International Marketing Strategies for Global Soft Drink Company

This report provides an analysis of international marketing opportunities for a global soft drink company seeking to expand into the Chinese market. It begins with an executive summary and then delves into the marketing environment using PEST and SWOT analyses to assess political, economi...Read More

International marketing

TABLE OF CONTENTS
Executive summary..........................................................................................................................1
MARKETING ENVIRONMENT...................................................................................................1
1) PEST..................................................................................................................................1
2. SWOT analysis...................................................................................................................3
Competitive review..........................................................................................................................5
Market entry strategy ......................................................................................................................5
Positioning.......................................................................................................................................6
Marketing objectives........................................................................................................................6
Marketing strategies.........................................................................................................................7
Target market..........................................................................................................................7
Marketing mix........................................................................................................................7
RFEFERENCES..............................................................................................................................9

Executive summary
International marketing of business in very crucial aspect that requires lot efforts to
increase the products' recognition among customers.Present reports is based on analysis
international marketing opportunities for Global soft drink company which has its operations in
different countries. Increase in economic growth of China has increased the per capita income of
people and provide them ability to buy products in market. Economic growth in different parts
over recent years have served to exacerbate many of economic and social difference that already
exists between the different provinces. Findings of research has provided an understanding that
organisation needs to target middle class, youngsters and health conscious people for selling their
products.
MARKETING ENVIRONMENT
1) PEST
Significance of marketing has been increased over the last several decades as a result of
increase in competition which is caused by globalization, advancement of technology, increasing
role of internet and other reasons (Terpstra, Foley and Sarathy, 2012). In the present context,
Global soft drink has recently acquired a small business enterprise which is a producer of
smoothies and yoghurt based beverages. Company needs to expand its business in Chinese
market because their products are currently marketed only in the UK. For assessing the
attractiveness of global increase of this product in Chinese market, various factors are analysed
which affect the expansion of business in international market.
Political and legal forces Economic forces
 Political condition in China
 Changes in nature of business
 Introduction of new laws and
legislation
 Reforms in rights of consumers
 Increase in economic growth of China
 Economic growth in different parts
over recent years
 Increasing standards of living
 Inflation rate in China
Socio cultural forces Technological forces
 Changing perception of consumers
 Increasing busy lifestyle of consumers
 Moderate investments of R&D in food
and beverage industry
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 Changing work patterns
 More discriminating attitudes of
consumers towards product quality
 Introduction of new communication
channels
 Continuously improving the knowledge
management system
Political condition in China provides major influence on the marketing of new product.
Non-alcoholic drinks mainly fall in the category of Introduction of new communication channels
by technological advancement such as social media application, messages, e-commerce website
and digital marketing that have provided a great opportunity for organisation to improve its
marketing (Berthon and et.al., 2012). It helps in providing information to numerous people about
new beverage products in less time duration. FDA and the government play an important role in
manufacturing of these products. Introduction of new rules related to accounting, taxes,
international marketing and changes in labour law within China will also provide a huge impact
on company. Further, reforms in rights of consumers within China also provide influence on the
marketing of products in China.
Apart from this, increase in economic growth of China has increased the per capita
income of people and provide them ability to buy products in market. Economic growth in
different parts over recent years have served to exacerbate many of economic and social
difference that already exists between the different provinces (Papadopoulos and Heslop, 2014).
Increasing standards of living of people will also provide influence on the sale of this product
because people concentrate more towards purchase of quality products and services. Further,
inflation rate in China is also increased with economic growth which has provided impact on the
cost of material and increased the prices of products in market.
