SECTION A: International Market Evaluation
Trade has involved the exchange of goods and services between two parties, the buyer and seller. The sellers dealing in a vast range of commodities ranging from consumer goods capital goods. Other groups of the seller are involved in the sale of services. With the increased rise of peace and harmony among nations, trade has frequently been done between nations. The exchange transactions between countries are what make up international trade. International trade occurs due to the presence of various international payment systems that incorporate both the central and private systems of banking of different nations.
The exchange of commodities between countries revolves around imports and exports. However, international trade has always been of great significance to the developed countries which deal with the production of manufactured goods, unlike the developing countries. The latter countries import manufactured goods from the developed countries which are more expensive compared to the revenue earned by poor countries from exporting raw materials. Due to this reason, the developed countries occupy a larger share in international trade. A good example of developed countries trade block is the European Union which controls the majority of the exports around the world.
The majority of the developed countries are involved in trade deals with other developed countries. Trade between developed countries accounts for more than fifty percent of international trade. This owes to the fact that the world’s richest nations have various potential customers and markets to manufactured commodities.
In international trade is dominated by only a few nations like the USA, Germany, China, and Japan whose main exports are finished goods. Research has established that since the end of the Second World War in 1945, global Gross Domestic Product (GDP) and the value of international trade has risen by two percent every year. However, the 2008-2009 financial year is exempted where there was a fall arising from the Global Financial Crisis.
During the 1980s, China began to emerge as an important contributor to global trade. The nation intensified its involvement in exports and imports. China was ranked the world’s number one exporter in 2013 with the goods exported valued at two trillion US dollars. As a result, China has established many international trade deals with both developed and developing countries. Such deals have led to the creation of new opportunities for third world countries to earn revenue. In 2010, China started decreasing its global activities hence slowing its growth rate. This had adverse effects to numerous African countries that exported raw materials such as oil for the Chinese industries and companies.
Not only do the developed countries dominate international trade, but also various large economies that are emerging. These large emerging economies are referred to as EEs. The EEs are categorized into two groups, which are the BRIC group and the MINT group. The BRIC group includes the four vital participants in global trade, that is, Brazil, Russia, India, and China. The four countries are characterized by having large economies. Besides, they are rich in minerals and widely populated. The large population provides for the human resource require in manufacturing goods in addition to serving as a market for goods and services. The other group is the MINT group which involves the emerging economies of Mexico, Turkey, Nigeria, and Indonesia. The above-stated countries are crucial areas for manufacturing activities. Countries like Nigeria have their main participation in international trade from exporting oil.
There are various activities by a man that affect global marketing. Other influences on international trade may arise from natural disasters. The occurrence of natural disasters such as floods, typhoons, hurricanes, volcanoes, and earthquakes cause serious damage which turns out to be bad for the economy. Such disasters result in the destruction of tangible assets that are significant in the manufacture of finished goods. They may lead to the destruction of industrial machinery among other items that are vital in the production of goods. The occurrence of some natural disaster has had adverse effects to the extent of leading to the closure of firms hence reduced the production of goods for trade. Besides, there is also a loss of life associated with natural disasters which implies a reduction in human resources.
Research by academicians has shown that natural and man-made disasters can either influence international trade positively or negatively. The effects caused by disasters keep on varying depending on the various economic status of trade patterns, the type of disaster and frequency of occurrence of the disaster.
Other influences of international trade include terrorism. Academicians have done extensive investigations to evaluate the consequences of terrorist-related activities on global business. Terror attacks have adverse effects on components of international trade such as global stock markets. In the case of an instance of events of terrorism in the country, the state of the economy of that nation may deteriorate. This may be due to fear that the country cannot provide adequate security for the involvement in business activities. As a result, the costs of trading in a country raise owing to terrorist-related activities. Also, terrorism may affect the relationship between nations resulting in reduced business activities between nations. When the relation between nations is negatively affected due to acts of terror, bilateral trade between countries is adversely affected too.
Furthermore, one of the numerous influences on international trade is war. Trading activities between nations are reduced by the hostility leading to war among the countries. During the war, most of the healthy citizens are recruited to the army and other defense forces to aid a country in procuring victory. As a result, there is a reduction in the human resource required for activities promoting global trade such as the manufacture of goods. Besides, conducting business transactions in a nation under war is difficult due to an increase in the levels of insecurity. Apart from the war between nations, other forms of war that may occur and affect international trade include trade wars. Such wars have adverse effects on business activities and deals among countries. Also, they affect the relationship and peace in various nations.
