Page 327 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes 2. The host country’s legislation may protect domestic companies against foreign competition,
government may restrict imports or make it difficult to get clearance, and in some countries
trademark protection may be difficult.
3. Host government may restrict currency movements and profit repatriation from foreign
operations may be difficult.

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Caution The international marketer has also to consider regional trading blocs such as
Association of South East Asian Nations (ASEAN), European Free Trade Association (EFTA),
and North American Free Trade Agreement (NAFTA) etc. SAARC countries are trying to
strengthen the trade association.

Task Visit an Indian pharmaceutical company in India engaged international
business. Learn about their mode of operation and legal standards they
must follow in countries where they export generic medicines.

14.3.2 Economic Considerations

A company seeking foreign markets has to evaluate the economic conditions of the host country.
These dimensions will include infrastructure, level of economic development, and competition
etc.
Study of infrastructure would evaluate the foreign country’s ability to provide transportation,
power, and communications. Depending on the nature of product, the international marketer
will need certain levels of infrastructure development.

Example: A company may need efficient Internet availability, warehousing, and courier
services to do business. Companies will need newspapers, TV, and other communication media
to efficiently and effectively reach customers.
The company would consider GDP per capita, and income distribution at present and also what is
likely to be the scenario in future. In general, as GDP and per capita income figures rise, the
demand for most goods and services also increases. Income distribution may reveal some attractive
rich niche markets. For example, India and Indonesia have relatively low per capita income, but
there are small and wealthy niche markets with ability to pay for branded luxury goods.
For the last few years India has been gradually lowering the import duties and has freed selected
goods completely from any duties, interest rates have been lowered, direct and indirect taxes
are being rationalised, entry barriers are lowered, public sector undertaking are being privatised,
and limits of Foreign Direct Investment in many sectors have been increased. These sweeping
reforms are making India an attractive destination for large number of international marketers.

14.3.3 Social/Cultural Considerations

It is crucial for an international marketer to understand the society’s cultural values in a host
country. Study of culture will include various aspects of material, religion, social, beliefs and
behaviour, aesthetic, education, and language dimensions. Individual consumers from different
cultures patronise different products and may respond in different ways towards the same
product. Kazuo Nukazawa reported that appreciation of differences in cultural dimensions is a
fundamental requirement for being successful in international marketing.

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