Global Marketing and Franchise Entry Mode

This assignment provides an in-depth analysis of global marketing concepts and their application to business operations. It examines the political and economic conditions of China as a key market in the BRIC region and discusses various entry modes, including franchising. The report concludes with a discussion on the advantages and disadvantages of using franchise mode for entering new markets.

GLOBAL
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................3
Entry 1..............................................................................................................................................3
1. Development of global marketing concept ........................................................................3
2. Evaluating the development of global marketing concept.................................................3
3. Business organisation supporting the development of global marketing concept.............4
Entry 2 .............................................................................................................................................4
1(a) One of the BRIC country and its background.................................................................4
(b) Evaluating the political risk for China..............................................................................5
(c) The trade, tariff and non-tariff barriers between UK and China.......................................5
(d) Economic environment of china.......................................................................................5
(e) Advantage and disadvantage for M&S to move into the new market of china................6
Entry 3..............................................................................................................................................6
1 Choosing a company from the real business world.............................................................6
2 Model to enter a new market and it benefit to the M&S in choosing right entry mode......6
Entry 4..............................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Global marketing is the process that helps in adjusting the marketing strategies of an
organisation to adapt the business conditions of the other countries in a effective manner. The
process of global marketing consists of planning, creating, positioning and promoting the
products in the global market. The actual advantages of global marketing with the proliferation
of internet in the present marketing scenario is to the small business units as they can now reach
to a wider base of customers all over the world. The report will demonstrate the following area
related with the global marketing that will include global marketing concept, review of emerging
BRIC markets, the factors that influence the choice of entry mode for a company, choosing a
franchise in the new market.
Entry 1
1. Development of global marketing concept
The global marketing concept means the marketing process conducted to target the
markets all over the world for the betterment functioning of business operations. The global
marketing concept helps in flourishing the business in the global market and the organisation is
required to recognise the opportunities present in the international market and to react
accordingly. The global marketing concept can be defined as the overall marketing framework
which is adopted by an organisation that has a desire to work in the international market and it
helps in designing, introducing, distributing, promoting and maintaining their products and
services effectively (Ryu, Jang and Cho, 2014). The global marketing concept dimensions
include product design, the nature of packaging and labelling, choice in the proposed brand
name, planning advertising strategy according to each country and after sale services support.
The global marketing concept is not a revolutionary shift it is considered as the evolutionary
process the internationalized market place has been transformed over a period of time by the
changes taking place in the trading techniques, standards and practices.
2. Evaluating the development of global marketing concept
According to Gillespie and Riddle 2015, The development of global marketing concept
has taken place in this current time as the present business environment is of dynamic nature and
the has grown to be more competitive. The development has taken place because of the changes
taken place in the business operations which has been reinforced and retained by the new

technologies and has evolved the economic conditions between the organisations working
together on a global platform.
As per De Mooij, 2018, To get success in today's globalised economy, the organisations
are required to be simultaneously respond to the local and global market as well. So, it is
important for the organisations to develop the global marketing skills to proceed their business
operations in effective and efficient manner.
In the view of Griffith and Hoppner, 2013, The development in the global marketing
concept is matched by the different sector organisations that plays a important role in the
marketing exploration process and it also focuses on comparing the available company resources
and marketing goals in the successful international global trade. The development was required
because it helps the organisations to market the global platform in appropriate manner for the
extensive reach and the need for the organisation product or services is established effectively.
3. Business organisation supporting the development of global marketing concept
The organisation that can explain the development of global marketing concept in their
business operations successfully over the years is Coco cola as it is the true multinational
company and has a large market base almost in each country of the world. The company Coco
cola has adapted the market changes of every market in which they deal with full measures and
correct decisions to gain profitability at the global platform. It all has taken place because the
business organisation has followed the development in the global marketing concept effectively
and has adopted the changes in trading techniques, standards and business practices effectively.
Entry 2
1(a) One of the BRIC country and its background
China is a country in the East Asia and is one of the world's most populous country that
has a population of around 1.404 billion. The country emerged as one of the world's earliest
civilizations state and the political system of the country is based on the hereditary monarchies. It
is said that since the introduction of economic reforms has taken place in the year 1978, the
economy of china has become one of the fastest growing economy in the world with the growth
rate above 6 percent and after the year 2014 china is one of the largest economy in the world by
purchasing power parity. The country is the largest exporter in the world and the second largest

