BK005: International Marketing Environment Analysis and Strategies

This report provides a comprehensive analysis of international marketing strategies, focusing on the differences between domestic and international marketing environments, employing PESTEL analysis to understand macro-environmental factors. It explores the contribution of international markets to the world economy and examines the theories of internationalization, particularly the product life cycle theory. The report addresses the challenges and benefits of entering international markets, highlighting current marketing trends and opportunities, especially in the Asia-Pacific region, including the impact of foreign direct investment and technological advancements. The report uses Fonterra as a case study, applying Porter's generic strategies to understand its approach to international markets. It also delves into the challenges faced, such as high competition and differing international rules and regulations. Finally, it emphasizes the importance of innovation and adapting to emerging trends for success in the global market.

Strategies for International
Marketing
(Student Name)

Table of Contents
Introduction................................................................................................................................2
Difference between domestic and international marketing environments – Through PESTEL
Analysis......................................................................................................................................2
Macro Environmental Analysis..............................................................................................2
Contribution of International Market to the World Economy...................................................3
Theories of Internationalisation.................................................................................................3
Product life cycle theory.........................................................................................................3
Challenges faced in entering into international market..............................................................5
Benefits in entering into International Market.......................................................................5
International Marketing Trends..................................................................................................5
Growing Emerging Trends.....................................................................................................5
Innovation a significant need..................................................................................................6
Marketing Opportunities in the Asia-Pacific Region.................................................................6
Increase in Foreign Direct Investment...................................................................................6
Advancement of technologies................................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................7

Introduction
Marketing a strategy to create and maintain relationship with the customers for the
good results. It provides a platform to each and every company to do business with the
upcoming change and get updated with new technologies (Palmatier, Stern & El-Ansary,
2016). The company’s (Fonterra) growth and success are highly managed by the markets and
strategy towards it. As it can be seen that Fonterra is a dairy co-operative organization in
New Zealand which has mission to get the world with best quality products and make them
feel refresh from mind (Dee, 2016).
Difference between domestic and international marketing environments – Through
PESTEL Analysis
Macro Environmental Analysis
It includes six factors which show all internal and external environments and provide
a proper base to form any strategy and to initiate it. This benefits in all the senses as includes
government activities, legal framework, social relations, environmental change and political
actions. In the same way the Fonterra Company has main base for its business is PESTEL
Analysis because their cost according to others is very reasonable and its main reason for it is
tax saving policies and also customers demand. So the business of Fonterra is highly
expanded and also has a good profile in own and other countries (Rastogi & Trivedi, 2016).
There are many different things which can be seen in domestic and international
market because both provide a good revenue but with different plans and strategies.
Political Factor
The Government has initiated many programs and plans for the market intermediaries
to do business and maintain a healthy environment. In domestic the role of this is apparently
high from international because all domestic operations have direct impact on domestic
market but not on international because it follow different rules of different countries (Clarke
& Cheshire, 2018).
Economical Factor

The growth of economy is based on revenues of New Zealand and its policies
imposed by that government. The purchasing power has main role which affects the dairy
products. Both domestic and international market affects the economy as dairy products are
significant for all. Mainly the growth of economy is from international because domestic does
not provide more growth opportunities to the Fonterra (Khalaj, Scherer & Halgamuge, 2016).
Social Factor
It totally depends on lifestyle on people as non-vegans support huge percent in dairy
products and same in domestic up to a limit people will go for dairy products compare to
international because in international number of choices and number on individual’s increase
(Westphal et al., 2019).
Technology factor
To follow the latest trend and updated technology the business need to be expanded
which directly shows that international market is necessary because in domestic the use of it
will be limited (Fuenfschilling & Truffer, 2016).
Contribution of International Market to the World Economy
It promotes all the work with all the possible factors and needs for the company. The
main need of international marketing is to get a support in the capital needs and latest
technology for the work to be done with minimum cost and full utilisation of resources.
Basic contribution is capital requirement as much higher the capital the chances of
profit increases and a huge effect on goodwill which provide a company to get support
financially if any financial crises occur. The business tycoons support and invest in company
which they find a best source of fund in long term investment. As Fonterra has largest
supplier of dairy products in the New Zealand but its vision is to expand as much as it can
and till now there are much number of exporters which is a big source for its business
(Korhonen, Honkasalo & Seppälä, 2018).
Technology – An indispensable factor for every company to work in this dynamic
environment. Not possible for every country to have all updated technology same way the
New Zealand also can’t so to follow and use latest trend international marketing aid a lot by

