International Marketing Management Report: Arnott's UK Expansion

This report provides a comprehensive analysis of Arnott's Biscuits Limited's international marketing strategy, specifically focusing on its potential expansion into the United Kingdom. The report begins with a comparative analysis of the food market, examining price disparities and trends between the Australian and European markets, including currency conversions and exchange rate analysis. Part A of the report analyzes the prices of food items like potato, meat, eggs, and coffee in both markets. Part B delves into Arnott's expansion strategy, including a PEST analysis of the UK market to understand the current market scenario. Furthermore, it includes a SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. The report also explores market entry strategies, marketing mix elements (product, price, place, and promotion), and competition within the UK market. The report concludes with an assessment of the feasibility and competitiveness of Australian food products in the UK market, providing valuable insights for Arnott's potential international venture.

Running head: INTERNATIONAL MARKETING MANAGEMENT
International Marketing Management
Name of the Student:
Name of the University:
Author Note:

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Executive Summery
Arnott's Biscuits Limited is the largest biscuit producer in Australia. The company has over the
years provided the customers with high quality products at a very reasonable price. This report
includes a critical analysis of the company’s expansion in Britain. In the first section of this
report a comparative analysis of the of the food market keeping in mind four food items have
been conducted to understand and identify the trends and disparity in the rates in Australian and
European Market. It includes a currency conversion as well as an in depth exchange rate analysis
of the two markets. This has given an understanding about the food and beverage industry which
has further helped us in analyzing the situation of Arnott's Biscuits Limited in the next section.
The part B of the report discusses about the expansion strategy of Arnott's Biscuits Limited
includes a PEST analysis of United kingdom which will give an insight about the market that is
prevalent in the current scenario for the expansion of an Australian biscuit brand. It also includes
a SWOT Analysis about the company which emphasized on the strength and opportunities.

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Contents
Part A...............................................................................................................................................4
Step 1...........................................................................................................................................4
Step 2...........................................................................................................................................4
Step 3...........................................................................................................................................5
Step 4...........................................................................................................................................5
Step 5...........................................................................................................................................6
Step 6...........................................................................................................................................7
Step 7...........................................................................................................................................8
Part B.............................................................................................................................................11
Introduction....................................................................................................................................11
The company and the product........................................................................................................11
Country and product market attractiveness...................................................................................15
PEST Analysis...............................................................................................................................15
The British market of the product..................................................................................................18
Strategies to penetrate the market..................................................................................................18
Competition in the market and other aspects.................................................................................19
Similarities between Australia and the UK...................................................................................20

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SWOT Analysis.............................................................................................................................20
Entry Strategy................................................................................................................................22
Marketing Mix...............................................................................................................................23
Product.......................................................................................................................................23
Price...........................................................................................................................................24
Place...........................................................................................................................................24
Promotion..................................................................................................................................24
References......................................................................................................................................26

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Part A
Step 1
Belgium Denmark Bulgaria Croatia
Republic of Cyprus Czech Republic Australia Estonia
Finland Hungary France Greece
Germany Ireland Italy Latvia
Lithuania Luxembourg Malta Netherlands
Spain Portugal Romania Slovakia
Slovenia Poland Sweden and The United Kingdom
It has been found that there are various categories of product that are exported from
European Union to United Kingdom every year. A major portion of the exports are the food
products which are exported every year. The food products that are exported are meat, potato,
egg and coffee (Abs.gov.au. 2017). A small description of the food and vegetable product that
are exported to UK are mentioned below:
1) Potato is exported by Spain at 13991000 USD
2) Meat is exported by France at 3823000 USD
3) Egg is exported by Netherland at 4024000 USD
4) Coffee is exported by Germany at 8440000 USD
Step 2
A detailed analysis of the product that are available in the London Tesco Supermarket are
highlighted in this answer. The products that are sold in Tesco are offered at retail prices to the

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customers. Huge price differences exist between the products which are sold in both the places
(Akbar and Ahsan 2014). The examples of the retail prices of the products are described below:
The Italian blended ground coffee of 227 grams cost £1.75
A pack of 12 eggs cost £ 1.75 in the Tesco Supermarket
Red mere farms white potato of 2.5 kilogram cost £1.29
The beef lean steak contains 5% fat and it is packed in 500 gm packet which cost £4.00
Step 3
The following figure will be obtained if the AUD is converted
The cost of coffee will be 3.893 AUD
The cost of meat will be 6.8 AUD
The cost of egg will be 2.975 AUD
The cost of potato will be 2.193 AUD
Step 4
The comparison of the price of the product in AUD currency is described below
(Abs.gov.au. 2017). A brief comparison has also been made between EU and UK. Moreover,
detailed comparison is also carried out with the Australian currency.
1 kg of potato cost 4.90 AUD
500 gm pack of meat cost 6.50 AUD
A pack of 12 eggs cost 6.00 AUD

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100 gms of coffee cost 4.00 AUD.
Step 5
The below figure will describe the list of Australian processed food manufacturer. It will
also contain the list of agricultural products that Australia produces.
(Source: www.afgc.org.au/wp-content/uploads/AFGC_State-of-the-Industry-2016, 2017)
(Source: Abs.gov.au, 2017)

