International Marketing Strategies for Innocent Drinks in Spain

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INTERNATIONAL MARKETING

TABLE OF CONTENTS
Introduction...................................................................................................................... 1
LO1.................................................................................................................................. 2
P1 Analyze the scope and key concepts of international marketing.............................2
P2 Explain the rationale for it to want to market internationally and describe the
various routes to the market the organisation can........................................................4
LO2.................................................................................................................................. 6
P3 Evaluate the key criteria and selection process to use when considering which
international market to enter.........................................................................................6
P4 Explain using examples the different market entry strategies including the
advantages and disadvantages of each.......................................................................8
LO3................................................................................................................................ 11
P5 Present an overview of the key arguments in global versus local debate.............11
P6 Investigate how the product, price, pricing and promotional distribution approach
differs in variety of international context.....................................................................13
LO4................................................................................................................................ 15
P7 Explain and analyze the various international marketing approaches your client
organisation can adopt............................................................................................... 15
P8 Compare home and international orientation and ways to assess competitors
outlining the implications of each approach................................................................17
Conclusion..................................................................................................................... 19
References.....................................................................................................................20

LIST OF FIGURES
Figure 1: Smoothies of Innocent Drinks...........................................................................2

LIST OF TABLES
Table 1: Pros and cons for market entry routes...............................................................8
Table 2: Local versus global arguments.........................................................................10

