Legal environment for international marketing

It is important for the firm to know the legal environment in each of its markets. No manager can afford to ignore the policies and regulations of the country from which he or she conducts international marketing transactions. Whenever a firm is located, it will be affected by government policies and the legal system. These laws constitute the ‘rules of the game for business activity’.

The legal environment on international marketing is more complicated than in domestic markets since it has three dimensions:
*Local domestic law
*International law
*Domestic law in the firm’s home base

The differences between legal systems and the laws in various countries affect the practice of international marketing in many ways. Laws will affect the marketing mix in terms of products, price, distribution, and promotion activities quite dramatically. Many of laws and regulations may not be designed specifically to address international marketing transactions, yet they can have a major impact on a firm’s opportunities abroad.

Minimum wages legislation for example, affects the international competitiveness of a firm using production processes that are highly labor intensive.

Firms operating in the European Union are facing ever-increasing directives which affect their markets across Europe. This can affect aspects of a marketing strategy - for instance advertising of the form of media restrictions and the acceptability of particular creative appeals.
Legal environment for international marketing 

Legal environment

There are multiplicities of legal environment: domestic, foreign and international.

Throughout the world, legal systems vary greatly both in terms of their complexity and methods of interpretation and of necessity, the multinational enterprise needs to be fully aware not only of the individual legal systems, but also the ways in which the firm’s methods of operation will be affected by laws of the country in which it has base.

A company is not just bound by the laws of its home country but also by those of its host country and by the growing body of international law.

Too often business people see the legal system as an enemy when it should be viewed as a valuable facilitator.

Laws can affect many aspects of a marketing strategy – for instant advertising - in the form of media restrictions and the acceptability of particular creative appeals.

Product acceptability in a country can be affected by minor regulation on such things as packaging and by more major changes in legislation.

At their worst, laws can prohibit the marketing of a product altogether. It is usually illegal to import live animals and fresh fruits unless accompanied by the required certificates.

Furthermore, many products have to be modified to confirm to local laws before these products are allowed across the border.
Legal environment

International Marketing

International Marketing
International marketing involves operating across a number of foreign country markets in which not only do the uncontrollable variables differ significantly between one market and another but the controllable factors in the form of cost and price structures opportunities for advertising and distributive infrastructure are also likely to differ significantly.

It is these sorts of differences that lead to the complexities of international marketing.

International marketing is defined and interpreted depends on the levels of involvement of the company in the international marketplace. International marketing could therefore be:

• Export marketing, in which case the form markets its goods and services across national political boundaries.
  
• International marketing, where the marketing activities of an organization include activities, interest or operation in more than one country and where there is some kind of influence or control of marketing activities from outside the country in which the goods or services will actually be sold. Sometimes markets are typically perceived to be independent and a profit centre in their own right, in which case the term multinational or multi-domestic marketing is often used.
  
• Global marketing, in which the whole organization focuses on the selection and exploitation of global marketing opportunities and marshal resources around the globe with the objective of achieving a global competitive advantage.
  International Marketing

The Importance of International Marketing

The Importance of International Marketing
2007’s international trade in merchandise exceeded US$10.5 billion and world trade in services is estimated at around US$2.4 trillion.

While most of us cannot visualize such huge amounts, it does serve to give some indication of the scale of international trade today.

This global marketplace consists of a population of 6.6 billion people which is expected to reach 10 billion by 2050 according to the latest projection prepared by the Undiluted Nations.

Global wealth is increasing and this is reflected in higher demand. Increasing affluence and commercial dynamism has been nations across Asia. Central and Eastern Europe emerge as high growth economics, increasing affluence and demand simply means that consumers will actively seek choice, with the result that globally competition is intensifying as companies compare to win the battle for disposable income.

Population growth and increased affluence together have helped create a ‘global youth culture’ – teenagers now account for 30 per cent of the population globally.

In many countries, more than half the population is pre-adult, creating one of the world’s biggest single market, the youth market.

Everywhere adolescents project worldwide cultural icons, Nike, Coke, as well as Sega, Sony playstation.

When virtual reality is commonplace, the one world youth culture market will exceed all others as premier global market segment. Parochial, local and ethnic growth products may face difficult times.

Older consumers are also increasingly non-national on their identity, of not their personal identity then the perspective of the consumable fabric of their lives.

They drive international cars, take foreign holidays, watch international programmes on television, use international hardware and software.

On the supply side, multinational and global corporation are increasing in size and embracing more global power.

The top 500 companies in the world now account for 70 percent of world trade and 80 percent of international investment.

Total sales of multinational are now in excess of world trade, which gives them a combined gross product of more than some national economies.

The global marketplace is no longer the summation of a large number of independent country markets but much more multilateral and interdependent, economically, culturally and technically.

Information moves anywhere in the world at the speed of light, the case of transmission being facilitated by the convergence of long distance telecoms, cuts in the cost of electronics processing and the exponential growth in internet excess.

The combination of all these forces has meant that all companies need to develop a marketing orientation which is international in nature and that companies need managers who have the skills to analyze, plan and implement strategies across the globe.

It is for these reason that international marketing has become such a critical are of study for manager and an important component of the marketing syllabus of business faculties in universities.
The Importance of International Marketing