importer of goods. China is a nuclear weapon state and also has the world largest standing army
and the second largest defence budget in the world.
(b) Evaluating the political risk for China
The political risk is referred as the interference made by the government in the business
operations of a foreign organisation. The political risk can involve the interference range from
the level of outright nationalisation of organisation through asset confiscation. The particular
type of political risk that occurs in china and that is constantly present their between the country's
ruling government and the local governments over the applicable law and on its observance. This
political risk results as a problem for the organisations carrying out their business in the country
to get the information about the exact rules. The political risk in the country is explained with the
help of famous Chinese saying that “ the mountains are high and the emperors is far away”.
(c) The trade, tariff and non-tariff barriers between UK and China
The lengthy process of UK leaving the EU is set to begin by the end of march 2017, it
will definitely affect business operations of china as the country is one of the UK biggest trade
partners and the prospect of the free trade agreement with china is rising as a serious issue. The
last British Government worked positively to amend the good relations with china, but the
conservative attitude behaviour of the current government exponent attitude on the Chinese
investment in the sensitive infrastructure projects carried a threat to the well defined golden
decade of the business relation (Gillespie and Riddle, 2015).
(d) Economic environment of china
China is considered to be the largest economy in the world for most of the past two
thousands years in which they have seen the time of prosperity and decline as well. China is the
oldest continuous civilizations and with the organised society existing for more than 10,000
years. The country has a very complex and dynamic past and the pace of change and scope in the
country after the era of 1980 was unprecedented in the nation's long history. In over the years the
country has reduced the great number of its citizens those who were living in poverty and has
gained sevenfold increase in the per capita income from 1979- 2006. In the year 2008 china's
gross domestic product accounted for the 6 percent and the country became the third largest
economy of the world.

(e) Advantage and disadvantage for M&S to move into the new market of china
The advantages and disadvantages M&S will face by entering the new market are defined
as follows:
Advantages:
 It will help in attracting a large customer base for the company and will enjoy the stable
and growing profits over the time.
 It will also help in economies of scale as it is obvious in the manufacturing process, when
the production level takes place on large level it increases the productivity of the workers
and also reduces the per unit cost of materials.
Disadvantages:
 It will incur a high capital requirements and it will left less capital available for the other
business transactions.
 The company will be required to mould their products according to the conditions in the
new market and it will affect their business operations as well.
Entry 3
1 Choosing a company from the real business world
The chosen company from the real business world for this portfolio entry is M&S and the
further entry model will be explained on this company. The chosen company is one of the largest
retail industry in the market of UK and has a very large market base in many countries.
2 Model to enter a new market and it benefit to the M&S in choosing right entry mode
The given model defines the ways by which the company can enter the new market. To
enter a new market it is very important for the business organisation to examine the business
environment of the new market they are planning to enter in and also the internal and external
factors of the organisation also plays a important role in choosing a right entry mode (Griffith
and Hoppner, 2013).
The internal factors include the size of the firm and the international business experience
of the organisation that will help them in constructing proper entry mode decision. Whereas, the
external factors include the factors like:
 the sociocultural difference between the origin country and the host country of the
organisation.

