Unit 40 International Marketing Brakes Food Ltd
International Marketing Solution
1. LO1. 3
1.1. P1 Analyse the scope and key concepts of international marketing. 3
1.2 P2Explain the rationale for it to want to market internationally and describe the various routes to market the organisation can. 4
2. LO2. 5
2.1 P3 Evaluate the key criteria and selection process to use when considering which international market to enter 5
2.2 P4 Explain, using examples, the different market entry strategies, including the advantages and disadvantages of each. 6
3. LO3. 8
3.1 P5 Present an overview of the key arguments in the global versus local debate. 8
3.2 P6 Investigate how the product, price, pricing and promotional distribution approach differs in a variety of international contexts. 9
4. LO4. 11
4.1 P7 Explain and analyse the various international marketing approaches your client organisation can adopt 11
4.2 P8 Compare home and international orientation and ways to assess competitors, outlining the implications of each approach. 12
Introduction Unit 40 International Marketing
International business and marketing refers to expanding and promoting the business on global basis. While conducting the business at international level, the same marketing principles, which are applied while, doing business at domestic level are applied but, in a reformed manner (Morschett et al. 2015).
The organisation chosen for the discussion is Brakes Food Ltd. which is a UK based food and Distribution Company. The company provides wholesale and contract logistic services. Its customers mainly include schools, hospitals, contract caterers and various large restaurant chains. At present the company has 20 distribution centres in the UK and is planning to expand its business outside the UK i.e. at international level (Weismann et al. 2014).
The following discussion is presented in the form of a report wherein the various aspects of international marketing have been discussed. The discussion has been done in the context of chosen company.
1.1. P1 Analyse the scope and key concepts of international marketing
International marketing is also called global marketing which refers to the marketing that is executed by the multinational or transnational companies across global borders. According to the American Marketing Association the ‘the international marketing is the process through which planning and executing the conception and the element such as price, place, and promotion are considered for creating international exchanges that helps in satisfying the individual and organisational objectives’ (Pruthi et al. 2018). Thus, in other words it can be said that international marketing refers to the application of the principles of marketing across national borders.
The key concepts of international marketing are national borders and the business is required to be deal with unknown market environment which is more hostile to their own nation (Pendleton et al. 2018). The concept of international marketing is generally applied when a company being in the external or foreign marketing becomes self dependent and when it wants to expand at the international level. Multi domestic or multi domestic marketing are another key concepts in international marketing. Hence as soon as the company’s grip on external market begins to grow stronger it tries to settle itself in the foreign marketing and operates independently over there.
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As far as the scope of international marketing is concerned it is observed that the different scope involved is in the form of export, import and re-export. Export refers to the function of international business wherein the goods are produced in a home country and then are shipped to different country for the purpose of sale or trade (Millar 2014). On the other hand, import consists of goods and services that are purchased in one country from a foreign country for the purpose of selling in the domestic market. The last scope of international marketing is re export which means that import of semi-finished goods take place and after that further processing of the goods is done and then are exported to other countries in the form of finished goods.
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1.2 P2 Explain the rationale for it to want to market internationally and describe the various routes to market the organisation can
The chosen organisation for the discussion is Brakes Food Ltd which is a UK based company. The company at present is operating at the domestic level wherein it has more than 20 distribution centres. Within the UK it provides wholesale and contract logistical services and has its headquarters in Ashford. The company has been doing well in the UK market which can be seen from the revenue and the profit report of the company (Cavusgil et al. 2014). Thus, after successfully placing itself in the domestic market the company needs to focus on the international market which will help it to enhance its customer base and expand the market at the global level. In addition to this, considering the concepts of international marketing discussed in the previous section it is observed that Brakes Food Ltd. need to expand internationally in order to capture a larger share of the market and to promote its food products at an international level (Stahl and Tung 2015). This will help the company to grow globally. In addition to this, the company can adapt to demand fluctuations in the home country by expanding at the global level.
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Various routes to market that can be adopted by Brakes Food Ltd are as follows-
- Owning international website
- International B2B marketplace (Jiang et al. 2018)
- E-market place
- M-commerce and S-commerce
Hence, it is seen that various mode of market are made available for companies like Brakes to expand its market at an international level. International marketing is mainly concerned with the capturing the new global market and the promoting the products in that market.
A number of opportunities and challenges are involved with the international marketing that Brakes Food Ltd might have to face. Considering the opportunities it is observed that with the help of international marketing Brakes will get the opportunity of expanding its market which in turn will help the company to become more competitive at the global level (Armstrong et al. 2015). At the same time, it is observed that with the help of international marketing new avenues of business can be discovered by the company which can help in achieving economies of scale by being exposed to new technologies and environment at the global level. However, looking at the other side, it is observed that a number of challenges will have to be faced by the company such as incompatible political, social or economic environment of the countries which might raise barriers in the conduct of the business (Papadopoulos and Hislop 2014). Furthermore, challenges in the form of cultural change and variation in the tastes and preferences of the customers can be encountered by the company while expanding at the global level.
