International Marketing Strategies for Boots UK in the Chinese Market

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International Marketing
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TABLE OF CONTENTS
Introduction....................................................................................................................................4
LO1..................................................................................................................................................5
P1 Analyse the scope and key concepts of international marketing................................5
P2 Explain the rationale for it to want to market internationally and describe the
various routes to market the organisation.............................................................................6
M1 Evaluate the opportunities and challenges that marketing internationally presents
to your chosen client organisation..........................................................................................8
D1 Produce a critical evaluation of the international market context, including insight
into how your chosen client organisation should adapt their marketing strategies for
various markets.........................................................................................................................9
LO2................................................................................................................................................10
P3 Evaluate the key criteria and selection process to use when considering which
international market to enter..................................................................................................10
P4 Explain, using examples, the different market entry strategies, including the
advantages and disadvantages of each..............................................................................12
M2 Apply the market evaluation criteria and entry strategies and make
recommendations for your chosen client organisation.....................................................13
LO3................................................................................................................................................14
P5 Present an overview of the key arguments in the global versus local debate........14
P6 Investigate how the product, price, pricing, and promotional distribution approach
differs in a variety of international contexts.........................................................................16
M3 Evaluate the context and circumstances in which your client organization should
adopt a global or local approach, highlighting the implications of doing so...................18
M4 Determine and articulate in detail how to adapt the marketing mix of your client
organization in different international markets....................................................................19
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D2 Produce a critical evaluation of how the marketing mix is applied to a range of
international contexts..............................................................................................................20
LO4................................................................................................................................................21
P7 Explain and analyse the various international marketing approaches your client
organisation can adopt...........................................................................................................21
P8 Compare home and international orientation and ways to assess competitors,
outlining the implications of each approach........................................................................22
M5 Evaluate various marketing approaches and competitor analysis in relation to an
organization and make recommendations on how they should operate in an
international context................................................................................................................23
D3 Make recommendations on how organisations should be structured to maximize
the opportunity in an international context..........................................................................24
Conclusion....................................................................................................................................25
References...................................................................................................................................26
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Introduction
In the present competitive market, businesses are finding it extremely challenging to
survive in the current globalized market (Armstrong, et al. 2015). In order to deal with
this situation and gain a competitive edge in the market, some of the brands are trying
to expand their business globally or in a particular international market. It has been
further identified that for expanding into an international market, it is required by the
businesses to evaluate the current market trends as well as the route to expand in the
particular international market. The size and scope of the international market are
required to be gathered by the business entity that is willing to expand globally. There
are certain global standards that are required to understand before expanding globally.
Moreover, as a matter of fact, international expansion empowers the firm to establish
manufacturing facilities overseas and creating brand awareness globally. In order to
meet the global competencies, the business must have a fierce understanding of the
place of expansion as well as the strategies to survive in the competitive market.
The present report is based on the strategies and route required for international
marketing or expansion. The selected company to carry out the analysis is Boots, UK.
The objective of the writing is to evaluate the strategies and requirements for
international expansion for gaining a competitive edge as well as position in the market.
Company Background
Boots, UK is a retailer that specializes in the Health and Beauty sector as well as a
pharmacy chain running across the United Kingdom. The company is situated in
Nottingham, the UK as a subsidiary type under the parent company that is Walgreens
Boots Alliance. Boots is one of the largest retailers in the UK with respect to the size of
the market area covered along with a high number of shops in the country. The brand
owns a total of 2500 shops in the UK, ranging from small pharmacy units along with big
health and beauty shops.
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LO1
P1 Analyse the scope and key concepts of international marketing
International marketing is a vast concept as it involves the do's and doesn’t of
international or overseas expansion. The key concept of international marketing is to
grow and expand in the overseas market. International marketing is simply a tactic that
requires marketing in more than one nation or country (Eteokleous, et al. 2016). It has
been identified that the mentioned company that is Boots UK is willing to expand its
business internationally. However, there are several components that are related to
global or international expansion. For the selling and distribution subject matter, the
concept demands the company or brand to adopt feasible market opportunities for its
international expansion. Secretarial policies, economic stability, taxes, and lawful
hurdles, values, culture, and diversifications are a few limitations of hurdles connected
with the overseas market expansion desires by the health and beauty retailer that is
Boots, UK.
