marketing strategy is based in large part on the environment in which it operates, and that environment includes both the political climate of its domestic and foreign operations, and the reality of any regional groupings among its competition and its potential markets.
One of the most common intervention strategies is the imposition of tariffs on imported goods. These are fees that are charged on specific products entering a market that go to the government. The goal behind tariffs is to increase the price of goods entering the market so that the imported goods are priced at the same level or higher than domestically produced goods. In this way, companies cannot sell goods at artificially low prices in a foreign market merely to gain market share. If this were possible (and there are companies that continue this practice), domestic companies would be at risk; once the domestic competition is eliminated, the foreign importer would be free to raise prices to consumers.
Tariffs are a hotly debated issue and a particularly difficult problem for trade negotiators. They are found in most every country as lobbies of one industry or another are successful at securing tariffs for their protection. Some analysts argue that tariffs can be imposed for the greater good of the economy. For example, tariff reform programs that are both welfare improving and revenue enhancing can be effectively implemented, according to some analysts. These investigators conclude that tariffs which are over their revenue maximizing levels should be reduced, while those whose subsidy effect is to increase revenue should be raised (Aizenman, 1994, p. 460).
Tariffs and quotas are in many ways a natural expression of interest-group politics. The disastrous Tariff Act of 1930 (more famous as "Smoot-Hawley), which deepened and prolonged the worldwide depression, came about because Congressmen were unable to resist the clamor of their hard pressed industri...