International Marketing Research

This paper compares and contrasts the external environment of two international markets, China and Europe, for the brand R.M. Williams, now owned by LVMH. It discusses the political, economic, socio-cultural, technological, legal, and environmental conditions of both markets and provides strategic recommendations for doing business in them.

Running head: INTERNATIONAL MARKETING RESEARCH
International Marketing Research
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Table of Contents
1. Introduction............................................................................................................................2
2. Discussion..............................................................................................................................2
2.1. Company overview.........................................................................................................2
2.2. External Environmental analysis (PESTLE)...................................................................3
2.2.1 Political environment in Europe and China200........................................................3
2.2.2 Economic environment in Europe and China...........................................................4
2.2.3 Socio-cultural environment in Europe and China.....................................................4
2.2.4 Technological environment in Europe and China.....................................................5
2.2.5 Legal environment in Europe and China..................................................................6
2.2.6 Environmental condition in Europe and China.........................................................6
2.5. Strategic recommendations regarding Europe and China...............................................7
3. Conclusion..............................................................................................................................8
References:.................................................................................................................................9

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1. Introduction
One of the most striking and significant developments in the recent years is that of the
globalisation of the businesses all over the world. The ever continuing growth of the trades of
this world needs more and more information regarding the foreign markets in order to expand
the businesses overseas. With the same, the companies that are planning to expand their
businesses internationally needs to know regarding the particular international market along
with its, political, legal, cultural, economic and environmental condition that might influence
the business there. Along with this, it is also to note that the growth and development of the
new information and communication technologies has also changed the current lifestyle, the
behaviours of the consumers and their buying patterns world-wide (Chen, 2017). This simply
indicates that marketing research in the global environment has become of utmost importance
in the present market scenario.
This paper is going to elaborate on comparing and contrasting two different
international markets for a brand named R.M. Williams that is now owned by one of the
luxury goods company called LVMH, a conglomerate corporation. The chosen international
markets are China and Europe. It shall take into account the external environment of these
two selected markets for the brand, comprising of its financial, economic, legal, cultural and
political environment. Furthermore, it shall also discuss on the similarities and differences in
between these two markets while making a comparative analysis of the two. Furthermore,
this report shall present some strategic recommendations regarding doing business in China
and Europe.

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2. Discussion
2.1. Company overview
R.M. Williams was founded in the year 1932 by R.M. Williams, an Australian
Bushmen and a successful entrepreneur who rose to a millionaire from a mere swagman
(R.M.W. The Company, 2018). Primarily, it just delivered boots to the common public and
later, the business was developed and diversified its products’ range. These products
gradually started to get exported in 15 different nations and 50 different retail stores.
However, this brand is now owned by LVMH, a conglomerate company based in France. It is
a multinational luxury goods provider that has its headquarter based in Paris. It was founded
in the year 1987 by Bernard Arnault (Donze, 2018).
2.2. External Environmental analysis (PESTLE)
2.2.1 Political environment in Europe and China
Europe- Europe is more or less similar to a confederation where many policy areas
are federalised into a common institution that is capable of making laws (McCormick, 2017).
In this country, the companies are influenced by the legislation at the Europe and the national
levels. However, it is also to note that Europe does not control the foreign policy, the direct
taxation policies and the defence policy. There are several areas that are primarily under
control of the member states of the Europe. The constitutional organisation and basis of the
EU is dependent on its treaties.
China- China is one among the powerful nations in the world. It is also one of the
permanent members of the ‘Security Council of the United Nations’ (Van Ness, 2018). It is
the Communist Party that is ruling in china and is founding the political part of the PRC
(People’s Republic of China). However, it is to note that this country enjoys a stable political
environment but the shortage of political freedom is one of the significant areas of concern.
Notwithstanding this fact, it is also to mention that because of the stable political

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environment in China and due to its improved infrastructure and cheap labour, it position
itself as the greatest destination of FDI (Foreign Direct Investment).
2.2.2 Economic environment in Europe and China
Europe- Europe has successfully established a single market all over the territory of
all its member states. The seventeen member states of Europe have joined a monetary union
that is called the Eurozone and that makes use of the Euro as the single currency (Jones,
Kelemen & Meunier, 2016). Furthermore, the Cohesion funds and the structural funds are
something that are supporting the development of the regions in Europe that are
underdeveloped. It is also to note that the current GDP value of Europe is 27.87% of the
world’s economy and is growing at the rate of 0.5 to 1% each year (Paunica et al., 2018).
China- The economy of China is developing in very stable ways now a days and is
growing rapidly. It has always been among one of the rank holders in the list of developing
nations. It is the second largest economy by nominal GDP and is the largest economy on the
basis of purchasing power in the world (Ito, 2018). It is also to note that the growth of GDP
in China is about 10% per year. However, some of the significant economic challenges
present in China are its high rate of inequality, environmental damages and rapid urbanisation
and these are something that the country needs to deal in order to maintain the economic
stability that it possess right now.
2.2.3 Socio-cultural environment in Europe and China
Europe- It is to note that the free movement of the workers all around the European
countries have encouraged the growth of subcultures in this nation. It is a huge market for the
consumer product. One of the main social challenges that Europe is facing at present is that
of aging population (North & Fiske, 2015). With the same, it is also to mention that the
demand for the products is continuously rising among the people belonging over the age

