The problems of global markets

Revision notes for Unit 3 Business studies Edexcel on "The problems with global markets"

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Harry Bindloss
THE PROBLEMS OF GLOBAL MARKETS
1. A MISUNDERSTANDING OF CULTURE
Culturally bound products ­ Some products may be specific to a certain culture.
Therefore it may be difficult to market some products then others.
Market Research ­ This is important when going into markets overseas. Businesses
have to find out if there is a market for their product and work out the consumer's
wants and needs.
Advertising ­ The wrong colour, a poor choice of words or inappropriate actors can ruin
an advertising campaign and then give the brand a bad image. It is important to work out
what is suitable in new markets.
2. LANGUAGE BARRIERS
Language can cause many problems especially if a firm uses an international brand name
and/universal names for their products (there are cost advantages to this). Also when a
company tries to translate its brand name into another language it may not find the
suitable words.
3. LEGISLATION
A firm must also adapt its products and marketing to local laws and customs or there is
the risk of prosecution.
4. PRICING STRATERGY
With the wrong pricing strategy the firm may lose market share or fail to penetrate a
new market. A firm with a global brand may find it difficult or costly to differentiate
between markets and may be forced to sell their product at a uniform price throughout
the world, even if a lower or higher price would be appropriate in some cases.
5. DISTRIBUTION CHANNELS
International marketing can go wrong if it creates a demand, but distribution channels
fails because buyers are reluctant to stock foreign products. Domestic manufactures
may also bring out duplicated that retailers may prefer to stock.
6. PACKAGING
Some firms may use the wrong colours, packaging, shape etc. which may insult the
consumers unintentionally

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