International Marketing Report: Strategies for Fontain Motors in China

This report provides a comprehensive analysis of international marketing strategies for Fontain Motors, a UK-based Audi specialist company, focusing on its planned expansion into China. The report begins by defining international marketing, outlining its scope, and explaining key concepts such as export marketing, international marketing, and global marketing. It then evaluates the rationale behind international market expansion, highlighting the benefits such as increased profit margins, new sales opportunities, and business diversification, while also considering market entry routes like joint ventures, strategic alliances, franchising, and partnerships. The report further examines critical criteria for penetrating new international markets, including due diligence, legal and product readiness, and the importance of local business relationships. Different market entry strategies are discussed along with their advantages and disadvantages. The report also presents an overview of the local versus global debate, followed by an application of the 7Ps of the marketing mix in an international context. Finally, the report concludes by recommending strategies such as advertising and promotion to increase Fontain Motors' customer base internationally, emphasizing the importance of an effective marketing plan for successful global expansion.

MARKETING
INTERNATIONAL

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Evaluate the scope and key concepts of international marketing......................................1
P2 Evaluate the rationale of international market and specify various market routes to expand
internationally.........................................................................................................................4
TASK 2............................................................................................................................................6
P3 Key criteria and selection process while penetrating new international market...............6
P3 Different market entering strategies along with their advantages and disadvantages.......6
TASK 3............................................................................................................................................9
P5 Overview of key arguments in local vs global debate......................................................9
P6 7Ps of Marketing mix......................................................................................................10
TASK 4 .........................................................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
.......................................................................................................................................................16

INTRODUCTION
International marketing is defined as the multinational process of identification, planning
and executing the pricing, distribution and advertising of goods, services and ideas at global level
to satisfy organisational and individual objectives. It also means performing business operations
in more than one country. It is also termed as global marketing. International marketing
emphasize on leveraging assets, products and experiences of a company on global basis due to
which different countries are able to access unique services of other nations. This present
assignment is written in context with Fontain Motors which is a UK based sales company,
situated in Iver, Buckinghamshire. This report involves scope and key concepts of marketing at
international level along with different market routes. Criteria, process and strategies to identify
right market is mentioned (Baker and Magnini, 2016). Also, overview of local vs global debate is
carried out. An efficient marketing mix is prepared in international context. At last, different
international marketing approaches are discussed along with several ways to access competitors.
From this, it can be concluded that having effective marketing plan is vital to expand business at
international basis. It is recommended to Fontain motors to implement different market strategies
like advertising and promotion in an appropriate manner to increase their customer base
internationally.
Fontain motors was established in 1990. This company was first independent dealer in
UK which specializes in sales and aftersales of Audi. Fontain motors is situated in Iver,
Buckinghamshire. Annual turnover of company is around 10 million pounds and at present
company has employed 11 full time employees and around 150 temporary employees. As
company is Audi specialist, workers analyse market and identify modern and new Audi cars. In
accordance with that dealer finalize future used car-sales. Company is planning to expand their
presence in Asian countries mainly in Beijing, China.
TASK 1
P1 Describe the scopes and key concepts associated with international marketing
International marketing also termed as global marketing has a vast scope today. It is not
possible for any business to sustain at international level without implementing an efficient
market plan. As potential markets are increasing, it is important for Fontain motors to have
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complete information about markets in which they want to perform their business activities i.e.
Beijing, China.
Scope of international marketing
 Imports: In this business organisations purchases products from other countries and
resale it to potential customers. This benefit these firms in developing and improving
their production line along with their revenues. In case of Fontain motors, company can
import new modals of Audi from other countries and resale them in UK to achieve their
business targets and objectives.
 Exports: Companies export their final products to other countries in order to earn
revenue and profits. Semi- finalised products are also delivered in international markets
to enhance brand treasury. Fontain motors is planning to expand in China and exporting
their products in local markets is the best way to enter successfully.
 Contractual agreements: These agreements can be in term of licensing, technical
assistance or co-production. Fontain motor can sign some contracts with Companies in
China to promote and sale Audi cars through them. This agreements will take place for
specified time. Contract will terminate after the agreement expires.
 Multinational marketing: It involves the domestic firm expanding its influence and
services into multiple international markets. It includes the procedure of selling and
advertising commodities to customers worldwide. To expand successfully in China,
Fontain motors needs to adapt different aspects related with market and customers in
china. In this subsidiaries unit of Fontain motors will acts as an independent unit
(Cavusgil and et.al., 2014).