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group of 45 years. With the changing time, the buying behaviour of the people of Europe are
also changing and they have become more conscious regarding their health as well. Hence,
they always tend to buy the products that healthy and eco-friendly.
China- China is the first largest populated country in the world and its total
population at present is about 1.4 billion (Gerland et al., 2014). It is also a huge market for
the consumer products. Furthermore, the average level of wage in this country has gone up
gradually and this has led to an increase in the level of consumer spending as well. This
undoubtedly signifies great opportunities for the foreign and the domestic companies.
Furthermore, the rate of literacy in China is at present 96.4% and this signifies that people
here are well educated and they are likely to know which product is good and which is bad
for them (Zhang, 2015). With the same, they also have knowledge about international brands
and companies. However, one of the severe social challenges that China is facing these years
is that of aging population.
2.2.4 Technological environment in Europe and China
Europe-In Europe, the innovation and imitation are used as the modes of
technological developments in most of the industries. Most of the countries of Europe are
well developed and they have access to the latest technologies of the era (Adams et al., 2016).
Furthermore, an increase in the size of the manufacturing industries in Europe that the
science based leads to higher level of intra-industrial trade in between the nations in Europe.
It is also to mention that policy priorities in the new European members have been
increasingly devoted to the R&D as well as the innovation, being the primary driver of
growth in productivity.
China- As per the recent survey of 2018, along with a total of 772 million users,
China holds the top most rank in the list of largest online population countries in the world

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(Jia, Kenney & Zysman, 2018). There are several big ‘tech giants’ in China such as Tencent,
Alibaba and Baidu. These companies are so powerful that several big companies belonging
from other nation have completely failed in the Chinese market. It is also to note that this
country has a vision to become the global leader in the field of science and technology and to
attain this, it has launched the programme of “mass entrepreneurship and innovation” in the
year 2015. It aims at spreading entrepreneurship all through the China. Furthermore, it also
aims at helping the nation to move to an innovation driven economy from a labour intensive
one.
2.2.5 Legal environment in Europe and China
Europe- The laws of Europe exist at a total of two levels- a) the regulations which are
binding on the member states and, b) the directives that are binding by means of the
enactment of a law within the member state that are in line with the directive. There are
several laws in Europe that regulate the employment and the business practices in the country
and they are the European Labour Law, European Union Law and European Privacy Law.
China- Like Europe, there are several laws in China that regulate the employment and
the business practices in China such as the labour standards, labour disputes, employee
remuneration and benefits as well as different other issues that are regulated by the PRC
Labour Contract Law 2007, the PRC Labour Law 1995 and the other administrative
regulations.
2.2.6 Environmental condition in Europe and China
Europe- The five major environmental related issues in Europe as per the recent
survey are that of pollution control, the use of recyclable and non-wasteful packaging,
combating the issue of global warming, energy conservation and the conservation of other
lacking resources and lastly, the use of environmentally friendly components and ingredients.

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China- The rapid economic development of China has influenced the natural
environment of China very densely. Challenges such as air and water pollution, biodiversity,
industrial waste, deforestation and climate change are some of examples related to the
challenges that China is facing in present days. However, it is also to note that the
government of china has taken certain initiatives in order to address these challenges. For
example, the decentralisation of the responsibilities of the local levels, motivating public and
encouraging their participation in areas concerning environmental protection (Westman and
Broto, 2018).
2.5. Strategic recommendations regarding Europe and China
a) Localise the products. It is very important to start with a mind-set of the beginners and test
the current solution in the new market. Start with a Riskiest Assumption Test (RAT) or
Minimum Viable Product (MVP) mind-set for validating what is and is not working in both
the markets.
b) Getting aware of the cultural context of the European and the Chinese market is very
important for the business managers in order to successfully conduct the business in these
countries. The consumers in both the countries, or in any countries, differ from the other and
one of the key differences among them lies in the cultural background. It is very important to
discover these prevailing differences in the target audiences as well as designing the services
and the products which deliver the value to this particular context. It is both a great way to
show that the business care and to gain market insight and intelligence.
c) The challenges to entry in China and Europe are manifold, including the language
differences, the lack of access to the business network, the connections, as well as the local
regulations on the foreign investment and setups. Having partners (a Chinese and a European)
in these areas would help the company in coping up or tackling with many of these factors

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more easily, and at the same time, would increase the chances of the business success. It is
also to note that local partners could also help the company in navigating the waters and be
an invaluable asset in the long run.
d) The company should adopt a social media strategy in order to conduct business in these
countries, especially in China. It must adapt its social media strategy to the domestic channels
and in different ways in which they are been used. Facebook is not the place to promote the
brand or the product. Also, applying the Twitter strategy to the Weibo wholesale would also
fail because people use the platform in different ways. However, incorporating WeChat in its
playbook is very necessary, given that the consumer-facing service is also used widely as a
strong platform for corporate marketing.
3. Conclusion
Hence, from the above analysis it is clear that the main purpose of this paper was to
give a strong definition of the international market research of Europe and China and at the
same time, describing the factors that would influence the marketing research in these
nations. However, it is to note that LVMH will make more business profit if it enters into the
Chinese market due to better environmental condition there as compared to the Europe
business market. It is more favourable to this business as the socio cultural background along
with the economy, political and technological environment in this country is very stable.
With the same, China is a very big market for this new international brand to operate its
business.

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