Report on International Marketing for Delice Cafe Expansion Plans

This report provides a comprehensive analysis of international marketing strategies for Delice Cafe, a UK-based cafe chain seeking global expansion. The report begins with an introduction to international marketing concepts, including scope, key concepts, and the rationale for entering global markets. It then delves into market entry routes, the market selection process, and various market entry strategies like licensing and joint ventures, along with their advantages and disadvantages. A comparison between global and local marketing is presented, examining product, price, place, and promotion approaches in diverse international contexts. The report culminates in an examination of international marketing approaches tailored for Delice Cafe, including competitor assessment and home vs. international orientation, offering valuable insights for the company's global expansion plans. The report is well-structured, covering all the tasks in the assignment brief and providing a detailed overview of the content.

International Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Scope and key concepts of international marketing..........................................................1
P2 Reason for entering into global market and market entry routes......................................2
TASK 2............................................................................................................................................4
P3 Selection process to enter into the international marketing..............................................4
P4 Different market entry strategies and their advantages and disadvantages.......................5
TASK 3............................................................................................................................................7
P5 Global V/S local marketing .............................................................................................7
P6 Different product, price, place and promotional approach in a variety of international
contexts. .................................................................................................................................9
TASK 4..........................................................................................................................................11
P7 Various international marketing approaches for Delice Cafe.........................................11
P8 Compare home and international orientation and ways to assess competitors, outlining the
implications of each approach..............................................................................................13
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
International marketing is the process of doing business in another country with the aim
of achieving organisational objective(Kumar, 2015). Each firm aims to expand business in global
market so that it can gain competitive advantage and can gain attention of mass audience.
Present study will be based on the Delice Cafe company it is a local business of UK.
Recently company has only one shop and earn reasonable profit only. It is planning to expand
business internationally.
Report will include scope and concept of international marketing and various market
entry routes. Further more it includes the comparison between local marketing and international
marketing and different approaches of international marketing(Demangeot, Broderick and Craig,
2015).
TASK 1
P 1 Scope and key concepts of international marketing
Delice Cafe is a local cafe shop that offers limited cafe items such as coffee etc. to
consumers. Its main target market is students and youngsters those who like to spend time with
friends and families. It offers cost effective products to consumers so that customers like to come
here again and again.
International marketing refers to a strategy which is adopted by the firm to satisfy the
needs and wants of the global market. It simply refers to promoting the goods and services to
customers in more than one country for earning maximum profit (Stiglitz and Rosengard, 2015).
Local marketing refers to the marketing which is done inside the geographical boundaries
of the country while International marketing refers to the marketing which is done outside the
geographical boundaries of the country. Local marketing has less interference of government
while in international marketing have interference of government. In local marketing less
technology is used while in global marketing more technology is used. In local marketing the
taste and preference of the consumer remains almost same as compared to global market there
taste and preference vary from person to person. Risk is low in local marketing but in global
market risk is very high because of change in the country's environment. Scope and opportunities
for local market is limited as compared to global market. It has more opportunities and scope in
the business(Dinnie, 2015).
Scope of international marketing
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International marketing has a wide scope as follows:
1. Imports : It refers to buying of goods and services from outside the country. As global
market has wide range of scope in the business as importing goods from national borders
helps in building the good relationship with different countries so that trade procedure
becomes easy
2. Exports: It refers to shipping the goods and services to other countries. Through exports
foreign market value increase which in return generate benefit to country to expand their
revenue income and also engage in exchanging currency rates.
3. Contractual agreements: It helps to expand the business and have developed lots of
opportunities to grow in the business through different contractual agreements with
different companies(Boehe, Qian and Peng, 2016).
Concepts of international marketing
I. Differential advantage: Company can gain the advantage by giving differential product to
their customer as compared to its competitors.
II. Focus: Focus is required to gain the competitive advantage and customer value in the
global market. For getting success in the global market different principles is required to
satisfy the global needs of the customer (Javalgi and La Toya, 2018).
P2 Reason for entering into global market and market entry routes
Reasons for entering into global market
There are several reasons to enter into the global market for the purpose of expanding
business and to grab the external opportunities for the company are as follows:
 Government policies and regulations: Different countries have different rules and
regulations so for establishing business in the U.K. Delice Cafe have to adopt the rules
and policies of that country. Government may impose policies and barriers to expand
their business but there are no such restrictions on the investment in the global market so
Delice Cafe can enter into the global market (Jean and et. al., 2016). There are many
countries where trade laws are flexible and company can get raw material from home
countries. That will help Delice Cafe to establish its branch in new geographical location
and firm will be able to run business in cost effective manner.
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 Increased productivity: Increasing the productivity is necessary for every company.
Delice Cafe also increase its productivity by entering into the global market by serving
different products to the customers. If Delice Cafe enters into new location then it will be
beneficial for the business to raise its productivity and enhance demand as well.
