Global Marketing Management: Expanding into the Netherlands

This report discusses the global marketing management aspect of Iceland Food Ltd. and their plan to expand into the Netherlands. It covers the PEST analysis, market entry plan using the STP model, and justification for the expansion. The report also highlights the political, economic, social, and technological factors that will impact the company's operations in the Netherlands.

Global Marketing
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Overview......................................................................................................................................3
PEST analysis..............................................................................................................................3
Marketentry plan..........................................................................................................................5
Analysis of the expansion tool.....................................................................................................7
Justification..................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Global marketing management is one of the major functions only for those businesses
which always runs their business operations at then global or international level. Basically,
companies or businesses which runs their business operations globally are also known as
multinational companies. In this situation, top-level management within each multinational
company is highly responsible to make its’s all marketing functions too effective. Nowadays no
any organisation can easily survive in the global market without effective marketing functions.
Reason is, there are very huge competition within the global market in any sector or any
industry. This report discusses global marketing management aspect of the Iceland food ltd.
Basically, Iceland food ltd is popular British retail company which currently serves in many
countries, like; UK, Ireland, Spain, Iceland and Norway etc.
MAIN BODY
Overview
Iceland food ltd. is a multinational retail company, headquarter in Wales, United
Kingdom. Currently this company provides its different products and services in many countries
(Schlegelmilch, 2016). But recently top-level management of company has decided to more
expand its business operations in the global market by entering new market segment called
Netherlands. The Iceland food ltd. has still not started its business operations in this country. In
this situation, top-level management of company is responsible to use different market analysis
tools which can support to company for properly knowing the market conditions of Netherlands.
There are PEST analytical tool, STP model has been used below which can help to Iceland food
ltd to understand then new market segment.
PEST analysis
PEST analysis is very useful analytical tool which has used by lots of companies or
businesses for systematically knowing factors of their external business environment. Analysis of
external factors is very necessary task to a company or business, because without analysing these
all factors no company can make appropriate strategies for gaining huge profit in the market.
PEST term mainly refers four major external factors of business environment called; political,

economic, social and technological. By properly these all factors of Netherland, the Iceland can
easily enter in this country. These all factors of PEST analysis have been discussed below;
Political Factors
Political factors can highly influenceIceland food ltd in the Netherlands, because top-level
management of the company will highly responsible for following those all formalities which
has imposed by the local government of Netherlands on various businesses or companies.
Currently taxation is the best example of political factors, because every company or business
within the Netherlands is responsible to fulfil taxation formalities. On the other hand, local
government of this country has passed some specific rules for those all companies who serves
food and beverage to different people or customers. Basically, every food and beverage company
within the Netherlands is responsible to provide fresh and quality food to customers, because
poor quality product always badly affect people’s health (Leonidouand et.al., 2018). In this
situation, top-level management of Iceland food ltd will also responsible to follow this rule that,
providing quality products to different customers.
Economic Factors
Economic factors of the Netherlandscan positively influence to this retail company,
because economic factors will support to the Iceland to gain huge profit in the existing retail
market. The main reason behind the last statement is, Nowadays the Netherlands is one of the
richest countries in all around the world, that’s why it has well-developed economic conditions.
Most people of this country will easily afford products and services which has offered by the
Iceland food ltd. In this situation, top-level management of this company is able to achieve lots
of advantages by these economic factors of the Netherlands. For taking lots of advantages, the
management of company will use some appropriate business strategies while entering this
market segment. The company will need to stay strong against existing retail companies which
already runs their business operations in this country. According to the economic factors of the
Netherlands, top-level management of Iceland can easily sell its premium range of products as
well. Because most people within the Netherlands has high income status, in which they mostly
like to purchase premium range of products as well. In this situation, existing management of
Iceland should take huge advantages through these factors of the Netherlands.

Social Factors:Social factors are too favourable to Iceland food ltd, because most people in
theNetherlands are fully literate. They ready for paying any cost to buy the best quality products
and services in the market, in which Iceland food ltd (Di Benedettoand Lindgreen, 2018).will
able attracts lots of customers towards its own brand by providing the quality products and
services in the Netherlands’ retail industry. On the other side, people in this country like to buy
products and services from those companies also which always fulfil theirCorporate Social
Responsibilities (CSR) on time. In this situation, top-level management at Iceland food ltd also
will need to fulfil CSR on time for buildinglarge customer base in this new market place in its
initial stage. On the other side, company will need to provide great employment opportunities to
local people of the Netherlands. It is too necessary task to the company’s top-level management
for presenting positive image in the new market.
Technological Factors:Iceland food ltd. will able to take huge advantages from the
technological factors of theNetherlands, because currently different modern technological
machineries, tool and gadgets etc. are easily available in this country which can contribute in
increasing all over productivity and performance of this retail company. There is digital
marketing tool is also a major part of technological factors which will make able to Iceland food
ltd. for gaining large customerbase in the Netherlands’ retail industry. In this dynamic and
modern world, existing management of Netherlands will highly responsible to involve hi-fi
technology within its daily operations in new market segment, because currently this is the only
way to gain huge competitive advantage in the Netherlands’ retail industry.
Marketentry plan
A company or business is always responsible to create an effective market entry plan,
because without this plan no company can easily the new market segment (Pfajfarand
Mitręga,2016).Top-level management has decided to choose FDI (foreign direct investment)
option for starting its business operations in the Netherlands. There are Iceland food ltd. should
involve some effective marketing strategies which can contribute in easily entering the new
market segment. There are STP model has been discussed below which help to company in the
process of entering the Netherlands.
STP Model

