Several environmental factors such as economic, political-legal and cultural characteristics can affect global and domestic marketing decisions. A company must understand the global marketing environment before venturing into the arena. Companies must weigh the risks involved and answer many questions about the ability to operate globally. The company must learn to understand the preferences and buyer behavior of consumers in other countries. Some companies have the ability to adapt to other countries’ business cultures and deal effectively with foreigners. Mc Donald’s is a good example of a company that has stretched out globally. McDonald’s has been successful in establishing franchises in every continent.
McDonald’s considers the regulations and political environments of other countries. Companies deciding to branch out into other countries must consider the financial and political risks involved. Financial risks are associated with the fluctuating foreign exchange and the differing country interest rates (Currency Exchange Rate, 2007). One example of interest rates, short-term interest rates could be 2.8 percent in the United States, 3.5 percent in the euro countries, and only .5 percent in Japan. Transactions with these varying interest rates can knock a company off course and transform positives to negatives.
The need to adjust marketing mixes according to another countries preferences is a necessity in global marketing. Companies must decide how much of their products, promotion, price, and channels should be adapted for each foreign market. For instant, McDonald’s has built its reputation on their fast-food burger product. However, before entering the India market that focus had to change because of ...