International Marketing Analysis: IKEA's Global Expansion Strategies

This report delves into the international marketing strategies employed by IKEA, a renowned furniture and home goods retailer. It begins by defining international marketing and explaining its significance in business strategy, using IKEA as a case study. The report covers key concepts, including import/export strategies, contractual agreements, and fully owned manufacturing. It then explores the scope of international marketing, comparing and contrasting it with domestic marketing. The rationale behind IKEA's international expansion is examined, highlighting opportunities like increased profitability and market infrastructure, while also addressing challenges such as language barriers and legal regulations. The report evaluates IKEA's market entry routes, including direct and indirect approaches like alliance and channel partners. It concludes with a critical analysis of the international market context and how IKEA should adapt its marketing strategies for different markets, emphasizing the importance of market selection and key success factors for international ventures.

INTERNATIONAL
MARKETING
1

Contents
Contents...........................................................................................................................................2
LO1 Demonstrate an understanding of how marketing contributes to business strategies in an
international context........................................................................................................................3
LO2: Evaluate entry to a selection of international markets and define the key success factor......8
LO3 3 Investigate how elements of the marketing plan can be adapted or standardised across
international markets.....................................................................................................................10
LO4 Demonstrate an understanding of how to organise and evaluate international marketing
efforts (multinational, global, transnational, meta-national, etc.)..................................................11
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................12
2

INTRODUCTION
International marketing is define as the special branch of marketing which is deals with
marketing at global level. This strategy is used by organization to expand their business at global
level. For understand the concept of international marketing IKEA has been taken This
organization is based on Netherland it is Swedish company which deals in selling furniture,
home accessories and kitchen product to their customer. In this report the scope and importance
of international marketing the strategies and method through which personals enter into the
global market has been define in specific manner. It also includes the factor and elements effect
the international market and rule and regulation require before entering into the global market .It
consider all the international, national and local marketing approaches and opportunities and
challenges organization faces during the time company enter into the market.
LO1 Demonstrate an understanding of how marketing contributes to business strategies in an
international context.
Introduction to company & current market
Scope & concepts of international marketing
International marketing can be defining as the trade of business activities beyond the limits of
territories of nation. In other words international marketing is a branch of marketing which is
related with the use of marketing strategies for grow and enhance market in other countries.. In
the international marketing all the strategies related to communication exchange of serices are
offers at international level which are help in fulfilling the expectation of customers.
It is the application which helps in satisfying the want and desire of the international customer by
using the principle of marketing .it ls know as global marketing. it help in using marketing mix
and customize it as per the requirement of personals belong from different nation.
International marketing is useful in enhancing the scale of economy as well as spared target
market area .Organization will be able to spread their market and share an us developed the
business cycle (Qiu, 2014).
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Scope
International marketing is define as the operation of business activities which run in other
foreign countries. In this good and services are flow for one country to another country. The
main purpose business organization use international marketing strategy to enhance their
business at wider level and build strong position in market. At the present time the market
competition rate is too high thus it is very hard to maintain the position in the market for this the
organization use international marketing to increase their number of potential customer. For use
the strategy following are the way which organization choose
Imports: It is one of the most useful strategy of international marketing . In this organization
import raw material and other essential product from foreign countries and sell them in the
domestic market with the local customers. In this type of strategy if international marketing the
company need to pay customer duty tax , and loyalties.
Exports: This type of mode of international marketing help business organization to spread their
area in effective way. Business organization export raw material and product as well as their
service to other countries and earn high return . It is helpful in generating more profit for the
business organization.
Contractual agreements: In this type of mode organizations comes into contract with other
countries organization they deal their business to explore the trade in international level by
making equal effort .This contract is made for limited time period and all the essential
knowledge and information are describe in systematic manner in this contract .
Fully owned manufacturing: When companies are internet in foreign business then they
established their business unit in specific foreign country The main elements which effect the
companies to spared their business in countries is the cost deferential, tax value trained trade
barriers of competitors preference (Griffith and Lee, 2016).
Key Concepts:
Following are the concept which are related with the international marketing concept
Domestic marketing: In this type of method the company is only focus to the local customers and
local market because they are of interest in international marketing. They have no intention to
spared their business in international level.
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Comparative marketing: This term is related with the activity during which the manager
identify the key difference and similarities between international marketing and domestic
marketing. Thus it is known as comparative marketing.