 Increase profitability: This is an important objective of every company is to earn the
profit. Delice Cafe can earn more profit by expanding business into global market as
compared to the domestic market. Pricing strategy is higher in the global market as
compared to the local market that will be benefit for the Delice Cafe to earn maximum
profitability. Growth in the global market: As compared to the local market the growth in the foreign
market is very fast so local companies get attracted towards the global market (Fu and et.
al., 2015). Delice Café can get global presence and can raise its brand image by entering
into global market. Each firm wants to gain competitive advantage, if enterprise expand
its business in other location then it would help in raising awareness among consumers
and café will be able to gain competitive advantage.
Market entry routes
There are different market entry routes which are beneficial to enter into the global
market are as follows:
 Direct Exporting: It refers to selling the goods and services directly into the
market. Delice Cafe can use this strategy to enter into the global market. It
directly sells its product in the market and further distributor of the product in the
country can sell the product of Delice Cafe company.
 Partnering: It refers to the strategy in which one company can do business with
the another company by sharing profit. Delice Cafe can also use this marketing
route to enter into the global market. As it is useful strategy for Delice Cafe to
enter into partnering as it helps to know the local market of the country(Stiglitz
and Rosengard, 2015).
 Franchising: It means setting up the branch of a business in another country.
Delice Cafe can use this route to enter into the foreign market as setting up its
branch in foreign to expand its business operations.
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Delice Cafe have to adapt the franchising route to enter into the global market because
Franchisors provide training facilities to expand their business model and are getting more
success as compared to other routes of marketing. It is easy to operate their business through
franchising and it cost lesser from other marketing routes.
TASK 2
P 3 Selection process to enter into the international marketing
Before entering into the international marketing the company have to consider following
factors which can affect the operations of the company (Process to select international market,
2019).
 Economic condition: Delice Cafe have to see the economic condition of the
country before doing business. It depends on the GDP rate, inflation rate of the
country. If there is no growth areas in the country then it will not benefit for the
company to start its operation. If the personal income of the people is not good
then they are not purchasing goods that will be loss for the company to start
business there. If there is an unemployment in the country, then it will lead to low
spending on the product that will impact the production of the company. After
considering these factors company have to start its operations in the international
market. For example: Starbucks is running its operations in such countries where
GDP rate is high and there are high employment opportunities. This strategy of
company helps the firm in increasing demand and raising profitability of
business. Thus, Delice Cafe has to consider this element in order to select the
market effectively.
 Political condition: A political instability in the country will affect the operations
of the company. Changes in the labour law of the country affect the supply and
demand of labour in the company. If the political condition is not good it may
lead to business risk(Choosing an international market entry strategy, 2016).
Thus, Delice Cafe has to ensure political condition of particular country before
entering into that location, this will help in running operations there successfully.
 Education: Education is the another important factor considered while starting a
new business in the international market. If the people of the country is not
educated then it will be difficult to do business in that country. If the people are
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educated it results in benefits to the company to innovate and bring new concept
in the company.(Dinnie, 2015).
 Geographic location: It also plays an important part in selection process for
international marketing. As proper availability of resources also plays an
important role in deciding the location for starting business in the international
market. It is a critical factor for operating business operations in the country.
P4 Different market entry strategies and their advantages and disadvantages
The different market entry strategies are:
Licensing: It refers to the term in which one company gives license to the other company
to use its trademark, manufacturing, processing and some other skills. In taking license from
other company some expenses are occurring. It is similar to franchising. Cost incurred is of only
taking the policy and signing of an agreement between two companies.
Advantages
 It is useful for doing business in foreign countries through licensing
because it contains less risk.
 There is no need of investing money in the Delice Cafe.
 It helps in increasing the profit and market share.
 It reduces cost of acquiring new technology.
 It will be beneficial for the company to gain competitive advantage if the
licensing is exclusive.
 It saves time to introduce new product in the market(Advantages and
disadvantages of licensing agreement, 2019)
Disadvantages
 It is difficult to get the right licensee.
 There is no control over the product invention as it is being used by the
other company as well.
 There is a risk of poor strategy that will damage the product success.
 It becomes competitor for the company as may take time to overcome
from the cross technology.
 Sometimes returns from the marketing is not obtained.
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For example: Starbucks is doing business in many countries, it has to face
huge risk thus, it is essential for company to look upon potential risk in that market. That same
thing is required to be followed by Delice Cafe as well. This will help in establishing itself in
other market sucessfully (Javalgi and La Toya, 2018).
Joint Ventures: It is an enterprise that will be run by the two or more person that will
shared the ownership, risk and property rights of the company.
Advantages
 Risk is shared between the partners.
 Both partners are giving financial strength to the company.
 Responsibilities are divided among the partners not burden on one person to run
the company.
 Technology up gradation will be easy as of dividing investment between two
partners.
 As cost is distributed among the partners the production cost is low due to it.
Disadvantages
 There is not an equal responsibility between the partners.