STP is very useful model for various companies, becausethemodel gives opportunity in
deeply understanding accurate demand of various market segments. In this situation, marketing
team of Iceland food ltd.need to consider STP model in entering process. Basically, STP
indicates three major stages called segmentation, targeting, positioning, in which these all three
stages have been discussed below;
Segmentation:This is the first stage of STP model where Iceland food ltd. need to dividewhole
the retail market of Netherlands into small market segments, because when company divides
large market into small market segments, then it will easily understand actual demand of people
in the Netherlands (Abrattand Bendixen,2018). The company can divide marketgeographically,
demographically,income status,attitude and interest etc. This stage will enable company to
provide such products and services to people, which they really want to buy.
Targeting:After market segmentation where the company need to take variousactions towards
targeting different people and markets in the Netherlands. This is necessary stage for the
company, because its will be able to provide products and services in the Netherlands on the
basis of customers’ demand. Basically, Iceland food ltd.need to target customers on the basis of
their income status, attitude and interest.
Positioning:Positioning is the third stage in this model where company need to run
variouspromotional activities for positively affecting people in the Netherlands (Wu, 2016). It is
too important task for the Iceland food ltd, because it will able to company to easily attract
manyof new customers or people towards own brand with the support of these different
promotional activities
Evaluation
Currently various creative tools available in the market which marketing team of Iceland
food ltd. can use to promote its products and services in the various market segments of the
Netherlands. For example; marketing team of company can use digital marketing tool to attract
large customers base towards own brand. Iceland food ltd. will responsible to find those all
appropriate resources in the Netherlands which can contribute in it’s all over growth in new
market, like; human resource, raw-material, technology etc. At the end, this retail company will
be able to achieve excellent results in the Netherlands.

Analysis of the expansion tool
The tool that has been selected for the purpose of expansion is the Foreign Direct
Investment i.e. Iceland Food Ltd. Has selected this option as the method through which they will
expand their company’s operation is Netherlands (Sinha and Sengupta, 2019). The FDI as an
expansion options basically means that the company will open a store or an outlet o themselves
in some foreign country and the outlet thus opened will be completely under their control and
ruling. Therefore the Iceland Food Ltd. Will be opening their stores through FDI in Netherlands
where they will open the outlets that are completely under their control and management.
Although there are many positive aspects of this expansion tools there are certain major
disadvantages of it was well (Guimón and Filippov, 2017). The advantages and disadvantages
associated with the use of FDI as an expansion tool can be assessed in following manner:
Advantages Disadvantages
There are multiple number of advantages
that Iceland Food Ltd. Will be able to
enjoy by exercising the option of FDI as
their expansion method in Netherlands
(Baláž, Zábojník and Harvánek, 2020).
These can be quoted as:
 FDI is the correct and most
appropriate method that can be
used to increase the access of
the company to the
international markets where
the other options can limit the
amount of control and
interference that any company
can do in the international
market. Additionally in FDI
since the business is in
ownership, the access of the
company certainly increases
However, despite the illustrative
advantages of FDI, there are certain
disadvantages as well that can be
understood in following manner and
quoted accordingly:
 The risk of the political and
economical changes is
extremely high and volatile in
the situation of FDI and if the
country in which expansion
has been planned is not stable
in these two aspects than the
entire operation of the
company can get affected
creating a major loss making
situation rather than the
expected profits (Buckley and
et.al., 2020).
 Sometimes the option of FDI

and this ultimately helps in
taking better decisions that
would be in favour of the
economy i.e. to Iceland Food
Ltd.
 The resources that the
company requires or its
operation can be sourced out
form the country in which the
company has expanded
(Bohnenkamp and Schiele,
2017). This helps in saving the
resources of the home country
itself and the company is able
to gain access to cheaper
resources in the existing
country thus increasing their
profitability.
can prove to be a more
expensive option even in the
long run as compared to a
simple technique of export that
the company otherwise could
have used. In such case, it
becomes a major drawback
over the company.
 And FDI is opposed by many
countries and their
governments because it
basically means draining out
their own resources into some
other international market and
economies thus creating a
disadvantage to the economy
of the home country. This is
not acceptable to many
government and this there are
many restrictions that are
imposed on the FDI option
expansion.
Hence the tool of FDI as an expansion option is very critical for the Iceland Food Ltd. nd
they must implement it after careful evaluation of the multiple number of aspects that are
associated with it.
Justification
The expansion option that has been developed for the Iceland Food Ltd. is a very
comprehensive part and it has been decide that the company will be entering the international
markets of Netherlands by the option if FDI as an investment technique and additionally they
will position themselves in the company at a feasible options as it was identified in the STP
analysis where the prices would not be very high but they would be comparatively higher based