Introduction
International marketing refers to business performance enhanced by executing activities
that is designed for planning, promoting, directing and pricing of products and services
for satisfying consumer worldwide for boosting revenues and profits. The current study
aims at analyzing concepts and scope associated with international marketing in context
to Innocent Drinks that is leading in smoothie organisation under UK by its product
variants that explains several routes from which organisation can enter global market for
gaining higher profits and facing tough competition. Further, the report will evaluate
selection process that identifies correct market for entering by determining several
strategies related to market entry by listing their merits and demerits in reference to
Innocent Drinks. Moreover, it will present local versus global arguments by clearly
investigating distribution channels related to price, promotion and product in reference
to international market. At last, approaches of international marketing and comparison
between both orientations of dealing with rivals will be explained.
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LO1
P1 Analyze the scope and key concepts of international marketing
Innocent Drinks organisation is known for its juices and smoothies that are sold in
coffee shops, outlets and supermarkets. In a week, it sells 2 million smoothies that have
ownership with Coca-Cola organisation with 90%. It was founded by three friends
named Richard Reed, Jon Wright and Adam Balon that started their smoothie selling
from stalls. Several products are developed such as concentrated juice range, coconut
and carbonated water, super smoothies, veg juices etc. Innocent Drinks has expanded
in almost 13 countries and has aimed for increasing its operations in Spain with their
tasty and most liked smoothies and juices. By expanding at global level the aim is to
interpret brand voice in similar manner for enhancing brand for easy recognition (De
Mooij, 2015).
Figure 1: Smoothies of Innocent Drinks
(Source: Alys Key, 2017)
International marketing refers to marketing principles application that conducts its
activities in outer countries, across borders and overseas. It is conceptualized for
extending organisation’s local strategies of marketing through targeting, taking
decisions and identifying internationally. It is essential for Innocent Drinks for
establishing marketing plan that helps in entering potential market (Leonidou, et.al,
2018). International Marketing is conceptualized for product distribution, researching for
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prospective buyers, developing services, charging reasonable prices and providing
services after selling product based on customer demands. In reference to Innocent
Drinks international marketing carries huge scope that is described below:
Contractual Agreements – It refers to increasing business activities across national
boundaries that aids in market, profit or volume and base of consumer expansion. By
partnering with other companies present overseas helps in increasing the business of
Innocent Drinks.
Imports – It refers importing of raw materials from one country, after which product is
sold into domestic markets. The raw material import is based on market demand.
Similarly, the fruit used for making drink or smoothie is imported from another country
for selling it into UK market.
Export – The organisation sells finished product to other franchises and international
markets for capturing higher revenues. In recent interview, the founder of Innocent
Drinks has explained the importance and benefits to their brand through exporting as
they can sell more products and gets higher profits for organisation (Eteokleous, et.al,
2016).
Fully Owned Manufacturing – For engaging in foreign soils, the organisation has
opportunity for owning manufacturing in country that has been planned for increasing its
profits. It aids in managing product quality. While expanding business in Spain fully
owned manufacturing will increase product selling in targeted country.
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P2 Explain the rationale for it to want to market internationally and describe the various
routes to the market the organisation can
Expanding business in Spain is essential for Innocent Drinks for slowly capturing high
market share and bringing brand awareness of products across world. Performing
business activities at global level will dispense several chances of increasing revenues
and reputation through healthy and safety products. Hence, organisation must have
knowledge of best routes for making entry into global market. Following are international
market entry routes for Innocent Drinks that are as follows:
Brand Franchising – The process is developed for market expansion in which
transferable business gets success that holds repetitive business model
(Badrinarayanan, et.al, 2016). The two essential factors for brand franchising consist of
strong competition and brand recognition. The method is beneficial of breaking into
fresh markets but create major problem of compromising with franchisers that may
impact its profits and revenues. High brand recognition will run business effectively even
opened at different and new locations.
Direct Exporting – It identifies the market in which organisation has targeted to sell its
finished products. For example – specific retail organisation has planned its product
selling in Japan that they have to search Japanese stores for which will display products
and sells accordingly. The main expense includes shipping logistics but provides huge
profit by selling internationally.
Licensing – The process is knowing as piggybacking in which foreign organisations are
targeted for temporarily owning product instead of reaching domestic firms for holding
goods (Gillespie and Riddle, 2015). For example – smoothie and juices can be easily
sold at supermarkets due to numerous consumer entries which will easily popularize the
product. In context to this, the organisation is required to ask supermarket for owning
the product.
Partnerships – It refers for getting foreign firm that helps in business marketing or
invest their funds for running business that is indulged in same businesses. It is
essential for organisation to maintain relations in another country for conducting better
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partnership agreements. For example – grounds will be unbreakable in Asian countries
due to foreign attribute; it simply needs partner that will explain business regulations of
particular country for conducting business operations effectively.
Therefore, Innocent Drinks require market expansion through direct exporting that will
help in removing the barriers. Exporting products will help in determining market and
entry condictions that will increase the chances of licensing and partnerships. It is
important to determine market and government regulations for entering into international
market as business mostly gets affected from such factors. Hence, direct exporting will
be suitable that will enhance expansion strategies for Innocent Drinks (Keegan and
Green, 2015).
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LO2
P3 Evaluate the key criteria and selection process to use when considering which
international market to enter
Innocent Drinks has planning for expanding its operations into Spain market that needs
research and thinking for conducting its results and activities effectively. The
organisation requires focusing on evaluation process that creates path of entering into
international market in stepwise manner. The five steps of process dispense product
selling opportunities in international market by obtaining positive outcomes in terms of
revenues and profits. Planning market expansion needs to aim for achieving best
process for determining market conditions of Spain (Muzychenko and Liesch, 2015).
Following steps are market selection process which is as follows:
1st - Country Identification
It aims at identifying the country under which Innocent Drinks has planned for
expanding their business by researching potential markets and customers. Selecting
country for business purpose needs to be available near that will help in reducing
product and services cost while exporting the finished goods. Spain has cultural groups
that require studying their preferences in wider manner by studying their lifestyle and
spending capacities.
2nd – Preliminary Screening
It aims to determine factors associated with macroeconomic environment that includes
domestic consumption degree, recent economic stability and rate of exchange. As
Spain is facing recession and inflation issues that has bought unemployment crisis that
impacts planning of expanding business from Innocent Drinks (Goyat and Nain, 2016).
Hence, it is essential for organisation to determine people and their conditions by
obtaining country’s data that will make easier to perform.
3rd – Conducting In-Depth Screening
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After knowing country’s situation is each aspect, the business finalizes specific country
in which global expansion is being planned. Micro factors are eliminated for researching
and market is targeted to identify pricing strategies, segmenting and distribution
channels from which products will be availed to Spain organisations. In depth research
will provide correct market to conduct activities for expansion.
4th – Final Selection
The list is prepared for the nations that have potentiality in business operations. The
situation will occur of determining rivals and market competitors that may impact
functioning of Innocent Drinks. For example – researches must be done for identifying
the people group that consumer non-alcoholic drinks that will make easier to produce
demanded products.
5th – Experiencing Directly
After finalizing the nation for expanding business, marketing manager must visit the
destination for knowing business practises and culture that aids in listing trading factors
based on dissimilarity and similarity of factors present in domestic markets (Ozturk,
et.al, 2015). Self-referencing of nation will be beneficial while expanding market through
product and services of Innocent Drinks.
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P4 Explain using examples the different market entry strategies including the
advantages and disadvantages of each
Innocent Drinks has planned to increase their business in Spain by formulating variety
of market entry strategies. It is important for marketing manager to identify
disadvantages and advantages for market entry routes that will aid in managing
potential market of Spain effectively. The table below explains strategy benefits and
limitations which are as follows:
Table 1: Pros and cons for market entry routes
Advantages Disadvantages Examples
Direct Exporting
It aids in controlling market
selection and boosts
profits and sales of an
organisation (Shaw, 2015).
The customer relationships
get stronger by capturing
feedbacks and reviews
from consumer of target
market.
High cost and risk is
associated with the
method that focuses on
time management,
organisational changes
and huge resource
investment. It aims at
boosting consumer base
by indulging large number
of people that creates
confusion while handling
business activities.
Selling computer parts
direct to plant at computer
manufacturing.
Brand Franchising
It focuses for expanding
the business at global level
with low potential risk and
cost that aids in escorting
growth from worldwide
profits. It brings huge
The franchisee controlling
and managing gets
tougher, creates tough
competition in market,
establishing image is risky
and solving legal disputes
Well known examples
include Subway, H&R
block UPS and
McDonald’s.
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