 There be chances of conflict between the partners due to some internal reason of
the business.
 There is a high investment risk because of some technical issues or failure in the
system.
For example: Starbucks company come into joint venture business and start a business of
food processing. They have to share the risk, cost and many other factors of the business(Jean
and et. al., 2016). Thus, if Delice Cafe adopts this joint venture strategy then it will ghave to
face risk but company can get many benefit due to this.
Franchising: It is the opportunity given to start the business legally by using some others
ideas process of doing business.
Advantages
 All the franchise use the same marketing strategy, infrastructure, services to the
customers in different countries.
 The working people are also provided by the franchisor there is no outside people
working in the franchise company so that the quality remain the same.
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Disadvantages
 These are regulated by the rules and regulations by the government which cannot
be changed.
 The franchisee have to follow all the instructions written in the agreement it
cannot make changes in the agreement.(Kumar, 2015).
TASK 3
P5 Global V/S local marketing
Bases Global marketing Local marketing
Meaning Global marketing means
selling the same products and
services across all countries.
Starbucks is working as global
company , it has branches in
many locations.
Local marketing means selling
the products and services
according to the regional
differences within the home
country. For example Delice
Cafe is working as local
business in UK and it sells its
products in UK only.
Business operations Starbucks company runs its
business operation in
worldwide. It uses new and
highly automated technologies
for making their operations
effective(Alon and et.al.,
2016).
Delice Cafe company runs its
business operations within the
home country. They do not
have so many technologies for
their operations.
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Marketing plan Starbucks marketing plan of
goods and services are so vast
and different for every
country. Its marketing plan
includes company's current
financial position,
vision/mission, marketing
strategy, competitors, budget
strategy and monitoring &
controlling strategy etc.
Delice Cafe marketing plan of
goods and services are limited
to home country. Brake bros
marketing plan includes
company's current financial
position, vision/mission,
marketing strategy and
competitors etc(Hitt, Li and
Xu, 2016).
Concern Global marketing of Starbucks
concerns both global values
and local values of the goods
and services in different
countries.
Local marketing of Delice
Cafe only concern of local
values of the good and services
in UK.
Marketing strategy Marketing strategy of
Starbucks varies from country
to country. So, they need to
make various strategy for their
marketing of the products in
different countries. Its
marketing strategy includes
product, pricing, promotion,
place, physical evidence,
people and process. Starbucks
focus on promotion and
product strategies.
Delice Cafe is made only one
marketing strategy for their
branding of the product. Its
marketing strategy includes
product, pricing, promotion,
place. Its focus on place and
pricing strategies.
Benchmarking For globalisation of the
Starbucks is needed to set
benchmarking from their
In local marketing, Delice
Cafe do not need to set
benchmarking for their
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competitors. products.
Marketing activities Marketing activities of
Starbucks includes operations,
activities and interests in
various countries and also
some kind of control and
influences in its marketing
activities by the countries.
Marketing activities of Delice
Cafe Brake bros includes
operations, activities and
interests in UK and also
control and influence in its
marketing activities by the
UK's laws and internal and
external environment(Alon
and et.al., 2016).
Area Starbucks marketing is
stretched its product and
services across worldwide.
There is a large area for their
marketing.
Delice Cafe marketing is
stretched its product and
services within UK. They
served its marketing in very
small area in comparison to
global marketing.
Government interference Government interference is
huge in Starbucks marketing.
Very less government
interference in Delice Cafe
marketing.
Risk factor Risk factor is high in global
marketing(Hitt, Li and Xu,
2016).
In local marketing, low risk is
available in comparison to
international global market.
Capital requirement Huge capital is required in
Strabucks marketing.
Less capital is required in
Delice Cafe marketing.
Marketing research In-depth research is required
for Starbucks marketing
because of global customers.
Research for Delice Cafe
marketing is required but not
at very high level.
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P 6 Different products, price, place and promotional approach in a variety of international
contexts.
Marketing strategies Starbucks (global market) Delice Cafe(local market)
Product strategy It uses differentiate marketing
strategy for their product. Its
main product is coffee and it
also includes tea, baked goods
and sandwiches. Starbucks
differentiated themself from
others by providing premium
quality of coffee. Its strategy
includes quality, quantity,
product layout and design of
the coffee that differentiate
the product from others(Luo
and Bu, 2018). Product
strategy of Starbucks is
considered the central pillar of
its marketing strategy. It
enhances customers loyalty
towards Starbucks. It builds
great reputation by providing
great quality coffee with
variety of flavour and best
customer's services.
It mainly deals in supply of
foods and drinks with numbers
of brand like country choice.
Pricing strategy Starbucks is a premium brand.
It uses premium and
competitive pricing strategy
because its target customers
are higher and middle class
Delice Cafe is used skimming
pricing strategy for their
products. Delice Cafe is far
from cheap but it is not so
much expensive. They
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