getting other countries technology and being the best in dairy products with highest range of
customers.
And the main one for the run of product is customer’s satisfaction, quality and
reasonable prices are provided by the Fonterra to all which bind the customers as necessary to
do so. Needs of customers are the main things a company can fulfil by keeping their product
quality best and price affordable (Kimiagari, Gabrielsson, Gabrielsson & Montreuil, 2015).
Also the company need to maintain a social relationship with the employees,
customers and with everyone who is indulge for their business activities to run. So the factor
mainly responsible for Fonterra is technological and social. The growth of economy depends
on company outcomes, its revenues and market position. To be a good contributor in world’s
economy most of things need to be proper and maintained properly as Fonterra is doing.
Fonterra contributes a healthy percent to the world economy because the products they make
are highly demanded and it has less competition according to others. Its strategy for doing
business is following PORTER’S GENERIC STRATEGIES which are cost leadership,
differentiation, cost focus and differentiation focus (Stein & de Andreotti, 2016).
Theories of Internationalisation
Product life cycle theory
This theory is an economic theory and explains the pattern of international trade. To
manage and deal with the product newly launched or already launched but not in that much
demand so this theory shows how to deal with the market to new dealers.
Taking any product of Fonterra like milk, butter as an example to see the how the
product life cycle theory works in international market. In the product’s life cycle theory
there are five stages which tell the product growth and its actual position in the market (Jian,
Cai & Chen, 2017).
The stages are:-
Introduction
First stage where customers are not aware of the product, so companies conduct
programs to launch their product or do advertisements or any adopt any other method which

introduces their product as its best. The Fonterra introduces toned milk in an even to make
their product easily known to customers. As much the customers will aware of it the demand
for the product will arise and in behalf of it the product response will be shown. In this stage
the competitors are less and profit is also low. During this stage companies main motive is to
make familiarise the product with the customers so demand can be raised in upcoming time
and product starts gaining.
Growth
The product is now known to customers and this stage shows its growth as sale
increases, growth automatically increases which shows that product is gaining. In this
competitors ratio also increases so companies need more innovative ideas to be in the market
and win from competitors. The Fonterra advertise its product to attract many customers and
do all the things which make their product superior from other competitors. A target is
decided for every stage and when it is achieved the product shifts to a next level (Finnegan,
Goggins, Clifford & Zhan, 2017).
Maturity
The consumers are happy to consume it and they have made their choices that which
product is to choose. At this stage the demand gets a level and also sales starts increasing but
with a tiny change. Competition is high between marketers, so the Fonterra decides to reduce
the price and maintain the sale percent and demand ratio because at present it may not be
profitable but in future it is definitely profitable. Also at this phase the demand for product in
international market also rises and product gets more mature and familiar.
Saturation
A stage which shows balanced position of product as no increase and decrease in sales
volume. But this shows the real position in the market that product has any share in market
or not. This stage needs to be modified with latest trends to attract customers.
Decline
The stage where the product sales goes on decline as no demand comes or a point
which shows that the company is not able to manage the product work and need to handover