2.1 P3 Evaluate the key criteria and selection process to use when considering which international market to enter
While entering in the international market, a number of criteria and a proper selection process are required to be selected. The basic criteria which are required to be considered by Brakes Food Ltd while entering or selecting the foreign market are technology, culture market needs, free markets, economic integration, and management vision (De Mooij 2015). All these criteria are required to be considered before selecting a particular international market. Brakes Food Ltd generally deals in food and drink items and therefore criteria such as market differences and culture plays an important role. Furthermore, being a UK based company it would be better to consider economic integration as important criteria and only those countries should be entered in where there is high economic integration.
The selection process which is required to be used when considering the international market to enter involves the following aspects-
- Determining the international marketing objectives
Brakes Food Ltd. should identify its marketing objectives. The marketing objectives of Brakes Food ltd are to increase the market share and to increase its profit (Chen et al. 2017).
- Collection of information
The relevant information must be collected from the overseas market in respect of demand of product, competition, and nature of consumers (Pruthi et al. 2018).
- Analysis of information
The collected information is required to b analysed and should be researcher more.
- Short listing of market
After analysing each of the market short listing of market should be done on the basis of competition prevailing, demand, consumer and government policies (Pruthi et al. 2018).
- Selection of markets
The overseas market should be selected on the basis of inflation, government instability and trade barriers. Overall, that international market should be selected which can provide good return investment not only in the short run but also in the long run.
2.2 P4 Explain, using examples, the different market entry strategies, including the advantages and disadvantages of each
Brakes Food Ltd. can select different market entry strategies to enter the international market. Five common entry strategies are exporting, licensing, franchising, strategic alliance and acquisition. Exporting is considered to be the easiest market entry strategy which offers benefits in the form of avoidance expense of establishment and low risk is involved. However the main disadvantage is low control on the market, and potential negative environmental impact of transportation (Pendleton et al. 2018). The other strategy is licensing in which a firm transfers the right to use product to another firm. The main advantage involved is its fast entry and low cost involved. However the main disadvantage involved is its less control and licensee may become a competitor. Franchising is a reformed form of licensing which works well for the repeatable business model (eg. food outlets), which, can be transferred into other markets. The main advantage involved is that it has low risk involved but the main disadvantage involved is that this entry model can be impacted by legal and regulatory environment. Partnership and strategic alliance is another entry mode strategy wherein a contractual agreement between two or more enterprises take place to achieve a common purpose in the international market. Main advantage involved is that the costs of business can be shared and the company can be considered as local entity. Main disadvantage involved is that the cost involved is higher than exporting and licensing. Moreover, problems may arise in integrating the corporate culture of two companies (Samiee et al. 2015). At last, acquisition offers chance to enter the foreign market wherein the a transaction is involved for a firm which gains control of another firm by purchasing its stock and exchanging the stock of its own. Main advantage involved is that established operations can be gained for the company whereas high cost and integration issues are the disadvantages involved.
It is important to apply market evaluation criteria and entry strategy criteria before entering into the international market (Morschett et al. 2015). Brake Food Ltd. needs to apply market evaluation criteria and the selection process criteria discussed above should be used by Brakes. Within the discussion being carried out in the above section the specifications regarding the Brakes Food Ltd and the factors and the criteria which need to be considered by the company are mentioned. As far as entry mode is concerned it is seen that the best entry mode which will suit Brakes Food Ltd for international expansion is franchising model (Millar 2014). The main reason involved for this is that being a food outlet the company need to follow repeatable business model and for this franchising is best suited entry method.
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In order to enter in the international market a through critical analysis is required to be made. From the discussion carried out in the above discussion it is seen that each of the entry strategy is critically analysed and discussed. Brakes Food Ltd. needs to adapt to the marketing strategy for various markets. Different international markets require adoption of different marketing strategies. For instance if the company is planning to expand in US then Brakes Food Ltd. need to consider the political environment of US and thus required adopting strategies accordingly. Furthermore, if the company is planning to operate in a developing country like India then it needs to adopt the marketing strategy considering the economic conditions (Shenkar et al. 2014). Thus, overall the international market environment need to be critically analysed and then strategies are formulated accordingly.
