In Appraising the International Marketing Environment, the Economic Environment of a Country is the Most Important Consideration for an Enterprise. Discuss.
Under the current economic conditions the market for all businesses globally is intensely competitive and volatile. Steps taken by a new enterprise within such an environment must be made with trepidation and all components involved with the development of any business should be scrutinised carefully before a venture is embarked upon. This is particularly the case when considering business in the background of a foreign marketplace for a service, or product. For this process the level of scrutiny must be increased to ensure all aspects of commerce are comprehensively considered. There are many complex factors involved when appraising an international market environment including the economic viability of the product, potential market threats and the overall costs to the company of the development. The key factor in the appraisal is the economic environment of the country into which the product, or service is being marketed, this is the most important consideration. There are other factors which must also be considered. These include the state of the global economy and the reduction in international trade barriers. To present a fully balanced argument it is also important to address a close definition of the phrase ‘economic environment’ and outline what is meant by marketing strategy. Through a detailed examination of all of these issues this essay will conclude that it is the ‘economic environment’ of a country that is the primary focus for a marketing strategy. Although Mankiw (2008)asserts that it is the price of the individual product which is the key driving factor in the success or failure of an enterprise he does also endorse the fact that this pricing should be set to fit within the economic environment of a country.
Much has been made of the globalization of the world economy in recent years. The development of the internet and e-commerce has led to the blurring of national boundaries within the global economic framework. (Rodrik, 2007) It is not just possible, but customary, for shoppers from developed countries to perform international searches for products and services when they are assessing where to procure their requirements. Items ranging from seasonal gifts, to life-changing surgeries, can be obtained from places that would, in the not-too-distant past, have been considered in accessible by many.
This factor has enabled trade between countries on a greater scale than ever before and has had a complex effect on the marketing strategies that have been employed to sell products. It is possible to argue that within this type of economic structure there is no need for businesses to focus on the economic environment of any individual country, but rather they should focus on obtaining a foothold in the world market place. This kind of businesses is limited to particular goods and services and can only occur after a solid foundation of sales within a local environment has been made. In order to capitalize on a global market companies will need to ensure that they have a healthy trade basis in centers around the world and to do this they must establish their market within local environments.
To develop this argument it is important to look at individual locations. There are several countries around the world that have proved fecund for businesses in recent years, even in spite of the global recession. In particular Brazil, Russia, India, and China have come to the fore as emerging economic superpowers. As a consequence of this progress these locations have developed a strong sense of national identity. In her 2008 volume on the premise Mahtaney illustrates that an international marketing appraisal which reviewed a location within one of the so-called emerging superpowers would contain many positive constituents. She suggests that the consistencies between all of these locations is the fact the economic environment that they are home to is buoyant. The populace of China, for instance, are possessed with a greater disposable income than they have ever had before. Consequently it is possible to predict the performance of a product within this market. This example demonstrates that the most important aspect of the appraisal is the economic environment of the country.
As previously stated there are many factors involved in analysing the market of any location. This type of analysis is complex and throws forth a vast array of permutations that need to be considered. These range from factors that are concerned with finance, competition and basic practicalities like supply and demand(Stevens, 1993). All of the features of this analysis are imperative and without them any analysis that is performed would be incomplete. As such it could be argued that placing any single part of the process above all of the others incorrect. Furthermore, to say that the consideration of the economic environment of the country would be redundant, if there was not also a review of product competition, or supply and demand chains, is not a valid argument, as all of these components are interdependent. The answer to this argument is the view that the economic environment is more than just a single item. It is not just a piece of the jigsaw, but it is the table on which the jigsaw is assembled. The economic environment provides the launch pad for all the other marketing tools and if it is not viable then none of the other parts of the process will work…
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