International Marketing Strategies for Armajaro Trading Limited

Desklib provides solved assignments and past papers to help students succeed.

INTERNATIONAL MARKETING
Student Name:
Student ID:
Professor Name:
1

Contents
Introduction..................................................................................................................................3
LO1 Contribution of marketing in the formulation of business strategies......................................3
Analysis of Scopes and key concepts..........................................................................................3
Explanation of Market routes......................................................................................................4
Evaluation of opportunities and challenges.................................................................................5
LO2 Selection of International market and major success factors..................................................6
Selection of target market............................................................................................................6
Advantages and disadvantages of market entry strategy.............................................................6
Adaptation of marketing strategy................................................................................................7
LO3 Adapting marketing plan in accordance to the requirements of the global market.................8
1. Overview of global and local marketing strategy....................................................................8
2. Prevalent approaches...............................................................................................................9
LO4 Organize and evaluate international marketing effort...........................................................10
1. International marketing approaches and recommendations for the company.......................10
2. Market condition and competitor analysis.............................................................................12
Conclusion.....................................................................................................................................13
Reference List................................................................................................................................14
2

Introduction
The notion of marketing generally refers to the various activities that an organization undertakes
in order to boost the selling or buying of a particular service or a product. Marketing
encompasses advertising, selling and delivering the service or product to the end customer.
Based on the operational reach of the business, marketing can be categorized in two major
sections i.e. domestic marketing and international marketing.
Domestic marketing focuses on the promotion, production and sale of products or services in a
local market; whereas International marketing focuses on the same on a much larger scale
(Gillespie and Riddle, 2015, P. 84). Domestic marketing is much less complex and requires
lesser amount of financial resources. On the other hand, international marketing is very complex
and it requires huge amount of monetary investment.
LO1 Contribution of marketing in the formulation of business strategies
Analysis of Scopes and key concepts
According to Hitt et al. (2016, p. 58-73), global marketing is mainly concerned about
standardizing and integrating marketing activities across a large number of geographic markets.
Most of the organizations now a day are not restricted to operate within the country of its origin.
The scope of spreading the business all around the globe is increasing drastically. Countries with
emerging economies like China, India, Mexico, Chile and Brazil are proving to be fertile
grounds of spreading the business. The increasing purchasing power and the changing taste and
preference of the citizens of different countries are providing ample scope of growing the
business all around the globe. The major scopes and natures of global marketing for Armajaro,
the commodity investment firm, are as follows:
 Availability of broader market: Unlike the domestic marketing, the number of
consumers is not restricted just to the national population in case of international
marketing. Naturally, global marketing will provide Armajaro a window of opportunity
of catering to a broader market.
3

 Presence of uncontrollable variables: At least two sets of uncontrollable variables are
always present in case of the international marketing. Variables like politics, economic
conditions possess the potential of affecting the business of Armajaro drastically.
 Intense competition: As the companies who are willing to spread the business in a new
country has to compete with the domestic companies as well as with the other
international companies the degree of competition for Armajaro is always high.
 Scope of contractual agreements: It is often witnessed that when companies moves out
in the international level, it starts making contractual agreements with other companies
(Skarmeas et al. 2016, p. 22-40). These agreements encompass co-production or even
technical assistance. Naturally, the chance of developing the skill of the employees also
increases.
Explanation of Market routes
There is no doubt about the fact that spreading a new business into a foreign market is a daunting
task. The most prevalent market routs of breaking into a new market are as follows:
 Franchising the brand: Franchising is one of the most prevalent routes of breaking into
a new a market and Armajaro could use this for entering a new global market. After
creating a successful brand, the company can grant other parties the right of using the
trademark, certain business processes and systems. As opined by Fan et al. (2017, p.
2082-2125) as the other parties are generally accustomed to the market conditions
beforehand, it becomes easier for the main company to create its brand image in the new
market.
 Partnering with other companies: This is another commonly used method of gaining
access in a new market. A partner in the business can help in production, in promotion or
with any other marketing related activity. However, choosing right partner will be an
important task for Armajaro and the firm should make sure that their partner is actually
helping them up in the business and not slowing down the process.
 Buying a company: This is perhaps the easiest way of entering a new business market.
Although, it requires huge amount of initial investment it can provide immediate market
share, an existing brand image, customer base and less hazards in licensing and other
4

