The Rising Cost of Freedom

We are finding that the cost of freedom seems to be increasing lately. Terms like free trade or free choice have been misleading since they all come with a price, which international marketers pay in terms of preparing their shipments, scrutinizing their customers, and conforming to government regulations of tariffs or taxes. They pay ofr it when subsidies are reduced and markets are opened further, resulting in more intense competition.

Now prices are going up when international marketers have to file special paperwork or comply with security guidelines, which slow down the flow of merchandise. Every time a shipment is delayed, international transactions are less profitable and the subsequent business dealings become less competitive. Customers talk about unmet expectations and domestic firms point to the vagaries of itnernational markets.

We are all paying a higher price due to global terrorism, which has permeated the global marketplace. In most instances, terrorism is not an outgrowth of choice but rather the lack of it. Terrorists may succeed in reducing the freedom of others but not in increasing their own. The prinicpal choices played out between those exercising terrorism and those exposed to it are those consistent with economic theory of return on investment. When terrorists select targets in response to governmental implementation of anti-terrorism policies, the harder targets are likely to motivate them to go for easier ones. Increased protection of past targets may result in attacks on new and unexpected targets that are more likely to succeed. Similarly, if terrorists can no longer enter a country, they may attack that country’s symbols and representatives abroad. If embassies are then more secured and fortified, terrorists may attack that nation’s individuals and companies.

Who is typically most affected by terrorist acts? Attacks aimed at business, such as the infamous bombings of U.S. franchises abroad do not bring MNCs to their knees. The local participants, the local employees, the local investors and the local customers are affected most. Who can protect tehmselves against such attacks and who can afford to protect targets? Only the more wealthy countries and companies can. They have the choice of where to place etheir funds, with whom to trade, and whether to hold the enemy at bay through a security bubble created via exports, a franchise, or a wholly owned subsidiary. The poor players do not have any choices and ther alternatives are not improved by any gruesome act. The local firms, the nations with economies in development, and the poor customers continue to be out there, exposed to further acts of terrorism without the ability to influence events.

But international marketing can enable the disenfranchised to develop alternatives. As suggested by Prahalad and Hammond (2002), multinational firms can invest in the world’s poorest markets and increase their own revenue while reducing poverty. With support from shareholders and the benefit of good governance, marketers can, and should continue in their role as social change agents. It should be kept in mind that international marketing has value maximization at its heart. If it is worthwhile to fulfill the needs of large segments of people even at low margins, then it will be done.

 

5 thoughts on “The Rising Cost of Freedom

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