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Unit 39 P4

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P4 describe how the monetary environment affectsA business that operate internationally. | An exchange rate is the price for which one currency is worth converted into another rate. The exchange rate is determined by the supply and demand conditions of relevant currencies in the market transaction of currency exchanges occur in the foreign exchange markets. For example, currently, the £1 is worth $1.67 which means that at this stage, the pound is stronger than the dollar. Businesses should ensure that they frequently check the exchange rates to see if any changes to their prices need to be made or if the exchange rate benefits them. If Iron Bru were to export a large amount of products to a country such as Germany or Poland, there will be an exchange rate applied which can then increase or decrease the amount of money the company would have to pay. The exchange rate occurs when a demand for the supply of goods is applied when making a transition. UK – Pounds | USA - Dollars | £1.00 | 1.20 | |

Why may language be a barrier in selling IRN BRU in Germany? Give some examples of where language as caused difficulties in business. (Analysis)When exporting and importing to and from different countries, companies may find that communication problems will occur, mainly due to the fact that English may not be the first language spoken In that particular country. Iron Bru are a British manufactured company which means that when selling their products to countries where English isn’t spoken we could be a problem.32% of the German environment knows how to speak English, which leaves 58% of Germany not knowing how to speak English. If Irn Bru plans towards selling their items then they should consider translating the language to suit the opposing country. The advantage of Iron Bru selling their products abroad is that English Is a well-known international business language, which means that most countries would understand what’s on the labels. When selling products abroad, businesses need to ensure that their products and advertisement in the country which their exporting to is not offending their tradition. For example, on the right hand side of the page shows a company called ‘Soup for sluts’. In China this may not be inappropriate and suitable for the public but in the UK, this is not suitable. | Different countries use different marketing techniques to advertise their products. One of which is advertising using televisions. Based on the percentage of people who watch television in that country, if the percentage of people who do watch television is over 50% then companies would find that television is one of the strongest ways to persuade non-existing customers to buy their products. Ideally, when businesses export and advertise in a different country they would advertise according to which advertisement technique is used frequently to attract customer’s attention. For example, in the USA, Coca-Cola normally advertises using Facebook or ads on the web due to the fact that the majority of the USA uses Facebook frequently. However, in the UK, Coca-Cola advertises their products on TV. The majority of the UK spends most of their time watching TV which means that when a Coca-Cola advert pops up, it is highly likely that it will attract them. UK Advertisement USA Advertisement These images shows Coca-Cola’s advertisement in the UK
These images shows Coca-Cola’s advertisement in the UK
This images shows Coca-Cola’s advertisement in the USA
This images shows Coca-Cola’s advertisement in the USA |
Are shops the same in the UK and Germany? Are there any differences? Give some examples. (Analysis)Shops in the UK and shops in Germany are very different. There are certain aspect of advertising and selling which they may disagree on.
Difference
The difference between shops in the UK and shops in Germany is mainly the formality of the actual shop and how businesses sell and advertise their products. Businesses in Germany mainly advertise their products using magazines, newspaper and billboards. German businesses are not known to sell products online which mean their physical shops are far bigger than the shops in the UK. However, in the UK, things are the opposite. UK businesses sell products online and in physical shops, which is referred to as ‘Clicks and bricks’. UK businesses advertise their products mostly on Television, internet ads and on Local transport e.g. Buses and Trains. | When selling abroad to another country, there are many barriers. One of which being the fact that selling goods in a foreign country means the commission rates and standard charges will be different. Also, there are certain tariffs set in different varieties of countries. This means that the business may need to pay a fixed amount of money in order to export goods into a different country. Selling abroad also means that the country which you’re exporting to may not speak the same language as the company’s origins. This means that the company need to ensure that they change the language on the advertising banner in order to suit the customer’s knowledge.Companies will also find that when selling abroad, the exchange rate change at any time which could be very beneficial. Companies must always check the exchange rates to see whether the exchange rate is in their favor or not.Mercedes-Benz & Volkswagen Mercedes-Benz is one of the biggest car manufacturer companies in the world. Mercedes-Benz are currently operating worldwide but are originated in Germany. Last year, Mercedes managed to sell 1,461,680 cars in 2013 which resulted to an income of £94.5 billion Volkswagen is also a car manufacturer. Volkswagen are ranked 14th in the world’s most valuable cars. Last year, Volkswagen managed to sell 9.07million cars which led them to a income of £86.9 billion. Clearly, Mercedes made more income which means the public feel as if they’re the better brand and car manufacturer. Irn Bru has very healthy reputation in the UK due to the different ranges of marketing techniques it uses in order to suit the general public. Irn Bru is known for their ability to create advertisements which attract customers and producing products which customers are satisfied with. The advertisements generally include a variety of promotional techniques used in order to introduce potential customers.

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