International Politics And Its Impact On Global Marketing

Understanding International Marketing

Globalization has had a tremendous impact over that last couple of decades. It has rewritten the rules of the world economy. Free trade has seen a remarkable growth because of new economic powers, countries breaking barriers and forging new relations and democratization.

Yet, International politics is highly volatile and unpredictable. The political environment of a particular nation or group of nations could make or break the successful launch of a product or a global market initiative.

What is marketing?

Simply defined, marketing is the elaborate procedure of planning the pricing, distribution, and promotion of goods, services and ideas to the end consumers. Successful marketing satisfies both the consumer and the company’s objectives.

Read More About : Prediction For International Politics In 2018

What is international marketing or global marketing?

When a company takes its marketing activities across national boundaries and borders, it becomes international marketing. It involves two or more companies from various countries. What makes international marketing different from domestic marketing? Well, the basic principles of marketing are the same but their implementation, complexity and intensity differ.

There are many factors that influence international marketing and these are usually predicted and analyzed by corporate giants:

  • Economic factors
  • Fluctuation of currency rates
  • Global and domestic competition
  • Cultural influences
  • Legal complexities
  • Target customers
  • Trade regulations
  • Taxations
  • International treaties
  • Active legislation

What most global companies are unable to predict and be geared up for is the political environment which is one of the crucial deciding factors to make big business decisions.

Group Of Flags Of Various Countries Raised Up In The Sky.

The Unpredictability of International Politics

Politics is always unpredictable. It is in its nature to be volatile and its outcome can have a profound effect with the socio-economic stability of the world. Public factors have a profound reign over the political environment of a country.

What are these public factors? They are highly popular or relevant public identities and sensitivities that the public relate to and hold on to as a political or historical identity.

Public factors can be deep rooted in mythology, ideology, the historical facts and roots, and nationalism. These factors are extremely sensitive and when the public feels that the factors are being threatened, manipulated or challenged, it has the potential to backlash and cause unrest.

These volatile political situations are difficult to predict. In this digital age, they have the tendency to mutate and blow out of proportion with news and speculations spreading like wildfire on social media. Such a situation can be very challenging and costly to bring under control.

International Marketing Environment: An Overview

The International marketing environment is shaped and influenced by four main factors:

  • Economy
  • Culture
  • Finance
  • Politics

Most companies are comfortable in assessing domestic politics because they have reliable resources and company heads have the clout to befriend political figures. However, the same can’t be said about the political climate in a country where the company is making a big investment.

Political risks in the international marketing environment

When doing international business, political risk is a non-commercial risk that is sometimes inevitable. These risks have the tendency to shake the very core of the business. Political risks will threaten:

  • Ownership
  • Exposure of business property and life
  • Business operations
  • Fund transfers and financial interactions
  • Free movement of imports and exports
  • Economic sanctions of the country.

Political instability can also arise due to disputes over territories in something as mundane as a Google Map. Google’s repeated mistakes in labelling disputed territories has sparked protests, boycotts and open condemnation. Google has come under fire and criticism in its insensitive approach by more than half a dozen countries.

Such insensitivities often come under the direct scanner of the government. As in the case of Google, it has received backlash from both the Indian and Chinese governments. It has had to modify the map technically to pacify both countries.

Even if the territory in question is but a sliver of land, it is a clear example of how geographical territory and people’s identity are closely linked. It is also an indication how companies can face unnecessary political risks if they are not careful on foreign turf.

Various Countries Plotted By Their Flags In The Globe.

International Politics and Global Business Endeavours: The impact

The instability of international politics can have massive repercussions for businesses looking to expand beyond international borders. The list is big:

  • Loss of Profits
  • Loss of assets
  • Loss of sales
  • Disruption of production and operation
  • Increase in security and managerial costs
  • Increase in operation costs.

In conclusion, we can say that political instability and its impact are not factors that can be completely avoided. However, analysing the situation can help to mitigate the risks of a global business endeavour.

Strategic analysis can be based on building various scenarios with the political realities in the country where business campaigns will be launched. When and if those theoretical scenarios become realities, the company will be better prepared to face them and deal with them before it faces the brunt of the impact.

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