
the still very poor. At the top are upper- class consumers, whose spending patterns are not affected by
current economic events and who are a major market for luxury goods. There is a comfortable middle
class that is somewhat careful about its spending but can still afford the good life some of the time. The
working class must stick close to the basics of food, clothing, and shelter and must try hard to save.
Finally, the poor class must count their pennies when making even the most basic purchases. Over the
past three decades, the rich have grown richer, the middle class has shrunk, and the poor have remained
poor.

The following article is a small elaboration of the major economic factors affecting business organizations.
Internal environment, operational environment and external environment are 3 major classes of such
factors. The following list is however a comprehensive and integrated list of all possible economic factors
that affect the working of business organizations.

Demand and Supply

The demand and supply are two principal factors that affect the working of any business model. The
demand is the will and ability of consumers to purchase a particular commodity and the supply is the
ability of the business to provide for the demand of consumers. It must be noted that all the factors that
are included in this list are inter-connected. You may also read demand and supply analysis.
Marginal and Total Utility
Utility is the amount of satisfaction, that is derived by consumers from consumption of goods. It so
happens that after continuous and successive consumption of units of the same goods, the satisfaction
that is experienced by consumer starts decreasing. This often results into short term or long term fall of
sales. Some organizations prepare for the launch of another brand before the fall in utility and sales is
experienced. The launch of new brand ensures that the revenue trend of the business does not fall.
Diminishing utility is among the external factors affecting business. You may also read more on
diminishing marginal utility.

Money and Banking

Banking facilitates monetary and fiscal policies that affect business and also the customers of the
business. Money in circulation dictates the paying power or rather the demand of the consumers and the
banking facility dictates the borrowing capacity of individuals as well as the business.

Economic Growth and Development

Economic growth dictates the amount of finances that the society at large is earning and development
indicates the volume of money that is being invested into channels of long term up-gradation. Among all
the economic factors affecting business environment, development is the most important one, as the
business has to cater to the demand of an economically dynamic society.

Income and Employment

Another very important aspect of the economy that affects the working of the business, is the level of
employment and rate of income. The per capita income and density of employment dictates the rate of
demand, density of demand and also the purchasing power of the people.

General Price Level

Another very important aspect of the economy that affects the business is the general price levels of the
commodities that also affect the sales of the business. Costs of raw materials, paying power of people,
cost of production and finally, cost of transport are some of the important components that determine
the general price level and also, the sales of the firm.

Trade Cycles
Trade cycles are the fluctuating costs of goods and commodities in an economy. Rise, stability, continuity
and fall are some of the important cycles that affect the prices off all goods such as raw material, credit,
final goods, etc. Trade cycles also many a times affect the general price level.
 c) Measurement of consumer income in different countries

Low Income Countries

Low-income countries are those with per capita national incomes of less than $400 per year. The
marketing in these societies is relatively simple. A large proportion of population live by subsistence
farming, producing most of the food, housing, clothing, and other goods they need with their own labor.
They engage in a small amount of selling in order to buy a few manufactured goods. A marketing system
exists to accomplish this exchange, but the volume is small and the variety of goods involved is very
limited. Hence, the volume of goods limits the marketing process. The channels of distribution are simple.
Sales promotion is practices, but typically at a low level of development.

The Moderate-Income Category

The important distinction between moderate-income countries and low-income countries is that with the
ability to purchase many items beyond the bare subsistence level, appreciable discretionary buying power
emerges in moderate income countries. The magnitude of the marketing system is greater and therefore,
different types of distribution channels appear, and the advertising and sales-promotion process develops
as sellers seek to steer the discretionary buying power in one direction or another

High Income Societies

The United States is an excellent example for high-income societies and differs from moderate-income
group of societies as the large part of societies in U.S. could achieve an adequate level of Income by
prevailing social standards. In high-income societies, most people can afford many luxury items of a good
life. The marketing system in these societies show increased complexity because of the greater volume of
goods handled. But the most important characteristic is the high degree to which their distribution and
sales promotion systems are geared to influence the buyer because they must not only guide but also
generate demand.

d) Recognition of a country’s currency exchange rates

 4) Political factors

Nations differ greatly in their political–legal environments. At least four political–legal factors should be
considered in deciding whether to do business in a given country: attitudes toward international buying,
government bureaucracy, political stability, and monetary regulations.

In their attitudes toward international buying, some nations are quite receptive to foreign firms and
others are quite hostile. For example, India has bothered foreign businesses with import quotas, currency
restrictions, and limits on the percentage of the management team that can be no nationals. As a result,
many U.S. companies left India. In contrast, neighboring Asian countries such as Singapore, Thailand,
Malaysia, and the Philippines court foreign investors and shower them with incentives and favorable
operating conditions.

A second factor is government bureaucracy—the extent to which the host government runs an
efficient system for helping foreign companies: efficient customs handling, good market information, and
other factors that aid in doing business. A common shock to Americans is how quickly barriers to trade
disappear in some countries if a suitable payment (bribe) is made to some official.

Political stability is another issue. Governments change hands, sometimes violently. Even without a
change, a government may decide to respond to new popular feelings. The foreign company's property
may be taken, its currency holdings may be blocked, or import quotas or new duties may be set.
International marketers may find it profitable to do business in an unstable country, but the unstable
situation will affect how they handle business and financial matters.

