International Marketing Management: Sepia Restaurant's Expansion Strategy in India

This study examines the international expansion strategy of Sepia Restaurant, a leading Australian eatery, as it ventures into the Indian market. It analyzes the external environment using a PEST analysis, highlighting the political, economic, social, and technological factors influencing the restaurant industry in India. The study also explores the government's role in the Indian economy, the level of economic integration between Australia and India, and the chosen entry strategy for Sepia. Finally, it delves into the marketing mix, outlining the product, price, place, and promotion strategies for Sepia's Indian expansion.

Running Head: International Marketing Management
International Marketing Management
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Running Head: International Marketing Management
Table of Contents
Introduction......................................................................................................................................3
External Analysis of Sepia Restaurant............................................................................................4
Government Intervention in the Economy......................................................................................6
Economic Integration.......................................................................................................................7
Choice of entry................................................................................................................................7
Marketing Mix.................................................................................................................................7
Conclusion and Recommendations..................................................................................................8
References........................................................................................................................................9
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Running Head: International Marketing Management
Introduction
International expansion is a tough decision and hence it is extremely important for an
organisation to make sure there is a proper planning which would help to expand the business in
the best possible manner. There are number of key aspects which are involved in the
international expansion procedure and hence it is extremely important to discuss these key
aspects effectively which would help an organisation to expand its business effectively. The
Australian Restaurant industry is a huge industry which has significant turnover and this has
helped this industry to grow up significantly. The external environment plays an important role
in the understanding of the foreign market which is extremely important for an organisation to
realise the viability of the expansion plan and hence it is extremely important for an organisation
to ensure that it understands the external environment in the best possible manner. Sepia
Restaurant is one of the leading cafes in the New South Wales. The organisation has served
many consumers effectively in the area of Sydney which has made it one of the emerging food
and beverage organisations in the market (Penrose, 2017). The organisation after a good outing
in the New South Wales region has been planning to expand its market in the South Asian region
to create a new market and disruption in the Asian region. The organisation has planned to
expand its market in India which is one of the leading and emerging markets in the world. Sepia
Restaurant is planning to expand its market in India because the restaurant culture has been
effective in the country and the huge market of the country attracts a number of organisations in
the market (Penrose, 2013). The present study will discuss the expansion strategy of Sepia
restaurant which is a prime restaurant working in Sydney It is extremely.
External Analysis of Sepia Restaurant
The Sepia restaurant is one of the leading organisations in Sydney and hence it is an effective
decision for the organisation to decide to expand. In order to expand successfully the
organisation needs to analyse the importance of external analysis because external analysis helps
an organisation to understand the external environment of the market it is preparing to expand in.
The Indian Market is completely different from that of the Australian market and hence it is
extremely important for the organisation Sepia Restaurant to understand the common differences
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Running Head: International Marketing Management
through the PEST analysis which would help to provide strong insights especially on the
political, economic, social and technological factors.
Political: The political environment of India is partially stable. It is important to mention that the
political environment is not a barrier to the expansion of business in the Indian market. The
Indian market is expanding quite fast and hence most of the foreign businesses are focusing on
spreading their business out here. The political environment of the country plays an important
role in the establishment of new foreign chain of businesses because the country is allowing
foreign direct investment in its small and medium scale businesses and it is also stretching its
hands to establish foreign businesses in the country to increase the gross income of the country.
The present political environment of the country has implemented a number of things which
would be effective for the organisation Sepia Restaurant to open a chain of restaurants. The
Indian Government has reduced overall strict approach for the foreign organisations to set up its
business in the country which is extremely effective for the organisation to operate effectively.
Hence it could be said that the political environment is more or less effective for the expansion
of chain of restaurants in the country (Cavusgil et al., 2014).
