Global Marketing Global Marketing In this century, pharmaceutical companies are developing at a higher rate than most companies. This is due to the high rate of income exchange and a ready and available market for each and every new development they make. This is, however, only true to the already developed companies. When upcoming pharmaceutical companies make a development, bigger companies either suppress it or buy it off. This explains why in the recent past, upcoming pharmaceutical companies collapse in their early stages. Most prefers the monetary offers from larger companies to buy them off (Hill, 2011). Those that are persistent prefer to sell their products abroad and so is the small developing Canadian pharmaceutical company.
This is an excellent idea; however, it can be a significant flop if the economy of the market is poor, or the marketing strategy used is not suitable. In this case, the company is either aiming for China or the U. K. because those are the two upcoming economies and exceptionally strong just after America. In order for it, to make the best choice it has to consider the outcome in the long run.
Therefore, a thorough survey of both of these economies is appropriate (Dickens, 2011). In order to determine the perfect place to develop a market for their new drug, we will carry out a pestle analysis of both U. K and China. China has been progressively developing with a 10% margin annually for the last thirty years. The economy comes third after the United States and the European Union. Experts around the world say that, in about twenty year’s time, China will be the dominant economy.
This large economic development of China is due to the large investor interest caused by cheap, available labor (Hill, 2011). Though the economy is developing, china has a decidedly vast population hence poor living conditions. This allows manipulation of labor for the workers to do more work with less pay. Most American companies are presently seeking Chinese labor due to this factor. The inflation rate in china is low and hence the chances of acquiring losses are minimal (Dickens, 2011). China is one of the oldest civilizations, and it has had many political issues, but the Chinese have managed to resolve them.
China is a communist country that adapted a democratic mode of leadership in the twentieth century. There were wars of independence between china and Japan that frightened away investors. After resolution of this conflict, the government shunned foreigners hence the economy declined. In the mid 90’s the Chinese system of government changed and they encouraged more foreign investors hence the economic development (Dickens, 2011). China has been leading in the technological growth with production of gadgets for global selling. It has managed to produce many vehicle models and buy even more production rights from American companies.
This has led to better interaction with most nations and foreign ties. China produces vehicle spare parts shipped into countries all over the world at cheaper prices hence creating a remarkably wide market (Hill, 2011). China has been a friendly country for many years and uses this to help its marketing strategy. China is very effective outsourcing strategy both in Asia and other continents. It manages to offer development to developing African countries in exchange for contracts to its companies.
The inflation in China is thus lessened by this distribution of its resources in many different places (Dickens, 2011). The exchange rate presently between the Canadian dollar and the Chinese Yuan is 1.00 CAD = 6.38 CNY. Exchange rate: 6.379307 thus the Canadian company marketing in china will have lesser losses through inflation. The fact that China holds the largest number of United States treasury bonds hence marketing in China will enable even easier marketing in the united sates. China has a more widespread market globally in all continents.
Marketing the drug in China would, therefore, mean that the market is larger hence marketing in China would be advisable. The availability of cheap labor would also reduce the cost of marketing (Hill, 2011). The way that this drug should be marketed would also determine the sales the company gets. Manufacturing the drug at home and then using foreign marketing agents is advantageous to the company because the topography of production would not change. Canada is a well off country, and this marketing strategy would not be hard to implement. The foreign marketing agents also are better aware of their economy and topography than the Canadian company.
If the company would decide to market their goods, for example, in China, it would have to make a massive loss due to the newness of the drug in the market. If they use foreign marketing agents, however, they know their culture and know how well they can integrate the drug (Dickens, 2011). If the sales grow more than the rate of production, then the company can decode to outsource and set up a branch in the market area.
That is when the company should set up a wholly owned subsidiary to handle marketing in the new location. Several points hinder this as the first course of action. These points include; competition from originally existing pharmaceutical companies which are likely to be deeper rooted and culturally integrated than the small Canadian firm. The knowledge of the country’s boom and recession period and knowing to time the production with them would also hinder the company from making such a drastic marketing venture. The knowledge of the market does not only mean studying it but also experiencing it before getting into a rhythm with it (Hill, 2011). It is, therefore, more likely that a marketing subsidiary in a foreign country will cause bigger losses than using foreign marketing agents.
The latter means the advertising of this drug falls solely on the marketing agents. It is easier to cushion a loss caused by marketing through foreign agents other than cushioning that caused by a collapsed subsidiary (Hill, 2011). References Dickens, P. (2011) Global Shift: Mapping the Changing Contours of the World Economy.
Sixth Edition. London: Guildford Press. Hill, C. W. L. (2011). International Business-Competing in the Global Marketplace. 8th edition; International Student edition. McGraw-Hill. Hill, Charles W. L. (2011) Global Business Today. Global Edition. McGraw-Hill. International Monetary Fund, 2011. Retrieved on March 22, 2012. Available at: http: //www. Imf. org World Bank, 2012. Retrieved on March 22, 2012. Available at: http: //www. worldbank. org World Trade Organization, 2011. Retrieved on March 22, 2012. Available at: Http: //www. wto. org