International Marketing

MKT303 International

Marketing Political and economic factors impacting international marketing

Workshop 2

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Icon Meaning Activity

Take notes These are important points and you should take notes.

You will be required to know this

information.

Individual

Activity

Students complete an individual task.

Group Activity Students discuss/ complete activities in groups and report back to the class.

Research

required

You will need to research this and do

some reading before the next class.

Important

Concept

You MUST understand this concept to

successfully complete the subject. Seek

help if you don’t understand.

Practice

Questions

Students will complete these questions as

practice.

What will we be learning? Week Topic

1 Introduction to International Marketing

2 Political and economic factors impacting international marketing

3 Social and technological factors impacting international marketing

4 Legal and environmental factors impacting international marketing

5 Assignment presentations

6 Study week (Attendance is compulsory)

7 Trade relations

8 Culture and communications

9 Market entry – an international marketing approach

10 Getting a product to the customer – international context

11 Product management and surviving in an international marketing

12 Future of international marketing and ethics

Workshop Activity

Revision

What did we discuss last week? Identify the

three main points that you’ve learned during

last week’s class.

Share your thoughts with the rest of the

class.

Why am I learning this?

Understanding the political and economic

context of an international market allows you

to explore the market potential and ease of

doing business.

This Topic’s Big Idea

“If goods don’t cross borders,

armies will”

Frédéric Bastiat (1801-1850)

Learning Outcomes

1. Explain the functions of government in terms

of its effect on international marketing

2. Identify those aspects of the political

environment that affect a firm’s international

marketing

3. Understanding economic conditions and its

impact on international marketing

4. Explore the role of the PESTEL (PESTLE)

analysis

Internal Factors to a Business

• An organisation has direct control of internal factors.

• An organisation can determine the following in terms of marketing: – Marketing plan

– Marketing budget

– Brand strategy

– Culture

– Structure

– Operations

– Employees

– Shareholders

Source: Unsplash

External Factors - PESTLE

Organisation

Political

Economic

Social

Technological

Legal

Environmental

You cannot control external factors

How to consider the external

environment

• Considers the political, economic, social, technological, legal and environmental factors that impact an organisation.

• These are factors outside your direct control but may have an impact (either positive or negative) on your organisation

• Defining a PESTLE: https://www.youtube.com/watch?v=bYn4C yL3r5w

Workshop Activity

In pairs or small groups discuss why is it

important to know the macroeconomic

environment if you cannot control it?

Provide a list of reasons and share your

thoughts with the rest of the class.

The PESTLE

POLITICAL

• Government policies

• Government stability

• Methods of governance

• Taxation policies

• Policies being debated politically

• Global trade agreements and restrictions

Photo by Marco Oriolesi on Unsplash

Government Policies

• The vision and direction of government.

• What policies is government proposing?

• How could it affect your business or market?

• Domestic and international policies

• International policies include trade, security, conduct with international organisations, treaties

See Australia’s international policies

here:

https://www.dfat.gov.au/international-

relations/Pages/international-

relations

Types of Government

Democratic (representative)

Absolutist (Autocratic)

Citizens vote for government

Citizens can influence government policy

Typically a parliamentary style government

Government or selected groups determines policy

Dictatorships and absolute monarchies are

examples of absolutist governments

Parliamentary Government

– United States

Source: https://www.usa.gov/branches-of-government#item-211477

Parliamentary Democracy

- Australia

Source: http://www.abc.net.au/ra/federasi/tema1/aust_pol_system.htm

Absolutist – North Korea

• Has a defined leader currently Kin Jong-un

• 25 million citizens

• Government has controls over what citizens see, foreign broadcasts are banned

• Travel around and in/out of the country is difficult.

• Little knowledge of the world outside North Korea.

• Life in North Korea: bit.ly/mkt303northkorea

Source: https://www.bbc.co.uk/newsround/20692214

Internet/Tech

Companies in China

• Do American Tech Companies Keep Failing in China?