Economic: The economic environment of the country is fluctuating to a large extent. Even
though the country is considered developing it has certain key economic advantages as well as
problems. It cannot be denied that the economy is largely mixed economy which is a huge
advantage for the foreign businesses to come in and establish themselves. On the other hand the
country has recently reduced taxes for the emerging organisations especially for those who are
foreign firms. On the other hand it is important to mention that the population is ever increasing
and hence there is a huge possibility for the organisation to get more and more consumers in the
coming future. Since the overall market is considered affordable the organisation will be able to
sell its beverages and food items in the best possible manner at an affordable rate grabbing
significant market share. The reduction in excise income tax and the implementation of Goods
and Service Tax has helped the businesses operating in the country which would be an added
plus for the company to prepare its items effectively. Overall it could be said that the economic
environment of the country India is also suitable for the company to expand in (Forsgren and
Johanson, 2014).
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Social: One of the major factors in the External environment of the organisation. It is extremely
important to mention that any visible change in the social environment of the country clearly
impacts the overall business environment. The very first social issue in the country is the
differentiation in the religious and cultural differences in the country. In the recent past with the
change of the Government there has been assumption of religious uproars which hasn’t taken
place so far but it could. Hence when an organisation expands in India it is extremely important
to prioritise the religious sentiments of the people living in the country. For instance the Hindus
in the country don’t eat beef whereas the Muslims eat halal food which means they won’t have
pork which clearly shows the difference in the thinking of the people (Ball et al., 2012). The
aspect of nationalism and patriotism is extremely high in the country and hence the setup that the
organisation should have in its chain of restaurants is to be very nationalist kind which would
add advantage to the business plan and help the organisation to sustain in the market for a long
period of time. It cannot be denied that the cultural differences in the country is a huge indicator
of the food choices they make and hence Sepia as a foreign brand would have to learn about
them effectively. For instance if the organisation opens in the Eastern Part of India that is in
West Bengal the organisation will have to understand their preference because people here prefer
fish to a large extent. On the other hand people from Northern India prefer to have chicken and
hence the dishes will have to be apt for the regions especially. The demographic condition of the
country is good as the birth rate is high which would help the country to pick up people
effectively (Folsom et al., 2012). On the other hand ethical consumerism is another key aspect in
the social environment at the present moment because the consumers have become aware of the
impacts of plastic and paper which the organisation will have to keep in mind. Bigger brands
operating in the country like Starbucks has already implemented green packaging system which
is an excellent choice in a country like this. Overall it is extremely important to mention that the
social environment is extremely important to be understood by the organisation Sepia Restaurant
which would help the organisation to make the most of the Indian market.
Technological: The technological environment of the country is constantly evolving which is an
excellent sign for the organisation. It is extremely important to note that India as a country has
evolved over the years and have made significant developments in technological infrastructure
which is extremely effective for the country as well as the businesses operating in the market.
The organisation Sepia Restaurant can implement all the best and advanced technology in its
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business like the online payments and booking system, developing application for the restaurant
and also creating high profile security in the outlets which would be extremely effective for the
organisation (Twarowska and Kąkol, 2013). Hence the technological advancement would largely
help the organisation to manage the operations. The launch of next generation internet services
like 4g has been extremely effective as the Government itself has emphasised on making digital
India which is a great initiative by the ruling party. Hence it could be said that the gradual
development in the technical field is extremely effective for the country to invite new foreign
businesses and it would also be effective for the new businesses to expand in the country
effectively (Griffin and Pustay, 2012).
Government Intervention in the Economy
Indian economy is one of the bigger economies in the world. India has developing mixed
economy which is a huge influence for the organisations to expand their markets in. It is
important to note that the mixed economy has number of key features as the businesses are
largely free to expand and do well in the market and the Government has partial influence in the
economy which doesn’t make it completely open economy or doesn’t make completely closed. It
is important to note that the Government India has partial influence in the economy and to the
surface level as the businesses are not driven by the Government and hence it could be said that
the influence of the government in the country is absolutely minor which also influences the
interest of the organisations in the market. The Government takes taxes and doesn’t interfere in
the business operations of the organisation which is extremely important for the organisation to
operate freely in the market (Verbeke, 2013). Hence it could be said that the minor influence of
the government in the market largely influence organisations like Sepia restaurants to open its
chain of restaurants here.