to other company. But no every product face this stage as some products goes for lifetime as
their growth is good with a healthy demand (Cook, 2018).
The Fonterra is mainly focusing on emerging trends and to make familiarise the
product to whole economy with best options and always be a trustworthy company. Their
goal is to sustain the taste and maintain a high quality all the time (Pawson & Perkins, 2017).
Challenges faced in entering into international market
High competition – Entering into new market directly shows a tough competition
which sometimes leads to be harmful for the product and same is faced by the Fonterra. The
company was not ready for a huge competition that’s why the growth and demand of the
product declined.
Open entry – A market in which new suppliers come to sell their product, can be said
that they come to try their product which have a bad impact on company’s performing
business from many years. Fonterra is one of them which has to face this difficulty as new
suppliers come for the milk and th company has to take from them which results in decrease
of their sales volume.
Different rules in different countries – As going international the laws and rules for
doing business will need to be changes as per the country’s laws which brings a challenge to
the company’s newly launched or sometimes also a bad impact is raised (Pavlovich, Sinha &
Rodrigues, 2016).
Benefits in entering into International Market
As there are challenges, there are benefits to which force the company to do business
globally. There are many reasons to turn into international market which Fonterra also
applied for doing business globally and now it’s having a huge percent of sale that comes
from exports.
Fonterra is making quality of their products more high to give tough competition to
customers in international market. Also the revenue from this increases and new innovative
ideas get develop by the changing time and taste.

Also new opportunities are raised with a scope of achieving it and also an access to
new talent arises (McGiven, 2016).
International Marketing Trends
Growing Emerging Trends
As standard of living is increasing same way trends of market is also increasing and
for this companies need to emerge with latest technology and methods to become the
customer’s first priority. Financial stability, culture, economic system and style of work
influence the market which helps to cooperate in the international market. Growth, survival
and profit of business totally depend on the method a company adopt. Fonterra adopts a
method to get updated with the time to survive in the international market and trying to offer
best quality of products. To operate business in a proper manner a company should indulge
with countries in which they get proper resources for their product and also a good amount in
return of investments done. International market have competitors to an extent which
provides a benefit to customers as whose product is best they will choose that, so to maintain
the trust of customers change is must. Also satisfaction of customer’s needs is must to be in
the priority list (Watson, Worm, Palmatier & Ganesan, 2015).
Innovation a significant need
As the research is done the basic factor or trend came out is to be innovative or to
explore more for operating business operations. New companies develop new product with
latest trend and that has an impact on companies running from past, so to be in operation
companies formed years ago need to be more innovative then new one and their speed of
innovations, new ideas should be faster. New skills should be promoted and fresh talent must
be rewarded so the work will get easier and challenges of new companies can be faced easily.
Research shows that using the past experience with today’s knowledge will provide a good
method to run the business in international market. Fonterra is doing initiative to produce
more products to deal with competitors and also giving opportunities to fresh talent for
survival in this emerging trend as they provide latest ideas which seem very innovative and
easy with minimum cost (Bessant & Trifilova, 2017).

Marketing Opportunities in the Asia-Pacific Region
Increase in Foreign Direct Investment
The flow of funds in market is common but investment of fund is complex as
choosing the right place to invest is quite difficult. But in some time there will be a good
opportunity of foreign direct investment which is beneficial for the company and the
economy also. More opportunities will be raised with this and also business profile will be
attracted as more investors will come to invest and a huge percent of capital ratio will
increase. The development of country takes place with the increase in exports. Also an effect
on exchange rate will be occur, will get stabilize and flow funds, capital increases. This will
help country to develop its backward areas by raising employ ent opportunities, providing
different schemes, plans to the people living there.
Advancement of technologies
To follow the latest trend every company need to be advance in each phase of
business. Coming in touch with other countries benefits a company to adopt their latest
technology or any method suitable for their product and process best with minimum cost.
Also it will raise the employment opportunities as new machines will be used so need of
labour will increase and directly economy development will occur. With the latest technology
consumers also get attract which result in demand high and profit a level up. This will also
make employees to work more as new technologies will attract them; their stamina tends to
be increased towards the work (Sengupta & Sahay, 2017).
Conclusion
From the above analysis it can be concluded that Fonterra has expanded its business
in the international market and in the domestic market efficiently. The company is greatly
affected from the macro environment of Australia and other internal market where the
company exist. The Australian government supported the company to grow as well as the
economic condition of the company country is better than other countries. The developed
country such as UK, US have also provided great market to the company to grow in an
effective manner.

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