The world has become a global village where many companies producing their goods and services are marketing to the entire world. That is greatly influenced by the global economic interdependence, trade practices, and agreements in the market. For any company to be able to make global marketing decisions, it has to take into consideration the global economic interdependence together with the practices and agreements in the market.
When planning to market goods in another country there are several factors that one has to consider before investing in the market. Analyzing the pricing of goods in the country that you are targeting is one of the ways that global interdependence influences the market of a commodity. Another important factor to look at is the purchasing power of a commodity in a different country; this can be determined by the amount people earn, and generally the GDP of the country (Quelch & Bartlett, 2006).
Very many companies have failed to progress to the global market since they cannot meet the trade practices and agreements of other countries. Different countries have set different practices followed while operating in their country. These practices may not go well with other companies thus depriving them the opportunity to enter the global market. A good example is the North America free trade agreements (Guasch, 2002). A company like Disney freely conducts business in this area since it has attained the requirements of the agreement. The agreements may favor one company to the other making it either easy for one company to conduct its business freely and the other facing challenges still on the same market.
The tariffs and other charges levied on goods vary from country to country, these are some of the agreements that a company has to get involved in so as to perform or conduct its business in that given country. If the tariffs are too high, it may prevent other companies from engaging in the same market, but if they are favorable, then they may encourage many companies to get involved in the market (Guasch, 2002). High charges on importation greatly affect the market. Many companies may not wish to participate in business that will lead to loses, this therefore, makes companies to only major on countries that do not charge more on imports so that they can make profits.
Demographic and physical infrastructure is very important in the creation of market. A company has to lean and know the kind of people it is going to tell its products to. For example, a company producing male shoes cannot begin a market in a country where there are more female that men, this will meant that, if such a company gets involved in such, then it is bound to make loses. A thorough study of the demographic and physical infrastructure therefore, becomes important in the development of a marketing strategy. By looking at the infrastructure of a country, then a company can with a lot of ease identify what to sell (Quelch & Bartlett, 2006).
Different countries have different cultures that determine their lifestyle. It is not meant to change in a specific country. A company cannot use one kind of marketing strategy in different countries; this has to keep changing from country to country since their consumption tendencies do not resemble. A company must study the demographic tendencies of a country before it decides on what products to market in such a county (Miles, 2011). Developed countries have different likes in their consumption; this makes it possible for companies like Toyota that operates globally to know the king of physical infrastructure in order to determine the kind of commodity to supply. It thus makes culture very influential in the marketing strategies.
Corporate social responsibility has been on the rise to determine the success of any organization, organizations that do not adhere to the corporate social responsibility have terribly lost market for their valuable goods, a good example for insensitivity to CSR is the Nike company that lost a lot of market in America for not Adhering to the needs of the workers due to the poor working environment and the minimal pay to its employees. Such ethical issues together with the legal obligations have a lot to influence the marker for commodities (Quelch & Bartlett, 2006).
Different countries have different laws that govern the way business is conducted in those countries; these laws are meant to protect the customers and the image of the country at large. The same regulations affect the way business is conducted in such countries; monopoly can be allowed in one country and denied in the other thus affecting the market of commodities (Guasch, 2002). The international relation on the other hand is meant to protect the customer from exploitation. Consumption of illegal goods is captured due to the same and may in one way or the other affect the market due to the costs incurred to attain the standards.
The foreign corrupt act of 1977 focused on two important points, corruption of officers at the international level and transparency in the accounting practices. The two have a serious implication on the market. In order to create a free, transparent market, it was very important that the two aspects be seized. Some of these unlawful acts may destroy the image of an organization leading to a negative picture that will affect the market of its commodities (Guasch, 2002). There are several consumers in different countries who do not consume a good because of its quality in as much as it matters a lot, but also looks at the reputation of the organization. These acts are thus meant to affect the market of the company’s goods.
Technology on the other hand has a lot of effects on the market. To begin with, selling the commodities physically may not be the right way in this era of technological advancement. Companies that do online marketing are meant to win more customers than their counterparts. Technology therefore affects the market in the same manner (Miles, 2011). Many companies are now using technologically advanced methods in their productions that save then on the market. Availability of commodities in the market also helps to capture the market affecting those companies that cannot cope up with the changing technology.
Reference
Guasch, J. L. (2002). Labor market reform and job creation: The unfinished agenda in Latin American and Caribbean countries. Washington, D.C: World Bank.
Miles, D. A. (2011). Risk factors and business models: Understanding the five forces of entrpreneurial risk and the causes of business failure. Boca Raton: Dissertation.com.
Quelch, J. A., & Bartlett, C. A. (2006). Global marketing management: A casebook. Australia [etc.: Thomson.
