Global Marketing: Development, BRIC Markets, Entry Modes, and Franchise

This study explores the development of global marketing, the impact of BRIC markets, factors affecting foreign market entry mode decision, and the franchise entry mode of Goodhood fashion retailer. It discusses the importance of adapting marketing strategies to the global market, provides examples of real-world companies, and evaluates the benefits and drawbacks of franchising. The study also highlights the significance of market size, governmental regulations, and economic risks in the decision-making process.

Global Marketing
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Development of global marketing concept..................................................................................3
Discussion of development of global marketing concept by using appropriate sources.............3
Example of real business world and their relation to development of global marketing concept
......................................................................................................................................................3
TASK 2............................................................................................................................................4
One of the emerging BRIC markets information.........................................................................4
TASK 3............................................................................................................................................5
Company background..................................................................................................................5
Factors affecting foreign market entry mode decision................................................................5
TASK 4............................................................................................................................................6
Franchise entry mode of Goodwood............................................................................................6
Chosen market to use franchise by Goodhood fashion retailer...................................................6
Evaluation of using franchise entry mode...................................................................................7
Benefits to choosing franchise for Goodhood fashion retailer....................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9
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INTRODUCTION
Global marketing refers a procedure in which companies adjust their marketing strategies
as per changing conditions of global market or other countries as it is all about flexibility or
ability to adapt changes (Kotabe and Helsen, 2020). This present study is based on Goodhood
multi brand retailer which is offering around 200 brands of men and women. This study is going
to show effectiveness of developing global market as how it is allowing companies to increase
customer base and sales. Further, it will show some factors which affect BRIC country and its
performance. Lastly, it will discuss importance of selecting the best market entry mode in order
to expand business and evaluation of both internal and external factors while selecting the best
entry mode.
TASK 1
Development of global marketing concept
Global marketing refers marketing in which companies target, markets throughout the world and
it is vital for all sector of businesses (De Mooij, 2018). For developing global market and
becoming successful there is requirement of using international distribution networks as well as
having knowledge of intensity of competition in foreign market. An organization which design,
promote and maintain its services and products in the global area in known as global marketing.
Discussion of development of global marketing concept by using appropriate sources
As per the (Kasemsap, 2018) global marketing refers an application and uses of
marketing strategies and principles to more than 1 country. Exchanges of services and products
between different national markets is also known as global marketing.
Global marketing is all about an ability of an organisation of adapting changes occur in
international market and changing own marketing strategy accordingly by performing planning,
positioning and promotional functions (Global Marketing, 2019).
Global marketing concept is not only limited to selling products in international market but it
includes: production, planning and promoting products in worldwide market (Homburg, Jozić
and Kuehnl, 2017).
Example of real business world and their relation to development of global marketing concept
There are several companies and retailers who have effective relation with this global
marketing concept. For example: Airbnb, Nike, McDonald's, Red Bull and others. One of the
main features of Red Bull Australian company in the development of global market is its ability
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and tactics to host extreme sports events all over the world. Its effective marketing strategy made
it able to promote and attract customers from all around the world.
Nike is other real world example who can define development of global marketing
concept and how it works. Its ability of selecting international sponsorship like longstanding
relation with Manchester United is the main key of its success and expansion of business.
NikeID is its other main strategy of developing global market.
In the context of Goodhood it is stated that it is now planning about expanding its
business and it has expanded business with another floor section for men and women separately.
With franchising it is planning to expand business and attracting customers to the great extent.
TASK 2
One of the emerging BRIC markets information
BRIC refers to countries of Britain, Russia, India and China. They collectively are accounted for
around more than 40% of world population and around 20% of global GDP.
Background: China is known as the holder of the world's largest foreign exchange
reserves and it is the one among all BRIC country to contribute bulk of currency pool. It is also
stated that China wants to become location of reverse. It is the first summit to include South
Africa alongside original BRIC countries with having around 1,415,045 and the higher than
others.
Political risks: It is stated that Beijing issued a new white paper for china and outlined its
relation with other countries and to the world. This paper also concentrated that China is trying
to become democratic and its efforts to democratize the international system by promoting
interest for other countries. In the first decade of 20th century Beijing found that BRIC as an
influential political coalition along with emergence of China (IS BRICS Losing its Shine for
China, 2019). It is found as an important player. From last few months influential power of
China states that aspirations of the Chinese leadership to reshape the contours of global
governance.