Economic Integration
It is extremely important to note that Australia and India have good relationship between
themselves even though the trade relations are absolutely in the initial level. The countries are at
initial level in terms of trade relations which also largely influence the organisations to come in
to operate in the Indian market. The total value of trade between India and Australia has
increased to a large extent especially in certain fields which shows promise effectively for both
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the countries as well as the organisations working. The countries have worked on reducing
import and export tariffs which would enhance the overall economic relations between the states.
Hence it could be said that it is the perfect time to operate in the market. Since Sepia will be
focusing on selling food and beverage products it will be important for the organisation to
emphasise on understanding the trade relations effectively (Peterson, Arregle and Martin, 2012).
Choice of entry
The organisation has planned to enter the market with the help of penetrative pricing strategy
which would help the organisation to ensure that the company is able to reach the best possible
mass. Once the organisation has gathered an effective mass it would shift to premium pricing
targeting the high class market.
Marketing Mix
Product: The product will be implemented with the help of Global+Local strategy which would
help to reach the best possible mass. The products mainly will be same with little difference. The
core product will be quality food suitable with the culture in the market. The augmented product
will be the service and overall presentation of the dish (Verbeke, 2013).
Price: The price of the product will be kept penetrative which would help to ensure success in
the market. The penetrative pricing will help to penetrate the market as possible.
Place: The places will be selected based on the connectivity. It is important that Sepia opens its
restaurants based on the connectivity and class of the place. Websites and applications could be
developed to connect with the people virtually.
Promotion: The promotion will be done through banners, hoardings, leaflets, radio ads et cetera.
Discount selling will be effective for the consumers (Hutzschenreuter, Kleindienst and Lange,
2014).
Conclusion and Recommendations
The Indian market is an emerging market and hence it is extremely important for an organisation
to understand the market effectively for success. In order to achieve the expansion objectives
certain recommendations could be made:
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 Creating tie ups with a local organisation will help to get better footfall in the market.
 Preparing items in line with the religious sentiments and cultural differences would be
effective for the organisation.
 Emphasising on the promotion would be effective for the organisation.
 Abiding by the employment legislations would be effective for the organisation.
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References
Ball, D., Geringer, M., Minor, M. and McNett, J., 2012. International business. McGraw-Hill
Higher Education.
Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L.,
2014. International business. Pearson Australia.
Folsom, R.H., Gordon, M.W., Spanogle, J.A., Fitzgerald, P.L. and Van Alstine, M.P.,
2012. International business transactions: a problem-oriented coursebook. ThomsonReuters.
Forsgren, M. and Johanson, J., 2014. Managing networks in international business. Routledge.
Griffin, R.W. and Pustay, M.W., 2012. International business. Pearson Higher Ed.
Hutzschenreuter, T., Kleindienst, I. and Lange, S., 2014. Added psychic distance stimuli and
MNE performance: Performance effects of added cultural, governance, geographic, and
economic distance in MNEs' international expansion. Journal of International
Management, 20(1), pp.38-54.
Penrose, E., 2013. The Large International Firm (RLE International Business). Routledge.
Penrose, E.T., 2017. Foreign Investment and the Growth of the Firm 1. In International
Business (pp. 33-48). Routledge.
Peterson, M.F., Arregle, J.L. and Martin, X., 2012. Multilevel models in international business
research. Journal of International Business Studies, 43(5), pp.451-457.
Twarowska, K. and Kąkol, M., 2013. International Business Strategy-reasons and forms of
expansion into foreign markets. In Management, knowledge and learning International
conference (pp. p1005-1011).
Urbiztondo, S., Bonardi, J.P. and Quélin, B.V., 2013. International expansion, diversification and
regulated firm nonmarket strategy. Managerial and Decision Economics, 34(6), pp.379-396.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
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