in the good quality of their products and services (Jin and Richard, 2020). This can further be
justified by a number of academic theories and practices that have been developed for
international expansion but one theory in particular is in direct accordance with the plan that has
been developed for Iceland Food Ltd.
The three stage theory of international expansions states that there are basically three
stages that a firm will have to go through before they can earn positive and much better returns
from the international expansion that they have planned for themselves. This is basically a U
shaped movement where the company initially is faced with the negative returns from the
expansion that they did in the foreign country but slowly the negative profits make a turnaround
and then in the third stages the company begins earning profits (Gulanowski, Papadopoulos and
Plante, 2018). The profits that are earned after the turn around increase continuously for a longer
time period and the return are also comparatively much higher than that of the normal expansion.
This theory has been tested and applied on all the different types and options of ventures that are
available and the ultimate the result was the similar in all the cases where initially irrespective of
the international brand name or fame of the company, they were not in a profitable position but
slowly the turnaround happened and the companies were able to earn huge profits form such
international markets. Therefore, it is necessary for companies to keep operating in the
international markets even if there are losses in the initial time period of their operation. The
above theory justifies the approach that have been developed for the Iceland Food Ltd. where the
company knows that their brand name is not very big right now in the international market and
their can be certain amount losses in the initial period in which they begin their international
operations in Netherlands by FDI method (Kalasin, Cuervo‐Cazurra and Ramamurti, 2019).
However the company is also aware that the profits will slowly begin coming in once the
company is able to establish the utility of their products in the international market and more and
more people get familiar with their products. Therefore, in this manner the approach that has
been developed by Iceland Food Ltd. is justified by the academic theories as well thus showing
the strong expansion plan of the company.

CONCLUSION
It can be concluded that, currently there are various innovative marketing strategies are
available in the market which can contribute in entering process of the Iceland food ltd (Rather,
2019). Currently marketing techniques plays very excellent role for different companies, in
which Iceland also can use these techniques to promote its brand in the Netherlands various
market segments. There are existing management of the company is highly responsible to
properly follow each guideline which has provided by the government of Netherlands while its
entering process. The company will need to provide quality products for gaining huge
competitive advantage in its initiate stage within the Netherlands.

REFERENCES
Books & Journals
Abratt, R. and Bendixen, M., 2018. Strategic Marketing: Concepts and Cases. Routledge.
Baláž, P., Zábojník, S. and Harvánek, L., 2020. FDI as a Driving Force of China’s Expansion.
In China's Expansion in International Business (pp. 161-235). Palgrave Macmillan,
Cham.
Bohnenkamp, T. and Schiele, H., 2017. Supply market attractiveness: Employing FDI insights to
expand the global sourcing criteria set. In Supply Management Research (pp. 115-135).
Springer Gabler, Wiesbaden.
Buckley, P.J., and et.al., 2020. The role of endogenous and exogenous risk in FDI entry
choices. Journal of World Business. 55(1). p.101040.
Di Benedetto, C.A. and Lindgreen, A., 2018. The emergence of Industrial Marketing
Management as the leading academic journal in business-to-business
marketing. Industrial Marketing Management. 69. pp.5-12.
Guimón, J. and Filippov, S., 2017. Competing for high-quality FDI: Management challenges for
investment promotion agencies. Institutions and Economies, pp.25-44.
Gulanowski, D., Papadopoulos, N. and Plante, L., 2018. The role of knowledge in international
expansion. Review of International Business and Strategy.
Jin, Z. and Richard, L., 2020. The influence of home country intellectual property rights (IPR)
protection on the international expansion efforts of entrepreneurs: A multi-level study
through the lens of dynamic capabilities.
Kalasin, K., Cuervo‐Cazurra, A. and Ramamurti, R., 2019. State ownership and international
expansion: The S‐curve relationship. Global Strategy Journal.
Leonidou, L.C., and et.al., 2018. International marketing research: A state-of-the-art review and
the way forward. In Advances in global marketing. (pp. 3-33). Springer, Cham.
Pfajfar, G. and Mitręga, M., 2016, July. GLOBAL DYNAMIC CAPABILITIES
REVITALIZED–A NOVEL APPROACH AND FUTURE RESEARCH
DIRECTIONS. In 2016 Global Marketing Conference at Hong Kong. (pp. 995-997).
Rather, R.A., 2019. Consequences of consumer engagement in service marketing: An empirical
exploration. Journal of Global Marketing. 32(2). pp.116-135.
Schlegelmilch, B.B., 2016. Global Branding and Communication. In Global Marketing
Strategy. (pp. 153-176). Springer. Cham.

Sinha, M. and Sengupta, P.P., 2019. FDI Inflow, ICT Expansion and Economic Growth: An
Empirical Study on Asia-Pacific Developing Countries. Global Business Review,
p.0972150919873839.
Wu, C.W., 2016, July. The empirical study of city marketing strategies and performance. In 2016
Global Marketing Conference at Hong Kong. (pp. 1709-1709).