Effects of Political & Economic Factors on Marketing (Essay Sample)

Marketing
Institution (n/a))
Author’s Note (n/a)
Effects of political and economic factors on marketing within the emerging markets (case of the BRICS group)
Introduction
In the 21st century, many new markets have emerged with their economies impacted by the powerful forces. As indicated by literatures, a lot of changes have been experienced in the business world regarding how organizations are carrying out their operations following the increased movement of people, organizations as well as goods across the global environment. Formerly, a lot of instabilities were com common in emerging economies with rampant military coups as countries struggling with foreign debts. China and India became well-known economies that presented the emerging markets. On the same note, Brazil was known as the economy that represented the future of marketing (Maryam, & Mittal, 2020). However, regardless of their attractive attributes, these markets impose a lot of threats to the global market, especially to the marketers.
Over the past decades, many changes have been experienced in the political and economic arenas, shaping the way organizations carry on with their businesses. For this purpose, some scholars are suggesting that the term “emerging economies” is not appropriate since these economies have already emerged and are now refining minor aspects for strengthening their economies further (Akhmadeev et al., 2018). Furthermore, these marketing regarded as emerging are playing key roles in the global economy as they are strategic fosters of corporations.
The purpose of this paper is to investigate how the political and economic factors are affecting marketers in the emerging economies (Ahmad, Mishra, & Daly, 2018). Specifically, this paper gives a report of the impacts brought about by the political and economic factors on marketing the McDonald products within India and China. Finally, the paper provides recommendations that should be considered by any corporation that wants to get to these emerging markets.
Emerging markets’ business environment
In the emerging economies, there is an increased number of middle class people amid the rapidly growing population. Furthermore, domestic competition is close to absence, making a good attraction to many corporations (Song, Liu & Sriboonchitta, 2019). However, these economies are characterized by tough business environments promising neither success nor growth. After entering these markets is when corporations can realize how different bureaucratic interference levels are and the variations that exist in the practices undertaken by businesses. The most common problem encountered by corporations within these emerging markets is lack of control over the interest rates within the economy. For this and many other reasons, businesses should carry out market researches to understand the markets they are moving into (Bouri, Gupta, Hosseini, & Lau, 2018). Getting to understand such markets from consumers is also another hard nut to crash by the marketers despite the fact that these markets provide growth prospects. Therefore, for organizations that extend their markets to these emerging markets just understand these challenges in order to put in place and execute effective plans for success.
Impacts of economic factors
In the recent past, developed countries such as US and Japan have recorded slower or delayed growth periods. These have a long-term impact on the consumptions levels as there are more restrictions to credit shopping by the retirees, who form the most of consumers. This minimizes the numbers of consumers per product (Rasoulinezhad & Jabalameli, 2018). Contrary to this, the emerging markets are doing well as they are reporting a recommendable economic growth. The reason remains to be their export-oriented nature, well-founded business venture as well as supportive financial bodies. In China for instant, there are well established, high-priced real estates that are a relevant for an emerging economy. It must as well be noted that poverty rates have remarkably reduced in the emerging economies such as Brazil and India in the past years.
Most citizens of nations with emerging economies have become part of the reliable consumers even to the deprived individuals (Paul, 2019). This follows a lesser purchasing power parity brought about by the inflation rates. Banking systems are not left behind in the emerging economies. Banks have put in place affluent groups to influence the credit facilities for economic growth. Furthermore, the exchange rate systems have been stabilized by these emerging economies coming up with their own currencies. This beefs up confidence among both domestic and international marketers and corporations in these economies. However, to one side, these reforms in the exchange rate systems has reduced capital flight. This means that foreign companies will find it hard to meet their objectives while aiming at introducing their products in such markets.
China is the largest economy in Asia by now drawing attention of many product exporters. China conducts joint trades with Canada leading to a unique style of purchasers’ experience, huge inhabitation and powerful disposable earnings. Furthermore, Chinese economy is growing so fast that it soon becomes one of the best globally. For these reasons, China becomes one of the strategic emerging markets for McDonald’s products.
On the other hand, Indian economy is founded and built by highly educated and skilled workers. This means that there are high income and high savings.
Effects of political factors
Unlike well-established economies, marketing in the emerging economies has never been without problems. The governments tend to protect their people from external obstructions coming from the global economies. This simply means that corporations from the global market are restricted from accessing these economies. This kind of protection hinders investors and marketers from external markets. Many of these countries are proud of their economies and closes foreign marketers who would wish to promote their products and services in the emerging markets. To open up such markets to the global scope, cultural changes and reframing of ethical considerations will be needed by these countries (Berisha, Gupta, & Meszaros, 2020). Products like fast foods will be perceived as a foreign investment within the local markets. But the introduction of the fast foods will mean alteration of the societal structure and industrial manufacturing of food products. Whenever these economies have no trust in the fast food products, it will be very difficult for marketers to have it in these markets (Demir, & Ersan, 2017). On top of these, the two economies are characterized by stable political scenes creating safer environments for foreign corporations and can facilitate prosperity of McDonald’s products success.
Marketing McDonald products in China and India
As pointed above, these two economies are booming and create vast opportunities for businesses just the same as the McDonald Company. However, winning marketing strategies must be drafted and implemented by marketers to avoid challenges associated with high competition (Grima, & Caruana, 2017). Other challenges include bad domestic infrastructure that makes uneven distribution of economic growth. For these developing economies, most of infrastructural developments are concentrated in major cities and towns leaving other parts of the countries underdeveloped. This means that McDonald Company will have to do more to reach out to the remote areas residents.
Furthermore, there are challenges associated with briberies and insecurities following the underdevelopments in these economies. To McDonald Company, the biggest threat will be distributing products and services within a timely period to get to clients as fast as possible, mainly to the outcasts of the towns and cities. Furthermore, insecurity will greatly hinder McDonald stores and distribution facilitie