 The risk involved in the country with the demand uncertainty of the product and services
produced.
 The market size and growth of the new market and its outreach in the customers.
 Direct and indirect trade barriers between the two countries and their different rules and
regulations.
 The amount of intensity of competition present in the new market where the organisation
is planning to launch their business venture.
 The small number of the relevant export intermediaries available in the new market.
These external factors plays a very important role in constructing a effective entry mode decision
and results in creating a clear path for the organisation to follow the well constructed steps to
sustain in the new market successfully.
Entry 4
Marks and Spencer is a UK based retail firm who is entering in the China by using the
franchise as a entry method. The company has selected this location for expansion as it is a
emerging country which has huge opportunities for the M&S to expand their operations for
increasing the customer base and market share in the global market. Also China is a developing
country which is growing at a rapid pace and this provides the opportunities to the M&S to enter
in this market which is full of opportunities (Keup and Keup, 2012).
There are various advantages and disadvantages of using the franchise as a entry method
which are discussed below:
Advantages
 By using the franchise, M&S can rapidly expand their operations in China. By using the
franchise, the sales volume, profit and revenue of the firm can improve along with the
market share (Grünhagen, Dant and Zhu, 2012).
 Franchise is suitable for entry as the trademark and brand image of the M&S can improve
along with the recognition in the customers of China which will also improve the
confidence in the quality and range of products of a single company.
 Franchisees have a better understanding of the local market in which they operate and the
customers they serve (Hodge, Oppewal and Terawatanavong, 2013). Both franchisors
and franchisees can share this understanding with each other so that the brand, products
and customer services of the firm can improve.

Disadvantages
 The main problems of franchising is the regulation of host countries as the early entrants
who use franchising in China faced too many problems which is caused by the
undeveloped franchising legislation.
 Franchisors can face the problems associated with operation, communication and quality
due to having low control of the franchisees.
 Also there are chances that the franchisees may become the future competitor to
franchisors as they can gather the data, knowledge and technology from franchisors. Due
to this knowledge and data, they can set up their own new business which maintains the
quality as well as franchisors (Hachemi Aliouche, Kaen and Schlentrich, 2012).
There are various benefits of the franchise which are beneficial for the M&S when
entering into the China. Some of these benefits are discussed below:
 The major reason for choosing the franchise is that it allows the firms to expand in a new
market without the risk of debt or the cost of equity. Franchise allows the companies to
grow by using the resources of others . By using the money of other people, the
franchisor can grow largely unbound by debt.
 Due to having the part in the growth and success of the M&S, franchisees are always
looking for opportunities to improve their business.
 Franchisees are also beneficial for generating new ideas. When franchisers speaks with
the franchisees on a regular basis then franchisor gets a fresh perspective which can leads
to the generation of new ideas which will improve the franchise.
CONCLUSION
From the above given report it can be concluded that development of global marketing
concept is very essential for the business organisation to carry their business operations in a
successful manner on the global platform. Further the report explains the about one of the
countries from the BRIC market and its political, economic conditions. The choice of right entry
mode is defined with the use of model in the context of M&S. In last, the franchise aspect is
defined with its advantages and disadvantages of using a franchise mode for entering in a new
business market.

REFERENCES
Books and Journals
De Mooij, M., 2018.Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
Gillespie, K. and Riddle, L., 2015.Global marketing. Routledge.
Griffith, D. A. and Hoppner, J. J., 2013. Global marketing managers: Improving global
marketing strategy through soft skill development. International Marketing
Review, 30(1), pp.21-41.
Grünhagen, M., Dant, R. P. and Zhu, M., 2012. Emerging consumer perspectives on American
franchise offerings: Variety seeking behavior in China. Journal of Small Business
Management. 50(4). pp.596-620.
Hachemi Aliouche, E., Kaen, F. and Schlentrich, U., 2012. The market performance of franchise
stock portfolios. International Journal of Contemporary Hospitality Management.
24(5). pp.791-809.
Hodge, C., Oppewal, H. and Terawatanavong, C., 2013. Determinants of franchise conversion: a
franchisee perspective. European Journal of Marketing. 47(10). pp.1554-1575.
Keup, E. J. and Keup, P. E., 2012. Franchise bible: How to buy a franchise or franchise your
own business. Entrepreneur Media.
Ryu, S., Jang, W. and Cho, H., 2014. China market entry strategy of Paris Baguette. Journal of
Business Case Studies (Online). 10(2). p.155.

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