International Marketing Management Report: Felicetti Pasta Expansion

This report delves into the international marketing strategies for Felicetti, an Italian pasta manufacturer, focusing on its potential expansion into Japan and Malaysia. It begins with an overview of the Italian pasta industry and a company profile of Felicetti. The report then explores market analysis and research, including Porter's Five Forces model and risk analysis, to evaluate the attractiveness of each market. Customer preferences and market findings are presented, based on a research conducted in Japan. The report also covers market entry strategies and advertising approaches, with pro and con statements. The report concludes with recommendations, and an advertising strategy, along with segmentation and targeting considerations. This comprehensive analysis aims to provide insights into the factors crucial for Felicetti's successful international venture, enabling the company to make informed decisions and achieve its desired growth in new regions.

International Marketing
Management
1

Table of Contents
INTRODUCTION...........................................................................................................................1
Italian Pasta Industry........................................................................................................................1
Company Profile..............................................................................................................................2
Expansion...............................................................................................................................2
Market analysis and Research..........................................................................................................2
Porter five forces model: .......................................................................................................2
Risk analysis: .........................................................................................................................4
Customer Preference and market Findings.............................................................................6
Recommendations................................................................................................................13
Market Entry Strategies........................................................................................................13
Task D............................................................................................................................................14
Advertising strategy..............................................................................................................14
Task E............................................................................................................................................18
Segmentation and targeting:.................................................................................................18
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21
Appendix........................................................................................................................................23
2

INTRODUCTION
With the time, the size of organisations is growing at a very high speed. They are
expanding into new area's and countries. This expansion is important as to ensure higher profits
and growth for the company. It will also ensure its survival in the long run. International
marketing management is a subject which helps the organisation in identifying and targeting the
best market. It helps the organisation in overcoming the threats and exploit opportunities
available in the overseas market. There are many methods and techniques defined in the
international marketing management which assist the company as well its manager in
understanding different market, evaluate their market opportunities, feasibility and probable
results if they venture into it (Allen and et. al., 2012). This aids the decision making process and
provides basis for effective strategy formulation. In this report it is stated about how a Italian
pasta manufacturer Felicetti can expand into the countries such as japan and Malaysia. The
market entry strategy as well as advertising strategy will be explored with the help of pro and
counter statements. Also the best market segment for the pasta company will be chosen. This
report will enable the reader to understand how a company can venture into new regions and
what factors are needed to be kept in mind as to ensure that they achieve the desired results in a
efficient way.
Italian Pasta Industry
Italian pasta is considered as the best category of pasta in the world. They are famous for
their pasta and pizza. Basically the staple food produced in Italy is always have a high demand
all over the world. It is considered as a top quality and tastier pasta and people are attracted
towards the brand which displays manufactured in Italy or it have a tag of Italian pasta. After
1990's the industry has seen a global boost in its sales as it was a effect of globalisation in the
developing as well as developed countries. The global pasta industry has registered a significant
rise in last few years which is a good sign for the Italian pasta manufactures. Between 2008 and
2014, the pasta market grew with an average growth rate of 8.3% annually. The growth rate will
see a 0.8% rise in coming years. The Italian manufacturer of pasta like Felicetti are aiming for
global outreach for its products. For its global expansion it is looking at the best market for pasta
consumption, like China, Japan, Mexico, Malaysia, etc.
1

Company Profile
Felicetti is a Italian pasta manufacturer which due to its innovative approach towards
pasta making and market approach has registered a high growth rate and a global outreach. They
are able to achieve the required level which ensures that their functioning is able to fulfil the
market needs. The company is currently aiming for a expansion in the major countries where
pasta consumption is very high and the forecast predicts the same for upcoming years. It wants to
spread its business into new areas as to ensure that it achieves its target of organic growth.
Expansion
As per the forecast by global agency the company is aiming to target a major market. It
has chosen two markets japan and Malaysia. These two countries needs to be evaluated as to
evaluate which market will bring the best results. There are various methods which are
mentioned in the international marketing management which can help the company in evaluating
the countries potential (Ball and et. al., 20122). The type of market, its structure, environment,
customer buying power, its preference, best way to market entry and other strategies to promote
products has to be understood before making the move for expansion.
Market analysis and Research
There are two countries Japan and Malaysia which are considered as a potential market
for the pasta company Felicetti who wants to evaluate the best market for its expansion. There
are many ways to analyse the market or the country potential for the product which is being
offered by the company. There are few main basis on which it can be evaluated, Economic
growth of economy, per capita income or buying capacity of buyer, suppliers in the market,
competitors, culture, political factors and market size of industry.
There are many methods by which these factors can be analysed. For example Porters
five forces model to understand the market factors impact on the company.
Porter five forces model:
It is a framework which helps in analysing the level of competition which exist in the
industry and promotes organisation strategy development. It examines five forces which have
direct impact on the company as well as industry performance. It also displays if an industry is
attractive or not.
2