Finally, companies must also consider a country's monetary regulations. Sellers want to take their
profits in a currency of value to them. Ideally, the buyer can pay in the seller's currency or in other world
currencies. Short of this, sellers might accept a blocked currency—one whose removal from the country is
restricted by the buyer's government—if they can buy other goods in that country that they need
themselves or can sell elsewhere for a needed currency. Besides currency limits, a changing exchange
rate also creates high risks for the seller.
 5) Cultural factors

 Each country has its own folk-ways, norms, and taboos. When designing global strategies,
companies must understand how culture affects consumer reactions in each of its world markets.
In turn, they must also understand how their strategies affect local cultures.

 The seller must examine the ways consumers in different countries think about and use certain
products before planning a marketing campaign.

 Business norms and behaviors vary from country to country.

 Some critics argue that "globalization" really means "Americanization."

 These critics contend that exposure to American values and products erode other cultures and
westernize the world.

The cultural environment is made up of institutions and other forces that affect a society’s basic values,
percept ions, preferences, and behaviors. People grow up in a particular society that shapes their basic
beliefs and values. They absorb a world view that defines their relationships with others. People in a
given society hold many beliefs and values. Their core beliefs and values have a high degree of
persistence. For example, most Indians believe in working, getting married, giving to charity, and being
honest. These beliefs shape more-specific attitudes and behaviors found in everyday life. Core beliefs and
values are passed on from parents to children and are reinforced by schools, churches, business, and
government.

Cultural factors have a significant impact on customer behavior.

Culture is the most basic cause of a person’s wants and behavior. Growing up, children learn basic
values, perception and wants from the family and other important groups.

Marketing are always trying to spot “cultural shifts” which might point to new products that might be
wanted by customers or to increased demand. For example, the cultural shift towards greater concern
about health and fitness has created opportunities (and now industries) servicing customers who wish to
buy:

• Low calorie foods

• Health club memberships
• Exercise equipment
• Activity or health-related holidays etc.

Similarly the increased desire for “leisure time” has resulted in increased demand for convenience
products and services such as microwave ovens, ready meals and direct marketing service businesses
such as telephone banking and insurance.

Each culture contains “sub-cultures” – groups of people with share values. Sub-cultures can include
nationalities, religions, racial groups, or groups of people sharing the same geographical location.
Sometimes a sub-culture will create a substantial and distinctive market segment of its own.

For example, the “youth culture” or “club culture” has quite distinct values and buying characteristics
from the much older “gray generation”

Similarly, differences in social class can create customer groups. In fact, the official six social classes in
the UK are widely used to profile and predict different customer behavior. In the UK’s socioeconomic
classification scheme, social class is not just determined by income. It is measured as a combination of
occupation, income, education, wealth and other variables.

It is imperative that marketing messages strike a chord with their intended targets.  Doing so is made
easier by thinking about the influences of buyer behavior - culture, society, individuality, and psychology.
Of these four influencers, the cultural influence is the strongest; if you intend to attract and keep clients
of the highest quality, you will benefit from understanding how cultures, subcultures, and social class
affects buying decisions.  

Culture

Culture is the single largest factor in shaping desires and thus behavior.  As a child grows up the culture
in which he lives impresses his mind with a general set of values and preferences.  According to Leon
Schiffman and Leslie Kanuk in their book Consumer Behavior, American children receive the following
values: achievement and success, activity, efficiency and practicality, progress, material comfort,
individualism, freedom, external comfort, humanitarianism, and youthfulness.  Much of these values are
taught in the American school system - both public and private - where children spend a majority of their
waking hours.  

Subculture
Each culture consists of smaller subcultures that include nationality, religion, and geographic regions.
The subculture often reinforces the values instilled by the culture at large.  For instance, children are
taught in the culture, either deliberately or covertly, that youthfulness is a higher value than old age.
When they enter their subculture (in this case their general neighborhood) and compare their quality of
life to the quality of life in the local nursing home, the value of youthfulness is reinforced.  This is a
general example; I am not using it to make a statement of any kind against nursing homes.  I am only
making the point that Americans clearly value youthfulness.  

When subcultures gain power and wealth, companies customize marketing messages and campaigns to
serve them.  This is known as diversity marketing, and has proven to be an effective marketing strategy.
Think about the consequences of a group of consumers who feel ignored by your message.  They may fit
your definition of a dream client, but if your campaign ignores the subculture they identify themselves
with, the message will fall on deaf ears.  

Social Class

Almost all societies have a social class system.  The clearest example of this is in the Indian caste system
where members of different castes are brought up and trained for specific roles within society.
Americans experience a class system, from lower to upper class and all the levels in between.  Each class
is defined by a shared set of values and behavior.  Class is not defined solely by wealth.  Other factors
include occupation, education, and values.  Unlike in India, Americans may move up and down class
systems throughout the course of their lifetime.  

The application for marketers and salespeople is that your target market demands some sort of
customization in your marketing message.  Your communication needs to be tailored to your target
market at least to some extent.  Budget demands will always limit the amount of customization any
company can afford, so carefully select the images and verbiage of your marketing materials and your
sales presentations to have the maximum impact within your market.