3.1 P5 Present an overview of the key arguments in the global versus local debate
Before entering in the international market it is important for Brakes Food Ltd. to analyse the domestic and international marketing in a detailed manner. If the company continued to operate in the domestic market of the UK it will not require doing thorough market research as it is already done by the company. In addition to this, the company can enjoy benefits of high profits and revenge use as it already knows the taste and preferences of the customer and hence can market or promote the products accordingly (Stahl et al. 2015). However, looking at the others side it is seen that it is observed that the company cannot expand its market to a fuller level while operating in the local environment. It is because saturation is observed when a company operates in a domestic market because the market is limited. Apart from that, it is observed that while operating in a domestic market the company will not be able to achieve competitive advantage which can be availed only in the case of international expansion (Vahlne and Johanson 2017).
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Looking at the other side, if the company plans to operate in the international market then it can enjoy a number of benefits in the form of competitive advantage, wider market reach, and wider expansion. It is observed that with the help of international market expansion Brakes Food Ltd. can expand its market at a global level which in turn can help the company to expand its customer base and sales and revenue base (Morschett et al. 2015).
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However, expanding at the international level is risky as there might be chances that the food products of Brakes Food Ltd. might not be liked in the international market. There are a number of disadvantages and challenges of expanding at the international market which cannot be overlooked. If the company plans to expand in the international market then a thorough research of the market is required to be done. Additionally, it is difficult to adapt the national and corporate culture by the company which can become another limiting factor.
3.2 P6 Investigate how the product, price, pricing and promotional distribution approach differs in a variety of international contexts
While operating in the international market the marketing mix elements of the products to be offered is required to be carefully considered. The management of Brakes Food Ltd. needs to investigate the marketing mix elements in a careful manner (De Mooij 2015). Various approaches and aspects to be considered in the context of marketing mix while operating in the international market are as follows-
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Product– it deals with the products to be offered in the international market. While operating at the international level the company needs to taste and preferences of the customers in the different countries and thus should offer the products differently as per the different tastes and preferences (Samiee et al. 2015). In other words, it can be said that the company needs to follow the approach of standardisation and adoption as per the tastes and preferences of the customers in the market.
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Price– the economic condition and the spending habits of the customers across the global level, needs to be considered before implementing the pricing strategy in the international market. Here the approach of economic feasibility and understanding the economic condition should be used by the company before implementing the pricing decisions in the international market.
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Place/Distribution- the customers in the different countries might be using different distribution channels for the food and drinks to be purchased (Jiang et al. 2018). Hence, the factors such as cost involved in the distribution, most preferred distribution channel used by the customers, channels used by the competitors in the international market should be considered by the company.
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Promotion- the main aim of promotion is to persuade the buyers and the customers. Therefore, in different countries different promotional methods are used. In some countries such as China the main promotional channel or medium is television or PR relations (Millar 2014). On the other hand, the main promotional channel used by the companies while operating in countries like US and Canada is social media marketing. Thus, the company is required to choose the promotional method accordingly.
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Overall, it is observed that the management of Brakes Food Ltd. is required to do a thorough research about the different approaches that can be followed while considering the marketing mix elements of the company in the international context.
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Considering the discussion being carried out in the above section regarding the global and domestic strategy it is seen that Brakes Food Ltd. need to carefully analyse the pros and cons involved of both the strategies and then needs to adopt the strategy accordingly. The company should adopt the domestic approach in case it has not covered the specific regions of the UK till now and there is scope for further expansion in the domestic market (Cavusgil et al. 2014). On the other hand, the global approach should be adopted by the company when the domestic market is saturated. In addition to this, the global approach should be used by the company when it wants to expand its customer base at the global level and wants to avail the comparative advantage in the international market. Furthermore when the company has done thorough research of the international market then only it should adopt this approach.
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The marketing mix of Brakes Food Ltd. needs to be different in different international markets. Hence, the company needs to analyse each of the market specifications in different countries and then is required to adapt the marketing mix accordingly (Shenkar et al. 2014). Furthermore, it is observed that in order to adapt the marketing mix in different international market the company needs to hire local employees so that the each of the element of marketing mix is aligned well with the local environment of the host country in which the country operates.
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The marketing mix is applied to a range of international contexts so as to avail benefits of international marketing. The company can enjoy the benefits of getting positive response from various countries by adopting the different marketing mix for different countries. However, looking at the other side, it is observed that it becomes difficult and chaotic process for the company to adopt different marketing mix for different international markets and hence for this, the company needs to appoint market specialists who can design and formulate each of the elements of marketing mix in a careful manner (Stahl and Tung 2015). Therefore, considering both the aspects it is observed that there are positive and negative impacts available of adopting different marketing mix for different international contexts.