Felicetti porter five forces model application to understand Japanese and Malaysian market.
Basis Japanese Malaysian
Supplier power The market has many suppliers of
raw material which will be required
by the company.
The supplier concentration is
currently with existing companies.
The volume has to be significant as
to attract the supplier away from
existing company.
The supplier number is less.
It requires additional resources as to
get supplier which can fulfil the
company demand.
There are some competitors which
are using all the suppliers.
Huge threat of vertical integration is
there.
Buyers Power The buyer concentration is intense
Brand loyalty exist
quality is priority
The buyers are still scattered
Brand loyalty is not there
Taste and cost are priority
3
Illustration 1: Porters Five Forces Model

New entrants
Threats
Very low chances of new entry
Required huge investment
Needs brand recognition and
appropriate proprietor
The market is open for new entry
It does not needs huge capital
investment
New entry is open
Substitute Threat Many substitute available Number of substitute is high
Rivalry There are big rivals in the industry
Mitoku, Jetro, etc
There are some rivals who pose a
intense rivalry
The analysis states about the differences between the two markets. Japanese market has a
separate section of consumers who prefer staple food and that too pasta, while the Malaysian
market is still scattered and unstable for pasta makers.
Risk analysis:
This is an analysis which assist the company in understanding the variables which have
impact on the market attractiveness of the country. This is essential to ensure that the company
chooses the right path to approach a country market (Cant, 2011). It also aids in comparing two
market which are being analysed to know about the best market where the organisation can
expand its operations. There are various factors which have to be measured as to do risk analysis:
 Political: A stable political environment is very essential for business and other
economical activities. To analyse the political stability in Japan and Malaysia, we have to
look at the BERI index which states about the business environment risk intelligence.
Stability of market ensures a very good support to the business in the country. The global
average is 72 for political risk index.
Basis Japan Malaysia
Political It have a score of 85. this means it is
more political stability.
While it have a score of 78
 Economic growth: The economic development of the country displays the growth aspect
of companies which can nurture by entering into the market.
Basis Japan Malaysia
4

Economical It have a 4 largest economy as per
purchasing power and 3rd largest on
the nominal basis.
It is one of the fastest growing
economies.
 Labour cost/productivity: The cost of labour and their productivity matters as this states
about the probable investment which a company has to make on the human resource if it
ventures into the market.
Basis Japan Malaysia
labour cost and
productivity
The labour cost is high but the
productivity per person is much
higher.
The cost of labour is low but
productivity is not as high as japan.
 Communication: The organisation also have to analyse the communication barriers
which exist if it enters into the market.
Basis Japan Malaysia
Communication The Japanese language is officially
used. English is a secondary language
but not used a lot. Language is a
barrier
Malaysian business and people use
local language but English is a
priority.
 Culture: The culture impacts the customer choice of product, type of marketing and even
the business structure used in the market.
Basis Japan Malaysia
Culture The Japanese culture is a dominant
force which have direct impact on the
business and its working. But the
companies which adopt it become
very successful in the market.
The Malaysian culture is not as
dominant. Many multinational
exist. Its very hard to make an
impact in the country.
5

Cultural factor can be evaluated with the help of Hofstede's cultural dimensions theory. It is a
framework of cross cultural communication (Czinkota and Ronkainen, 2013). It states about the
impact of cultural values on the people of society and how it forces people to behave in a certain
way to a situation. He stated about six factors which decide about a country or society culture
and behaviour of people towards a situation.
On the basis of the above factors and analysis, the company can measures the risk and
enter the market (Gilligan and Hird, 2012). The Hofstede's method will help the company in
understanding the cultural variables which forms the society and its values. It states and
measures the type of society on the above mentioned factors.
Customer Preference and market Findings
This research was conducted as to understand the customer preference and other factors
which impacts their choice of product.
THEME 1: Did people of Japan like pasta
Q1. Do you like pasta? Frequency
A. Yes 750
B. No 250
6

Findings: The findings were astounding as out of 100 thousand people, 750 prefer pasta only
250 were not in favour.
THEME 2: What is the candidate age
Q.2 What is your age? Frequency
A. 10-20 350
B. 21-30 450
C. 31- 40 150
D. 41-50 50
7
A. 10-20 B. 21-30 C. 31- 40 D. 41-50
0
50
100
150
200
250
300
350
400
450
500
350
450
150
50
A. Yes B. No
0
100
200
300
400
500
600
700
800 750
250