legal issues. However, the brand image of the newly bought company will be primarily
different than the previous brand image of Armajaro.
 Exporting: The process of manufacturing products in the country of origin or any other
country and transporting the products to other countries is generally referred to as
Exporting. It is a popular way to enter into the foreign markets because; it is an
economical, less complex and less risky method of entry.
Evaluation of opportunities and challenges
Opportunities
 The increased size of the market is the most important benefit of the global marketing
strategy. It will undoubtedly cater Armajaro with ample amount of opportunity to invest
in research and development. The investment in the research and development can help a
company to gain competitive advantage in the market. International marketing provides the companies the scope of operating in larger markets
and enables them to enhance their efficiency level in terms of R&D expenditure and
capital investments and Armajaro will not be an exception. Keeping pace with the competitors is another opportunity that is provided by global
marketing. According to Madanoglu and Castrogiovanni (2017, P. 377), by 2025 almost
75% of the consumers will be from the developing countries. Naturally, most of the big
companies are trying to break into these emerging markets to cement their footholds
before their competitors.
Challenges Creating the brand image of Armajaro in the new market will be one of the most
daunting tasks of global marketing.
 Gap of communication is another major challenge that most Armajaro may face while
entering in a new market. Effective communication with the counterparts across the
globe is an integral part of spreading the business.
 Tariff barriers are another major challenge for the companies that mainly rely on
exporting products to the target market. Taxes and duties imposed on the imported
5

products can drastically reduce the profit margin of the host company (Child and Lu,
2018, P. 96).
LO2 Selection of International market and major success factors
Selection of target market
The selection of the target market will be conducted by following a few steps. The first step of
choosing an international market is the identification of the country. The economic, political,
technological and environmental factors are needed to be taken care of before selecting a
particular country. China and India are witnessing drastic economic growth; naturally entering
these markets will be beneficial for the growth of Armajaro. After short-listing the countries both
preliminary and in-depth screenings are needed to be conducted to finally select a target market.
The macro-economic factors like exchange rate, currency stability, and political stability of the
nation are also needed to be considered.
Preliminary screening reveals that although Indian currency has been more stable than the
Chinese currency, the exchange rate of Indian rupees is lower than the Chinese Yuan. Moreover,
the political condition of China is much more stable than India. Apart from that, during in-depth
screening procedure it has been found that the bound tariff rate of India is 48.5% and MFN
applied average tariff is 13.4%; naturally, this huge uncertainty in the tariff rates can cause
hindrances in the business procedure (Gay, 2016, P. 119).
Finally, China’s policy of partnering with any local company may prove out to be beneficial in
the sense that it will cater Armajaro with an existing consumer base and market share. Judging
all these parameters it can be said that the emerging market of China will be fertile ground for
the further growth of Armajaro.
Advantages and disadvantages of market entry strategy
Market entry strategy Advantages Disadvantages
Directly exporting the products  Direct way of entering
a new market.
 Expansion of market
and thereby fostering
 Rise of administration
cost due to tariff
charges.
 Handling remote
6

better margins and
larger economies of
scale.
relationships.

Franchising the business  The success rate of
franchising is much
higher than other
modes of entering a
new market.
 Franchising the
business will provide
the scope of getting
access to better talent.
 Easy method of
accumulating
expansion capital,
which can be used for
the further growth of
the company.
 The profits or a certain
percentage of sales
will be shared.
 Dependency on third
party.
 The flexibility of
franchising is very
low. Due to this reason
the chance of adapting
to the new market
condition becomes
tough.
Partnering with other company  Helps in adapting to
the conditions of the
new market.
 Local partners bring
knowledge about the
local market.
 Provides existing
contacts and consumer
base.
 Initial investment will
be lower because it
will be distributed
amongst the partners.
 Each of the partners
will be jointly and
severally responsible
for the partnership’s
debts.
 Chance of
disagreement between
two partners
 Being an agent of the
business every partners
is liable for the actions
of the other partners.
7

