International Marketing Report: Arla Foods in Bangladesh

This report provides a detailed analysis of Arla Foods' international marketing strategy, specifically focusing on its expansion into Bangladesh. It begins with an introduction to international marketing and the challenges Arla faces in a new market. The report then delves into market research instruments, including demographic analysis and governmental regulations. It outlines Arla's marketing strategies, considering market risks, pricing, and financial issues. Operational considerations, such as broader competence, challenges from competitors, and labor-related issues, are also discussed. Furthermore, the report examines international marketing communication, including language barriers, religious considerations, and the role of technology. The report concludes with recommendations for Arla Foods' senior management, emphasizing the importance of thorough market research and strategic implementation to ensure success in the Bangladeshi market. The report utilizes relevant references to support its analysis.

Running head: INTERNATIONAL MARKETING
International Marketing
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Task 1...........................................................................................................................................2
Task 2...........................................................................................................................................3
Task 3...........................................................................................................................................5
Conclusion and Recommendation...................................................................................................7

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Introduction
International marketing is the initiative taken by a company to extend its operations in
another country with the objective to make profit. However, oftentimes it becomes challenging
for a company to set up its roots in a foreign country considering the competition, governmental
control, legal restraints, varied consumer behaviors, and other ecological conditions like the
weather and availability of raw materials, etc. Arla Foods by DANO intends to open a new
branch in Bangladesh (Dyrhauge and Akther 2018). There has always been a shortage of dairy
products in the country which prompted the company to open a new market chain in this
particular place. In this report, a briefing of the marketing campaign including implications of
international marketing, marketing strategy, and international marketing communication will be
discussed. All the issues will be mentioned in details, which the senior management should
follow in order to gain a strong foothold in the aspect of international marketing in Bangladesh.
Discussion
Task 1
a. The market research instruments for analyzing the international marketing of Arla are the data
which needs to be collected considering the scenario of Bangladesh. In this analysis, some of the
major factors of international marketing instruments will be taken into consideration like the
availability of raw materials, transportation facilities, latest trend in market and governmental
regulations or legal issues. The demographics have also been considered which ensures the
distribution of dairy products which caters to the tastes of a wide age group including children,
women, adults, and old people. It will also help the company to take proper steps regarding the
strategies Arla needs to take. Moreover, Bangladesh has a favorable international marketing

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strategy which would help DANO in establishing its company due to the low production costs,
unexplored market, and nutritional deficiency of the people. Therefore, the cost efficiency factor
is the most important aspect which would help the company to take venture in the international
marketing. (AC 1.1;AC 1.2)
b. The company has to develop a solid strategy which would enable it to foster and grab a huge
share in Bangladesh’s market. Arla, which is the fourth largest producer of milk in the world, has
to adopt some steps that would help to cushion the risk while extending its market in
Bangladesh. The senior management also needs to explore the target market and extend its scope
for reaching out to the customers. It also has to take into account the income, age, occupation,
gender, region, and family size in order to customize the products and make it appealing before
the customers. The political risks must also be seen which might become a barrier for the
company due to stringent international business policies.
c. In the context of pricing and financial issues, the company must take some prior arrangements
which would safeguard it from any losses. Some of the aspects which Arla needs to take into
consideration are the export price escalation which might incur losses than gains. In this case it
should cut off the export price and find any other alternatives in Bangladesh itself. Similarly, the
other factors that the company needs to check are the inflation rates, transfer pricing, currency
movements, price coordination, and anti-dumping laws. Arla should take into consideration the
perspective, preferences and price sensitivity of Bangladesh. This will help the company to
adjust according to the pricing condition.

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Task 2
a. While developing international strategies, Arla food should take into account some operational
considerations (Chowdhury 2019). Some of the features of international market which company
Arla might also face while establishing itself in the lands of Bangladesh are –
 Broader competence – The Company must take into account the necessity of broader
competence, greater management skills, and expertise to deal with various situations like
change in the rules and regulations of the government, the mindset of the people and their
perspectives, political scenario, etc.
 High risks and challenges – Arla must take appropriate steps to meet several challenges
and risks pertaining to the establishment of dairy product in Bangladesh. Among many
problems, it has to take into consideration the employment prospects of the local youth,
women and their perspective about the company in overall.
 Other competitors – The senior management of Arla should also take into consideration
the competitors, mainly the Pran milk industry and New Zealand dairy products
Bangladesh. However, since the region has a deficit of almost 51 percent of dairy
products, the company has a huge prospective of improving its base along with the
competitors in Bangladesh.
b. The important characteristics of Arla’s international marketing strategy is internationalization
which would allow the company to cut off its cost in the low production cost rate countries like
Bangladesh. Moreover, it would also get the benefit of hiring employees at a much reduced cost
thereby allowing it to channelize the profit. It would also help the company in times of financial
crisis in the domestic market. In relation to this, the company must evaluate the labor and
employment related issues like the laws pertaining to employment in Bangladesh. The company

