Chapter - II

Global Marketing Environment

Learning objectives:
• Economic Environment
• Political and Legal Environment
• Cultural environment
• Analyzing Global Marketing Environment

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Junior Research Fellow 15-2
Global Marketing Environment

• Marketing environment refers to all those

internal and external forces which are
relevant to the marketing strategy
formulation.
• Global marketing is often influenced by
some of the external and internal factors.
• The environmental factors effecting
marketing environment are:

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Junior Research Fellow 15-3
The
The Marketing
Marketing Environment
Environment
Demographic

Company
Cultural Economic

Publics Suppliers
Company
Customers
Competitors Natural
Political
Intermediaries

Technological
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Junior Research Fellow 15-4
The
The Microenvironment
Microenvironment

Company
Company

Publics
Publics Forces
Forces Affecting
Affecting aa Suppliers
Suppliers
Company’s
Company’s Ability
Ability to
to
Serve
Serve
Customers
Customers
Competitors
Competitors Intermediaries
Intermediaries
Customers
Customers

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Junior Research Fellow 15-5
Customer
Customer Markets
Markets

International Consumer
Markets Markets

Company
Company
Government Business
Markets Markets

Reseller
Markets

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Junior Research Fellow 15-6
The
The Macro
Macro environment
environment
International
International

Cultural
Cultural Forces
Forces that
that Shape
Shape Economic
Economic
Opportunities
Opportunities
and
and Pose
Pose Threats
Threats
to
to aa Company
Company
Political
Political Natural
Natural
Technological
Technological

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Junior Research Fellow 15-7
Economic factors:

Economic factors are classified into:

1. Macro economic environmental factors
2. Micro economic environmental factors

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Junior Research Fellow 15-8
Economic factors:
 Tax Systems
 Investment Considerations and Allowances
 Sophistication of Financial Markets – ease with which
capital can be moved and raised
 Commodity Prices – oil, energy, metals
 Monetary and Fiscal Policies – interest rates, tax
regimes, government aid
 Internal Regulation and Bureaucracy – can be stifling!
 Exchange Rates

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Junior Research Fellow 15-9
Macro economic factors
• Macro economics is the study of the entire economy in terms of
the total amount of goods and services produced, total income
earned, the level of employment of productive resources.
• These factors include:
1. Demography and income distribution
2. Consumption patterns
3. Economic indicators (GDP, rate of unemployment and rate of
inflation)
4. Financial indicators (value of local currency with $, money supply,
factor income, corporate bond yield etc.)
5. Economic system

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Junior Research Fellow 15-10
Micro economic factors:
• Factors surrounding a specific product or market
concerning the competition rather than a country’s
overall economic environment.
• The factors to be considered are:
1. Financial variables (capital acquisition, interest rates for
commercial borrowings, projected investments,
exchange rate fluctuations etc.)
2. Marketing variables (size and potential, distribution,
promotional costs etc.)
3. Product market engineering variables (availability of
raw material for building infrastructure, accessibility
factors etc.)

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Junior Research Fellow 15-11
Political factors:

• Effectiveness of political system ( system

of democracy, authoritarianism,
communism)
• Political intervention( expropriation
{official seizure of foreign property by a
host country or forced nationalization},
domestication and nationalization)

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Junior Research Fellow 15-12
Political factors
• Exchange control
• Import restrictions
• Market control
• Tax and human resources controls
• Antiglobalization movements
• Civil wars
• Labour unrest
• Protest by the people

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Junior Research Fellow 15-13
Legal factors:

• Tariff barriers (to control the flow of

national money, protect home market
products and services etc.)
• Anti-dumping laws (agreements through
WTO)
• Export/import licensing

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Junior Research Fellow 15-14
Cultural factors
Culture refers to the distinctive way of life of a group of
people.
Culture can provide:
1. New opportunities for local communities to share skills
and generate incomes
2. Local-level development through communities using
their diverse social, cultural and economic resources.
3. Strengthening social capital
4. Diversifing strategies of human development and
capacity building for knowledge based dynamic
societies.

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Junior Research Fellow 15-15
Cultural factors:
Cultural factors include:
1. Language (powerful source for communication)
2. Social institutions (family, education, political structures,
media etc.)

3. Aesthetics (creative ideas embedded in culture concerning sensory

appeals)

4. Respecting employees religious feelings

5. Attributes of product
6. Place & determinants of price

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Junior Research Fellow 15-16
 Natural
Natural
Environment
Environment
More
More Government
Government
Intervention Intervention

Factors
Affecting
Higher
Higher Pollution
Pollution the Shortages
Shortages of
of
Levels
Levels Natural Raw
Raw Material
Material
Environment

Increased
Increased Costs
Costs
of
of Energy
Energy

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Junior Research Fellow 15-17
Technological
Technological Environment
Environment
Rapid
Rapid Pace
Pace of
of High
High R
R&&DD
Change
Change Budgets
Budgets

Issues
Issues in
in the
the Technological
Technological
Environment
Environment

Focus
Focus on
on Minor
Minor Increased
Increased
Improvements
Improvements Regulation
Regulation
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Junior Research Fellow 15-18
Analyzing global environment
• Emergence of new economic powerhouses
• New direction in global engagement
• Changing consumer demographics and
expectations
• Changing nature of competition
• Emergence of global services economy
• Advent of new technologies
• Growing transparency of corporate practices

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Junior Research Fellow 15-19