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lnternational Marketing Chapter2 The Political and Legal Environment

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The political environmentThe legal environment

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Слайд 1lnternational Marketing

Chapter2
The Political and Legal
Environment

lnternational MarketingChapter2The Political and Legal Environment

Слайд 2The political environment

The legal environment





The political environmentThe legal environment

Слайд 4A.Political Environment
Political environment is defined as the state,

government, institutions and laws together with the public and private

stakeholders who operate and influence that system.

Companies will pay attention to the political environment to see how government actions will influence their company.

A.Political Environment  Political environment is defined as the state, government, institutions and laws together with the

Слайд 5Government affects almost every aspect of business life in a

country. National politics affect business environment directly, through changes in

policies, regulations, and laws.

The political stability and mood in a country affect the actions a government will take.


Government affects almost every aspect of business life in a country. National politics affect business environment directly,

Слайд 6The political environment in international business consists of a set

of political factors and government activities in a foreign market

that can either facilitate or hinder a business' ability to conduct business activities in the foreign market.

There is often a high degree of uncertainty when conducting business in a foreign country and this risk is often referred to as political risk.

Home country VS Host country

The political environment in international business consists of a set of political factors and government activities in

Слайд 7The political environment in which the firm operates (or plan

to operate) will have a significant impact on a company's

international marketing activities.

Changes in government often result in changes in policy and attitudes towards foreign business.
The political environment in which the firm operates (or plan to operate) will have a significant impact

Слайд 8a foreign company operates in a host country at the

discretion of the government concerned, the government can either encourage

foreign activities by offering attractive opportunities for investment and trade, or discourage its activities by imposing restrictions such as import quotas, etc.
An exporter that is continuously aware of shifts in government attitude, will be able to adapt export marketing strategies accordingly.
a foreign company operates in a host country at the discretion of the government concerned, the government

Слайд 9Political factors

1. Type of government
Republicanism
a country without

a king or queen, usually governed by elected representatives of

the people and a president.
Constitutional monarchy
It is a form of government in which a monarch acts as head of state within the guidelines of a constitution, whether it be a written, uncodified,
or blended constitution.



Political factors 1. Type of governmentRepublicanism  a country without a king or queen, usually governed by

Слайд 112. Party system
One-party system
China. Viet Nam. North Korea...


Two party system
US.UK. Canada...
Multipartism
France. Argentina

2. Party systemOne-party system  China. Viet Nam. North Korea... Two party system   US.UK. Canada...Multipartism

Слайд 12CASE
Republican VS Democratic

CASERepublican VS Democratic

Слайд 13In the United States. the sense of two party system

describes an arrangement in which all or nearly all elected

officials only belong to one of the two major parties
In the United States. the sense of two party system describes an arrangement in which all or

Слайд 14Republican Party:
Founded in 1854. There have been 18

Republican presidents, the first being Abraham Lincoln. and the most

recent being George W. Bush
Republican Party:  Founded in 1854. There have been 18 Republican presidents, the first being Abraham Lincoln.

Слайд 15Democratic Party :
Founded around 1828. It has elected

15 presidents. The first was Andrew Jackson, the most recent

is the current president, Barack Obama.




Democratic Party :  Founded around 1828. It has elected 15 presidents. The first was Andrew Jackson,

Слайд 173. Economic policy of the government

Economic policy refers

to the actions that governments take in the economic field.

It covers the systems for setting interest rates and government budget as well as the labor market, national ownership, and many other areas of government interventions into the economy.

3. Economic policy of the government  Economic policy refers to the actions that governments take in

Слайд 18Trade policy is a collection of rules and regulations which

pertain to trade. Every nation has some form of trade

policy in place, with public officials formulating the policy which they think would be most appropriate for their country.

The purpose of trade policy is to help the nation’s international trade run more smoothly.

Trade policy is a collection of rules and regulations which pertain to trade. Every nation has some

Слайд 19Some governments attempt to protect their local industries with trade

policy which place a heavy burdan on importers.

eg.

Trade barrier is simply anything that makes it harder for a company to export products to a foreign country.Formal trade barriers include tariffs and product quotas that limits the number of products imported into the country.

Some governments attempt to protect their local industries with trade policy which place a heavy burdan on

Слайд 20Also. governments may impose regulations that aren't primarily promulgated as

barriers to trade but have the same effect.

eg.specific product standards

and health and safety standards that businesses will be required to meet before the products can be sold.

Also. governments may impose regulations that aren't primarily promulgated as barriers to trade but have the same

Слайд 21CASE 1
Carbon Tariff

CASE 1Carbon Tariff

Слайд 22A carbon tariff is a tax imposed on imported goods

from countries that do not curb their emissions of greenhouse

gases.