Over the years, there have been policies established between countries to ensure protection for home industries from facing unfair competition from incoming foreign companies. The main techniques used in trade protection involve usage of tariffs, quotas, subsidies, manipulation, and currency. The main goal of protection is to discourage traders and business individuals and organizations from being involved in export and imports, which are the main features of international trade. The form of protection is a defensive measure whose main influence revolves around the political measure. However, despite the advantages linked to trade protectionism, such measures may make a country less competitive internationally.
There are also measure in place that seeks encouraging countries to involve in international trade. Several governments have made trade agreements and policies whose main aim is to encourage trading beyond one country. Also, due to increased global trade activities, there are bodies in place that monitor international activities involved in the trade. These bodies also come up with policies that govern how to conduct international trade besides ensuring the terms and conditions of trade agreements are followed to the latter.
Business environment around the world has always evolved to incorporate new technologies resulting in the creation of new markets. Some of the emerging markets are due to increased competition among various businesses around the world hence the need for creativity and innovation. As different individuals, groups, organizations, companies, and nations innovate ways to survive in an extremely competitive environment, they always come up with new forms of markets. Emerging markets are responsible for a greater percentage of international economic growth. The majority of the developing countries play a significant function in international economic systems through their involvement with emerging markets.
Advancements in technology and intensified higher learning in Information Technology and Computer Science have enabled the procurement of goods and services through the internet. In other words, this refers to monitoring and controlling business by the use of electronic means. A customer can purchase commodities from a seller or producer whose location is many miles away. The incorporation of technological advancements to conduct business proceedings, popularly known as electronic commerce has aided in globalizing trade. Due to these developments in technology, the world can be viewed as a village where individuals from distinct countries can conduct business together. The transactions in e-commerce can occur between businesses, consumers, consumers and businesses, businesses and consumers among other groups. Electronic commerce allows buyers and sellers from different countries and nations globally to involve in trade without being discriminated against.
Owing to the growth of electronic commerce, the need for non-cash modes of payments has been on the rise. The purchase and sale of goods and services through the internet require payment techniques that are also over the net. Since 2016 when electronic commerce began dominating the global market, organizations through research and studies have explored new modes of procurement of goods and services. Two of the major electronic methods to transfer money include PayPal and cryptocurrency. The development of the two is significant for allowing for transactions involving the transfer of funds between buyers and sellers globally. These payment modes facilitate trade through the internet.
The development of other methods of payment eliminates the need for physical currency. Online currencies are linked with numerous merits when utilized in payments for international trade activities. To start with, cash payments across the international border are associated with high transactional costs when compared with online payment techniques. Besides, the use of physical currencies takes time, unlike online currencies which have proved to be quite speedy. Furthermore, transacting through online methods of payments is secure. Therefore, numerous global organizations opt for online payment means other than the use of physical currencies to pay for goods and services.
The incorporation of the use of the internet for transactions has been incorporated in other activities enhancing trade internationally. Such activities include transport and accommodation. Through the usage of air bnb, business persons can secure rooms in new places with ease unlike in the past where booking hotel rooms was done manually. Besides, transport has been eased by Uber services which are fast, cheap and more efficient than using taxis.
Regardless of the benefits linked to the usage of the internet to perform business transactions, electronic commerce is also associated with various risks. The most popular risks arising from the use of e-commerce include hacking and cybercrime. The occurrence of these risk affects both parties that are involved in a business transaction. Hacking and cybercrimes are viewed as advancements and incorporation of technology in traditional methods of theft.
Recently, the introduction of new markets has facilitated the development of political environments. The political stability in various countries around the world has been on the rise to allow generation of revenue from international trade. Variation in the political stability of nations has proved to have numerous effects. Political stability influences opportunities for investments in a nation and the development of merging markets. Also, financial stability influences how the financial system of a nation is able to counter any unfavorable changes in the economy.
Since the election of President Donald Trump, his government has established and implemented strategies that have influence international relations, therefore influencing global trade. Strategies have influenced the lives of numerous individuals and redefined a power balance between consumers and producers or businesses.
In 2016, an election was done in the United Kingdom that prompted the UK’s withdrawal from the European Union. The European Union is responsible for fostering economic growth among its twenty-eight member countries. UK’s withdrawal from the EU influenced the UK’s economy. However, the effects of the Brexit are still uncertain.
Different governments around the world have also come up with common laws and regulations. Negotiations among countries and governments have led to the establishment of international legal and regulatory requirements. These regulation are responsible for the creation of legal business environment around the globe. Violation of the international legal requirements can lead to imposing trade barriers against nations. The most popular trade barrier is tariffs. Trade barrier imposed on nations like North Korea and Russia implies flooding of the nation’s domestic market due to reduced involvement in exports. Also, countries revenue earned from exports falls.