Finding: Most consumers were from the group of 21-30. these people are mostly those who have
started their new job at new place and prefer pasta over other staple food. Candidates from 10-20
years age group were second in liking the pasta.
THEME 3: How much you consume pasta
Q3. How frequently do you eat pasta? Frequency
A. Daily 200
B. Twice in a week 400
C. Once in a week 300
D. Rarely 100
8
A. Daily
B. Twice in a week
C. Once in a week
D. Rarely
0
50
100
150
200
250
300
350
400
450
200
400
300
100

Finding: Mostly people consumed pasta twice a week or more. So the consistency of pasta
consumption is very high.
THEME 4: Is pasta considered as the healthy food
Q4. Do you think pasta is not healthy? Frequency
A. Yes 300
B. No 700
Finding: 70% people said yes to the question as they stated in the interview that they consider
pasta as healthy choice because of the ingredients it is made up of.
THEME 5: How much amount people can pay for pasta
Q5. What amount you are willing to pay for pasta? Frequency
A. 200 Yen 400
B. 300 Yen 350
C. 400 Yen 150
D. 500 Yen 50
9
A. Yes B. No
0
100
200
300
400
500
600
700
800
300
700

Finding: The consumers wants the pasta at a efficient pricing or low prices but they can pay
more for the quality and taste.
THEME 6: Which flavour is consumed most
Q6. Which flavour of pasta do you prefer most? Frequency
A. Italian pasta 400
B. Mexican pasta 350
C. Chinese pasta 250
10
A. 200 Yen B. 300 Yen C. 400 Yen D. 500 Yen
0
50
100
150
200
250
300
350
400
450
400
350
150
50

Finding: The People of Japan love the Italian pasta most they like the flavours which are used in
it and it is different from their traditional rice pasta.
THEME 7: For purchasing of the product which outlet is mostly used
Q7. From where you buy your product? Frequency
A. Retail store 300
B. Online store 300
C. Super market 400
11
A. Italian pasta B. Mexican pasta C. Chines pasta
0
50
100
150
200
250
300
350
400
450
400
350
250

Finding: Mostly people prefer buying the product from super market. As they consider it more
convenient. Also supermarkets have more variety than the retailers.
THEME 8: At which time people love to consume pasta?
Q8. At what time you consume pasta? Frequency
A. Before 12 noon 150
B. After 12 noon 250
C. In evening 500
D. 10 P.M or after 100
12
A. Retail store B. Online store C. Super market
0
50
100
150
200
250
300
350
400
450
300 300
400

Finding: People consumed the pasta in the evening most. They like to mix their evening food
with more flavours and taste.
THEME 9: Is the population of Japanese are vegetarian or non vegitarian
Q9. Are you vegetarian or non vegetarian? Frequency
A. Non Vegetarian 750
B. Vegetarian 250
Findings: The people of Japan mostly are non vegetarian.
13
A. Before 12 noon
B. After 12 noon
C. In evening
D. 10 P.M or after
0
100
200
300
400
500
600
150
250
500
100
A. Non Vegetarian B. Vegetarian
0
100
200
300
400
500
600
700
800 750
250

Recommendations
The Japanese market present a lot more opportunity than the Malaysian market. No doubt
the Malaysian market presents a lot of opportunities as it is in development phase but the
Japanese market have much higher growth rate in the pasta industry. Also the country have a
intense and fragmented population which can be targeted easily (Glowik and Smyczek, 2011).
The risk is less in the Japanese market as it is more stable as per the BERI index ratings. While
the Malaysian market is also above the global average but it is not as stable as its counterpart.
Market Entry Strategies
There are several marketing strategies which can be used by the Felicetti as to enter into
the Japan market. The company has researched about the risk and other market forces which can
impact its productivity and profitability. There are some market entry strategies but for Felicetti
Exporting will the best method to venture into the new market.
Exporting is a process where a producer exports the product from one home country to
host country and it is sold by a sales representative company. It is most successful when the
company wants to establish product in the market before it physically set its facilities in it. There
are two types of exporting out of which the direct exporting method will be used.
Direct exporting refers to the condition when the company focuses on production in home
country and exports the product in the host country. It is able to control the distribution of its
products and services in the other country in much better manner (Grönroos, 2011). The market
also needs an approach where the company first establishes its name and product first and then it
physically enters the market. The main characteristic of direct exporting model is that there are
no intermediaries between the company and its market approach.
There are two types of exporting which can be done:
 Sales representatives: These are the representatives which represent the foreign
company in the host market. This person helps the exporter in advertising, identifying
local sales opportunities, customs clearance formalities, assisting in legal requirements
fulfilment.
 Importing Distributors: This is the type of distributor which will be used by Felicetti.
These are the people or firms which imports the company's product and then sell it to
local whole sellers and retailers. This strategic move will help the company is targeting
the distributors and sellers which are engaged in selling other companies products.
14