Adaptation of marketing strategy
There is no doubt about the fact that the Chinese market is very complex and to enter this new
market Armajaro should consider about either partnering with other company or think about
finding the perfect agent. Collaborating with local companies will help Armajaro in
accumulating knowledge about the traditions of the Chinese market (Pradhan, 2017, P. 113-148).
It would be easier for the company to rely on the existing infrastructure, network and trained,
local staffs of the local company rather than starting the business from scratch. However,
partnering or joint venturing with a local company can make the intellectual properties of
Armajaro more vulnerable. To prevent this, Armajaro should make create certain restrictions
regarding the sharing of intellectual properties between the partners. After successfully creating a
brand image in the Chinese market, the company should think about a wholly owned foreign
enterprise i.e. a company wholly owned by the foreign investor with limited liability. Unlike the
joint ventures or partnership businesses it will provide Armajaro a complete control over
managerial aspects, ability of dealing in the local currency and employing local staffs without
any restriction. However, after establishing a WOFE, there will be the requirement of
maintaining it on a regular basis.
LO3 Adapting marketing plan in accordance to the requirements of the global market
1. Overview of global and local marketing strategy
Global marketing is much more than just selling a product or service internationally. It
encompasses the entire process of planning, placing, producing and promotion the service or the
product in the international market. On the other hand, the notion of local marketing refers to a
particular type of marketing that targets the community of the vicinity from where the company
originates (Madanoglu and Castrogiovanni, 2017, p. 377). The most prevalent differences
between local and global marketing are as follows:
 Global marketing is riskier than the domestic marketing.
 Domestic marketing is much simpler than global marketing.
 The requirement of financial resources is higher in case of global marketing.
8

 Domestic marketing only deals with one single market whereas global marketing focuses
on several markets.
 The demands of a wider range of customers in needed to be taken care of in case of
global marketing.
 The number of uncontrollable variables is lesser in local marketing than the global
marketing.
Armajaro Trading Limited mainly engages in the trading of coffee, cocoa and sugar. Apart from
that, the company also provides financial instruments which include forward price cover.
Moreover, the company is also known for catering its customers with over the counter risk
management solutions. The company caters to the coffee and chocolate manufacturers of South
and North America. In the local market the company already possesses a tight grasp; however,
after spreading its business in the Asian countries like Malaysia, Vietnam and Indonesia,
Armajaro is willing to enter the Chinese market.
As the service provided by Armajaro is not at all heterogeneous in nature, the creative
development and messaging campaign will not require customization. Moreover, as the budget
of the company is centralized, the assets will be managed at the corporate level. According to
Gay (2016, p. 119). The best policy for the company would be thinking in a global way and
acting in as per the local needs. However, with the rapid growth of globalization the fine line
between local and global is fading out. Due to this reason global as well local teams of Armajaro
need to ideate policies and strategies together to ensure impactful and wider reach.
2. Prevalent approaches
Change of approach in case of product: Culture has a huge impact on the choice of products.
The common values and ideologies of a group of individuals or a particular community decide
their consumer behavior. Naturally, Armajaro need to customize their products and services in
accordance to the preferences of these cultural factors. In other words, it can be said that the
company will have to adapt to their marketing mix strategy and product to fulfill the wants and
needs of the local people. However, as the world is becoming a smaller place due to
globalization, the choice and preferences of people are also standardizing. Keeping this scenario
in mind the company can also utilize a standardized approach to their marketing mix (De Mooij,
2018, p. 164).
9