Chinese officials and analysts said the US move was another kind of "trade protectionism". they are using it as a means to pressure developing countries.
A carbon tariff is a tax imposed on imported goods from countries that do not curb their

Слайд 25 More than 30 countries refuse to allow Chinese

mooncakes sent through the mail to pass their borders, essentially

banning the delicacy which symbolizes the Mid-Autumn Festival celebrated by the Chinese globally.

Those countries have strict inspection standards for imported food, especially for stuffed baked goods like mooncakes.
More than 30 countries refuse to allow Chinese mooncakes sent through the mail to pass

Слайд 26On the other hand.some nations eschew trade barriers .promoting free

trade in which domestic producers are given no special treatment

.and international producers are free to bring in their products.

Besides. If the country has entered into a trade agreement with another country, conducting business in that country will usually be easier and less risky because the trade agreement will provide some predictability and protection.
On the other hand.some nations eschew trade barriers .promoting free trade in which domestic producers are given

Слайд 274. Political stability
Once a country is stable, more

investment opportunities will be realised, thus attracting more and more

investors. This will reflect positively and directly on local businesses, as citizens will be able to have full confidence in them.
Some countries are not politically stable and are subject to civil unrest and even violence. Civil unrest can make conducting business very risky, including the possible loss of property and life.
4. Political stability  Once a country is stable, more investment opportunities will be realised, thus attracting

Слайд 315. Political relations between home and host countries
Political

relations often determine the relative risk of entering a foreign

country. Obviously, good relations will reduce risk and encourage trade by private companies, but circumstances can change rapidly.

Host and home country relations may be strained, affecting business affairs .
5. Political relations between home and host countries  Political relations often determine the relative risk of

Слайд 36Let’s have a talk...

Let’s have a talk...

Слайд 37 Firms operating internationally face major challenges in conforming

to different laws, regulations and legal systems in different countries.



The domestic laws of your home country
The domestic laws of each of your foreign markets
International law in general




B.The legal environment

Firms operating internationally face major challenges in conforming to different laws, regulations and legal systems

Слайд 38Domestic laws govern marketing within a country, e.g. the physical

attributes of a product will be influenced by laws (designed

to protect consumers) relating to the purity, safety or performance of the product.
Domestic laws might also constrain marketers in the areas of product packaging, marking and labelling, and contracts with agents. Most countries also have certain laws regulating advertising, e.g. Britain does not permit any cigarette or liquor advertising on TV.
Domestic laws govern marketing within a country, e.g. the physical attributes of a product will be influenced

Слайд 39The implications of law on marketing operations
are legion:

Product decisions

- physical, chemical, safety, performance, packaging, labelling, warranty

Pricing decisions

- price controls, resale price maintenance, price freezes, value added systems and taxation
The implications of law on marketing operations are legion:Product decisions - physical, chemical, safety, performance, packaging, labelling,

Слайд 40Distribution - contracts for agents and distribution, physical distribution, insurance



Promotion - advertising codes of practice, product restriction, sales promotion



Market research - collection, storage and transmission of data

Distribution - contracts for agents and distribution, physical distribution, insurance Promotion - advertising codes of practice, product

Слайд 41what taxation schemes will be faced abroad?

what taxation schemes will be faced abroad?

Слайд 43 The controversy arose over a US embargo forbidding

US business to trade with Cuba and concerned whether or

not the embargo could be enforced in Canada. Wal-Mart was selling Cuban made pajamas in Canada. When Wal-Mart officials in the United States became aware of the origin of manufacture, they issued an order to remove all the offending pajamas because it is against US law (the Helms Burton Act) for a US company or any of its foreign subsidiaries to trade with Cuba.
The controversy arose over a US embargo forbidding US business to trade with Cuba and

Слайд 44 Canada was incensed at the intrusion of US

law on Canadian citizens. The Canadians felt they should have

the choice of buying Cuban made pajamas.

Wal-Mart was thus caught in the middle of conflicting laws in Canada and the United States and Canada – US foreign policy feud over the extra territoriality of US law.
Canada was incensed at the intrusion of US law on Canadian citizens. The Canadians felt

Слайд 45Wal-Mart Canada would be breaking US law if it continued

to sell the pajamas, and it would be subject to

a million dollar fine and possible imprisonment of its managers.
However, if the company pulled the pajamas out of Canadian stores as the home office ordered, it would be subject to a $ 1.2 million fins under Canadian law.
Wal-Mart Canada would be breaking US law if it continued to sell the pajamas, and it would

Слайд 46 After discussion with Canadian authorities, Wal-Mart resumed selling

the pajamas.

