The international marketer’s task is more complicated than that of the domestic marketer because the international marketer must deal with ...
The international marketer’s task is more complicated than that of the domestic marketer because the international marketer must deal with at least two levels of uncontrollable uncertainty instead of one. Uncertainty is created by the uncontrollable elements of all business environments, but each foreign country in which a company operates adds its won unique set of uncontrollable. Exhibit below the total environment of an international marketer. The inner circle depicts the controllable elements that constitute a marketer’s decisions area, the second circle encompasses those environmental elements at move that have some effect on foreign – operation decisions, and the outer circles represent the elements of the foreign environment for each foreign market within which the marketer operates. As the outer circles illustrate, each foreign market in which the company does business can (and usually does) present separate problems involving some or all of the uncontrollable elements. Thus, the more foreign markets in which a company operates, the greater the possible variety of foreign environmental uncontrollable with which to contend. Frequently, a solution to problem in country market A is not applicable to problems in country market B.
The success full manager constructs a marketing program designed for optimal adjustment to the uncertainty of the business climate. The inner circle in Exhibit represents the area under control of the marketing manager. The marketing manager blends price, product, promotion, and channels-of-distribution activities to capitalize on anticipated demand. The controllable elements can be altered in the long run and usually, in the short run, to adjust to changing market conditions or corporate objectives.
The second circle, representing the domestic environment is includes home country elements that can have a direct effect on the success of a foreign venture: political forces, legal structure, and economic climate. A political decision involving domestic foreign policy can have a direct effect on a firm’s international marketing success.
In addition to uncontrollable domestic elements, a significant source of uncertainty is the number of uncontrollable foreign business environments. A business operating in its home country undoubtedly feels comfortable in forecasting the business climate and adjusting business decisions to these elements. The process of evaluating the uncontrollable elements in an international marketing program, however, often involves substantial doses of cultural, political, an economic shock.
The more significant elements in the uncontrollable international environment, shown in the outer circles include (1) political/legal forces, (2) economic forces, (3) competitive forces, (4) level of technology, (5) structure of distribution, (6) geography and infrastructure, and (7) cultural forces. They constitute the principal elements of uncertainty an international marketer must cope with in designing a marketing program.
Also a problem for some marketers attuned to one environment is the inability to easily recognize the potential impact of certain uncontrollable elements within another environment, one to which they have not been culturally acclimated. Road signs of danger and indicators of potential in a foreign market may not always be read or interpreted accurately. The level of technology is an uncontrollable element that can often be misread because of the vast differences that may exist between developed and undeveloped countries. For example, a marketer cannot assume that the understanding of he concepts of preventive maintenance for machinery and equipment is the same in other countries as it is in the United States. Thus, in less developed countries where the general population does not have the same level of technical knowledge that exists in a developed
Country, a marketer will have to take extra steps to ensure that routine maintenance procedures and their importance are understood.
The political environment offers the best example of the alien status. Domestic marketers must consider the political ramifications of their decisions although the consequences of this environmental element are generally minor. Even a noticeable change in government attitudes towards domestic business with a change of political parties is seldom serious: such is not the case in a foreign country. The political environment can be extremely critical, and shifts in governments often mean sudden changes in attitudes that can result in expropriation, expulsion, or major restrictions on operations. The uncertainty of different foreign business environments creates the need for a close study of the operating environment within each new country. Different solutions to fundamentally identical marketing tasks are often in order and are generally the result of changes in the environment of the market. Thus, a strategy successful in one country can be rendered ineffective in another by differences in political climate, stages of economic development, level of technology, or other cultural variation.