Change of approach in case of pricing: Armajaro should first define the pricing objective, in
case of entering the Chinese market the objective of the company should be market penetration
and preventing entry of competitors. Apart from that, a proper analysis of the market
characteristic and cost calculation in the local market is needed to be conducted. Finally, a proper
strategy is also to be formulated which will be able to deal with the fluctuating exchange rates.
According to Gillespie and Riddle (2015, p. 208) the factors that are needed to be taken care of
are mentioned below:
 Import duties and tariffs
 Transportation cost
 Fluctuation of exchange rate
 General economic condition of the country
Change of approach in case of promotion: Again culture plays an important role in the process
of determining promotional strategy. The promotional activity of the company should include
multi-lingual advertisements, usage of various Medias. As China has its own social media
platforms and search engines, Armajaro should think about utilizing those platforms to the
fullest. Simplified Chinese, traditional Chinese and Standard Chinese languages are needed to be
used in the social media platforms like WeChat, Toudou Youku and Baidu Tieba.
Armajaro should adapt promotional activities, which can suit the political environment, religious
practices as well as cultural attitudes.
Change of approach in case of place: Išoraitė (2016, p. 2394-3629) posits that the element of
place is mainly oriented to the distribution of services and products to the end customers, at the
right time and at the right place. As Armajaro is willing to spread its business overseas the
company will have to keep in mind that more than one parties will be involved in the process and
the distribution process of the goods to the end customers can be completely different. The
distribution chains of China is needed to be investigated beforehand to make the distribution
procedure smooth and seamless. Furthermore, Armajaro will have to decide who they are going
to sell their products, to businesses, wholesalers, retailers or directly to the end consumers.
10

LO4 Organize and evaluate international marketing effort
1. International marketing approaches and recommendations for the company
The current era is an era of globalization and in this globalized world the restrictions regarding
the movement of goods and services is gradually getting demolished. Thinking globally and
acting locally has become the most prevalent strategy for the international companies. However,
to spread a business in every parts of the globe requires an adequate, flexible strategy which can
use various approaches in accordance to the demands of the situation. The most prevalent
approaches of entering a new market that can be utilized by Armajaro are as follows: Centralized approach of international marketing:
The centralized approach of international marketing refers to the process where most of the
marketing decisions are made by the marketing teams that are located at headquarter. The
centralized team formulates most of the strategies and conducts most of the marketing related
programs. This approach will be beneficial for Armajaro because Armajaro’s marketing
department is highly competent and possess the experience of working in various markets.
Moreover, the service that Armajaro provides demands very less localization, therefore, it will be
easier to control the business by using a centralized approach of international marketing (Kumar
et al. 2017, p. 1-9). Finally, being an UK based company that distributes the highest quality
cocoa from Ghana, Armajaro possess a positive country of origin or COE effect.
If the company thinks about having a centralized approach of international marketing, it should
focus on elevating its scalable processes and in-house marketing abilities. Ensuring this will help
the company in gaining control over the sales cycle. Apart from that, all sort of communication
gap is needed to be eliminated between the sales and marketing staffs.
The major benefits Armajaro will get if they use centralized global marketing are as follows:
 It helps the organization in reducing the cost by taking advantage of economies of scale.
 As the internal departments adheres to a unified set of procedures as well as rules, the
entire procedures gets streamlined and reduces the overall cost.
 Centralized marketing approach can reduce uncertainty and thus it can create consistent
environment for working, which in the long run reduces regulatory cost.
11

 Elevated level of efficiency and responsiveness is another most prevalent benefit of
centralized marketing strategy. It helps in increasing the ability of data collection and
analysis, which in turn improves sales, functions and marketing. Decentralized approach of international marketing
In case of the decentralized approach of marketing, all sorts of decision making and marketing
functions are pushed towards the operational ground of the business. In this approach companies
tend to have a small group of independent staffs who are known as company representatives or
distributors. Relying on the local in-country sales office also falls under the hood of
decentralized approach of marketing (Išoraitė, 2016, p. 2394-3629). This particular approach
works best in the situations that are mentioned below:
 When there is huge requirement of localizing the product before selling it in other
markets
 If a strong market bias is present towards local sales connections and local language
 The country of origin effect is negative
 The primary resources of the company is very limited
 If the marketing staffs of the company are not adequately trained
 If the local market is highly regulated by the government
The center of attention in case of decentralized method is supporting and motivating the
representatives and local marketing staff. It is often witnessed that marketing supplies are
produced as a template, which the representative or local marketer can use as a starting point for
translation and localization. If Armajaro chooses this approach, the company will have to focus a
lot on maintaining and developing working relationships with the marketing staff and in-country
representatives. Effectively maintaining these two parameters will lead towards the success of
the organization (Gillespie and Riddle, 2015, p. 168).
The benefits of decentralized marketing strategy are as follows:
 It is often witnessed that decentralized marketing strategy frees up the resources and
personnel for higher-value tasks.
 Makes the recruitment process smooth because it is majorly carried out in the
departmental levels
12