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must comply with all the relevant policies like wage, health and safety of the employees. The
Human Rights concept should also be taken into consideration where exploitation and abuses of
labor should be strictly handled.
c. The Arla model follows a sustainable approach towards the production of dairies that
maintains standard and quality of the products produced. It has also embraced the environmental
responsibilities and strives towards achieving the goals in a greener way (Azuayi 2016). The
international marketing strategy of Arla also maintains stringent policies regarding the injecting
of hormones into the cattle which might have severe health implications. All these strategies
would secure the company’s entry into a new international market since it practice and imbibe
safe methods. This will pave the way of the company towards global success including its
venture in Bangladesh.
Task 3
a. In the context of marketing and communication, Arla Food might face problems in
Bangladesh due to the language barrier, customs, religious practices and other ethical
considerations unique to the country. It is necessary for the company to check these issues which
might affect the production quality, and the sales of the company. The significant religion
followed by the country is Islam (Afzal 2019). Therefore, Arla has to take the religious
implication into consideration which would help the company to adhere to the policies and
customs and act accordingly without hurting the sentiments of the local people. Since
malnutrition is visibly larger in these regions, the company also has the obligation to focus on the
quality and provide the customers with the best options.
The role of technology in improving the communication of the company is significant. It
has facilitated the company in multiple ways like telecommunications, transportation,

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globalization of markets and production, e-commerce, etc. All these means will help the dairy
company to establish itself in a foreign ground with ease, and remove the barriers of
communication. Online services should be incorporated in their strategies which would help the
consumers reach the products with absolute ease.
b. There is a dire need of different sales and marketing communication strategies which will
eventually bridge the communication gap between the company and the local people. Moreover,
the employee recruited should be communicated in accordance to the need o the situation
through which the company has to perform (Douglas and Craig 1983). There is a massive
requirement of providing the right kind of training and motivation to the employees in order to
make them be able to adapt to the needs and requirements of the customers as well as fulfilling
the gas and objectives of the company. Company representatives sent to Bangladesh has to be
made familiar with the Bengali language (which is the official language of the nation) in order to
make communication lucid and make them able to understand the issues faced by the
subordinates who are mainly the local communities residing in Bangladesh (Johnsson-Sederholm
and Du 2016). The company further need to make its operations and decision making in a
creative and decentralized manner in order to make space for proper and adequate
communication between employees and the management body (Pinstrup-Andersen and Cheng
2018). In addition, updated communication machineries such as direct messaging platforms and
social media has to be made used of in order to aid in sharing huge sized files and enable real
time based communication between the management body and employees.
c. Glocalisation is a combination of the words Globalization and Localization, which means that
a specific product or service is designed in manner so that it can accommodate the preferences an
d needs of the local customers. Glocalisation in context of Arla Foods predominantly means that

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the representatives who are directly sent from the home branch to the Bangladesh Branch have to
act and make decision which favors the cultural and traditional beliefs and practices of the local
customers (Shihab 2019). The company should design the foods in such a manner that it satisfies
the taste and preferences of the customers. In no manner, the company should hurt the sentiments
and religious beliefs of the people in order to maintain the global as well as local approach for
the food products.
Conclusion and Recommendation
In the essence of the above analysis, it is recommended to the senior management of Arla
Foods to have a thorough market research in Bangladesh. The tastes and preferences of the
market should also be analyzed along with the PESTLE and SWOT analysis, which would help
the company determine the future prospects in the country. Therefore, the company should also
be in the gaining side by taking strategic steps while implementing the international marketing
strategy in the soils of a third world country like Bangladesh.

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References
Douglas, S.P. and Craig, C.S., 1983. International marketing research (p. 192). Englewood
Cliffs, NJ: Prentice-Hall.
Azuayi, R., 2016. Internationalization strategies for global companies: A case study of Arla
foods, Denmark. Journal of Accounting & Marketing, 5(4), pp.1-9.
Chowdhury, A.T., 2019. Assessment of a Project of Local Sourcing Milk: A Case Study of
ARLA Foods Bangladesh Ltd.
Johnsson-Sederholm, P. and Du, N., 2016. Sustainability aspects in a dairy cooperative'sbusiness
model: The case of Arla Foods AB.
Pinstrup-Andersen, P. and Cheng, F. eds., 2018. Case Studies in Food Policy for Developing
Countries: Domestic Policies for Markets, Production, and Environment (Vol. 2). Cornell
University Press.
Shihab, S.K., 2019. Distribution management from ARLA Foods Bangladesh Limited.
Afzal, Q.R., 2019. Optimizing the Salesforce Using Route to Market at Arla Foods Bangladesh
Ltd.
Dyrhauge, H. and Akther, M.N., 2018. Green Growth and Bangladesh: Bilateral Cooperation
between Bangladesh and Denmark in this area.