MKT550 Global Marketing: Developing Coles' Market Entry & STP Strategy

This report assesses Wesfarmers' subsidiary, Coles' potential market entry into Germany, focusing on strategic marketing adaptations. It summarizes a previous environmental analysis of Germany, highlighting its stable economy and competitive retail landscape dominated by regional players. The report details the five stages of overseas market selection, justifying Germany's attractiveness based on its purchasing power, strategic location, and political stability. It outlines SMART objectives for Coles, including financial and market share targets, and evaluates various market entry strategies such as franchising, direct exporting, and joint ventures. The report identifies urban populations and middle to upper-income demographics as primary target markets, discussing positioning and marketing mix options. Finally, it recommends a preferred market entry mode, target market, positioning strategy, and generic strategy for Coles in the German market. Desklib provides students access to similar solved assignments and study resources.

Running head: GLOBAL MARKETING
Global Marketing
Student’s name:
Name of the university:
Author’s note:

GLOBAL MARKETING
Table of Contents
1.0 Introduction to report.................................................................................................................2
2.0 Summaries from assignment one...............................................................................................2
3.0 Screening of market selection....................................................................................................3
3.1. The five stages of overseas market selection process...........................................................3
3.1.1. Reason to choose country..............................................................................................4
3.2. Objectives.............................................................................................................................5
4.0 Alternative market entry strategies............................................................................................3
Target market selection, positioning, marketing mix options.....................................................5
4.1. Alternative target market selection, positioning...................................................................8
4.2. Market selection process.....................................................................................................10
4.2.1. Target market selection process through alternative entry modes to the country of
choice.....................................................................................................................................10
4.3. Outline possible positioning for each of target markets in entry mode..............................10
4.4. Alternative generic strategies.............................................................................................11
5. Recommendations for a preferred strategy for Country............................................................11
5.1. Market entry mode..............................................................................................................11
5.2. Target market......................................................................................................................12
5.3. Positioning strategy............................................................................................................12
5.4. Generic strategy..................................................................................................................13
Bibliography and Reference List...................................................................................................15

GLOBAL MARKETING
1.0 Introduction to report
Global marketing is the process of redefining the marketing strategies of the company to
adapt to the situations in other countries. As stated by Peng (2016), global marketing is about
taking commercial advantage of a country by establishing the global operational difference. The
companies always judge the opportunities and similarities so that they can meet the global
objectives set by the management. In this assessment, Wesfarmers’ subsidiary Coles is chosen to
market in Germany. International entry modes are described along with it is necessary to
recognise the potential market segments and target market in chose country. In this assessment,
choice of STP strategies for Wesfarmers’ Coles is given for each of the target market segments.
In addition, recommended positioning strategies for each of the target market are also provided.
2.0 Summaries from assignment one
In the assessment 1, external environmental analysis of Germany has been conducted
where political, economic, social, technological, legal and environmental analysis has been
analysed in light of the retail industry. Germany provides a stable economy as the GDP of
Germany reached $4.171 trillion (Heritage.org, 2018). Political decisions of Germany ensure the
bigger companies can do business effectively. Market analysis of Germany's retail industry has
been conducted. Germany has 20% of the purchasing power in Europe and the retail industry in
Germany mainly shows the characteristics of Oligopoly. Competition in the retail industry in
Germany shows the competitors are mainly regional companies like EDEKA, REWE, METRO
and the European large retailers Aldi and Lidl are also in Germany. In the final section of
assessment 1, organisational analysis has been conducted where Coles' strengths of being in the
market for more than 100 years is shown. In addition, Germany has the fourth largest GDP in the

GLOBAL MARKETING
world and Germany will also provide 80 million customers to Coles. On the other side,
weaknesses of Coles lie in the dispute among the stakeholders. In the European market, Coles
does not have any experience.
3.0 Screening of a market selection
3.1. The five stages of the overseas market selection process
Domestic regulation and management preferences: Before setting up the international
market, the firm needs to understand which international markets are of no interest to the firm. In
addition, the organisation needs to follow governments exercise in some of the degrees of control
over the firms and it should conduct the business. Restrictions are changing and the firm needs to
track the trade barrier.
Initial entry assessment: Initial entry assessment can be done by analysing macro-
environmental factors in international markets. External environmental analysis helps to identify
the most attractive foreign market. According to Shenkar, Luo & Chi (2014), expanding to the
new market is an effective way to bring growth for the business and the entry assessment starts
with defining the market and performing the market analysis.
Competitive environment: The firms have to identify foreign markets and the
competitors in the market. If the competitors are high in the market, both foreign and domestic,
the new companies have to take the solid marketing strategies. High competition creates
substantial barriers for the company.