Trade and other barriers between UK and China: China has some trade barriers due
to imposed restrictions and fee. Tariff barriers include: duties and taxes paid on particular import
and non-tariff include: regulation and license requirements. Because of fragile nature of
development or continuous growth, China is known as an active country in this area. It has tariff
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barriers or taxes on luxury products but Goodhood operate in clothing so, there is risk to some
extent (Trade Barriers in China: Tariff and Non-tariff, 2020).
Economic environment: In the context of China among all BRIC country is stated more
likely to have developed economy as it is also stated that China alone contributed more than ½ of
the BRIC countries' share along with around 15% of growth on world economic output from
2000-08. It is developed in main areas such as : merchandise export, human development index
and others than all other BRIC countries
Advantages and disadvantages of Goodhood: It can be said that by expanding and operating
business in China that Goodhood can have benefit of burgeoning middle class that has a high
demand for umber of products. Language barrier is also minimal because business
representatives there speak in English.
In the context of disadvantages it can be said that the government has some strict rules
related to ways as how products needs to be designed, sold. So, without having knowledge of
laws related to China, it may face several problems. Getting license or permission of operating
business is also a critical process so, rising cost, manufacturing and other are some problematic
areas.
TASK 3
Company background
Goodhood store is a multi brand retailer in London which sells around 200 brands
including clothing, cosmetics, footwear for both men and women. This retailer remains unique in
its brand identity, its culture as well as ways of serving to customers. This multi brand retailer
wants to cultivate its unique vision of effortless lifestyle or luxury living by providing products
at affordable prices (Goodhood: A Decade of Building a Cult Following, 2017). It also wants to
create culturally relevant experience rather trends of fashion because it makes people feel valued.
It gained reputation in the year of 2008 for its unique selection of products. In one year 2007-
2008 it faced several problems but with help of staff members and key partners it expanded its
business.
Factors affecting foreign market entry mode decision
For expanding business into new market it is important for small and medium size of
companies to choose appropriate market entry mode. Company can make the best decision only
when it evaluates both internal and external factors in a detailed manner. Some internal factors
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like availability of resources, lack of HR support, strengths, weakness and some external factors
like economic condition, technical development and others can affect this selection (Kimemia,
2017).
Governmental regulation: Governmental regulations have effects on selection of the type of
entry mode because some gulf countries governments have made it compulsory for foreign
companies to have local partners. So, by considering all regulations, company needs to decide.
Market size: It also plays an important role as for entering a market with long market size,
company will require higher investment. So, selection of the entry mode require focusing on this
area.
Economic risk: There are some economic factors like exchange rate, market currency, mode of
payment by people of the country and other activities in foreign market can directly affect
selection of mode of entry in market because companies find difficult to operate in markets
where inflation rate is high.
Availability of resources: It is internal factor which can affect in selection of market entry
mode. For example: If company has lack of finance and other resources then it cannot direct
exporting as it will require investing money in several functions so, it will require choosing to
franchise (Ahi and et.al., 2017). So, overall it can be said that selection of entry mode mainly
depend upon financial strength of the company.
International experience: It is other internal factor in which strengths and experience of
company can help them out in taking the best decision regarding market entry selection.
TASK 4
Franchise entry mode of Goodwood
For entering in a new market, company chooses different modes as per their suitability,
availability of finance and the nature of their business. Goodhood is an award-winning multi
brand retailer specialized in clothing or fashion retailer. It focuses on franchise as an entry mode
in new market. In this type, as a franchisee, it takes several benefits because in this type a well-
known company or franchiser give it permission and rights to use their trademark, brand and
increase sales (Rosado-Serrano, Paul and Dikova, 2018).
Chosen market to use franchise by Goodhood fashion retailer
It is stated that Goodhood is not only sell fashionable clothing but also expanding its
range of products and now it is offering footwear, skin care products, bags for both men and
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women. For its new launches and make it successful it requires attracting customers to the great
extent and entering into a new market. But it is a medium level organisation so, it has selected
franchise because in this type it is not required focusing and investing in promotional and other
functions. By using brand of franchiser it is now focusing on Dover street market in London.
