Discuss the Macro Environmental Bases or variables for International markets.

The environment in which an organisation operates in is divided into Marco and Micro environment. These environmental factors pose a major challenge for marketers in international markets. A comprehensive study and analysis is required on these variables.

Macro environment –
Macro Environment in International markets exists in the form of cultural forces, political forces, economic forces, competitive environment, demography and Geography of the region.

Social and Cultural Environment –the social and cultural values are passed on from generation to generation affects the regions social structure, habits, life-style, customs, traditions, etc. These vary from country to country.

• Extent of religion, collectivist or individualistic, attitude to authority
• Changes in lifestyles, fashions
• Components of the culture and its impact on the strategies.
• Views about the natural environment, others.
• Healthy, home based or social
• Family centered, work driven (e.g. Japanese), solo or couple

Adjusting to the nation’s culture is the biggest challenge that marketers face. In one country the customer may be independent in making a purchase, while in other country the elders in the family have a final say due to great respect for elders in that country. In such cases the promotion campaigns will have to be designed accordingly. For example,Amazon ads in countries like India are targeted towards elders in the family. Hollywood movies often get edited when they are released in a country like India, where nudity or intimacy is not openly shown or discussed. Similarly, as compared to women in Arabic countries, women in European countries drive their own cars and have their own belief system when it comes to fashion, etc.

Political forces –
• Government trade and spending policies
• Current Tax and duties and their changes in future that may affect strategies.
• Current regulation and the possible changes.
• Operation of the organization in autocratic or democratic government. Structure of government and power (central vs state)
• Attitude of government towards consumer protection, industrial relations, health and safety, and competition.

These factors have major influence on price, distribution, legal processing, employment generation advantages, etc. Increase in corporate tax or changes in labour laws like increase in the wages will have a major impact on the organisations operations.

Economic condition is the attractiveness basis the income level of the majority of the population, their savings habits, exchange rates, GDP, etc.

• Inflation, interest, currency rates
• Economic growth and emerging trends in spending power
• Governments microeconomic policies –wage regulations, encouragement of exports, assistance to various industries, assistance to particular state or region in the country, foreign aid, etc.

For example, in some markets, the majority of the population likes to spend the earnings, while in others, people like to invest more in savings.

Demographic Environment relates to the size, age, density, location, sex, race, occupation, economic condition, urban rural divide, etc. of the human population.

• Age, size, education etc. of population
• Racial or ethnic composition
• Demographic trends that affect market size
• Significant trends offering threats and opportunities

These characteristics differ from country to country.

For example, in a developing country like India where the youngsters form the major part of the population, most of the products launched by various firms target the young. In the major cities, the youngsters have high disposable income because of boom in the BPO and IT industry. There are large number of restaurants, fast food chains to serve the needs of the working couples. If there is a shift in the demography, preferences of people change and the objectives of the organization also change.
Competitive environment in the target nation will have a huge impact on the marketing plans and program. For example, Imagine Apple trying to enter an Asian market where Samsung is the market leader. The Marketing program will be different from that implemented in Canada or UK.

Geography of the country will impact the distribution, communication as well as product specifications. Climate, topography, natural resources, etc. affect the marketing functions.

• Climate of the region
• Terrain – hilly, plane, desert
• Natural resources availability and implications on strategy if changes occur
• Ecology

There will be changes to support services like guarantees, services, delivery timelines, etc. These have to be analysed for each country of operation to make correct marketing decisions.