International Marketing Analysis New Zealand 2022

International marketing
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Contents
Introduction...................................................................................................................3
1.a. PESTLE analysis of Domestic and international business environment of Burger
Fuel...............................................................................................................................3
1.b. Contribution of international marketing to the world economy..............................5
2.a. Product Life Cycle Theory.....................................................................................6
2.b Benefits and challenges of franchising as a mode of market entry........................7
3. Critical evaluation of trends in international marketing.............................................8
4.Emerging marketing opportunities in the Asia Pacific region which may benefit
Burger Fuel...................................................................................................................9
Conclusion..................................................................................................................10
References.................................................................................................................11
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Introduction
Firms continuously try to expand their market share. A good way to expand is to enter
international markets where demand is unsaturated and there are more opportunities for
business (Czinkota, 2014). With globalisation of the world trade scenario, many large
companies view overseas expansion as an ideal way to increase sales, profit and market
share’
Burger Fuel is a New Zealand burger restaurant company with franchises in New Zealand
and many other parts of the globe. The firm is headquartered in Ponsonby in New Zealand
(Burger Fuel, 2019), Burger Fuel was established in 1995 and has been well received in New
Zealand. The firm has been trying to establish in the global markets under the name Burger
Fuel Worldwide. The firm has restaurants in UAE, US and Saudi Arabia (Burger Fuel, 2019).
Following is an analysis of international marketing opportunities for Burger Fuel.
1.a. PESTLE analysis of Domestic and international business environment
of Burger Fuel
PESTLE (Political, economic, social, technological, legal and environmental) analysis is a
management tool to understand the external environment in which a company functions
(Bamford & West, 2012). Following is an assessment of PESTLE analysis of Burger Fuel in
domestic and international market.
Political Factors
Domestic market- The political system in New Zealand promotes growth of hospitality, food
and beverages industry (Odendaa, 2019), However, firms have to abide by food safety,
customer safety and workforce related norms.
International market- Many countries especially those in the emerging markets of Asia,
Africa and South America encourage forgiven direct investment (Parboteeahm, 2017).
Therefore, political systems of these countries support expansion.
Comparison- There is support for the industry in both domestic and international markets.
However, chances of expansion in international markets are high because of Government
focus on growth and FDI.
Economic Factors
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Domestic- economic system in New Zealand supports free trade (Odendaa, 2019).
Disposable income of people is high. Therefore, economic opportunity for the company is
high. However, tough competition with global giants like McDonalds and Burger King are
fast saturating the market
International Market- Disposable income and demand patterns in the international
emerging markets is rising (Parboteeahm, 2017). Due to this the growth potential is higher in
this market despite the global competition.
Comparison- There is more potential of growth of profits and sales in the international
market
Social Factors
Domestic markets- There is a trend away from unhealthy food (Cavusgil, 2014). Due to this
the market demand is saturating for Burger Fuel which mostly serves fast food.
International markets- There is a trend away from unhealthy food in the international
markets as well. However, the scale of this trend is much lower (Smith, 2016). Therefore, the
markets have an opportunity to expand
Comparison- There is comparatively more social trend for fast food in international markets
as compared to domestic markets.
Technological Factors
Domestic Markets- The firm is established in the domestic market. Therefore, the
technology it used is sophisticated and up to date (Burger Fuel, 2019). Therefore, much
investment is not required in technology.
International Markets- The firm may find some of the emerging markets a bit low on
technological advancement and infrastructural development (Parboteeahm, 2017). Therefore,
the firm will have to spend more on technology.
Comparison- Large amount of technological investment in terms of machinery, equipment
and training is required for expansion to international markets as compared to domestic
markets (Cavusgil, 2014)
Legal Factors
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Domestic Markets- In New Zealand, restaurants are legally responsible for safety of their
guests (Odendaa, 2019). Furthermore, food safety norms have to be abided to. Additionally,
there are stringent regulations for labour and discrimination etc
International Markets- countries across the globe have now become conscious of legal
aspects of business (Panibratov, 2017). Even in emerging markets there are strong customer
safety, workforce and anti-discriminatory norms. Therefore, the firm has to take care of these
to survive.
Comparison- Legal requirements and regulations have to be understood and abided to by the
firm whether in domestic or international market.
Environmental Factors
Domestic Markets- Hospitality industry can produce large amount of waste in terms of food
article. Hence, Burger fuel has to abide by safe waste disposal regulations of New Zealand.
International Markets- International community and the emerging markets are also
becoming careful of environmental health hazard. Most emerging countries have safe waste
disposal norms (Cavusgil, 2014). However, even if an economy does not have such norms it
is a moral responsibility of the firm to invest in safe waste disposal schemes
Comparison- Emerging markets may not have stringent environmental protection norms.
However, the company must abide to these as it abides in the domestic market
Therefore, emerging markets provide greater growth opportunity to Burger Fuel.
1.b. Contribution of international marketing to the world economy
In the modern competitive business world, more and more large companies are expanding to
other global markets to find more demand and sales opportunities (Cavusgil, 2014). Due to
movement of many companies into the global sphere the world has become a global economy
which gets impacted by industrial changes in any part of the world (Kvint, 2015). It can be
said that international marketing has brought the world closer.
