Cochlear is one of Australia’s most successful ‘born global’ companies. Choose one overseas market and discuss how macro-environmental factors (otherwise known as PEST – political/legal/regulatory; economic; social/cultural; and technological) would impact Cochlear’s global marketing mix.
Cochlear is a leading global biotechnology company that specialises in the design, manufacturing and supply of Nucleus Cochlear Implant, the Hybrid electro-acoustic implant and Baha bone conduction implant. The company was formed in 1981 with the support of the Australian government to commercialise hearing implants, and today it holds over two thirds of the worldwide hearing implant ...view middle of the document...
According to Montinola Et. Al (1995), China’s stable political environment and economic success can be accredited to its political reform, whereby the provision of a considerable amount credible commitment to markets was achieved. Although this environment suggests that legislations a firmly set in place and will not change unexpectedly, Montinola Et. Al (1995) highlights the fact that in these markets a lot of competition is fostered. Cochlear must therefore continuously monitor and review its marketing strategy and elements in its global marketing mix such as promotion and price programs will have to be updated.
The company must be flexible and able to easily adapt in this macro-environment in order to achieve the goals of its marketing strategy.
Politcal and economic factors are closely related. From the above section we examined China’s political environment and found that due to its political action and reform, it has resulted in a very prosperous and stable market. Therefore this political stability in China has resulted in the vast growth of its economy and it has become perhaps the most attractive market to enter since it is currently the world’s second largest economy. It is soon to be surpassing the world’s largest economy, the United States, by 2015 (Yaprak, 2012). Changes in the global economic forces have an effect on Cochlear’s global marketing mix, however the magnitude of these effects is closely related of the type of product the company sells.
Unemployment levels are a major economic factor that affects the company’s performance. Once again if we consider the Chinese market, according to the Trading Economics statistics, we can see that its unemployment rate is 4.1 %. Relative to Australia this is a fairly low figure, and therefore spending levels in China will be high. If however, unemployment levels increase in China, this will result in a decrease in spending and an increase in savings. Therefore, consumers will spend a much lower proportion of their income on luxury goods. The fact that Cochlear sells medical products that are a necessity to many people will play as an advantage for the company. However pricing programs in the marketing mix will be affected since in an economy where the unemployment level is high, in order to make the product more accessible to the public and in order to compete with competitors, the company will have to adjust its price, therefore positioning this product in the upper market would be the wisest adjustment.
China is currently experiencing a rapidly aging population as a result of the decrease in fertility and mortality in recent decades (Cheng, 2011). The outcome of this is the development and popularity of aged care facilities in the capital of Beijing. Cochlear would benefit greatly from this target market of the elderly for many reasons such as; the likelihood of loss of hearing at an older age, the willing to spend on such necessities after retirement and the...