Once the product is set in the market and its is having a good distribution channel the company
can enter the market. It can start searching for facilities and other locations which will help it in
channelising the functioning and resources in efficient way (Hair and et. al., 2012). Felicetti will
also be able to concentrate on the production function. There are certain advantages of this
method:
 Control over the distribution of product
 Choice of market representative is in company's control
 better protection against any copy right, trademark infringement
 Increase in brand recognition and goodwill
 Higher sales and better profitability
 Company is able to build better relationship with customers.
 The strategy will ensure companies market visibility
 Establishes company before it officially enters the market.(works as a turnkey project)
The company has to ensure that it positions itself in a proper manner. A proper identification of
distributors and sales representative will assist it in greater sales and profitability.
Task D
Advertising strategy
Advertising: Advertising is process in which company calling public attention to
something. It is a paid process. It is medium by which company can generate awareness about
their product and services among people. It is one of the important activities which an enterprise
take into consideration. Different organisation use different form of advertising such as
newspaper, television, magazine etc. every firm makes its own strategy to promote its product in
different manner.
Different types of advertising methods
Advertising involve thousand of modes to communicate its customers. Enterprise choose
an y of the methods to promote its product in market. Following are some of adversing methods.
 Online advertising: One of the way to advertise product is online via internet. This
advertisement is called online advertising. Company can promote their product by online
sources. This source is used by most of companies because it is having large consumer
15

reach (Hollensen, 2015). Firm can post their picture on Facebook, snap chat and twitter.
It is one of famous way to promote goods and services.
 Cell phone advertising: This another way to advertise products. People use portable
devices like phones, iPads, kindles and others. Company can use these devices and
application which can be access in these devices to promote goods and services.
 Print advertising: There is one thing which is certain in advertising is being different is
always good. This is an attractive manner to promote product. Some of the examples of
print advertising is brochures, leaflets, flyers etc.
 Guerrilla advertising: This type of advertising method is growing day by day. In this
enterprise invites customers to participate and interact with a firm. The concept of this
type promotion way is creating new ideas and new innovations. This method doesn't
incurred large cost.
 Outdoor advertising: This advertising is also known as out of home. The tools of outdoor
advertising is billboards, bus shelter posters, fly posters etc. this way is cheaper way to
promote company products. Its attract more customers because of its high visibility. Product placement advertising: It is form of advertising where company goods and
services are promoted on shows and movies. Example in a particular show the celebrities
are having pasta and expressing their views about product quality and taste. This
influence people to buy product.
Steps to developing and advertising strategy
Every company need to promote its product so that they can reach to its final consumers.
Adverting is strategy which can fulfil this purpose. Following are the step to formulate these
strategies. Define product: First step is to identify the product which company wants to offer its
customers. By the position can be determine in market. Firm should understand whether
product can met customer expectations or not. Every member of business should be clear
about their objectives that are need to achieve. Understanding target audiences: Company should identify its target market to which
they want to sell their product. They need to take into consideration such as
16

demographic factors, psycho graphic factors and consumer behaviour. These factors has
great impact on strategy formation (Kotler and et. al., 2014). In context to company if
consumer wants the product which easy to make and take less time pasta is good option
for them. Market research: After targeting has been done next task is to study about market for
particular product. Firm identify problem which are arising because of these kind of
products. Marketing plan and strategy can be made by help of this study.
 Developing market plan: Next step is to make marketing plan. This plan can be made by
analysing trend in market. This plan includes all activities which take place to produce
goods and reach the product to final consumers. Deciding communication media: Company choose right media to promote its product.
It is very important to choose right mode to advertise goods and services. Budget: Budget can be made before and after creating strategy. It depends on
availability of resources with company. If firm have large resources available there is no
need of making budget. But if resources are limited then firm need to prepare budget
before formulating strategy. Marketing methods: There are different marketing method such as push or pull method.
In push method enterprise convince retailer to promote product. On other hand pull
method direct target to consumers. Modifying advertising strategy: Company has to keep eyes on recent trends. So that they
should adopt most modern way to promote product. Company has to modify its
marketing strategy time to time.
Different type of advertising strategies
Advertisement is big is vital concept. Every companies advertise its product one or in
different way (Lee and Carter, 2012). Firm need to allocate their resources effectively on
advertising so that they can get more benefit in small budget. There are different types of
advertising strategy that can be used by organisation.
17

