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CX770007 International Marketing

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  • Course Code: CX770007
  • University: Otago Polytechnic
  • Country: New Zealand

Question:

Learning outcomes:

  1. Critically evaluate the impact of differing regulatory and currency regimes as well as transportation cost, tariffs, and trade agreements

  2. Critically evaluate the cultural and communication needs for an off shore market

Task:

Critically evaluate the differences between the local NZ market and that of an international market. You should be specific about the differences between NZ and one other country.

The report should cover:

  1. Comparethe international country to the NZ market highlighting key differences between the markets including different regulations, currency regimes and transportation.?currency and transportation some country well very difficult ?thinking about technology communication ?problem
  2. Discuss the tariffs and trade agreements between the two countries and how this will impact on a marketing plan.(How the word impact about new Zealand organization) problem
  3. Critically evaluate the cultural differences and communication needs and explain how this will impact on a marketing plan.(How they impact about marketing plan) problem
  4. Highlight some of the problems that need to be solved for a NZ organisation to dobusiness in the international country. (45 problem different language, what do we actually do for this saturations)
  5. You should use both academic and non-academic referenced research to back up your discussion
 

Answer:

Introduction  

The marketing initiatives that are planned by organizations are required to focus on the identification of the differences in regulations, tariffs, trade agreements, culture and the prospects of communication. The delineation of the differences helps an organization in undertaking expansion in the global economies. The marketing initiatives that are undertaken by6 the organizations in the international markets are dependent on the identification of the culture and the communicational differences that exists. The key changes that are undertaken by the organizations in the marketing initiatives are dependent on the assessment of the differences.

The discussion will be undertaking steps to evaluate the differences in the regulations, tariffs, trade agreements and the like that exists between an organization in New Zealand and Japan. The identification of the differences will be helping the New Zealand’s organization in identifying the marketing prospects that are faced by the same while operating in diverse Japanese markets. The identification of the differences and the issues that might be faced by the NZ organization will be helping the same in framing strategies in order to enhance the processes.

Differences in regulations, currency and transportation

The identification of the differences in the regulations in the economies, the currency and social status and the transportation systems helps an organization in maintaining the efficacy of the marketing initiatives that are undertaken by the same. The section explores the differences in regulation and the other factors in the NZ and Japanese markets in order to delineate the marketing prospects faced by the same.

Regulatory differences 

The Japanese markets follow an open trade policy, which does not impose the need of import license for most of the goods that are imported to Japan. It will be helping the organizations in NZ to facilitate proper trade relation while expanding in the Japanese economy.  However, Transparency.org. (2017) stated that the Japanese trade union imposes the utilization of trade license in the case of importing goods relating to hazardous materials, animals, plants, perishables. The nation favors nations with the membership of World Trade Organizations (WTO) or if the nation holds a bilateral treaty with Japan. Japanese Trade commission imposes acts like Electrical Appliance and Material Safety Law, Consumer Product Safety Law, Gas Utility Industry Law, Food Sanitation Law, Pharmaceutical Affairs Law and the like helped the nation in upholding the efficacy of the product imports.

 Japan imposed the utilization of civil law system, which is  based on the German model. Lester,   Mercurio and Bartels   (2016) stated that the  regulatory system of Japan reflected mixed Anglo-American influence and Japanese traditions. On the other hand, NZ followed the common law system based on the English model, which enforces special legislation for the Maoris. The differences in the regulatory systems in the nations might affect the marketing initiatives that might be undertaken by the organization sin NZ. The key changes that are undertaken by the organization aims at maintaining the efficacy of the operations that are undertaken by the same as per the marketing needs of the business.

 

Currency and economic differences 

The GDP of Japan is $5.96 trillion, which is 36 times more than that of NZ (Worldpopulationreview., 2018). The gradual economic development of the organization has helped the same in making technological advancements. The organizations are required top match the technological advancements that are made by Japan in order to export their products in the different regions. IT has challenged the marketing initiatives that are undertaken by the organizations in NZ in order to maintain the efficacy of the operations as per the standards. The per capita GDP of Japan is $46,720.36, which is 24% greater than that of NZ (Data.worldbank.org., 2019). The key elements of change that are undertaken by the organization in NZ are dependent on the smooth functioning of the systems in order to correlate themselves to the Japanese standards of market. Mpi.govt.nz. (2017) stated that the economic differences between Japan and NZ have created havoc discrimination between the trading capabilities of the NZ organizations in the international markets of Japan. On the other hand, the enhanced GDP of Japanese markets have ensured the potentiality of the customers to afford the products that are offered by the organizations in NZ. It will be helping the organizations in NZ to find potential customers while marketing their products to the Japanese markets.