SECTION B (7 Pages)
- Establish a marketing strategy for products or services that can be imported by Australia or exported from Australia to my home country.
- Identify the achievements that export or imports contribute to the international market.
- Develop a risk management strategy for managing contingencies.
- Show how the risk management strategy would ensure the achievement of marketing strategies.
- What product or service is absent in Australia and whose availability would be of great significance in its economy?
- How will the market strategy operate?
- Who are the main participants?
- What are the skill and knowledge requirements?
- Who is the target market?
- Who are the main competitors?
- What are the risks involved, capital requirements, legislation, pricing, and contingencies?
- Will the product or service be accepted?
Justification and significance of the research
This study has allowed for the identification of existing gaps in the Australian government. The research help in establishing what goods or services Australia may need to improve the quality of life of its public. Besides, it established new opportunities for Australia’s involvement in international trade. The study has its focus on a marketing strategy that may prove useful in intensifying two country’s involvement in international trade through imports and exports.
Australia is one of the countries whose involvement in international trade has been on the rise for the past few years. A large percentage of imports by the Australian government covers machinery and equipment for transport. Machinery and transport equipment account for forty percent of all commodities imported by Australia. These machineries are categorized into automobiles, machinery for industrial use, electrical equipment and machines utilized in telecommunication. Austria other imported commodities include petroleum products, finished industrial products, chemicals, and agricultural products, that is, both live animals and foods.
China is the most important import partner in Australia and is responsible for twenty-three percent of all products and services entering Australia from international borders. Other Australia’s import partners include German, Thailand South Korea, and Malaysia.
Approach and operational structure
Companies and organizations have incurred huge expenses to evaluate promotion strategies for products in attempts to achieve business globalization. Numerous organizations have always had a debate on whether to indulge in the customization of products or promotional activities. One of the global approaches for product promotion with a global influence includes product standardization. Businesses have employed the usage of product standardization in ensuring the maintenance of uniformity of the products and services they offer worldwide. Product standardization is a marketing technique that enables the possibility of the sale of a commodity without necessarily introducing any changes to it. This implies that the aspects of the commodities remain unchanged. The same procedures used in the manufacture of the commodity, raw materials, and target markets are unaltered. Also, the packaging and the name of the product do no vary at all.
For business and organization to achieve product standardization, there are particular guidelines and recommendations that need to be followed. Although different organizations have been trying incorporation of product standardization to achieve relevance in the global market, the techniques for standardization may vary from one form to another. One of the methods utilized in the creation of uniformity in products includes standardizing products based on customer requirements. Uniformity of goods or services aids in enhancing customer satisfaction and maintaining particular customers. This is due to the unchanging quality and appearance of the products or provision of services, which may also attract customers. Having standardized products helps organizations advertise their products internationally with ease. However, the technology and level of skills required to create product uniformity around the world are extremely expensive.
The use of product standardization is linked with numerous benefits that are enjoyed by both the consumers and the providers. The most significant advantage of manufacturing uniform commodities or providing similar services around the world is the reduced costs incurred. To begin with, product standardization is associated with cutting down the expenses that are linked with the production of goods or the provision of similar services. In addition, this technique for the promotion of goods and services globally helps in establishing efficiency in the production of commodities. Different organizations and industries producing the same product around the world use the same production process where less effort is required. Also, if a particular product is available in the different markets internationally, it becomes a brand that all consumers accept, trust and recognize globally. Product standardization not only advertises a product internationally but also enhanced the strengthening of a specified brand beyond international borders.
On the consumer’s side, product standardization is crucial for a specific type of product. These products include automobiles and different technologies in the construction of products. Utilization of uniform technologies ensures that different nations have a similar product to meet some specified user needs. For example, iPhone manufactures employ the same technology in the manufacture of some phone or tablet brand. Owing to the use of uniform technology, an iPhone user in the USA receives the same services offered by that iPhone brand in Australia.
Finally, the standardization of products ensures that all goods and services are produced by having a uniform quality. Such measures create trust from the consumers since the quality of the product remains standard over time. However, producers may incorporate new technologies to ensure that the product effectively meets the user’s needs. Such additional technologies do not change the product’s standards.
The other technique utilized in the global promotion of products and services is product customization. An organization that involved in product customization comes up with new products to meet specific requirements for the consumers. Customization implies that industries design new commodities that alter product uniformity around the globe. The main aim of product customization is to have the same product capable of solving different needs in distinct markets. Product customization is most rampant in the movie industry where producers include subtitles or produce the same movie in different languages.