Basic concepts in international marketing are mentioned below along with their
interlinkage and differentiation. Key concepts of international market beneficial for Fontain
motors are:
key concepts of international market:
 Export marketing: This is the basic step taken by a company to step out from local
market and grab expansion opportunities outside the country. Here, the main objective of
company is to expand their market size. Fontain motors can expand their sales and
aftersales services in other nation especially China by this means. Export marketing will
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help Fontain motors to expand their market size without any additional efforts of
marketing such as marketing mix and full- fledged strategies.
 International marketing: As export marketing doesn't undertake and marketing effort in
other nation and simply exports surplus products to other countries. This way is not
reliable as selling products and services in this manner doesn't provide long term
advantage. In international marketing, main aim of company is to analyse market and
formulating efficient strategies which will help the company in increasing sales of their
products. Fontain motors can establish subsidiaries in China to operate marketing
operations. These subsidiaries will work according to the policies formed at headquarter
of Fontain motors.
 Global marketing: Managing work on a global basis is difficult task as people of one
country have different preferences and choice form people of other countries. To expand
internationally, Fontain motors needs to understand expectations of particular market,
before performing business activities.
Advantages of international marketing:
 International marketing assures high standard of living to individuals of a nation. It is not
possible to produce every kind of good in a single country due to geographical and
infrastructural restrictions.
 Another merit of international marketing is the logical allocation of resources and their
optimum utilisation in required manner.
 Demand for new products increases because of globalisation. This results in growth of
industrial economy. It offers job opportunities and use of resources in a desired manner.
 It leads to cultural and social exchange among different nation around globe. This
facilitates cultural exchange and integrity between people of different origin (Baack,
Harris and Baack, 2013).
Disadvantage:
 At the time of international trade and shipping, companies need to pay heavy custom
duties and taxes.
 Language barrier and cultural differences makes difficult for a company to sustain in
international market.
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P2 Evaluate the rationale of international market and specify various market routes to expand
internationally
Companies extend business activities at international level for variety of reasons. Their
basic reason is to expand and grow their business operations and revenues. Other motives are
competing for new sales, diversifying, investment opportunities, hiring new talent, reducing
expenses and earning more profits and market shares.
Fontain motors wants to expand globally for following reasons:
 Enhance profit margins: Local companies like Fontain motors wants to expand their
customer base and revenues to sustain a strong position in market. After capturing local
market, only alternative to expand business is going international. This will help Fontain
motor to increase their earnings.
 Competing for new sales: International marketing offers a high competitive market,
operating under such complex market results in improved working potential and helps in
increasing overall productivity of firm along with sales.
 Diversification of business: International marketing reduced the risks of decrease
demand of products. If UK market losses interest in services and products of Fontain
motors then there are other regions where they can perform business operations
successfully.
Market entry routes for Fontain motors:
 Joint venturing: It is a collaborative association of two companies for a decided time
period. This collaborative association works individually and achieve targets other than
objectives of parent companies. In case of Fontain motors, company can join venture
with other automotive companies in china for an agreed time to expand their influence
and presence (Babin and Zikmund, 2015).
 Strategic alliance: Gaining competitive advantage in international market is a difficult
task. Without receiving help of already established company, it is not possible to Fontain
motors to sustain their reputation and revenues in china. Fontain motors can form an
alliance with other companies by formulating specific strategies which will helps
company in acknowledging the preference of Chinese customer in an appropriate manner
 Establishing franchise: Franchising is an efficient way to penetrate into new markets.
Fontain motors needs to take their existing successful model of business operation and
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opens up a franchise their by targeting specific group of people. Franchising will help
Fontain motors to maintain a successful brand at international level.
 Partnership: To expand successfully in China, Fontain motors must partner up with
potential partners which will help them in extending their business activities. Partners
will helps company in understanding regulations and policies in an appropriate manner.
Opportunities for going international: Several opportunities for Fontain motors while going
international are mentioned beneath:
 Increased market size: Size of international market is very wide. Due to this, company
make investment in R&D to achieve competitive advantage. Firms which operate
domestically such as Fontain motors have low growth opportunities in local market. To
increase revenue and profit companies go international.
 Economies of scale: Fontain motors can learn core competencies and knowledge to
perform business operations efficiently while expanding in china. This will helps in
improving economies of scale for company.