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4.1 P7 Explain and analyse the various international marketing approaches your client organisation can adopt
International marketing requires adoption of various approaches while expanding in the international market. There are mainly two types of marketing approaches that can be used by Brakes Food Ltd. they are the centralised and decentralised approaches. In a centralised international marketing approach the marketing team operates from the headquarters wherein most of the marketing decisions are made (Cavusgil et al. 2014). This approach is generally used when the marketing department is highly competent and has experience of operating in the international market. In this approach, the company can hire country experts who can help the marketing team for localising the materials at the right level.
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Furthermore, in this approach of international marketing direct exporting is generally used as the entry mode. Furthermore in house marketing capabilities are required to be developed for adopting this approach. Another international marketing approach is decentralisation wherein the marketing functions and decision making authorities are distributed across the international level (Morschett et al. 2015). When this approach is followed then small team of independent distributors can be formed by the company. With the help of this approach of international strategy the local marketing staffs are supported. Furthermore, for following this approach of international marketing close working relationship is required to be formed with others in different countries as a key to successful marketing.
Brakes Food Ltd. can adopt any of these international marketing approaches on the basis of their marketing idea and concept to be used. Centralised international approach can be used by Brakes Food Ltd. when it can go with slower growth rate in the international market and at the same time when it wants to remove all kinds of growth barriers in the long run in the international market (Armstrong et al. 2015). Decentralised international marketing approach can be used by the company when it is ready to give some control of the brand to be represented in other countries. The company needs to thoroughly analyse each of the each of the international marketing approaches before choosing any of them.
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4.2 P8 Compare home and international orientation and ways to assess competitors, outlining the implications of each approach.
There are mainly four types of orientations that can be used by the companies. They are ethnocentric approach, polycentric approach, regiocentric approach and geocentric approach. Ethnocentric approach refers to the approach wherein overseas operations are considered as secondary in comparison to domestic operations. This is a part of domestic or home orientation and under this; Brakes Food Ltd. will be required to assess competitors by considering the domestic competitors first over the international competitors (Lich and Teece 2014). Similarly polycentric approach is followed as a part of home orientation wherein the local personnel and techniques are considered to be the best for dealing with the local market conditions. As per this approach, subsidiaries are established in the international market and each of the subsidiaries is generally operated in an independent manner.
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For the international orientation, regiocentric approach and geocentric approach can be used by the company. As per the regiocentric approach different international regions are considered to be different markets of the company. Thus the competitors at the international level are treated differently and different strategies will be required to be formulated for them (Weismann et al. 2014). At last, under the geocentric approach the company will be required to consider the entire world as a single market and hence, standardised marketing mix will be required to be adopted by the company. As far as the competitors are concerned as per this approach, common strategy for all the competitors around the world will be required to be followed by the company.
If the company uses home orientation then it will be required to deal with the competitors based on the local strategy. Moreover, as per this approach the company will be required to prioritise the local or domestic competitors over the international competitors. On the other hand, if the company uses international orientation, then it will be required to focus on international competitors more in comparison to domestic competitors (Jiang et al. 2018). Furthermore, as per this approach, competition will be required to be treated uniformly and similar strategies will be required to be adopted for the competitors.
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Before stepping in the international market, the company will be required to assess the competitors in the market at the international level. Therefore, the company will be required to make a thorough competitor analysis. For analysing the competitors, two types of orientations can be followed by the company namely home or international orientation and each of the orientation deals with competitors in different manner (Vahle and Johanson 2017). On the other hand, two marketing approaches have been discussed namely the centralised or decentralised international marketing approaches for operating in the international market. Out of these two approaches it is recommended that Brakes Food Ltd. should opt for centralised international marketing approaches because this approach supports exporting entry mode. In addition to this, the food market is highly competent in all the countries and therefore this approach will be more beneficial for the company as the company will not be required to invest in marketing in other countries and centralised decisions can be taken. As far as the orientation is concerned it is recommended that home orientation should be followed as it will align well with the centralised marketing approach.
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In order to maximise in the international context, Brakes Food Ltd. is recommended to be structured in a hierarchical manner wherein the headquarters in the UK should discharge responsibilities to all the international locations of the company (Weismann et al. 2014). Apart from that, it is recommended that the company should take all the relevant decisions from the home country as this will help in avoiding all kinds of risks related to decision making. Since the company is well established in the UK therefore, the management of the UK is efficient in taking the relevant decisions.
On the basis of above discussion it is concluded that international marketing plays a significant role in the international expansion of the companies. Furthermore, it is concluded that a number of aspects such as adaptation and standardisation are required to be considered. In addition to this, it is observed that the company needs to decide whether to opt for international or domestic strategy, for this a thorough market analysis is required to be made by Brakes Food Ltd. before choosing any of the strategies. Overall it is concluded that Brakes Food Ltd. needs to make a number of considerations before entering into the international market.
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