GLOBAL MARKETING
Market responsiveness: The firm needs to understand certain activities which help in
marketing efforts to gain the satisfactory market share. Market responsiveness allows marketing
activities to establish product or service in the marketplace.
Internal trade-off analysis: When the firms find that the domestic market is no longer
attractive and they opt to consider trade-off to meet the objectives so that they can gain the
competitive advantage. Cultural similarities between the two countries will help to sell the
products and the trading gets easier if the products heavily on the geographical proximity
(Brannen, Piekkari & Tietze, 2017). The firms can influence technological and e-commerce
advances.
3.1.1. Reason to choose a country
Germany represents 20% of purchasing power in the continent of Europe and retail
marketing of Germany has the turnover of EURO 512 billion (Junker & Wittenberg, 2017).
Retail market of Germany is extremely competitive; however, the retail market of Germany
shows the positive growth during 2014. Wesfarmers' Coles chooses Germany as it provides a
strategic location in the centre of Europe. Germany provides political stability and it also gives a
good anchor in international relations. Germany has the largest population of the European
Union and Germany has the best infrastructure among the developed European Union. Germany
provides a strong manufacture basis and Germany earns one-third of the GDP from the
manufacturing business. Germany has the strong export as it has the high range products with
diversified clients. Germany has a highly-qualified workforce as youths are educated mostly.
Germany provides the consolidated public finances and competitive taxation that can help the
foreign businesses to flourish. In World Investment Report, Germany won the 8th place in the
world and Germany is the world’s 11th top economy in terms of the inflow of the business

GLOBAL MARKETING
(Kundnani, 2017). Among the 190 economies, Germany is ranked 20th in the ease-of-doing-
business. Most importantly, Germany provides the proactive business climate which develops
the economy in last few years.
3.2. Objectives
Mission statement:
Coles thinks itself to be an innovative industry leader that supplies customers with value,
superior service and convenience. Wesfarmers' Coles focuses on the customer proposition,
innovation and operating excellence. Coles wants to deliver a satisfactory return to the
stakeholders and it has developed unique, disciplined business and highly-focused.
SMART objective:
Financial objective:
To cross the break-even point within 1 year and achieve 5% profitability within 2022
Specific Coles sets the target of achieving 5% profitability
Measurable This objective can be measured by keeping the financial records of Coles'
business in Germany and the accounts department will do the work
Achievable This objective is achievable by doing the extensive marketing and opening
new retail stores in Germany in different locations
Realistic This objective is realistic as it will help the organisation to grab the profit
within a short period of time
Time-bound This objective is achievable within 2022

GLOBAL MARKETING
Market share objective:
To gain 3% of the market share in Germany by the end of 2022
Specific Gaining 3% of the market share
Measurable Coles can measure the market share by doing an annual survey in the
industry or by checking the annual report published by Government each
year
Achievable Coles can achieve the market share by increasing the numbers of retail
stores in Germany and through strengthening the customer relationship,
innovation and doing the smart hiring process
Realistic This objective is realistic as it will bring more revenue
Time-bound This objective is achievable within 2022

Running head: GLOBAL MARKETING
4.0 Alternative market entry strategies
Market Entry
Strategy
Examples Advantage Disadvantage Justification
Franchising McDonald's uses a
franchising business
model
Franchising will provide
the benefit of reducing the
risk of business failure.
The business will be
expanded easily using a
franchising model.
Franchising the business
is easier and the business
management will provide
proper training to the
franchise. The franchisee
will get the benefit of
making a relationship
with the suppliers.
Franchising can be a
disadvantage for the business
management as the franchise
may not be potential.
Franchise agreement has
some restrictions and the
franchisers need to
understand this. The
franchisee may go out of the
business and it is also difficult
to give the franchise of the
business (Forsgren &
Johanson, 2014). In addition,
the inflexible nature of the
business franchisee might
restrict the ability to introduce
the change of the business.
The franchisee may not help
to get the higher profit from
the business.
Wesfarmers' Coles can
opt to take franchisee
entry strategy in Germany
as franchising can
provide the speed of
growth of the business
and Coles will have the
ease of supervision of the
business. In Germany,
numbers of retail stores
are many, franchising
Coles' stores will increase
the profitability and it
will help to gain market
share.
Direct exporting Kiwi Importer is a New
Zealand based company
and it uses the direct
exporting technique to sell
the products in the US.
Indirect exporting, the
company directly sells the
products to the customers
without using another
organisation or person.
Direct exporting provides
a high chance of making a
great profit as there is no
middleman and
intermediary. In addition,
each step of the business
is entirely in the hands of
the management and the
total control of the
business is on the
management (Adeola,
Boso & Adeniji, 2018).
Direct export helps the
organisation to identify
Direct exporting is associated
with the additional expenses
and the time of the
organisation. If the business is
not big enough to provide a
lot of effort in making sync of
all the activities, the business
will suffer. The business
management needs to take the
responsibilities to handle each
step of the business and the
employees do not have time
to relax. The customers’
feedback and comments must
Wesfarmers’ Coles can
take the strategy of direct
exporting; however, they
do not manufacture any
products as they just
assemble the products. In
addition, direct exporting
will improve the faster
communication from the
management. Coles can
easily protect the
trademark and copyrights
of the business. Coles is
the subsidiary of the large