International Trade: This term is related whit the flow of product and service between the
nations. The main objective of this term is to change the commercial trade and serve in
international level a gain high rate of profit.
Main difference among international & local marketing
The marketing has wider scope and in between local as well as international are the part of
marketing. But there are huge difference among local and international marketing which are
define below
International marketing Local marketing
Rationale for company to want market internationally
IKEA is established as large business organization of Netherland. But the organization is famous
in the local market for the best quality of furniture and kitchen product thud which increasing of
the goodwill of the company the CEO thing that they need to explore their furniture product in
the international market . As furniture retail products is one of the major demanding product in
the world market has been increase .With the increasing of demand the number of competitors
also increase and it will directly effect on the organization ‘s profitably level. Thus to maintain
the position in market and spreading their target market in the large are and build strong goodwill
in the mare the IKEA decide to use international marketing strategy to increase their market in
international level. When the organization enter into the international market the goodwill and
market share is automatically increase as well as the demand and popularity of the product rate is
also enhancing. With the past few year the increasing level of profit of the IKEA product the
organization ;s profit ratio has been increase and they have foreign thus they demand to
employer the company in their country like, /mid Asia, India, America for exploring the business
the IKEA organization decide to use the international marketing strategy. It will help in
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inhancing the earning per share increase goodwill and reputation in the market (Cavusgil,
Deligonul, Kardes and Cavusgil, 2018).
International marketing Routes
Every administration can marketplace globally in order to gain thought of greatest number
of people en route for product on hand by Theatre Company in market. With position to IKEA
and its substitutes which are additive & additive free and includes all ingredient that is untreated
and of high class. IKEA can take on two routes to internationally market its contributions which
are as follows:
Direct Route: It involve those channel anywhere an body directly comes into contact with
persons in global markets in order to persuade them to buy merchandise which are offered by
enterprise. IKEA has the ability to adopt channel such as contribution websites delivery, sales
agent conducting exhibition in order to expand direct make contact with customers and to leave
a good impression in mind set of customers.
1. Indirect Route: It involves channel where an body enter or make a agreement with
third party & than delegate accountability to of influence consumer towards them.
IKEA can embark on various options such as OEM partners, Union partners,
structure integrators, strait partners and many more in order to draw inhabitants of
foreign county. These option are define below:
Alliance Partners: It consist of group that are lesser in size and having the ability to advise
Cafepod Coffee about commerce initiatives that can be think by them to expand strong
admission in other country.
Channel partners: It is classify as those company which consist of industrial expertise to
outcome the clients mind definitely. It involves rate added resellers, allotment partners, resellers
that assist IKEA to market internationally.
It is suggested to IKEA to adopt channel partner as a forward to market globally its
offering. It helps on given that latest technique and also provides equipment’s that can increase
an edge to IKEA to tussle with their rivals in that finicky industry.
Opportunities & challenges associated with international marketing
International marketing offers organizations various kind of opportunities. Only those
organization are survive in the international market whose have strong marketing skills as the
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market is offers many opportunities by they also have threat and challenges which are describe
below
Opportunities
Raise in profitability: With entering into the international market the IKEA have opportunities to
increase their sale an relate of revenue as they sell coffee which is highly on demand at present
time thus it may be pososlbity that when the organization expand their market into global
economy their rate of profitalbity has been increase and it help in growing the organization.
Market Infrastructure: Once the organization enter into the international market thy can improve
their infrastructure, developed their place with the use of international technology they also
introduce or launch new marketing strategies by using technique of foreign companies. IKEA
organization wills b affords to take the infrastructure from their countries in which the cost of
infrastructure development comparatively low (Bocconcelli and en.at. 2018).
Challenges
Language: International market may provides various opportunities’ to the business organization
but it also have some change which are the organizations. Language is the main problem while
dealing in the other countries and in every country different language are spoke thus it is vary
essential or organization before deal or establish their work in another country it is essential for
them to learn the language use in other country.
Illustration 1: Different Cultural Meanings of Colours and Numbers
(Source: Different Cultural Meanings of Colours and Numbers, 2019)
Laws & Regulations: While taking decision regarding deal in international market the C IKEA
management department also focus on the legal formalities and regulation ethical right and law
established in the other country as before deal it other countries it is essential for the organization
to know and understand all the regulations so that the company will be able to understand all the
rules and not done any illegal activity they also work and pay the loyal tax for other countries as
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they run their business in another countries. The IKEA organization also take decision in those
countries they deal and start their business where the right and la are not rigid.