 Return on investment: To acquire good returns huge market is required. International
expansion offers a scope to Fontain motors for large market and allow them to increase
operations appropriately in terms of large-scale research, development expenditure and
capital investment.
Challenges for going international: Here are discussed few challenges that Fontain motors can
face while expanding on international level:
 Foreign laws and regulations: Gaining knowledge of local regulations and laws is must
for a company while going international. If Fontain motors will not give proper
consideration to tax implications and trading laws then sustaining business in China and
other international market will become challenging (Dibb and Simkin, 2013).
 International accounting: It can be a challenge for multinational businesses which are
liable to corporate tax board. In case of Fontain motors different rates, compliance
requirements and tax systems can make accounting function as a challenging aspect.
 Currency rates: Fluctuation in currency is the biggest challenge for companies which
wants to expand internationally. To avoid problems due to this, Fontain motors needs to
monitor exchange rates as a central part of their strategy. Major fluctuation can dis-
balance the business cost and profit margins of company.
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TASK 2
P3 Key criteria and selection process while penetrating new international market
It is important for every organisation to consider some important aspects before
penetrating into new international market. These criteria provides a guidance to organisation to
sustain and stabilize their presence in foreign land. In case of Fontain motors which wants to
expand in China key criteria is mentioned below:
Some key criteria while entering new market:
Perform a deep due diligence: Before going international, it is important for Fontain
motors to acknowledge the impact of this expansion on business. Company needs to perform a
market segment analysis to check if product will be accepted in the international market or not.
An efficient gap analysis is needed in respect with local products. Strength, weakness,
opportunities and threats needs to be identified.
Legal and product readiness: It is important for Fontain motors to market-ready their
products and services to achieve desirable product differentiation. It is important for company to
consider and review government regulations to obtain required certificates which helps in
operating business in china. Also, company must initiate a trademarks and patent so that
operations of company will not get affected.
Close relation with local businesses: Considering ways to manage close relations with
local businesses will helps in gaining competitive advantage against rival companies who are
operating in same industry. This relation will help Fontain motors in minimising financial risk
and scaling organisation (Griffitts, 2016).Different market entering strategies along with their
advantages and disadvantages
Selection process to use while entering new market
Selecting a right process before entering a new market will helps the company in
achieving objectives and targets within specified time. In case of Fontain motors, company can
opt below mentioned selection process:
 Defining the market: To successfully perform business operations properly, Fontain
motors need to identify potential customers for their products and services. But
understanding the needs, preference and expectations of wide market is a complex
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process. To achieve this market segmentation is needed in which different markets are
divided on the basis of geography, demography, physiography and behaviouristic factors.
 Performing market analysis: Before expanding into new market a proper market search
is required in addition with assessing targeted customers. Appropriate understanding of
market growth rates, competitors, forecasted demand and barriers which can emerge
while entering. It is essential for Fontain motors to analyse market in China before
operating there.
 Assessing internal capabilities: During this step, internal capabilities assessment takes
place. In this, Fontain motors needs to assess how much core competencies they can
leverage in different international markets and needs to identify proper sales distribution
channel along with infrastructure of country in which company is going to expand.
 Prioritize and select market: Main task of Fontain motors is to prioritize a potential
market in which expansion results in huge revenues and profits. Company can prioritize
market on the basis of strategic fit and ability of company to satisfy customers. Also,
ways to fill market gap are specified and the right market is selected which is capable to
pay for products of Fontain motor which are branded models of Audi.
 Develop market entry options: In case of Fontain motors, company has analysed
international markets appropriately and decided to expand in china due to wide
opportunities and large population (Lane, 2015). Company can expand through series of
acquisitions. For this an effective business plan, investment case and implementation of
work plan is needed.
Marketing entering strategies:
It is the planned method of distributing services and goods to potentially targeted market.
At the time of import and export , it is referring to establish and manage appropriate contracts
with foreign nations. Below are mentioned some marketing strategies which can be adopted by
Fontain motors while expanding their business operations in China: Exporting: It is the process in which surplus products produced in a country are sold to
other countries. It is an efficient market strategy for Fontain motors to enter new markets
of China. In direct import no intermediaries are needed. In indirect exports, Fontain
motors will have no control on their products in international market.
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Advantages are that company have control over selection of foreign market and
representative. Helps in achieving greater sales.
Disadvantage is that company needs high investment of time and resources. Also, wrong
choice of distributor can hinder the success of company. Licensing: It allows Fontain motors to develop a proprietor's product for the agreed time.