The scope of international marketing explains the direct and indirect flow of goods and
services from business to customers of the international market. The scope of
international is quite high in the Asian markets as compared to the markets of the
western world. Some of the emerging markets in the Asian regions are Indonesia,
China, India, and more; however, China is said to be one of the highest emerging
markets which are found as a feasible option for most of the companies in the western
side or region.
As boots desire to expand internationally, it has been found that China is a feasible
market for selling their goods and services in the market. There are several tactics
identified with respect to international expansion and selling of goods and services in
the Chinese market. Some of the methods which Boots can use are direct exporting,
partnering, joint ventures as well as brand franchising (Mathews, et. al. 2016). These
options will be well-suited for the established brand that boots for its expansion in the
feasible market of China. However, businesses have started selling their products and
services with the help of online mediums such as website as well as social media
applications that have further increased the entry of new brands in a number of potential
markets.
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P2 Explain the rationale for it to want to market internationally and describe the
various routes to market the organisation
It is evident that global or international expansion helps the business to increase its
sales and profitability. However, if the brand or organization did not adopt a proper or
suitable route for its international expansion, then it may face chances of severe loss in
the profits and revenue of the business (Leonidou, et al. 2018).
The rationale for international expansion in the Chinese market is to gain market
position as well as a stronger market niche by increasing the sales and profitability of
the company. It has been identified that the cited health and beauty retailer is expecting
to expand in the international market so that it can beat its competitors in its home
market as well as position itself in the international market that is China. The Asian or
Chinese market is feasible for the beauty and pharmaceutical brand as the company is
economically viable and politically stable for international expansion.
There were some challenges faced by the company that is Boots UK due to which the
business desires to expand in the international market or in China.
It has been known that the primary reason of the business to increase its brand market
size globally is saturated home marketplace which is a chief concern faced by the
mentioned health and beauty retail chain for which it wishes to opt for increasing its
brand in the global market.
Furthermore, it has been identified that the pharmaceutical and beauty retail chain is
facing a threat of increased competition in the market where the company had to play
hard for achieving a competitive advantage among the existing big retailers in the
market.
The above issues or challenges are somewhere responsible for the decision of the
company or brand for international expansion. International growth does not merely
imply to create money in the overseas market or away from the home market; the
perception slightly focuses on implementing the functions of sales and profitability as
well as existing in the nation of development. From the above discussions, it has been
identified that China has been chosen for the global expansion of the cited health and
beauty retailer that is Boots, UK. The reason behind selecting China for the business’s
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international expansion is, the economy of the nation is steady and is a possible or
potential region for growing the services internationally (Demangeot, et al. 2015).
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M1 Evaluate the opportunities and challenges that marketing internationally
presents to your chosen client organisation
International marketing further comes with certain pros and cons that benefit or impact
the overall business expansion in the international market. The ratio of positive aspects
is more than negative facts with respect to the subject matter of international marketing
and expansion of the cited health and beauty firm that is Boots, UK ( Javalgi and La
Toya, 2018).
The number of customers Boots is able to reach, the more profit it can make as well as
position itself in the international market that is China. It is a well-known fact the
organization can make an immense amount of profit when it tries to reach a large
number of audience. Furthermore, this statement suggests that reaching a broader or
wider range of customers as well as increasing the productivity of the company in the
international market which is the most common opportunity that comes with
international expansion or marketing.
The product and services offered by the health and beauty brand (Boots) will be
represented internationally, as well as the sales and revenue of the business will
increase gradually when the business reaches in the global market. Though, on the
contrary, goods, and efficiency reflects upon the achievement of the goods and services
in the marketplace, which can be further recognized by applying or via a number of
advertising plans or marketing strategies.
Conversely, it has been identified that some of health and beauty products may not
translate well or turn out to be successful in the Chinese market as the Asian market is
full of branded health and beauty products (Gillespie and Riddle, 2015). For instance, if
Boots offers products and services of health and beauty that are already famous in the
international market that China and the established brands in the country are already
serving the customers, then it is likely that the products and services offered by Boots
may not make the desired sales and profitability. The saturated home market is the
actual reason for the company to expand its services in the global market that is China,
and for positioning itself in the Chinese market, Boots is required to fully study the
international region completely by understanding or evaluating it in-depth.