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
IKEA organization enter into international market as it will help them to gaining their business
shares. The organization use indirect rout when which they use alien and channel partners so
that they can easily run their business in effective way. The organization entering into the
marketing by using indirect rout and apply the alliance partners strategy although they get many
opportunity it an but they also face channel like alien as well as they deal all the rigid rules and
regulating of the bother countries all theses challenge are farce to garb . Opportunities the IKEA
organization get when they successful build their image in global market (Mahmoud and Rice,
2014).
LO2: Evaluate entry to a selection of international markets and define the key success factor
Key criteria & selection process while emerging international market
For entering into international market it is essential for the organization to choose the correct
path and market other vies they are not able to enter or maintain their position in the international
market. Selecting of market play vital role for the business organizations. The procedure of
selection of market are define below
International Marketing aim & objective: For selection of market first of all the objective and
aim of the business organizations matter. The market is choose on the base of the development
object they decide by consider the value o, ethic right, vision and mission of the organization.
IKEA has the mission into expand their market in the international level.
Parameters of selection: After deciding the aims of the international marketing the other proceed
is to let the parameter. The parameter which IKEA have been decide is that they are focus on the
let of competition, availability of resource and the demand of coffee on the other countries.
Preliminary screening: In this section organization cut their market citrate on the basis if
identified the factor in which are not favoured for the organization. They delimited factor, six
growth population.
Analysis & selection: For selection of market business organization choose the Analysis the
market on the bias of coat analysis. IKEA organization scans the whole organization on the bias
of their cost performance.
8

Test marketing: In this section the business organization to understand the response and
underpants the nature of the customer they sell their product and serve to specify geographical
place though which they can analysis their recur their deal in the international market. The IKEA
organization focus on the Customers of New Zealand as their main international IS situated in
the other countered of European Australia.
Commercial production: If the result of art gets positive then the organization take decision to go
into the market the select and producer heir product at mass level to sell it into th intonation level
(Kumar and Yakhlef, 2015).
Key criteriaFolowing are the cirtei of choose global market are describe below
Infrastructure facilities: one of the majority necessary thing that is require to be careful
for global marketing is availability of communications as it make sure high manufacture to IKEA
Competition: In order to select market, it is important to consider threat of competitors
prevailing in the market place along with their strategies.
Laws & Regulations: IKEA require to take on all the legislation of the scrupulous global
market in order to easily and appropriately approved out performance as well as operation.
After implementing the selection procedure and regard as the key criteria, the
marketplace which is preferred by marketing consultancy for expand the business of IKEA is
New Zealand
Market entry Strategies
The For enter into the international market there are various types of strategies and method are
avAIABLE through which organization easily enter into the international marketing all there
define below
Strategy Sub Types/
Description
Advantage Disadvantage
Export By foreign agents
 In this method the
cost of entry in the
market is
comparatively low
 The risk rate is low
 Organization easily
deal with and
 Profit rate is
comparatively low
Dependency on the
agent is higher.
 Company not able to
gain experience of
international
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overcome problems
regarding enters
(Rosson, and Ford,
2016).
business
By foreign distributor  Reframe of this is
very low.
 The cost of
marketing is also
low.
 In this the
transportation cost is
very high.
 Rate of trade
barriers also high.
Licensing Sales of civil rights
that is back up and
related with the
intellectual property .
 Low entry cost
 Less financial risk
 Gain knowledge
regarding local
circumstances
through licensee
 Low control on
excellence
preservation within
foreign market
 Lower profits
(roylaties)
 Fear of betrayal of
licensee
Franchising The right of sale is
given to domestic
franchisor who
implement activities
by foreign franchisee
 Chance of elevated
expansion
 Less cost of way in
 Need to manage cost
 Profit sharing in the
middle of home
franchisor and
franchisee
 readily available
might be chance of
franchisee
unfaithfulness.
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LO3 3 Investigate how elements of the marketing plan can be adapted or
standardised across international markets.
Covered in PPT
Key arguments in context of local against global marketing
Local and global marketing have different prescriptive as they both have different area. In
local market funds are require in limited . The organization doesn’t need to follow strict rule and
pay loyalty as well as tax incurred on import or export of business product. When organization
dealing in local market they don’t need to focus on incurred their monetary resource on research
and advertisement as they already have strong image among local. They also don’t need to waste
their time on digital marketing process (Angulo-Ruiz, Pergelova and Cheben, 2016). The
organization can easily enter and build strong position in the market by using effete strategies
even they can easily borrow loan from local banks. They don’t have face probes regarding
language end either issue which organization suffers when they newly entering into the
international market On the other side the in international marketing organization many face
problems related with entering and follow strict rules and regulation although but they gain
higher profits well as they aloe rise their marketing shares their goodwill also increase in
effective way. IKEA is famous organization of Netherland and they use international marketing
strategy although they have great impact on the local market thus their rate of market share and
profitabity higher as compare to their rival organizations.
