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MARKETING MANAGEMENT - Marketing Environment

The Political-Legal Environment - Marketing Environment

   Posted On :  17.06.2018 11:44 pm

No one should start playing a new game without first understanding the rules, yet some businesses exhibit remarkably limited knowledge about marketing’s political-legal environment – the laws and their interpretations that require firms to operate under certain competitive conditions and to protect consumer rights.

The Political-Legal Environment
 
No one should start playing a new game without first understanding the rules, yet some businesses exhibit remarkably limited knowledge about marketing’s political-legal environment – the laws and their interpretations that require firms to operate under certain competitive conditions and to protect consumer rights. Ignorance of laws, ordinances and regulations or failure to comply with them can result in fines, embarrassing negative publicity and possibly expensive civil damage suits.
 
Businesses need considerable diligence to understand the legal framework for their marketing decisions. Numerous laws and regulations affect those decisions, many of them vaguely stated and inconsistently enforced by a multitude of different authorities. Regulations affect marketing practices, as do the actions of independent regulatory agencies. These requirement and prohibitions touch on all aspects of marketing decision making – designing, labeling, packaging, distributing, advertising and promoting goods and services. To cope with the vast, complex and changing political-legal environment, many large firms have in-house legal department; small firms often seek professional advice from legal experts. All marketers, however, should be aware of the major regulations that affect their activities. Consumer Protection Act(COPRA), Sale of Goods Act, Contract Act, Copy Right Act, and others are to be kept in mind while taking decisions.
 
Some of potential issues from the political-legal environment to affect businesses include:
 
Ø  The national foreign policy can dominate the international business decisions of the local firms. EXIM policy and FOREX policy restrict the flow of goods and monies from India or into India.

Ø  The political ideology of the Government can affect the international brands wanting to enter a market. When Janata Party was in power during 1960s, ,Coco cola was asked to leave our country. After liberalization policy in 1990s, it reentered India. Today MNCs have free entry into our country.

Ø  The competitors who work closely with the government can help erect trade barriers for a firm. Reliance could lobby against TATAs when Rajiv Gandhi was Prime Minister.

Ø  Global trade organizations can enforce trade barriers when their regulations and guidelines are not observed. WTO is now deciding the rules of game for trade world over.

 Ø  A host nation may levy anti-dumping duties on a foreign firm and such a decision may be dominated by the local businesses lobbying with the government. When

Ø  Copyright infringements, trademark and intellectual property rights violations. Intellectual Property rights of basmati was contested by India when USA made claim for it.

Ø  Direct comparative advertisements may not be allowed in few countries

Ø  Use of children is advertising and advertising to children are banned in certain countries.

Ø  Price regulations preempt any pricing strategy of a firm. Steel industry is India is subject to price regulation.

Ø  A detailed displaying of the ingredients in product labels is mandatory in most countries. In India, Packaging Acts specify such conditions. The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of production, Supply and Distribution) Act, 1992, The Edible Oils Packaging (Regulation) Order, 1998 etc govern the packaging decisions.

Ø  Industry watch dogs and consumer groups are always on the prowl for any unethical trade practices. In India consumer associations like Mumbai Grahak Panchayat,Consumer Guidance Society of India, Common Cause and Voluntary Organisation in Interest of Consumer Education are active. Also environmentalists and animal lovers from time to time protest exploitation of nature and animals.

Each one of the above issues has serious implications for the marketer in his marketing decision making. Ignorance of the law is no excuse and breaking of the law is an offence. 
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