Case Study Analysis on International Marketing

Running head: CASE STUDY ANALYSIS ON INTERNATIONAL MARKETING
CASE STUDY ANALYSIS ON INTERNATIONAL MARKETING
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CASE STUDY ANALYSIS ON INTERNATIONAL MARKETING1
Section 1: Identification of Case Ethics Issues
AusSpritz is a small to medium sized enterprise specialized in the manufacture of
alcohol. The company is a wholesaler, retailer and producer of premium quality wine
cocktail. Owing to its superior quality, the company has faced a steady increase in demand
for its products, thereby necessitating their decision to outsource their production in Thailand.
However, this decision involves not only advantages for the productivity and profitability of
the company but also several questions regarding ethical production.
Outsourcing of production in developing countries, especially in Asia involves the
advantage of cost effectiveness for the company as these countries offer cheap labor and a
high availability of resources at lower prices (Brooks, 2016). This attracts the global
companies to expand their production units in these places with the intention of increasing
productivity and maximizing profitability. However, such profit-oriented decisions made by
AusSpritz involves ethical questions of equal wages and sweatshop environment that may
determine the consumption patterns of the socially conscious or socially aware consumers.
As the International Marketing Manager of the company, it is my responsibility to consider
the following aspects regarding the ethics involved in production outsourcing:
Wage inequality – Rapid globalization in the world economy has resulted in the expansion
of production outsourcing by several organizations. Similarly, the AusSpritz Company has
planned the expansion and outsourcing of its production in Thailand due to the availability of
cheap labor and resources. Alcohol production being a labor-inten sive industry requires a
significant amount of labor resource for production purposes. However, this may lead to the
exploitation of foreign labor and capital for the purpose of maximization of profitability and
productivity. This aspect includes the reduction of wages for the workers owing to a decrease
in labor demand and surplus of supply (Helpman, 2016). In this regard it may be said that one
of the potential ethical threats of production outsourcing is income polarization and resulting
unemployment patterns.
Cultural diversity – The expansion and outsourcing of production in other countries
involves diversification of workforce in the organizational scope (Martin, 2014). Prejudices
and bias owing to the differences in cultural background of the employees and managers may
lead to miscommunications and employee dissatisfaction, thereby hampering the production
processes. Furthermore, there may also arise the problem of language barrier, slackening the

CASE STUDY ANALYSIS ON INTERNATIONAL MARKETING2
productivity of the employees (Tenzer & Pudelko, 2015). Ethical problems arising out of
cultural diversity in the workforce may also include discrimination or sense of harassment.
Sweatshop environment – One of the major emerging problems of production outsourcing
and globalization is the rise of sweatshop culture in the workplace. Sweatshop culture refers
to working conditions within an organizational scope that is poor and often socially
unacceptable (Sethi & Rovenpor, 2016). Profit driven organizations often tend to deny labor
rights and equality in wages and working time for the employees with the intention to
maximize productivity. In this aspect, a major ethical problem that may arise in the
production outsourcing of the AusSpritz Company in Thailand is the exploitation of the
workforce and provision of poor working environment. The emergence of a sweatshop
culture in the production units of the Company in Thailand may further have a negative
impact of the consumption patterns of the socially aware customers, thereby hampering the
profitability of the organization (Kang & Hustvedt, 2014).
Section 2: Social, Cultural and Consumer Behavior Elements in UK
The AusSpritz Company has additionally decided upon expanding its consumer base
in the international market particularly in the UK. The high quality of products manufactured
by the company has high potential for consumption overseas (Gervais, 2015). However, there
are certain social and cultural aspects in the country that might determine the predominant
consumption patterns of the consumers. Based on Hofstede’s insights the consumer behavior
prevalent in UK can be evaluated. The Company may then accordingly strategize their
marketing plans to cater to the needs and requirements of the consumers based in the country.