Page 221 - DMGT545_INTERNATIONAL_BUSINESS

International Business

notes 11.5.4 legal restrictions

Legal restrictions also require consideration for the development of an international marketing
strategy. Product standards issued by local governments must be observed. To the extent that
they differ from one country to another, unified product design often becomes an impossibility.
Tariffs and taxes may require adjustments in pricing to the extent that a product can no longer be
sold on a high volume basis. Specific restrictions may also be problematic. In Europe, restrictions
on advertising make it impossible to mention a competitor’s name, despite the fact that such an
approach may be an integral part of the advertising strategy in Australia.
To carry out the international marketing task successfully, international managers have to be
cognisant of all the factors that influence the local marketing environment. Frequently, they need
to target special marketing programs for each country.
!

Caution International managers should make themselves knowledgeable about legal issues
of the host country, otherwise they could get into trouble.

11.6 major actors in international marketing

Several types of companies are major participants in international marketing. Among the leaders
are multinational corporations (MNCs), exporters, importers and service companies. These
firms may be engaged in manufacturing consumer or industrial goods, in trading, or in the
performance of a full range of services. What all participants have in common is a need to deal
with the complexities of the international marketplace.

11.6.1 multinational corporations

Multinational corporations (MNCs) are companies that manufacture and market products or
services in several countries. Typically an MNC operates a number of plants abroad and markets
products through a large network of fully owned subsidiaries.
Although the United States is home to the largest number of MNCs, the first multinationals were
of European origin and included firms such as Nobel and Alfa-Laval of Sweden, Unilever of the
United Kingdom, Royal Dutch/Shell of the Netherlands, and Nestle of Switzerland. Some of
the first U.S. companies to go multinational included Singer, which opened its first subsidiary
in England in 1870, and NCR, Remington, Burroughs, Otis, and Westinghouse. Most of these
companies possessed valuable patents that they wanted to protect from competition abroad.
To cash in on their technological advantage, they opened branch plants in many European
countries.

11.6.2 service companies

The early MNCs were largely manufacturers of industrial equipment and consumer products.
Many of the newer MNCs are service companies. Commercial banks, investment bankers,
and brokers have turned themselves into multinational service networks. Airlines and hotel
companies have gained multinational status. Less noticeable are the multinational networks of
public accounting firms, consulting companies, advertising agencies, and a host of other service
related industries.

Did u know? USA is the home to largest number of MNCs in the world.

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