• Watch: bit.ly/mkt303ustech

• What are the 3 reasons that web based companies find it hard to succeed in China?

Source: https://www.lonelyplanet.com/china

What about Australia?

Source: http://peoplepower1001.weebly.com/the-three-levels-of-law-making.html

Government Stability

Countries with the most stability Countries with the least stability

Source: https://www.theglobaleconomy.com/

Workshop Activity

Brainstorming Session

Why is political stability important from a marketing perspective?

Is political stability more important than the type of government?

Share your thoughts with the rest of the class.

Taxation Policies

• Australia has: – Personal income tax – if

you work for a business as an employee then your income is taxed.

– Business tax – company tax, GST, capital gains tax and other business taxes.

• Australia has taxation treaties with more than 40 countries with the aim to reduce double taxation and cooperation between taxation authorities.

Source: https://www.etsy.com/au/listing/634135043/wooden-tropical-earrings?ref=finds_l&cns=1

Industry Regulations

• Industry regulations impact who is in a market.

• Industry regulations in Australia cover subjects such as: – Intellectual property

– Business and environment

– Export and import laws

– Acceptable trading

– Financial reporting

• Aldi and the retail industry: bit.ly/mkt303aldi

Source: ABC

Source: https://www.abc.net.au/news/2018-08-02/aldi-supermarket-coles-woolworths/10065018

Global Trade Agreements

• Agreements between countries on the trade of goods and services

• Australia has free trade agreements with a range of countries: www.abf.gov.au/importi ng-exporting-and- manufacturing/free- trade-agreements

• Trade agreements: bit.ly/mkt303trade

Source: https://www.dfat.gov.au/sites/default/files/trade-balance-feburary-2020.png

Workshop Activity

In pairs or small groups discuss why do you

need to know about taxation and regulations

from a marketing perspective?

Share your thoughts with the rest of the

class.

The PESTLE - Economic

Economic

• Economic growth/ decline

• Exchange rages

• Cost of living

• Inflation

• Labour costs

• Consumer spending

• Interest rates Source: Photo by Christine Roy on Unsplash

Economic Growth/ Decline

• Measured using gross domestic product

(GDP)

• What is GDP: bit.ly/mkt303gdp

https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:AUS:CAN:IND&hl=en&d

l=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_mktp_cd&scale_y=lin&ind_y=false&rdim=world&idim=country:AUS:I

ND:USA:CHN&ifdim=world&hl=en_US&dl=en&ind=false

GDP Growth in Australia

https://www.rba.gov.au/chart-pack/pdf/chart-pack.pdf

Exchange Rates

• Exchange rate = value of a currency when it is exchanged for another

• Typically fixed or floating

• Fixed – Government sets the currency to a fixed rate.

• Floating – where the rate is influenced by demand and economic conditions

• Australia has a floating exchange rate

https://www.rba.gov.au/statistics/frequency/exchange-rates.html

Cost of Living

• The cost to live in a country within that country.

• Helps identify social classes.

• In groups of three to four discuss why is for marketers to know the cost of living?

Student living costs in Australia

Source: https://www.studyinaustralia.gov.au/english/live-in-australia/living-costs

Inflation

• The rate in which prices increase over time.

• Some inflation is preferred

• Excessive inflation devalues currency and living standards

• What is inflation: bit.ly/mkt303inflation

Source: Photo by Jason Leung on Unsplash

Labour Costs

• Labour costs vary from country to country

• Australia has some of the highest labour costs in

the world

Source: https://data.oecd.org/earnwage/average-wages.htm

Consumer Spending

• What individuals and

organisations spend

on.

• Includes a range of

different categories.

• Marketers can impact

consumer spending.

Source: https://moneysmart.gov.au/australian-spending-habits

Workshop Activity

In groups of three to four discuss why do you

think economic factors are important in

considering international markets?

What does the data tell you?

Share your thoughts with the rest of the class.

Next Week

Social and technological factors impacting

international marketing.