Transportation differences 

New Zealand companies have expanded their high-value supply chains which has helped the organizations in NZ to export their product offerings to different parts of the world.  On the other hand, the NZ companies have undertaken different attempts to establish in-market relationships with companies in different parts of the world. It has helped the same in enriching their supply chain and logistics operations. Transparency.org. (2017) stated that most of the exports that are undertaken by the companies in NZ are related to the farm products to the Japanese markets. According to a report, Japan’s agricultural productivity is two times greater than that of NZ, but due to the heavy population in Japan, the nation undertakes imports from different countries, including NZ (Worldbank.org., 2018). The transportation differences that are being noticed between the two nations are dependent on the utilization of extensive networks. The Japanese economy employs and intensive supply chain procedure. On the other hand, Transparency.org. (2017) stated that NZ employs extensive logistics and supply chain operations which has helped the NZ  based organizations in undertaking the operations as per the needs of the business in the international markets. The differences in the supply chain and logistics operations that are undertaken by the nation have helped the organizations in NZ in gaining a competitive advantage over the firms in Japan. The extensive collaborative functioning of the NZ firms through in- market relations has helped the same in perfecting the supply chain operations of the same.

 

Tariffs and trade agreements between Japan and NZ 

Tariffs and trade agreements 

New Zealand undertook a trade agreement with Japan named CPTPP, which has helped the agriculture exporters in overcoming the high agricultural tariff rates. It has helped the firms in NZ for achieving a competitive advantage over the exporters from Australia. The preferential access that is being provided by Japanese trade authorities to Australia and Chile based on the bilateral trade agreements has added to their competitive advantage4 against NZ. However, the agreement that is held by NZ with Japan has helped the same in enhancing the trade relations with Japanese markets. Worldbank.org. (2018) stated that the CPTPP has helped New Zealand business travelers with the freedom of traveling and staying in Japan up to 90 days. It will be helping the NZ firms in expanding in the Japanese markets more profusely.

The trade agreement that is held between the two countries has helped in enhancing the trade relation between the two. On the other hand, minimization of trade tariffs relating to direct and indirect taxation has enabled the NZ firms in undertaking smooth operations in the Japanese markets. The elimination of tariffs in the different sectors like horticulture, prepared meats, dairy products and forestry has helped the firms in NZ to undertake free trade with Japan. On the other hand, the reduction of tariff rates on products like fish, beef, wine and manufactured products has helped the NZ firms in maintaining the efficacy of the imports in the Japanese markets. The trade agreement, CPTPP, has helped NZ in enhancing the export processes that are undertaken by the firms in the Japanese markets. Mfat.govt.nz. (2018) stated that the elimination and reduction of the tariff on different manufactured and food products has helped in boosting the agricultural firms in NZ to undertake export activities to Japan. Therefore, the reduction of trade tariffs and creation of agreements has helped in enhancing the position of the NZ firms while undertaking trade relations with Japan.  

Impact of tariff and trade agreements on the marketing plan of the organization 

The relaxation of the trade tariffs has helped the NZ based firms in enhancing their marketing plan while doing business in the Japanese markets. However, there are different regulations relating to specific terms like getting electricity and collection of networks for enhancing the marketing procedures as per the concerns of NZ based business firms. Covin and Miller  (2014) stated that the Tokyo Electric Power Company (Tepco) takes around 105 days to connect a business enterprise to its mains. it might affect the smooth functioning of the organizations in the Japanese markets. However, Wei,   Samiee and  Lee  (2014) also stated that the relaxation in the trade laws and tariffs has helped the NZ based firms in undertaking the smooth expansion in the Japanese markets. The enumeration of the trade agreement will be helping to support the smooth functioning of the NZ based business firms while operating in the Japanese markets. On the other hand, Fletcher and Harris (2012) stated that the corporate taxes that are imposed by the Japanese government on the business organizations are 30% along with considerable tariff rates. It might affect the marketing initiatives of the businesses in the different parts of Japan through maximization of operating expenses. The trade agreement, CPTPP, provided the NZ businesses with an opportunity of winning government procurement contracts accounting to 16% of GDP of the Japanese markets (Petersen,  Kushwaha  & Kumar,  2015). On the other hand, the bi- polarized market structure of the Japanese markets has resulted to price fluctuations in the economic, which might affect the smooth functioning of the marketing initiatives undertaken by the NZ firms.   