When a company functions in a global scenario, it has to learn the socio cultural, economic
and legal aspects of the countries in which it functions (Czinkota, 2014). It also brings with it
its own home culture and expertise. This cause a healthy synergy in global economy.
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Due to globalisation, the world has moved faster towards technological advancement and
cultural synergies (Kvint, 2015). Large technology companies like Apple and Microsoft have
given uniform technical growth sphere to the entire world. Due to fast food restaurant firms
like Burger fuel, a new culture of eating and enjoying together has emerged in the developing
economies of the world (Panibratov, 2017). In the economic sense this has raised the
expenditure on group eating and enjoyment.
Multinational companies like Burger Fuel operate on a large scale. This leads to reduction of
costs in the long run in all countries in which these firms operate (Cavusgil, 2014) This also
leads to reduction of prices. Therefore, due to large scale operations world economic prices
tend to be lower.
Fast food and hospitality industry, of which Burger Fuel is a part, is a highly growing
industry (Parboteeahm, 2017). It provides jobs to a lot of people across the globe.
Employment has risen in emerging economies since globalisation started taking place (Kvint,
2015). As fast food is a growing trend, rise in employment has led to rise in disposable
income and growth rate of the world economy. Therefore, firms like Burger Fuel have a huge
contribution in the rise of the global economy in terms of employment generation.
However, international marketing has also had a negative impact on the global economy
(Czinkota, 2014). Due to global marketing the resources of the world economy are getting
depleted faster. Deforestation is quicker to make way for industrial infrastructure. Companies
like Burger Fuel which sell processed food cause environmental damage in terms of water
and greenhouse gas emission (Czinkota, 2014). Additionally, according to some experts
wrong eating habits, rise of wasteful expenditure and cultural damage are some of the
negative impacts of fast food industry in particular on the world economy.
Therefore, a company like Burger Fuel contributes to world economic growth through
employment generation. On the other hand, it is also contributing to environmental damage
and cultural change.
2.a. Product Life Cycle Theory
As per marketing experts, products have a life cycle like people (Armstrong, 2012). The
product life cycle is broken down into four stages. Introduction, growth, maturity and decline.
A brand or a product goes through these stages whether it operates in the domestic market or
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international market (Czinkota, 2014). Following is an analysis of these stages of the product
life cycle pertaining to Burger Fuel’s international expansion-
Introduction stage-In this stage a new or an existing product is launched into an
international market where the product or brand is relatively unknown (Czinkota, 2014). The
introduction stage is combined with high level of marketing activity to spread awareness.
In the introduction stage Burger Fuel launched itself into the Asian markets where the brand
was not known much (Burger Fuel, 2019). As the firm is a hospitality organisation, it had to
keep its prices slightly low initially so that customers would try its restaurants as opposed to
the established competitors,
Growth Stage-In the growth stage the product starts to become popular. Promotional activity
and sales revenue of the firm grows rapidly (Cavusgil, 2014). Burger Fuel’s popularity in the
west Asian markets has risen rapidly Sales of burger Fuel is growing steadily at 1.7 %
(Burger Fuel, 2019).
Maturity stage- In this stage the rate of sales growth begins to decline (Czinkota, 2014). The
firm reaches its highest demand potential. Sales promotions techniques are used to maximise
sales in this stage (Czinkota, 2014). Burger Fuel has not yet reached this stage in the
international market but once it reaches this stage the firm should try to maximise its sales
through vouchers, discount coupons or other sales promotion methods.
Decline stage- In this stage popularity of the product starts to decline (Czinkota, 2014). Sales
drop and demand falls. This may happen due to change in technology, newer alternatives or
change in tastes (Czinkota, 2014). Burger fuel has not yet reached this stage in the
international market. However, if it starts to reach this stage the firm must analyse the type of
change that has caused the decline and try to adapt and change to prolong the maturity stage.
Hence it can be said that product life cycle theory gives an insight to marketers for forming
stage wise strategies for the product.
2.b Benefits and challenges of franchising as a mode of market entry
When a firm decides to enter a foreign market, it plans on selecting a most feasible market
entry strategy (Schlegelmilch, 2016). The most popular entry straggles used by firms in the
modern business world are direct expansion, joint ventures and franchising.
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Franchising is a very attractive and frequently used market entry strategy in the hospitality
industry (Kvint, 2015). In this mode of market entry, the owner firm known as the franchiser
distributes the product through affiliated dealers, known as franchisees. These dealers have to
use the process underlined by the franchisers while they can use the logo, name and other
brand identity of the franchiser. Burger Fuel has also used this mode for market entry
Benefits of Francoism
As the capital requirement is provided by the franchises to open each new outlet, the capital
requirement of the franchiser firm is lowered (Czinkota, 2014). As the franchisee hires their
own employees the number of employees that the franchiser needs to hire in terms of own
company units are less.
