International Marketing Environment:

The most difficult part of planning for international markets is environmental analysis. Marketing internationally means entering other cultures and there is need to understand these cultures. The marketer must understand all the possible trends and how they are likely to affect demand. Environmental analysis is actually the heart of international marketing. The environmental factors that the marketer must understand include:

            (a) Political environment: Includes such issues as:

                                    •           the effects of type of government

                                    •           level of political stability

                                    •           political vulnerability

                                    •           forces of nationalism

            (b) Legal environment: Covers the following:

                                    •           type of legal system

                                    •           effects of regulations

                                    •           possibilities of regulatory changes

                                    •           protection for properties and

                                    •           preferences for local products

            (c) Social/Cultural environments: Includes:

Languages, religious beliefs, levels of education, people's values and attitudes and social roles which all affect buyer behaviour.

            (d) Business/Technological environments: This covers:

                                    Types and sizes of businesses

                                    •           rules for business conduct

                                    •           role of business in society

                                    •           level of technology used and ability to absorb technological changes.

            (e) Competitive environment: Includes the strengths and actions of:

                                    •           local and international competitors

                                    •           intensity of competition

                                    • nature of competition and relationships and interactions with competitors.

            (f) Economic environment:  Includes:

                                    •           Balance of payments trends

                                    •           Strengths/weakness of currency

                                    •           Trade barriers

                                    •           Interest rates and levels of inflation

                                    •           Financial risks

                                    •           Barriers to market entry and local economic trends

            (g) Physical/demographic environments:  Includes such factors as:

                                    •           population trends

                                    •           climatic conditions

                                    •           physical infrastructures e.g. transportation

                                    •           demographic profiles of population etc.

All these environmental factors greatly affect the market structure e.g. size of retailers, buyer tastes and preferences, buyer responsiveness to marketing variables, ease of starting business, product availability and communication with the market. Without a clear understanding of these environmental variables international marketing becomes a very difficult if not impossible task.