Continuous changing perception of youngsters towards purchase and consumption of
healthy products has created a huge demand of health products. Thus, company will tend to
achieve its desired sale of new Yogurt beverage in the Chinese market. Company can also take
advantage of increasing in engaged lifestyle of consumers in china (Czinkota and Ronkainen,
2013). People with this lifestyle are more likely to purchase ready to eat food products like those
of company such as smoothies, yogurt beverages and soft drink, etc. Moreover, company also
has an opportunity to continues enhancing its products quality to achieve high revenue in relation
with continuously discriminating attitudes of customers in China about the product’s quality
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In addition to this, on the basis of moderate research and development investments,
global soft drink company has an opportunity to boost its own R&D in order to improve its
competitiveness in market (Paliwoda and Thomas, 2013). Introduction of new communication
channels by technology advancement such as social media application, messages, e-commerce
website and digital marketing has provided a great opportunity for organisation to increase its
marketing. It helps in providing information to numerous people about new beverage products in
less time duration. Further, company can also exploit the benefits of knowledge management
systems to support its different business processes such as product innovation and strategic
decision making.
Thus, it is analysed expansion of product in Chinese market will be effective for
company if they will strategies effective strategies to minimize the negative influence of these
factors on business operations.
2. SWOT analysis
It is an important tool which is used to analyse the internal environmental factors that
affect the product expansion of organisation in international market. It also involves the analysis
of strengths, weaknesses, opportunities and threats for organisation that are needed to be
analysed for understanding the attractiveness and capabilities of organisation of products and
business expansion in Chinese market.
Strengths Weaknesses
 Strong financial position
 Strong brand equity in market
 High market share in European
countries
 Excessive and high quality of products
 Qualified group of employees
 Customer’s loyalty (Yang, Su and Fam,
2012).
 Strong electronic presence in the
market
 Low product diversification
 Less effective in development of
healthy soft drinks
 High dependency in European market
 Lack of presence in Chinese market
Opportunities Threats
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 Increase in differentiation of business
towards development of healthy
products
 Improvement in supply chain network
 Increase in economic development and
changing lifestyle of Chinese people
 Technological advancement and
increase in availability of promotional
channels
 Intense competition in the market
 Continuous changing requirements of
customers
 Changes in economic policies of
government and laws
 Rise in inflation rate
 Availability of substitute products in
the market
From the above table, it is clear that company has a strong financial position in soft drink
industry in UK as compared to competitors because it has its presence in different countries.
Improvement in the quality of products has created a major strong loyalty of brand among
customers in European market. This will provide support in the marketing of products and
achieve of positive recognition from Target customers in China. Moreover, with effective
marketing and providing quality products at low rates, company has also raised its market share
as compared to the competitors (Meissner, 2012). High quality of product is also the major
strength of organisation which provide them in achieve customers confidence in Chinese market
and influencing them to purchase the product. Moreover, company has qualified employees
which provides them support in production, marketing and selling of product in effectively in
Chinese and provides a competitive edge on rivals.
Apart from this, major weaknesses which is faced by organisation will be diversification
of products which is very low in present scenario because company is highly dependent of
beverage industry (Zhou, Wu and Barnes, 2012). Less effectiveness of manufacturing health soft
drinks is also major weaknesses of company because people in China are more concentrated
towards purchase of healthy products. Lack of presence and high dependency on European
market is also an issue which is to be faced by organisation and they have make huge investment
in promotion of product to maintain their existence in market.
Further, company has major opportunity of maximizing revenues in market if they will
diversify their business towards manufacturing other products along with beverage such as
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Smoothies, packaged food products with premium quality. Improvement in network of supply
chain in different parts of China will enable the organisation to meet the customers' requirement
and maximizing sales. Changing life style of people towards consumption of healthy product will
is also an opportunity for organisation to promote their new healthy beverages and tends to
achieve high recognition of target young and middle class customers in China.
Moreover, intense competition in food and beverage industry in Chinese had created a
threat for company because it will affect their marketing and sale of products. Continuous
changes customers preference will also create problems for organisation to sustain in market as
they have to continuous changes in their products. Thus, for expansion of business it is essential
for organization to overcome its weakness and develop strategies to face threats.
Competitive review
Segmentation of market is one of the most efficient tools for the marketers to cater their
target group. It makes it easier for organisation to personalize their campaigns, focus on what's
necessary and to group a similar consumer to target a specific audience in cost effective manner.