GLOBAL MARKETING
the potential buyers in the
different country along
with the buying
behaviour.
be handled carefully. organisation Wesfarmers,
therefore, it will not be
tough for the
management to employ
large numbers of
employees in doing the
business in Germany. It
will also help to extend
the market in Germany.
Joint venture The joint venture is a
popular market entry
strategy. Vodafone and
Telefonica agreed to share
their mobile network in
the UK.
The joint venture provides
access to a new market
and to the new
distribution networks. The
joint venture also
increases the capacity of
the organisation and it
shares the costs and risks
between two companies.
Moreover, joint venture
provides accesses to
greater resources like
technology, specialised
staffs and finance.
The joint venture will be risky
if the employees of the two
companies cannot work
together. Both the companies
need to go for a similar
objective (Hofer & Baba,
2018). If the partners have
different objectives, then the
firm will suffer. In addition,
partners of the joint venture
can bring different levels of
expertise in the business.
Coles can choose Joint
Venture to enter Germany
by selecting an existing
retail company. Coles can
choose existing regional
retail company as part of
the venture. It will
provide the benefit of
knowing the existing
customers and the
organisation can gain
existing market share at
the same time. Coles can
use the venture partner’s
customer database and
they can use join forces to
purchase, develop and
research.

Running head: GLOBAL MARKETING
Target market selection, positioning, marketing mix options
Target market:
In Germany, primary target customers of Coles can be an urban population of
Germany. The retail stores of Coles will be opened mainly near the urban sections. Therefore,
urban people will be the main target who can afford to visit the retail stores of Coles.
The secondary target customers of Coles will be based on the demographic target
customers, mainly the middle and upper-income category people. The middle class and
upper-class people mainly visit Coles' supermarket. Upper and middle-class family people
visit supermarket for their daily needs. Single individuals or the members of the extended
families visit the supermarket as they have different needs in the supermarket.
Positioning:
Wesfarmers’ Coles follows the positioning statement of ‘serving the people better’
and it mainly focuses on the consumer proposition, operating excellence and innovation. In
Germany, the positioning statement of Coles can be associated with the increased range and
quality of the products functionalities. Varieties of products with lower price can attract
maximum numbers of customers in Germany.
Marketing Mix:
Product: Coles is a supermarket as Coles always focuses to deliver value along with
quality for the customers. Major offerings of Coles are baby products, dairy, fresh vegetables,
fruits, bakery, gift cards, liquor and meat. The products are mainly top-quality and it means
that the products are fresh. Coles provides special diets to the customers, Gluten-free and
kosher. Coles offers low-cost pantry fillers to the customers of diverse ranges. Therefore, the
product strategy will be creating a new product line.

GLOBAL MARKETING
Price: Coles can set the competitive pricing in retail stores of Germany. Germany’s
retail industry is very competitive and competitive pricing will help Coles to compete with
other retail giants, both regional and international players.
Place: Coles can target establishing the retail stores in mainly urban sections of
Germany. At first, Coles can target to establish at least 15 retail stores in many of the famous
Germany cities. Market areas can be chosen as the destinations. In addition, the distribution
channel must be owned by Wesfarmers itself as it will accelerate the speed of filling the
inventory and shelves of the retail stores.
Promotions: Wesfarmers is a big company and Wesfarmers can spend money on
promoting Coles in Germany. Coles can be promoted through television and radio
commercials. Maximum of the family persons and women watch television commercials. In
addition, Coles can put advertisements in newspapers in Germany and it will attract
maximum numbers of middle-class people. Coles can also shift their promotions towards the
digital marketing and internet marketing. Coles is expected to spend millions in marketing so
that they can grab a large market share.
Generic strategic options for targeted segments
Coles can use a differentiation strategy of the products from other retail stores in the
city to attract the urban population. Coles can use a differentiation strategy by following the
diverse products line. The supermarket is known to stock up the diverse ranges of products
and Coles needs to do this in Germany.
Low-cost leadership is fruitful strategy to attract the middle and upper-class customers. The
customers will visit the Coles stores time and again if Coles will be able to take the strategy

GLOBAL MARKETING
of Every-day-low pricing strategy in the city. Everyone wants to have lower cost products
from the supermarket and Coles can fulfil this.