Cultural differences and the communication needs for the marketing plan 

The differences in the culture between NZ and Japan might affect the smooth functioning of the organizations in the Japanese markets.  The Japanese corporate culture depends on the utilization of keigo, a respectful language, which is used for addressing seniors (Laufs  & Schwens,  2014). Moreover, the Japanese corporate culture developed a more formal approach in the enterprises. The traditional aspects of the culture are distinctively different from that of NZ corporate culture, as the enterprises do not follow the so called traditions or a formal approach between the seniors and the subordinates. Schuster and Holtbrügge  (2012) stated that the NZ based organizations face relative difficulties in adapting themselves to the formal culture of Japanese workplaces.  On the other hand, the Japanese enterprise focus on the group functioning of stakeholders in an organization, which is completely different from the individualistic approach that is followed by the NZ. It might also result to a cultural clash between the economies while undertaking suitable trade relations.  The formal communication approach that is favored by the Japanese firms might affect the marketing capabilities of the NZ based organizations while undertaking an expansion in the different regions of Japan. The differences in the communicational and cultural restrictions in the corporate and social structure of Japanese markets might affect the message that the NZ based organizations desire to convey though the marketing and advertisements. NZ based firms believe in the informal approach of communication between the superior and the subordinates in the organizational context. The contradictions  in the cultural and communicational aspects between the two economies affects the marketing initiatives of the NZ based organizations in Japanese markets.

 

Issues that must be corrected by the NZ organization while undertaking marketing

The NZ based organizations face different issues while making their expansion in the Japanese markets. The issues are being enumerated in this section of the research for the lucid understanding of the different modifications that might be undertaken by the firms for gaining a competitive advantage.

Lack of knowledge on the customers or the market in Japan 

The firms from NZ have little or no knowledge of the preferences and the buying behavior of the customers. Moreover, the NZ based organizations are completely unaware f the type of market that exists in Japan. It has affected the capabilities of the organizations in expanding their venture in the different parts of the nation. The lack of knowledge of the buying behavior or the preferences of the customers affects the organizational capabilities of designing the line of products as per the demands. On the other hand, Shenkar  (2012) stated that the lack of identification of the market structure which is bi- polarized might affect the organizational understanding of the pricing. Moreover, lack of understanding of the market structure affects the organizational understanding of the competitors and the propositions made by the same.  The organizations from NZ might take steps to develop different market evaluation teams and thereby conduct market research for the better understanding of the Japanese markets. On the other hand, the evaluation of differences in the market structure and competition that the NZ based organizations are likely to face in the Japanese markets will be helping the same in enhancing the operations.  

Lack of proper communicability 

Communicational barriers related to the language differences might affect the smooth functioning of the NZ based firms in the diverse Japanese markets. The differences in the mentality and perception of the people might affect the communicability of the NZ based organizations. On the other hand, the pitch and tone of the message also affects the efficacy of the message relating to the interpretation of the same in the Japanese markets. Chang et al. (2012) stated that communication is one of the major reasons why corporations fail to expand in the diverse international markets. The communicational gaps between NZ based firms and the Japanese markets are dependent on the interpretation of the message. The organizations from NZ must take steps to identify the culture and the language that is widely used in the Japanese markets. It will be helping the organizations in upholding the efficacy of the operations as per the objectives of the business.

The lack of proper communication affects the organizational capabilities of establishing suitable relation with the traders in Japan. The different changes that might be undertaken by the NZ based firms are dependent on the identification of the language and the sentiments of the Japanese traders. The identification of the sentiments and perception of the people in Japan would be helping the organization in maintaining the efficacy of the operations as per the objectives of expansion.  Dycka and Arita  (2014) stated that the lack of proper communication in the international markets affects the organizational capabilities of holding contacts and efficient networking with the traders in the regions. In this connection, the NZ based organizations lacks in the understanding of the contacts that would help the same in enhancing the processes of the business.

Misinterpretation of the message that is forwarded by the NZ based firms might affect the marketing and expansion capabilities of the same while operating in the bi-polarized market structure of Japanese markets. Harcourt (2012) stated that the effective communicational strategy of the organizations helps in enhancing the knowledge of the needs of the customer base. Therefore, in order to maintain the efficacy of the operations of the business firms from NZ, the organizations must take steps to undertake effective communication with the Japanese traders and the government. On the other hand, the NZ based firms must consider communication as an effective tool for evaluating the needs of the customers for maximizing the prospects of the product offerings.

Cultural barriers 

The major issue that might be faced by the NZ based organizations while expanding in the different regions of the Japanese markets are dependent on the differences in the cultural backgrounds. The differences in the corporate culture affect the trade relation between the two economies.  Solís and Katada  (2015) stated that Japan follows a traditional culture while dealing with their clients. However, the informal approach that is being undertaken by most of the NZ based firm entrepreneurs might affect the trade relations between NZ and Japan. Walls,   Smith and Drahos  (2015) stated that the identification of the different cultural elements helps an organization in developing suitable operations in the diverse international markets with a clear intent of expansion. The key areas of change that might be undertaken by the NZ based organizations are to identify the culture that is followed by the corporate firms in Japan. The identification of the cultural elements will be assisting the businesses in facilitating the smooth functioning of the operations in the Japanese markets.  

