1. Trading blocA trading bloc refer to an economic alliance of many nations or businesses with the aim of establishing a single economic community and social and political cooperation an mutual understanding among the member nations or firms. Membership to a trading bloc usually has advantages to members as well as disadvantages. The following are the advantages of a nation joining a bloc; The market size increases as the many members of the bloc all culminate into a single economic region with favorable trading policiesThe firm is able to gather vital information about other firms in the same bloc.
There is creation of free trade, common policies, and elimination of trade barrier and enhancement of mutual cooperation. The following are some of the disadvantages of joining trading bloc; Members are barred from acting independently. The business secrets of the firm may be made known to rivals and competitors. Ways in which these advantages and disadvantages may influence the way businesses may market their organizations and services to other businesses within the trading bloc. Increase in the market size will be advantageous since a business/member in the trading bloc will end up having many customers (who are in this respect other businesses) to deal with.
Membership enhances business to business marketing as the firm in question is able to reach out other members easily, there is low cost of advertisement needed and the firm can utilize the bloc’s meetings to market itself. For instance Tesco and Waitrose are large supermarkets trading in mostly retail goods such as food (minced meat) operating in both Europe and USA. Moreover as the saying goes, there is power in information and this is a powerful tool that the firm in a trading bloc will use in decision making concerning its dealings with other members.
It will help the business to adjust its operations to improve its public relations. Also, information enables the firm to learn the needs of different firms, their competitive advantage edges and niches thus our firm can improvise methods to deal with all these issues in the most profitable way. For example member of the European Union know each other better and each one knows the weaknesses and strengths of the other.
This is very vital because it gives an insight of what competitors are doing and what potential customers need. With the creation of free trade and common policies firms are able to market their services and their organizations to others without restriction or hindrance, Bomberg, Elizabeth and Alexander. The European Union: How does it Work? (2003: page 15-20). Besides benefiting from trading blocs, member country or firm are restricted from acting independently and must adhere to the strict laws laid down for example pricing when dealing with members, quality and quantity et cetera.
For instance the case of European Union, where some member countries especially developing countries find themselves in this quagmire. This affects the way a business markets itself to others in the sense that it has first to abide by the laid down rules in the bloc for example on the use or a certain language, media, promotion activities and other marketing activities area hampered in one way or the other. Exposure of competition strategies will put the firm in problem with its competitors since it will be at a losing end in terms of gaining competitive advantage.
The business will have to approach the others from a more honest and persuasive away now that its secrets have been known.