As seen earlier, product standardization is associated with numerous merits when utilized as a strategy for marketing. In the present day, the internet has promoted globalization. As a result, the needs of different consumers around the world have turned out to be similar. With the use of product standardization, all products are the same in different markets across international borders. The goods and services are made available to all consumers regardless of their positions. If a consumer changes geographical location from one nation to another, the product is still available in the new country at the same pricing. Due to this reason, producers are able to meet customer needs hence facilitating customer satisfaction. Besides, product customization help in avoiding the cost required for adaptation.
There are distinct methods used for operational marketing structures. A market structure refers to aspects of a market that may be categorized as organizational or depending on the level of competition. A market structure provides a description of the type and nature of competition in addition to the policy for the establishment of market prices. Such a structure can also be viewed as the number of organizations involved in the production of a particular commodity and who is dependent on the competition that exists in the market. Defining a market structure has proved to be a difficult task due to the complexity of the variables that are present in the market. The different structures employed by various organizations vary due to the differences in technologies, customers and the nature of competition.
The structure plays a vital role in establishing an organizational design. There are four major marketing structures namely Oligopoly market structure, monopoly market structure, perfect competition market structure and monopolistic competition market structure.
Oligopoly market includes few producer or sellers dealing with either standard products or diverse products. This kind of market structure can be viewed to lie between pure monopoly and the monopolistic type of competition. In other words, few sellers are present in the market and have the ability to determine prices for products dealt with. In this market structure, there is interdependence among the organization dealing with the sale of products. Besides, all firms use a different method of advertisement to create the popularity of the products they sell. In an oligopoly market, there is no standardization of the firm in aspects such as size and location.
Like all the other market structures, the oligopoly market is associated with some demerits and weaknesses. The market structure has a limited number of sellers which may lead to a reduction in consumers’ choice. Also, a customer may be forced by some circumstances to consume poor quality goods or services due to lack of a choice. Secondly, the existing organization can come up with a barrier to prevent other firms from entering the market by manipulating the prices charged for products. Finally, the nature of the oligopoly market allows for sellers to have control over the pricing of commodities and services. The sellers may take advantage of the buyers and add extra charges to products due to the absence of competition.
The other relevant market structure is monopolistic competition. Here, there are numerous organizations and businesses dealing with the sale of commodities with the availability of other goods that can be used as substitutes. In other words, firms continually compete for the market for their goods-which are not identical. The competition is on the basis of numerous factors other than pricing. In this market structure, the consumer has a wide range of the market to choose from. Due to a wide range of choices for goods and services, consumers’ quality of life is improved. However, some firms in a monopolistic market structure possess full control over the pricing of some commodities. The market is also characterized by variations in the type of products that different organizations and firms produce. The variation in products arises from the use of various technologies, packaging, design and manufacturing procedures.
A monopolistic market is associated with various disadvantages. These major weakness due to a monopolistic market is that consumers end up being charged extra costs by the seller because of the incorporation of some specific features in a product. Also, as firms attempt to differentiate their products, they may end up adding irrelevant and non-beneficial features instead of focusing on product improvement. Finally, companies and organizations in a monopolistic market incur huge expenses as they advertise their products to reach the target group. The need for advertisement arises from the fact that the consumers have a wide variety of choices of the product they procure. Consumer choice is dependent on their preferences.
There is a market structure that involves only one seller dealing with a specific and unique product. The market structure is known as the monopoly market structure. The seller can restrict other producers from entering the market. In a monopoly structure, there are no substitutes to the commodity sold. Under a monopoly market, the company has control over the number of products supplied in the market. Control over supply implies that the firm has control over the prices of the commodities. The supplier has complete control over all aspects of the market, including the entry of other firms in the market.
A monopoly market has adverse effects on the consumers while the suppliers enjoy a number of benefits. Firms have control over the supply-demand curve and may produce few commodities and charge very high prices. Such action has effects only on the consumers, that is, in a monopoly market structure, there is increased exploitation of the consumer. Due to lack of competition, the producers may supply good of poor quality to the consumers.
Finally, a perfect competition market structure is characterized by numerous producers and consumers who participate in the sale and procurement of goods and services. The product dealt with may be uniform for all buyers and sellers and provided at a standardized price. The type of market stated here can also be known as pure competition. The existence of pure competition is in areas where there is the absence of competition between immediate rivals. The perfect competition market structure is the selected operational marketing structure.