Examination of pricing, product, promotion as well as distribution approaches
When the trade firm take opening in the new market place, it is imperative to make all the trade
activities and purpose in an effective manner in order to increase positive outcomes.
Element Netherland Market Global Markets (Asian Countries)
PRODUCT It has been analyse that, is IKEA
a business organisation which
offer superior effect raw material
in low cost to produce the
furniture
In Asian market the organization also
focus on furniture retailing business but
they are not able to manufacture product
because the rate of material is
comparatively high.
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PRICE In orientation of domestic
marketplace, there are elevated
level of opposition in relation to
pricing strategy of Netherland
prevailing in the marketplace
because there are ample of
company deal in similar section.
Whereas, in context of international
market, the director uses the price skim
strategy that helps in boost the good
brand image and reputation of company
in order to gain spirited advantage over
competitor firm in the market.
PROMOTION In context of IKEA the manager
adopt different promotional skill
such as advertisement, personal
selling as well as public relations
in order to promote their products
and military at market.
On the other hand, in reference of
worldwide market, there are various tool
which is adopted by the corporation such
as event, sponsorship as well as brand
diplomat for promote the product in the
market (Li Qian and Qian, 2014).
DISTRIBUTIO
N
In reference with local market,
the deliverance of goods and
services is from beginning to end
the online sources as well as
physical outlet in the UK market.
The global marketplace fixes the stall at
diverse presentation for maintain the
goods and military which is provided by
the business firm.
LO4 Demonstrate an understanding of how to organise and evaluate
international marketing efforts (multinational, global, transnational,
meta-national, etc.)
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Covered in PPT
CONCLUSION
From the above analysis it has been defined that in today’s competitive world maintaining
the position of a corporation in economy it is required for every business to apply the
international marketing. With the use of international marketing organization able to expand
their market and shares in the economy they gain profits and build strong image with the
position. For entering into the international market various route and strategy as well as method
are available organization many enter into direct, indirect way they also use alignment,
partnership, contract deal to enter into the market .They also face problem regarding language
and laws but once they successful enter into the global market the level of opportunities has been
wider. The company explore their area and generate profit and build strong position the market.
For identifying the threat the organization use porters five model system to understand the threat
various pricing product aim object affect the way market in affected. Marketing plan help
management department to use effect business strategies to run their business activities in
international market in effect way to archive success of the business organization.
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REFRENCES
Books and journals
Qiu, T., 2014. Product diversification and market value of large international firms: A
macroenvironmental perspective. Journal of International Marketing, 22(4), pp.86-107.
Griffith, D. A. and Lee, H.S., 2016. Cross–national collaboration of marketing personnel within
a multinational: Leveraging customer participation for new product advantage. Journal of
International Marketing, 24(4), pp.1-19.
Cavusgil, S. T., Deligonul, S., Kardes, I. and Cavusgil, E., 2018. Middle-class consumers in
emerging markets: conceptualization, propositions, and implications for international
marketers. Journal of International Marketing, 26(3), pp.94-108.
Bocconcelli, R., Cioppi, M., Fortezza, F., Francioni, B., Pagano, A., Savelli, E. and Splendiani,
S., 2018. SMEs and marketing: a systematic literature review. International Journal of
Management Reviews, 20(2), pp.227-254.
Mahmoud, E. and Rice, G., 2014. Marketing Problems in LDCs: The Case of Egypt. Marketing
in Developing Countries, pp.76-94.
Kumar, N. and Yakhlef, A., 2015. The effects of entrepreneurial marketing strategies on the
long-term competitive sustenance of born global firms: examples from the Indian
knowledge-intensive services industry. Entrepreneurship in International Marketing
(Advances in International Marketing, 25, pp.45-72.
Rosson, P. J. and Ford, I. D., 2016. Stake, conflict and performance in export marketing
channels. In Proceedings of the 1979 Academy of Marketing Science (AMS) Annual
Conference (pp. 66-69). Springer, Cham.
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