This marketing strategy involves a licensor in UK provided limited resources and
material to the licensee in international market i.e. China. These resources can include
trademarks, technology, skills and patents which allow licensee to sale products in china.
Advantages are that political risk is minimised as the license is locally owned. This
strategy helps in quick expansion without big risks and high capital investment.
Disadvantage is that this strategy offers less income than other market entering
strategies. An incompetent partner can ruin and reduce the reputation & trademark of Fontain
motors (Pappas, 2017P).
Market evaluation criteria:
This criteria helps in examining various aspects and analysing markets in which
performing business operation will be best option for a company. Evaluating a market is an
important decision for Fontain motors as it is a vital internal aspect in marketing strategy.
Fontain motors can adopt following criteria to evaluate desirable markets:
 Segment size: Fontain motors needs to analyse segment size on the basis of sales and
revenues to decide whether entering market will be beneficial or not. Small companies
like Fontain motor has less size requirement in comparison to large companies.
 Growth rate: Rate of growth associated with targeted segment is specified by manager in
Fontain motors.
 Profit margins: It is important for company to estimate profit levels. If high profit can be
achieved only then it is useful for Fontain motors to operate business operations there.
 Distribution channels: Access of distribution channel is easily available or not needs to be
evaluated before entering market. In accordance with that, Fontain motors will
acknowledge the level of investment they should pursue.
 Competitors: Also, Fontain motors needs to evaluate the reputation of rival firms in that
international market where company is planning to expand. This will helps them to
formulate specific tactics to tackle them.
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Recommendations for company: After analysing different international market in a
proper way, it has been recommended to Fontain motors that to sustain a strong presence in
China, company needs to formulate and implement effective strategies such as collecting review
and understanding preference, needs and desires of citizens in China. Also, they can partner up
with already established Chinese and foreign companies. This will helps them in promoting and
advertising their products which will help in improving brand reputation of Fontain motors in
new internal market (pike, 2015).
TASK 3
P5 Overview of key arguments in local vs global debate
Global business: Global business helps in innovating new concepts which are required to
tackle the needs and demands of new individuals (Rancati, Gordini and Capatina, 2016). In
accordance with new cultures products are produced due to which new ways to reduce cost and
expanses can be acknowledged.
Advantage:
 It helps in increasing the visibility of brand for ex, Fontain motor will have a wide
customer base due to international interaction..
 Global business helps in earning high revenues and profitability.
 Helps in reducing competition as sustainable position in internal market helps in
building positive image of company in domestic country. For ex, due to
popularity at international level, other local companies will not be able to stand
against Fontain motors.
Disadvantage:
 It is hard to determine if it is beneficial to enter a particular market or not. Wrong
decision can results in heavy loss to company.
 Company needs to follow different regulations and laws. If some law is not
considered properly, they have to pay heavy taxes.
Local business: Small and local businesses have emerged as a great way to enjoy a
standardised living. Franchisors are adding value to local businesses as they need support to
expand their business.
Advantages:
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 Companies enjoy local empowerment. Due to which a standardised living without
any risk factors can be maintained. For example, these companies don't have to
pay high taxes and adopt measue to analyse international market
 Company is not require to pay high tax and custom duties (Smith, 2014).
 Businesses that posses strong ties with local community and operate business at
local level can gain political advantages.
Disadvantage:
 They have access to few resources. One example is that their reach is up-to
domestic boundaries of UK, hence they have less alternatives for products.
 These companies have limited expertise as they can not afford to hire top
marketing experts.
Overview: Due to technological advancements, world has became a small place. Managing
global business has became easy due to availability of internet. Global marketing helps in
reaching more customers in limited time due to which high profitability and revenues can be
achieved. It involves techniques which are carried out by business owners to sustain a visible
position In marketing in which they are operating.
P 6: 7Ps of Marketing mix
Marketing mix is refers to the set of action, strategies and tactics which are used by the
company to promote its brand, products and services. It is a set of tools that is used by a
company to pursue its marketing objectives in the target (Baker and Magnini, 2016). The
marketing mix of Fortain Motors for different countries are as following:
Elements United Kingdom China
Product Product refers to what a
company selling, including all
0of the features, advantages
and benefits that customers can
enjoy from buying the
products. Fontain Motors
provide aftersales and
Fontain Motors did not
provide warranty on its
product but now it think to
operate its business in Beijing,
China and it plan to provide
warranty service on its
product.
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