Canada was upset with the United

States for attempting to impose its laws on Canadian companies (Wal-Mart Canada is a subsidiary of Wal-Mart US) while the United States says that Wal-Mart was violating its laws in not abiding by the boycott with Cuba.

After discussion with Canadian authorities, Wal-Mart resumed selling the pajamas.  Canada was upset with

Слайд 47The situation illustrates the reality of the legal environment and

international marketing companies are subject to both home country laws

and host country laws when doing business in another country.
The federal government finally settled with Wal-Mart in 2003 and the pajama caper was finally closed.
The situation illustrates the reality of the legal environment and international marketing companies are subject to both

Слайд 48CASE 2
Google has closed its Chinese-language
search engine Google.cn

CASE 2Google has closed its Chinese-language search engine Google.cn

Слайд 49International Law
It defined as that body of rules

which regulates relationships between countries or other international legal persons.

There is neither an 'international parliament' empowered to create international law; nor an 'international police force' to enforce it.
International Law  It defined as that body of rules which regulates relationships between countries or other

Слайд 50The principal sources of international law are treaties and conventions.

These are created when several countries reach agreement on a

certain matter and bind themselves to it by authorising their representatives to sign a document embodying that agreement.

Essentially, they have entered into a contract that obliges them to do something or to refrain from doing something. Failure to comply is the equivalent of breach of contract.
The principal sources of international law are treaties and conventions. These are created when several countries reach

Слайд 51a) FCN (Friendship, Commerce and Navigation)
b) IMF and GATT
c)

UNCITRAL (UN) international trade law commission
d) ISO (International Standards

Organisation)
e) IATA (International Air Transport Authority)
a) FCN (Friendship, Commerce and Navigation) b) IMF and GATTc) UNCITRAL (UN) international trade law commission d)

Слайд 53The World Trade Organization (WTO) is the only global international

organization dealing with the rules of trade between nations.

At

its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.

159  members on 2 March 2013
The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade

Слайд 54The WTO is a rules-based, member-driven organization — all decisions

are made by the member governments, and the rules are

the outcome of negotiations among members.

It deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
The WTO is a rules-based, member-driven organization — all decisions are made by the member governments, and

Слайд 55Cut living costs and raise living standards
Settle disputes and

reduce trade tensions
Stimulate economic growth and employment
Cut the cost of

doing business internationally
Encourage good governance
Help countries develop
Give the weak a stronger voice
Support the environment and health
Contribute to peace and stability
Be effective without hitting the headlines
Cut living costs and raise living standards Settle disputes and reduce trade tensionsStimulate economic growth and employmentCut

Слайд 56More trade, more traded goods and services and more trading

countries — they bring benefits but they can also increase

the potential for friction. The WTO’s system deals with these in two ways.

One is by talking: countries negotiate rules that are acceptable to all. The other is by settling disputes about whether countries are playing by those agreed rules.
More trade, more traded goods and services and more trading countries — they bring benefits but they

Слайд 57 The fact that the disputes are based on

WTO agreements means that there is a basis for judging

who is right or wrong. Once the judgement has been made, the agreements provide the focus for any further actions that need to be taken.
The fact that the disputes are based on WTO agreements means that there is a

Слайд 59on September .2009. the United States International Trade Commission had

recommended additional tariffs 35-30-25 percent over three years.

China announced

a WTO challenge to the tires safeguard decision within days.
on September .2009. the United States International Trade Commission had recommended additional tariffs 35-30-25 percent over three

Слайд 60CASE
Haier bought Sanyo's washing machine and refrigerator

operations in Japan and home appliance businesses in four other

countries in Southeast Asia
CASE  Haier bought Sanyo's washing machine and refrigerator operations in Japan and home appliance businesses in

Слайд 61What to do?
Do research before go abroad
Respect

other countries’ political system and obey the rules

Keep Flexible
Connection with home country
What to do? Do research before go abroad Respect other countries’ political system and obey  the

Слайд 62Summary
The political environment: Type of government. Party system. Economic policy

of the government. Political stability.Political relations between home and host

countries

The legal environment: The domestic laws of your home country.The domestic laws of each of your foreign markets.International law in general

SummaryThe political environment: Type of government. Party system. Economic policy of the government. Political stability.Political relations between

Слайд 63Reference
Global agricultural marketing management . http://www.fao.org/docrep/W5973E/W5973E00.htm
国际税收 朱青 人民大学出版社
http://www.wto.org/index.htm

ReferenceGlobal agricultural marketing management . http://www.fao.org/docrep/W5973E/W5973E00.htm国际税收 朱青 人民大学出版社 http://www.wto.org/index.htm

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