It is the main market on which it is focusing and expanding its business with using franchisee
mode and wants to attract medium income of people.
Evaluation of using franchise entry mode
There are several modes of market entry and franchisee is known as one of the effective
way because it has several advantages. Some advantages which franchisee companies can get
include:
Advantages
• It is an easier and simple way of implementing.
• Franchisee can have access to some market in which franchiser already serve by making
use of brand of franchiser.
• Expansion is faster in this mode because this mode provides effective workforce which
helps them in expansion and sales.
Rather, some advantages there are some limitations or drawbacks of this mode which include:
Disadvantages
• Revenue generation in this mode is likely to be lower than other market entry modes.
• It is somehow difficult for franchisee to manage and control closely because franchiser
sometimes have different goals than franchisee (Temesgen, 2016).
Benefits to choosing franchise for Goodhood fashion retailer
Franchising and licensing is chosen by Goodhood company and one of the main reasons
of choosing this mode of market entry is in this type, it is not required investing in promotional,
marketing and other basic functions. By making use of brand of Franchisor or well-known
company it can attract its existing customers and can increase sells of its new launches (Simin
and Živkucin, 2018). There are several other benefits which this retailer is taking and can take in
the future such as:
• It can secure financing and complete all functions in a cost effective manner.
• It consists of lower risk, lower start-up cost for franchisee.
• It can get valuable assistance throughout the life of its business.
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• It leads to large turnover and also helps in diverting business risks.
CONCLUSION
From the above study it has been summarized that choosing the best market entry mode
played an important role as they allow companies in expanding their business, accomplishing
their goals and attracting customers. This study has shown that franchising is one of the best
entry mode in which franchisee company does not require investment in marketing and other
functions. It has also discussed importance of development of global market as how it is allowing
companies in expansion of their business by selling products in all countries in the world and
attracting customers to the great extent. It has also discussed impacts of some externals like
apolitical, economic and other factors on BRIC country.
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REFERENCES
Books and journals
Ahi, A. and et.al., 2017. International market entry: how do small and medium-sized enterprises
make decisions?. Journal of International Marketing. 25(1). pp.1-21.
De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
Homburg, C., Jozić, D. and Kuehnl, C., 2017. Customer experience management: toward
implementing an evolving marketing concept. Journal of the Academy of Marketing
Science. 45(3). pp.377-401.
Kasemsap, K., 2018. The roles of social media marketing and brand management in global
marketing. In Social media marketing: Breakthroughs in research and practice (pp. 425-
453). IGI Global.
Kimemia, W.W., 2017. Factors affecting foreign market entry strategies for financial institutions:
a case study of equity bank Kenya (Doctoral dissertation, United States International
University-Africa).
Kotabe, M.M. and Helsen, K., 2020. Global marketing management. John Wiley & Sons.
Rosado-Serrano, A., Paul, J. and Dikova, D., 2018. International franchising: A literature review
and research agenda. Journal of Business Research. 85. pp.238-257.
Simin, M.J. and Živkucin, S., 2018. ADVANTAGES OF FRANCHISE SYSTEM FOR
DEVELOPMENT OF ENTREPRENEURSHIP. Knowledge International Journal. 28(1),
pp.177-181.
Temesgen, E.Y., 2016. Laws regulating franchise business in different jurisdictions. Haramaya
Law Review. 5(1). pp.145-157.
Online
Goodhood: A Decade of Building a Cult Following. 2017. [Online]. Available through
<https://www.drapersonline.com/people/goodhood-a-decade-of-building-a-cult-
following>
IS BRICS Losing its Shine for China. 2019. [Online]. Available through
<https://thediplomat.com/2019/11/is-brics-losing-its-shine-for-china/>
Trade Barriers in China: Tariff and Non-tariff. 2020. [Online]. Available through
<https://intrepidsourcing.com/trade-wiki/trade-barriers-overview-about-international-
business-obstacles/>
Global Marketing. 2019. [Online]. Available through <https://www.cleverism.com/global-
marketing-strategies/>
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