Impact of political risks in international marketing: the case of West Africa

INTRODUCTION

World economic order is increasingly changing. Emergence of new economic power, democratization, falling of barriers between countries, are all accelerating free trade. Domestic firms have been engaged into worldwide business, increasing their profits, but at the same time, competing with other firms. Marketing tools formerly tailored for domestic purpose are going profound changes with adjustment to new environments.

This international marketing must take into account the laws of the home country, as well as that of the host countries in which the firms operate. This is not obstacles free. According to Ricky Griffin et all, beside supply factor and demand factor, political factor is the third factor influencing foreign direct investments [1]. International relations are influencing international marketing and vice versa. Thus, political risks may emerge as serious barriers to Multinational companies (MNCs). However, those effects are not out control of a well-trained international marketer.

As world is assimilated to a global village, increasingly, many MNCs are willing to invest in Africa in general and West Africa in particular. So, it might be helpful to look for what kind of political risks firms may face in West Africa? Our hypothesis is that political risks in West Africa are both specific to that continent and also common to that of other places.

West African problem is that, African countries are not investors' nations; they rarely invest in other countries. However, all of them are host countries. So deal with only what investors countries should do will yield bias to the debate. And so, to depict the actual situation and fit well what is going on, there is necessity to focus on what investors should do to avoid African government-induced political risks, and how those countries can behave to preserve a safe business environment.

Under some ongoing structural reforms of ECOWAS and UEMOA^1(*), what are business opportunities in West Africa.? Also how the international marketer beside political risks, can reach the market. In particular the present thesis aims to review political risks in West Africa and to explore the link between country political disturbances and the some international trade indicators like production, import, exports, and so forth. Also some interactions between, and possible causes of, political risks will be assess in the context of Africa. After discussing those issues, some recommendations will be made accordingly.

PART ONE

The context of international marketing and political risks

Chapter 1: International marketing concept

1. 1 Definitions

1.1.1 Marketing: is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizations objectives^2(*).

1.1.2 Marketing Mix: consists of the way a firm chooses to address product development, pricing, promotion and distribution. Generally, it is admitted that marketing Mix encompasses the 4P: Product, Pricing, Promotion and Place (distribution). Often, two or more firms express share marketing services and expertise. This is marketing alliance

1.1.3 International marketing: is the extension of marketing activities across national boundaries. It involves firms trading in two or more countries. We may oppose domestic marketing and international one.

* ¹ ECOWAS and UEMOA are West African regional economic organizations. They will be fully described later.

* ² International Business, Ricky Griffin et al, 4^th edition, 2005, page 630.