 

Lack of proficient workforce in Japan

The employment rate has reduced in Japan by 0.3%, which is a growing concern for the NZ based organizations due to lack of adequate labor supply for the processes that are designed by the same (Lester,   Mercurio  & Bartels, 2016).  Lack of proficient labor force in the nation will be affecting the capabilities of the NZ based organizations in supporting the processes as per the needs of the same. On the other hand, the key changes that are undertaken by the organizations are dependent on the proficient functioning of the workforce.  Friel et al. (2013) stated that the labor force helps the organizations in upholding the proficiency of the same as per the objectives of the business. The diminishing supply of skilled labor force in the Japanese markets will be affecting the different processes that are designed by the NZ based organizations. It will be affecting the production and supply chain activities of the NZ based organizations while making their expansion in the Japanese markets. Therefore, the NZ based organizations must take steps to hire proficient labor force from the allied economies in order to facilitate the production and other activities as per the concerns of the business.

Conclusion 

Therefore, from the above discussion it might be stated that the diverse range of differences might affect the capabilities of the NBZ based organizations in undertaking exports to the Japanese markets.  The different issues that might be faced by the firms arre being enumerated as a part of the research. On the other hand, the enumerations of the communicational and cultural challenges also helped in establishing the contingency that might be faced by the NZ firms. However, the establishment of the trade agreement, CPTPP, between the Japanese and NZ government has helped in relieving the tariffs and taxes for ensuring free trade among the economies. Therefore, the report enumerates different issues that might be faced by an NZ based organization while marketing their products in the Japanese markets.

 

References

Chang, Y. C., Kao, M. S., Kuo, A., & Chiu, C. F. (2012). How cultural distance influences entry mode choice: The contingent role of host country's governance quality. Journal of Business Research, 65(8), 1160-1170.

Covin, J. G., & Miller, D. (2014). International entrepreneurial orientation: Conceptual considerations, research themes, measurement issues, and future research directions. Entrepreneurship Theory and Practice, 38(1), 11-44.

Data.worldbank.org. (2019). Research and development expenditure (% of GDP). Retrieved from https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS?end=2013&locations=NZ&start=2013&view=bar

Dyck, J., & Arita, S. (2014). Japan's Agri-food Sector and the Trans-Pacific Partnership.

Fletcher, M., & Harris, S. (2012). Knowledge acquisition for the internationalization of the smaller firm: Content and sources. International Business Review, 21(4), 631-647.

Friel, S., Gleeson, D., Thow, A. M., Labonte, R., Stuckler, D., Kay, A., & Snowdon, W. (2013). A new generation of trade policy: potential risks to diet-related health from the trans pacific partnership agreement. Globalization and health, 9(1), 46.

Harcourt, A. (2012). ‘Cultural Coalitions’ and International Regulatory Co?operation. JCMS: Journal of Common Market Studies, 50(5), 709-725.

Laufs, K., & Schwens, C. (2014). Foreign market entry mode choice of small and medium-sized enterprises: A systematic review and future research agenda. International Business Review, 23(6), 1109-1126.

Lester, S., Mercurio, B., & Bartels, L. (Eds.). (2016). Bilateral and regional trade agreements: Commentary and analysis(Vol. 1). Cambridge University Press.

Mfat.govt.nz. (2018). Free trade agreements in force. Retrieved from https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/

Mpi.govt.nz. (2017). Ministry of Primary Industries. Retrieved from https://www.mpi.govt.nz/

Petersen, J. A., Kushwaha, T., & Kumar, V. (2015). Marketing communication strategies and consumer financial decision making: The role of national culture. Journal of Marketing, 79(1), 44-63.

Schuster, T., & Holtbrügge, D. (2012). Market entry of multinational companies in markets at the bottom of the pyramid: A learning perspective. International Business Review, 21(5), 817-830.

Shenkar, O. (2012). Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of International Business Studies, 43(1), 1-11.

Solís, M., & Katada, S. N. (2015). Unlikely pivotal states in competitive free trade agreement diffusion: The effect of Japan's trans-Pacific partnership participation on Asia-Pacific regional integration. New Political Economy, 20(2), 155-177.

Transparency.org. (2017). Transparency International. Retrieved from https://www.transparency.org/

Walls, H. L., Smith, R. D., & Drahos, P. (2015). Improving regulatory capacity to manage risks associated with trade agreements. Globalization and health, 11(1), 14.

Wei, Y. S., Samiee, S., & Lee, R. P. (2014). The influence of organic organizational cultures, market responsiveness, and product strategy on firm performance in an emerging market. Journal of the Academy of Marketing Science, 42(1), 49-70.

Worldbank.org. (2018). World Bank Open Data. Retrieved from https://data.worldbank.org/

Worldpopulationreview. (2018). World Population Review. Retrieved from https://worldpopulationreview.com/

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