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D1 Produce a critical evaluation of the international market context, including
insight into how your chosen client organisation should adapt their marketing
strategies for various markets
As per the illustrations provided in the writings of Kotler, et. al. (2015), it can be said that
is necessary for the companies or brand who look for expanding in the global market
are required to know the local zest of the particular nation it wishes to advertise or
market its services and merchandise.
Being a health and beauty company or retailer, Boots is required to operate in the
Chinese market by adhering to the demands and expectations of the target customers
in the market. For instance, if Boots is promoting its health and skincare products, then
it is first required to understand the price and quantity of the products desired by the
Chinese population as well as the target audience and the age group it will focus on
initially. However, it has been argued by Schmid, et. al. (2016), that the population in
some countries demands or expects something new rather than the monotonous brands
which are available in the market every time.
The standardisation approach instead of adaption approach will be more suitable for the
cited business that is Boots as it will give the opportunity to the brand to trade real and
sole merchandise and services to the Chinese or Asian residents.
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LO2
P3 Evaluate the key criteria and selection process to use when considering which
international market to enter
It is necessary for the cited health and beauty retailer to evaluate the selection criteria
and process when considering the international expansion in the mentioned market that
is China. The recognition of the nation or market for expansion is the primary thing to
think about when expanding in the global market (Hoppner and Griffith, 2015).
There are certain things considered for the selection and evaluation process for
international expansion in the Chinese market. Some of them are briefly discussed
below:
Infrastructure: Boots, UK is required to evaluate the infrastructure of China in order to
locate physical outlets in the country. Therefore, for opening stores in the near future,
the company that is Boots are required to identify the infrastructure opportunities within
the Chinese market, and the place must be suitable for the store set-up as well as to
attract a number of customers in the market.
Size of Market: As per the evaluation, health and beauty sector in China is broad, and
customers in the country are willing to try new products and services bin cosmetics and
health brands. With respect to this analysis, it can be believed that the Chinese market’s
extent is wide and the businesses functioning in the business are completely flourished.
It can be further argued that the extent of the marketplace is the chief deliberation in the
assortment process to go into the global market (Gnizy and Shoham, 2018).
Political Stability: It has been acknowledged that political constancy of the nation is a
very important point of consideration in the selection criteria of the mentioned health
and beauty retailer that is Boots, UK, as for any brand or organization to function in the
fastidious nation; government authorization, as well as political stability, is the important
feature to be measured. Moreover, it has been identified that the political stability of
China has been unparalleled in recent times and the scale of same is rising at a high
pace.
Culture: Chinese inhabitants or the target audience is much attracted to buying fresh
items and consider encouraging new brands or start-ups in the region. Furthermore, this
can be a plus point for the mentioned UK based retailer brand to enlarge it's brand or
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products and services (health and beauty) in China in the near future (Broyles, et al.
2015).
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P4 Explain, using examples, the different market entry strategies, including the
advantages and disadvantages of each
There are myriads of options available for the business when it thinks to expand in the
international regions or overseas expansion. However, it has been identified that those
choices are further linked with a variety of threats as well as advantages revolving
around it. The cited company that is Boots, UK is supposed to operate in the restricted
market where the issues and circumstances of failures, as well as benefits, are required
to be evaluated by the firm (Baker and Saren, 2016).
Moreover, the way of entering the international market is however considered as the
major concern of expanding products and services in the global market. It has been
identified that there are three chief fundamentals that must be well thought-out or
evaluated by the health and beauty retailer that is Boots, UK while planning the
strategies for entering the international market. Some of the considerations are namely
market segmentation, identification of the target market, sourcing, as well as asset and
organize. It has additionally been known that while taking into consideration of these
key fundamentals, the mentioned health and beauty retailer situated in the UK is
required to be aware of the prime forces that are correlated with the nation as to ensure
viable expansion in the near future.
However, it has been identified that the core entry approach planned or projected by the
company is business franchising. This approach or tactic will further enable to offer the
products and services in the Chinese market without physically entering into the market.
As a matter of fact, Boots is required to evaluate the demand and expectations of the
products and services by the customers or the target audience present in the country of
expansion that is China (Eisend, 2015).
Mergers and acquisitions another means for entering the overseas marketplace; it will
further allocate the UK based health and beauty retailer to combine with the
conventional brands of cosmetics and health products of the international market
(China) and sell its merchandise with the help of the same.
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