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Step 6
Market Research Strategy
Woolworths was established in 1924 at the Imperial Arcade in Sydney by Percy
Christmas. The company has sold a wide variety of products and it has opened many stores by
the end of 1927 in Brisbane. Woolworths opened its first foreign brand in New Zealand in 1929
and by the end of 1930, the company has opened different stores in varied parts of Australia. By
the end of 1959, the company has sold variety of products in the Australian supermarket.
Woolworths offers the product at a much lower and competitive price and thus it is making it
difficult for the other brands to survive in the market. The company provides a wide range of
products to the customers at a reasonable price (Chen and Miller 2015).
Woolworths has concentrated on the distribution of potato in the UK market. It has
planned various kinds of market entry strategies in case of potato in the UK market. The
company has targeted a wide number of customers because the vegetable market in Australia
fulfills the purpose of a majority of households in Australia. The restaurants in Australia have a
huge demand of potato because a large number of dishes in the restaurant are made from potato
(Boateng et al. 2014).
A huge number of suppliers in the Australian market have not fulfilled the expectations
of the customers and thus it resulted to loss of the company. The strategies which are taken by
the company have helped in increasing the revenue of the company. As the product is highly
demanded by the customers and it is a daily requirement of them, it has been able to increase the
revenue and satisfy the needs and demands of the customers. Woolworths has also tried to serve
the customers of UK in a better way and it has helped in increasing the profit of the company

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(Barbara et al. 2017). The use of better facilities and technologies which is already present in
Woolworths acts as a positive aspect to the company. It will also increase the GDP of the country
and thus the customers will also buy the product more. This also indicates that the revenue of the
company will be increased to a large extent. Moreover, if the vegetables are sold at a much
cheaper rate, it will increase the sale of the product at an increasing pace. This is the most
important and striking strategy of Woolworths which is associated with the entry of products in
the market of UK (Bogomolova et al. 2015).
Step 7
It is necessary to find out whether Australian food products are competitive in UK
market, the price of the products in UK in EURO are divided by the price of the products in
Australia after the conversion of the Great Britain Pounds. It is necessary to find out EURO/
GBP (Buckley and Ghauri 2015). The information of the different price levels and the
calculations and conversions are discussed in the following table:
EU Products in UK Eggs (per
Dozen)
Ground Coffee (100
gm)
White Potato
(per Kg)
Beef Lean Steak
(500 gm)
Price in UK (in GBP) 1.75 1 0.516 4
Conversion of Price to
Euro
1.925 1.1 0.5676 4.4
Price in Australia (in
AUD)
6 4 4.9 6.5
Conversion of Price to
GBP
3.53 2.35 2.88 3.82
GBP/EURO 0.545325779 0.468085106 0.197083333 1.151832461
Thus, it can be concluded that the exchange rate of eggs must be:
GBP 1=EURO 0.54

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The exchange rate of ground coffee will be:
GBP 1=EURO 0.46
The exchange rate of white potato will be:
GBP 1=EURO 0.19
The exchange rate of beef lean will be:
GBP 1=EURO 1.51
It has been found that the Australian food products are much more feasible in the
UK market. It is necessary to find out the GBP/AUD. It can be derived by dividing the
Australian products in AUD by the price of the product in UK which is GBP. The calculations
are done below:
EU Products in UK Eggs (per Dozen) Ground Coffe (100 gm) White Potato
(per Kg)
Beef Lean Steak
(500 gm)
Price in UK (in GBP) 1.75 1 0.516 4
Price in Australia (in
AUD)
6 4 4.9 6.5
Conversion of Price to
GBP
3.53 2.35 2.88 3.82
GBP/AUD 3.428571429 4 9.496124031 1.625
The exchange rate of egg should be:
1 GBP=3.42 AUD
The exchange rate of ground coffee should be

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1 GBP= 4 AUD
The exchange rate of white potato should be:
1 GBP=9.40 AUD
The exchange rate of lean beef should be:
1 GBP=1.625 AUD
Thus, it can be seen from the above table that the food products of Australia except the
beef lean steak are not available at the cheaper rate than UK market. This indicates that the food
products which are exported by Australia in UK will not be feasible and competitive.

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Part B
Introduction
Arnott’s Biscuits Limited is the largest producer of biscuits in Australia. It is also the
second largest snack food supplier in the country. Arnott’s is a subsidiary of the Campbell Soup
Company of the United States. The company was established in 1865 by William Arnott and
operated under the family ownership until 1975. In 1997, the Campbell Soup Company acquired
Arnott’s in full. Despite the American ownership of the company, which led to considerable
amount of controversy, as the Australians wanted the famous company to remain in Australian
hands, the products of the company have not become Americanised and the manufacturing
remains in Australia. The company is now known as Snacks Brands Australia.
Arnott’s has a wide range of products under its banner and variety of productsare sold by
the company in the Australian market. From biscuits, candies, toffees, cakes, to breads, to ice
creams and many more types of dessert, Arnott’s virtually has existence in almost every market
of every available type of dessert in Australia (Dunn 2014). Arnott’s owns the top two brands in
almost every segment of crackers, sweet biscuits and chocolate biscuits.
The company and the product
Arnott’s is one of the biggest biscuits manufacturers in the world and is the biggest one in
the country. The Arnott’s umbrella consists of many sections and is the parent company of many
brands that are very famous in the Australian biscuits market. Five factors have ensured the
growth and of the company and also enables it to maintain the market hold in Australia.