Features of the International Market – SS3 Marketing Lesson Note (First Term)

International marketing is the promotion, sales and distribution of products or services beyond the borders of a country.

Behavioural objectives

By the end of the lesson, students should be able to:

1. define international marketing;
2. list the five features of the international market;
3. describe the economic, political and social factors an international marketer must consider;
4. explain the roles of cultural and legal factors in international marketing;
5. show how these features affect product, price, place and promotion.

What are the features of the international market?

The features of the international market are the economic, political, social, cultural and legal factors a business must consider when it expands globally.

• Effect: each factor affects how a business communicates with and sells to people in another country.
• Number: there are five main features: economic, political, social, cultural and legal.
• Use: a marketer studies them before entering a foreign market, to reduce risk and loss.

What is the economic factor?

The economic factor is the state of a foreign country’s economy, which shows how well it can buy and consume a product.

The international marketer judges the economic environment through these market characteristics:

• Population: the number of people shows the size of the possible market.
• Income: the level of earnings shows how much people can afford to spend.
• Consumption pattern: shows what people buy, how often and in what quantity.
• Infrastructure: roads, ports, power, telecommunications and banking affect how goods are moved and sold.
• Geography: distance, climate and land affect transport cost and the type of product needed.
• Attitudes towards foreign investment: some countries welcome foreign firms, while others restrict them.

What is the political factor?

The political factor is the stability and attitude of a foreign government towards business.

• Stability: governments change hands, sometimes violently, and this can disrupt trade.
• Change in policy: even without a change of government, a government may respond to new popular feelings.
• Trade controls: a government may use tariffs, import quotas or an embargo to limit foreign goods.
• Risk: an unstable country has higher risk of lost goods, delayed payment or closed markets.

What is the social factor?

The social factor is the way of life of the people in a market, which shapes what they want and how they buy.

The social environment includes:

• Religion: may forbid some products or affect the days and times people shop.
• Language: affects product labels, brand names and advertisements.
• Customs and tradition: affect what is accepted at festivals, weddings and daily life.
• Beliefs, taste and preferences: decide which designs, flavours and colours sell.
• Social stratification: the division of people into classes affects who buys which product.
• Social institutions: family, school and religious bodies influence buying decisions.
• Buying and consumption habits: include how often people shop and whether they buy in small or large quantities.

What is the cultural factor?

The cultural factor is the set of beliefs, values and norms shared by the people of a country.

• Understanding: international marketing requires an understanding of different cultures, beliefs, values and norms.
• Communication: a message that is welcome in one culture may offend people in another.
• Appeal: the business adapts its product, packaging and advertising so that diverse people accept it.
• Respect: showing respect for local values builds trust and loyalty to the brand.

What is the legal factor?

The legal factor is the set of laws, regulations and trade policies that a country applies to business.

• Different laws: each country has its own laws on imports, product standards, labelling and advertising.
• Compliance: understanding and following these laws is essential in international marketing.
• Purpose: compliance helps the business avoid legal issues and penalties.
• Trade policies: rules on tariffs and quotas affect the price and quantity of goods that can enter.

What is the difference between the social and cultural factors?

The social factor describes how people live and buy, while the cultural factor describes the values and norms behind that behaviour.

How do the features affect the marketing mix?

The five features shape the product, price, place and promotion that a business chooses for a foreign market.

Summary table of the five features

Evaluation

1. Define international marketing.
2. State the five features of the international market.
3. List four market characteristics an international marketer can use to judge the economic environment.
4. Why is political stability important to an international marketer?
5. Why must a business understand the laws and trade policies of other countries?

Assignment

Explain the importance of understanding consumer behaviour and cultural differences in international marketing efforts.