Due to the presence of numerous buyers and sellers in this market structure, there is no particular group with influence or control over the product pricing. Also, the output of the industry is still uncontrollable by either of the groups. The other significant feature of the pure competition market is that all producers and consumers handle a homogenous product. Dealing with standard products implies that there is no preference between buyers and sellers. In this market structure, both the buyers and sellers have adequate knowledge of the current market aspects such as the prevailing product pricing, all technologies used in the manufacture of the product. Therefore, the procurement or sale of commodities occurs at any time or place. One of the greatest advantages of this type of market structure is that there are no expenses incurred in transporting goods from one location to the other. The absence of transport costs is to ensure that prices charged for the product remain constant throughout. Lastly, this model does not involve any restrictions whether from the government or artificial restrictions. The absence of any form of restriction implies that the buyers and sellers are free to conduct business.
However, the perfect market structure has some weaknesses. In this structure, the consumers have a limited choice for goods and services. Users with a different preference end up being forced to consume the available product. Secondly, the freedom of entry or exit in the market has adverse effects on the already established firms. The increase in sellers as the number of the consumer remains constant has effects on the demand-supply curve. Lastly, the perfect competition market structure does not benefit the firm with economies of scale. Lack of the ability to enjoy economies of scale means firms are discouraged from the purchase of large quantities of goods.
Marketing strategies help organizations ensure that the products they sell are known to the target groups. Some of the staff include public relations manager, marketing director, digital marketing director, advertising manager, customer care coordinator, product marketing manager, market assistant and market research analyst. All of the above staff play different roles in marketing. For instance, the public relations manager. They are responsible for coming up with the message to the public concerning the product an organization sales. It is the role of public relations officers to attend press conferences, talk to news companies about their dealings, and deal with problems that may arise from bad reputation associated with the organization’s products.
Marketing directors in a company are held responsible for the supervision of different departmental budgets. Marketing directors are also responsible for hiring or firing employees in the organization. The marketing teams answers to the marketing directors. Recently due to intensified use of the internet, the sale of goods and services has also been done over the web. The digital marketing manager monitors all marketing activities on the internet. A digital marketing officer plays a role in the enhancement of the product’s website in case a firm utilizes the website for advertisements. A digital marketing manager responds to emails and messages arising from products or services provided by the organization. They find out customers reactions to products and provide a report to the organization’s management with recommendations on areas to improve on.
All firms need to advertise their products using the available means of advertisement. Advertisements are significant in the creation of awareness of the company’s products. The staff responsible for monitoring and supervising advertisement of products is the advertising manager. Advertisement managers also have a role to come up with new techniques for creating product awareness. These techniques may include coming up with new video among others.
In a situation where the consumers have questions about products, the customer care department is always available for such. The customer care coordinator ensures that customers with questions and are not satisfied with the product are answered. The customer care department plays a key role in the marketing of the product. However, the product marketing manager oversees all activities involved in the marketing of the firm’s goods and services.
When dealing with exports, the fastest and the most secure means of transport available are considered to avoid delays. The most convenient method of transport that means the above requirement is the use of air mode of transport. Secondly, the duties imposed before the commodities or services enter the destination country should be considered in performance management. Most of the government in the world require all organizations or countries dealing with imports or exports to procure a license before they begin such activities. Obtaining a license ensures that companies deal with the trade of legal products.
Every nation has a board that is dedicated to ensuring that goods procured from international trade through international trade meet all set standards. The main aim of these boards is ensuring that countries do not import or export low quality or counterfeit commodities. All nations involved in global trade are responsible for creating a budget for all the marketing requirements. The budget may include the costs incurred in obtaining international trade licenses, procurement of goods and transport costs.
Process evaluation and improvement
The involvement of nations in international trade has numerous advantages. Different nations are able to acquire raw materials for their industries or finished goods. Also, nations can export their surplus products to other nations and earn revenue. However, international trade needs to be monitored closely to avoid resulting in conflicts that may lead to war between countries.
A system for the evaluation of different components of the products dealt with in global trade is established. To monitor products, the system ensures that the products imported are of the required quality and quantity. Also, countries involved in international trade need to have licenses and documentation showing details of the products imported to a nation.
The system should also come up with pricing and policies to control market changes. Such policies should consider the supply and demand curves for the commodities and control the number of goods entering the nation. This is to avoid the change of the type of market structure by ensuring that the consumers are provided with a vast range of choices of products. Such systems also seek to eliminate consumer exploitation by suppliers.
Finally, the expected target for international trade should be defined clearly in a system. These targets may include the expected quantity of goods exported or imported and the amount of money the nation is willing to spend in global trade. Such specifications can then be utilized in the evaluation of the marketing progress in the country. The system establishes also seeks to ensure all requirements such as quality and cost are meet by the trading partners.
Section C (4 Pages)
Australian Bureau of Statistics 2004
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