The day to day operations of the franchised outlet are run by franchisee themselves; hence, it
reduces franchisers’ involvement in daily operations (Parboteeahm, 2017). Therefore,
franchisee reduces capital cost, employment expenditure and operations cost for a franchiser
Challenges of Franchising
Systems, procedures and support are the most important aspect of franchising for a firm like
Burger Fuel (Cavusgil, 2014). However, sometimes the franchisers and the franchisees do not
give importance to these leading to badly managed outlet with lack of customer service.
Hence, giving due importance to supports and procedures is a key challenge.
The success of franchising depends on the quality of franchisees (Cavusgil, 2014).
Sometimes finding the most suitable franchisee with the desired capabilities becomes a big
challenge. As the franchisor is a foreign company and the franchisee is a local firm; there
may be cultural disparity. This can lead to distrust or wrong flow of information (Cavusgil,
2014). While, forming a franchisee agreement Burger Fuel needs to keep these benefits and
challenges in mind.
3. Critical evaluation of trends in international marketing
Companies like Burger Fuel seek international expansion to find new avenues to sell their
products (Cavusgil, 2014). Trends in the international market also impact Burger Fuel.
Global customer engagement is a latest trend towards which many marketers are moving in
the international arena (Gupta, Pansari, & Kumar, 2018). Customer engagement is the
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emotional connect between the customer and the company (Pansari & Kumar, 2017). In other
words, an engaged customer feels a sense of belongingness for the company. Such customers
not only buy more of the products but are also brand promoters.
As per research finding, global customer engagement can be enhanced by a company by
focusing on cultural and economic factors in the host markets (Leonidou, . Katsikeas,
Samiee, & Saeed, 2017). Firms like Burger Fuel must relate to economic and purchase
capacities of the customers. Relationship can also be formed if the company establishes a link
between the product and the purchase aspirations of the customer (Gupta, Pansari, & Kumar,
2018). For example, in the emerging markets Burger Fuel can benefit from establishing a
humanistic link with customer’s purchase capacity and sell the product at par with it.
The products must be priced at a level where customer can aspire to buy the fast food for the
sake of enjoyment. Similarly, the products must be promoted in a way that they do not harm
the cultural sensitivities of the customer (Cavusgil, 2014). Understanding of cultural
dimensions of Hofstede can also help a firm in setting up customer engagement (Mooij,
2019) . For example, in a country where power distance index is high a fast food firm like
Burger Fuel can create marketing activities to target the individual in the family who has the
maximum power to determine purchases.
Another trend in international marketing is shift towards new technologies and innovative
ways of marketing to create demand in the host market (Leonidou, . Katsikeas, Samiee, &
Saeed, 2017). Firms are now tending to use relational, digital and hybrid approach too for
entry into new markets. Marketers now believe that digital marketing communication
techniques like social media marketing and web marketing have a far-reaching result than
traditional marketing (Czinkota, 2014). Additionally, relationship building with the client
through personal offers and human touch go a long way in creating awareness and brand
loyalty. Burger Fuel can also combine digital marketing and relationship focus with its
market entry strategy and enhance awareness of its products and brand in the new markets.
Therefore, new trends of technological innovation and understanding of economic aspects of
customers can help the firm in succeeding in the international arena.
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4.Emerging marketing opportunities in the Asia Pacific region which may
benefit Burger Fuel.
Countries in the Asia pacific region especially counties like India, Chine etc offer a huge
opportunity for expansion to foreign companies (Panibratov, 2017). This is because these
companies have a growing population with a rising disposable income. Additionally, these
countries have a huge demand for technology, digital platforms, automation and
infrastructure.
These opportunities in digital and infrastructural techniques can benefit Burger Fuel as well.
This is because these countries want forging firms to invest in their markets and bring with
them automated digital platforms and infrastructural advancement (Fletcher, 2017). Burger
Fuel can set up automated systems for billing and customer service in its franchisees and
benefit from these opportunities. The firm can offer sophisticated digital techniques and
knowledge sharing to these countries which will help it in expanding into huge marketplace
of these companies.
Business opportunities are supposed to rise exponentially in the economies of Asia Pacific
(Panibratov, 2017). Despite stringent immigration policies and tough rules against foreign
labour, these economies offer increased marketing opportunities. Companies like Burger
Fuel can hire local labour and train them to provide services like they do in the home
countries
With these economies spending on infrastructure, road and transport development , cost of
transportation of raw material can also be reduced and more focus can be put in
advancement of customer relationship marketing (Parboteeahm, 2017). With the emphasis of
the economies of Asia Pacific on Foreign direct investment, Burger Fuel can benefit through
direct investment in the markets of these economies.
Conclusion
International marketing opens the door for expansion of the products into new and untouched
markets. This can give huge boost to sales revenue. Firms’ like Burger Fuel can tap the
opportunities offered by emerging markets by setting up business ventures in these markets.
However, before venturing into international arena the firm must understand business
environments, entry strategies, benefits and challenges of international marketing.
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References
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Pansari, A., & Kumar, V. (2017). Customer engagement: the construct, antecedents,
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