In this context, majority of population in China consist of individuals in young age group which
are more focused towards consumption of quality and ready to bye products because they have a
busy lifestyle (Majaro, 2013). For expansion of new products in Chinese market it is essential for
organisation to target a particular market segment for promotion of its products. Mainly there are
four type of consumers market segmentation such as demographic, behavioural, geographic,
psycho graphic and basis segmentation. In this, most effective market segmentation Global soft
drink brand is demographic segment in which marketing managers of organisation will
differentiate the groups of customers on the basis of demographic variables such as Age, gender,
ethnicity, family size, culture, education, income and occupation etc. For achievement of growth
in new market, company should target customers of young age group, middle income, health
conscious and up market consumers which have the buying power to purchase the products
(Fletcher and Crawford, 2013). In this segment, key competitors of organisation will be food and
beverage firms like COCO cola, PEPSI and other firms etc. They have a strong market share and
tends to create strong competition for organisation in market.
Market entry strategy
There are various significant strategies are available which can be effective for
organisation to expand its business in international market of China. No one market entry
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strategy can work for all the international market. There are some important strategies for
entering in to foreign market such as direct exporting, licensing, franchising partnerships, joint
venture, Buying a company and green field investments etc. There are number of factors that
influence the choice of strategy including tariff rates, degree of adaptation of product
requirements, marketing and cost of transportation (Evers, Andersson and Hannibal, 2012). In
this context, best market strategy that organisation needs to adopt will be franchising for rapid
market expansion which has gained transition in different parts of world. In this strategy,
company will provide franchises of their business to small organisation's, individual and
agencies in different parts of country. These individuals or agencies will sell the products on
companies brand name and provide consideration to organisation in the form of royalty. It works
well for organisation because they have repeatable business mode that can be easily transferred
in to other markets. Moreover, it will provide growth to the organization by increasing sale of
products and services among the target customers.
Positioning
It refers to the place which the company wants to occupy in the mind of consumer and
the ways through which it will differentiate its products from consumers. With an aim of
positioning the products or brand, organisation will emphasize the distinguishing different
features of their brand and also make efforts to create strong brad image among its target
customers by providing quality products at lowest prices. There are various positioning that can
be adopted by organisation for expansion of business (Tan and Sousa, 2013). These can be
derived product attributes, competition, application and types of consumers involved in target
market. Some important positioning strategies are price, product, strategy based on application
and competitive strategy. In this, competitive positioning strategy should be used by Soft drink
company, in which implicit or explicit frame of reference are competitors. For increasing the
growth of business, company clearly determine its customers and analyse the features of their
products to differentiate their products from market. Company will create positive perception of
product among customers by making innovative and adding values for differentiating it from
competitors product. This strategy will aid the management to develop brand loyalty among
customers and creation of competitive advantage through supply differentiated products in
market. It is effective for organisation to use this strategy as it help in establishing products and
developing brands in order to become a successful participant in the market place.
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Marketing objectives
These are important elements of marketing plan for organisation which help in providing
direction that organisation needs to follow for expansion of business in international market.
These objectives of organisation are based upon their mission and vision which they want to
attain in the future. In this context, various significant objectives have been developed by
organisation related to marketing of their new yogurt beverage and smoothies in Chinese market.
These important objectives are as follows:
 To develop high customers base in china by providing new and quality products.
 To increase the market share by 10% in every quarter.
 Increase sales revenue by 10% every months (Akaka, Vargo and Lusch, 2013).
 Expansion of new and diversified products to meet the requirements of customers.
 Increasing brand loyalty among the customers by providing product at reasonable prices
as compared to competitors.
 Continuous improvement in products to meet the nagging requirements of consumers.
 To develop relationship with suppliers and organisation in different parts of China in
order to make the products easily assessable to customers.
Moreover, organisation can also analyse that whether these objectives have been achieved or not
by analysing results and its financial performance in market.