 Bursting strategy: In this type of strategy firm invest huge amount at its initial stage.
It is used when new product is launched in the market. So that awareness can be
generate fast among consumers. Seasonal advertising: When advertising expenditure if fluctuate according to time to
time its is called seasonal advertising. This strategy is used by those companies who
sell seasonal products. Steady advertising: When company is distributing its budget evenly through out the
year its called steady advertising. Step up strategy: In this company slowly advertise its product. When peak time
comes they heavily promote its product.
 Step down strategy: In this company heavily advertise its product in starting of
seasonal period and slow down its advertising when season comes to an end.
Felicetti is pasta manufacturing company. An enterprise is planning to expand their
business in Japan. Demand of pasta is increasing in japan. Pasta is a food which is easy to made
and also cost effective. Now a day people are preferring to have pasta because it is tasty and also
having nutritional value in it. Felicetti is do adaptation as culture of japan is total different from
other countries (Leonidou and Leonidou, 2011). The values, norms and language of particular
country is differ from other countries. In this way firm need to modify its advertising strategy to
invest in japan. Organisation is adopting bursting strategy for advertising in which they
promote their product at greater extend at initial stage. Because the country is new so it is
important to generate awareness among people about new brand and new product. For this
business unit need to spend huge amount on advertising. Impact of investment level is as
follows:
Investment Impact
2 million Yen 70.00%
18

5 million Yen 85.00%
Task E
Segmentation and targeting:
Segmentation is a process where the company divides the customers in some major
consumer types, sub groups, or market. As to divide or segment a market, the researcher looks
for the common characteristics such as customer preference, lifestyle, demographic profiles,
income group.
To get better result it is very important for the company to segment the market so it can
target it with a good strategy. The level of precision it have while segmenting the market will
decide the positive or negative outcome. The company has to ensure that they are able to target
the right population. This will help it in keeping the efficiency level at par with standards. The
segmentation process will be done as per the results of research conducted by the the company
for understanding customer preference and orientation towards the pasta and the industry. The
industry have a intense customer fragmentation which is good for any company which ventures
into the market (Lindgreen and et.al., 2012). But what is difficult is to attract the customer from
their preferred brand and make them loyal to the Felicetti brand. That is why exporting was
chosen as a mode of entry in the market.
Segmentation of population was done on two basis first age group and and purchasing
capacity(appropriate price). The results provided basis as whom the company has to target. Most
consumers of pasta were from the age group of 21-30 and 10-20 years old. The pricing which
was considered best was the 200 yen and 300 yen. There are products of company which are its
crown jewels, these products will be the most pricey ranging from 400 Yen to 500 Yen.
19
2 million Yen 5 million Yen
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
70.00%
85.00%

The prime target will be: Teenage and middle age market, prices of most product will be
kept under 200 to 300 Yen.
20
350
450
15050
10 years-20 Years
21years-30years
31years-40years
41years-50years
400
350
15050
200 Yen
300 Yen
400 Yen
500 Yen

CONCLUSION
The company have to prepare products which can fulfil the market requirement while it sells its
best quality and its world famous Italian pasta. There are varying factors which needs to be
analysed in order to understand the market needs. Also it has to be ensured that the product
matches the customer wants. The company first have to make a solid ground for its product in
the mark by establishing a good distribution channel before it formally enters the Japanese
market. There is high demand of healthy and tasty pasta for which the consumer are ready to pay
a moderate to high prices in the industry. The quality of products has be maintained as to keep
the standards high. The company will also need to keep on analysing the situation of market and
its product growth. This will assist in future development of product and profitability in the
market.
21

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Appendix
Q1. Do you like pasta?
A. Yes
B. No
Q.2 What is your age?
A. 10-20
B. 21-30
C. 31- 40
D. 41-50
Q3. How frequently do you eat pasta?
A. Daily
B. Twice in a week
C. Once in a week
D. Rarely
Q4. Do you think pasta is healthy?
A. Yes
B. No
Q5. What amount you are willing to pay for pasta?
A. 200 Yen
B. 300 Yen
C. 400 Yen
D. 500 Yen
Q6. Which flavour of pasta do you prefer most?
A. Italian pasta
B. Mexican pasta
C. Chines pasta
Q7. From where you buy your product?
A. Retail store
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