Marketing strategies
These are analysed as effective steps which are taken by organisation to increase the marketing
and sale of its products. International marketing of business in very crucial aspect that requires
lot efforts to increase the products' recognition among customers and increasing its sale through
application various strategies like:
Target market
Target marketing involves breaking of a market in to different segments and then
concentrating the marketing efforts on one or some key segments including the customers who
needs and wants most closely match the products and service offered by organisation. In order to
expand business in international Chinese market, Demographic segmentation will be the most
effective strategy for soft drink company in which they will divide their customers on the basis
of different elements such as age, income, preference, location and lifestyle of customers
(Majaro, 2013). In UK, company has also used this strategy for market segmentation. At present,
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company should target demographic market segment in china and select youngsters, health
conscious and middle income group people for promotion of their products and service. This will
effective for organisation in gaining rapid expansion in market.
Marketing mix
 Product: It is the most important element in marketing mix which implies to the goods
and services which are manufactured and provided by organisation in exchange of valid
consideration. In this context, products of Global Soft drink company is Smoothies and
new Yogurt beverage which they sell in UK and wants to expand in Chinese market. For
expansion of sales and product loyalty , marketers tends to increase the product quality.
 Pricing: Competitive pricing strategies is need to be adopted by company for expansion
of business in competitive global market (Evers, Andersson and Hannibal, 2012). In this,
organisation will tend to adopt prices of its new product after analysing the competitor
products prices so that they can keep the prices low and achieve high sales as compared
to competitor.
 Promotion: It is most important element which determines that how company will
provide information to its target customers about new products (Tan and Sousa, 2013).
There are various promotional channels which can be used by organisation such as social
media, development of video tutorial, events sponsorship of event, e-commerce and
digital marketing etc. In this, Social media and digital marketing will be the best measure
for organisation to promote their products widely in different parts of China.
 Place: This element of product marketing mix implies to the specific location in which
the company will provide and sell its products to consumers. In this context, Shopping
malls and departmental stores in China are effective places where the company can sell
its products effectively. Further, It can use its own website to sell the products to
customers online.
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RFEFERENCES
Books and journals
Akaka, M.A., Vargo, S.L. and Lusch, R.F., 2013. The complexity of context: A service
ecosystems approach for international marketing. Journal of Marketing Research, 21(4),
pp.1-20.
Berthon, P.R. and et.al., 2012. Marketing meets Web 2.0, social media, and creative consumers:
Implications for international marketing strategy. Business horizons, 55(3), pp.261-271.
Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.
Evers, N., Andersson, S. and Hannibal, M., 2012. Stakeholders and marketing capabilities in
international new ventures: evidence from Ireland, Sweden and Denmark. Journal of
International Marketing, 20(4), pp.46-71.
Fletcher, R. and Crawford, H., 2013. International marketing: an Asia-Pacific perspective.
Pearson Higher Education AU.
Majaro, S., 2013. International Marketing (RLE International Business): A Strategic Approach
to World Markets. Routledge.
Meissner, H.G., 2012. Strategic international marketing. Springer Science & Business Media.
Paliwoda, S. and Thomas, M., 2013. International marketing. Routledge.
Papadopoulos, N. and Heslop, L.A., 2014. Product-country images: Impact and role in
international marketing. Routledge.
Tan, Q. and Sousa, C.M., 2013. International marketing standardization. Management
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Terpstra, V., Foley, J. and Sarathy, R., 2012. International marketing. Naper Press.
Yang, Z., Su, C. and Fam, K.S., 2012. Dealing with institutional distances in international
marketing channels: Governance strategies that engender legitimacy and efficiency.
Journal of Marketing, 76(3), pp.41-55.
Zhou, L., Wu, A. and Barnes, B.R., 2012. The effects of early internationalization on
performance outcomes in young international ventures: the mediating role of marketing
capabilities. Journal of International Marketing, 20(4), pp.25-45.
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