International Marketing: Concepts and Applications Report

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International Marketing
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Executive summary
The aim of this report is to attain a wider understanding of the various concepts relating
to international marketing. It will discuss the ways in which marketing significantly
contributes to business strategies, identify, and examine the entrance of a business to a
new international market enlisting each factor that plays a vital part in it. It will also
discuss the various elements of marketing plan that is required to be adapted in various
international markets in order to ensure success. It will also try to understand in what
manner international marketing can be structured and evaluated on various levels.
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Table of Contents
Introduction...................................................................................................................... 4
LO1 Demonstrate an understanding of how marketing contributes to business strategies
in an international context................................................................................................ 5
LO2: Evaluate entry to a selection of international markets and define the key success
factors.............................................................................................................................. 9
LO3 Investigate how elements of the marketing plan can be adapted or standardised
across international markets..........................................................................................12
P5 Present an overview of the key arguments in the global versus local debate.......12
P6 Investigate how the product, price, pricing and promotional distribution approach
differs in a variety of international contexts.................................................................14
LO4 Demonstrate an understanding of how to organise and evaluate international
marketing efforts (multinational, global, transnational, meta-national, etc.)...................16
P7 Explain and analyse the various international marketing approaches your client
organisation can adopt............................................................................................... 16
P8 Compare home and international orientation and ways to assess competitors,
outlining the implications of each approach................................................................17
Conclusion..................................................................................................................... 19
References.....................................................................................................................20
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Introduction
International marketing is the process of applying various principles of marketing in
various countries by organisations internationally or within the national borders. This
practice is based on the idea of extending the organisation’s strategy for local marketing
where a special emphasis is placed on identification of markets, targeting and decisions
overseas. This report will delve into the various factors and concepts related to the idea
of international marketing. It will identify and discuss the various concepts and scope of
international marketing along with the reasons for conducting international marketing
and analyse its various types and their advantages and disadvantages. Overall, it is
aimed at a strategic understanding of the various concepts related to the idea of
international marketing and why is it beneficial to do so.
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LO1 Demonstrate an understanding of how marketing contributes to business
strategies in an international context.
Analyse the scope and key concepts of international marketing [P1].
Concept of international marketing
The concept of international marketing may be understood as the procedure of applying
the marketing principles in order to satisfy the various needs and preferences of the
customers residing in different corners of the world. It is basically implementing the
marketing activities in different nations. It is also known as global marketing and is
structuring the elements of the marketing mix worldwide and adjusting it in accordance
to the needs of preferences of cross border customers. An organisation may want to
conduct international marketing because of various reasons like high opportunities for
profit in the overseas market, high market share, long life of the products and the
presence of an unpenetrated international market (Chetty et al., 2015).
Scope of international marketing
Imports: This implies the practice of importing goods from one country and then selling
them in the domestic market. this is considered to be the easiest kind of international
marketing. This can only be done in a domestic market that has a consistent demand
for imported goods and services. There are instances where companies try to localise
the products that are imported according to the market needs.
Exports: This is the opposite of the process of importing and selling. Companies export
their goods and services to overseas markets where they will be able to sell them and
will generate high revenues (Demangeot et al., 2015).
Joint ventures: This occurs when two brands come together to enter a new potential
market and factors such as profits, losses and investments are decided from
beforehand taking into consideration value and the time period involved. There may be
instances where local partners may be useful dor conducting business and helps to
provide a domestic understanding of the dynamics of the market.
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Contractual agreements: When a business ventures into new boundaries beyond the
domestic boundaries, it gives the business opportunities for doing more business. In this
situation, there is an expansion of market and the consumer base along with an
increase in revenues and profits. A company tries to expand by entering into contracts
and agreements with different partners internationally (Eriksson et al., 2015).
Fully owned manufacturing: With a high level of engagement in the international
market, it becomes possible for companies to own a completely owned manufacturing
unit in a country. This gives the company the opportunity to sell the goods inside the
country as well as export them to other nations. When a company fully owns a
manufacturing unit, it is able to control quality more effectively.
Using your chosen client organisation, explain the rationale for it to want to
market internationally and describe the various routes to market the organisation
can adopt [P2].
Prufrock Coffee is one the best and most popular coffee shops located in London,
United Kingdom. It offers a great quality of coffee along with a warm environment that
ensures that customers have a pleasant experience there. It provides a great
opportunity for them to relax and enjoy the various services that are offered in the coffee
shop. After serving in London for many years, it has decided to conduct international
marketing in India. The primary reasons that encourage Prufrock Coffee to expand their
marketing operations in India can be explained as the following:
Boost sales and profitability: Conducting international marketing will provide it with
new source of revenue and will help it to attain more investment returns and ensure
enduring success for the business. In today’s world of social media and digital
developments, it has become all the more convenient and easy to access different parts
of the world for conducting business (Glynn, 2017).
Generate employment: When Prufrock Coffee expands in India, it will have to manage
the increased workload. It will lead to hiring of people accordingly to suit the employee
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requirements of the new jobs created. Availability of a huge number of skilled people will
be beneficial for them to conduct the various operations.
Penetrate new markets: After serving the local market in London, it would be profitable
for Prufrock Coffee to expand internationally. India would provide good opportunities for
it, as there is an increasing demand among Indians for such service industries. It is an
easy market for entering and the expected demand is high for such service in the Indian
market.
Expanding the customer base: It will be profitable for an organisation to increase its
base by penetrating into a foreign market through ecommerce or sales partnership,
which is based on collaboration (Grant, 2016). Prufrock Coffee will be in need of more
support to conduct its various functions and therefore adding people who would get
these various processes done is important.
Utilising social media and internet to explore the untouched markets: Prufrock
coffee might make an effective use of its proactive ecommerce site, which will let
customers know about them and the services they offer. This will generate interest in
the customers and make them motivated to visit the coffee shop.
Attaining competitive advantage in the market: Conducting international marketing
will help Prufrock Coffee to attain a greater competitive advantage in the market over its
competitors. It will try to establish a strong brand value and awareness among the
potential customers in the market. It will make effective utilisation of new technologies
and various industry ecosystems, which will help in improving their operations. It will
establish brand recognition among the customers and this in turn will help in attaining its
various organisational objectives.
The various methods that Prufrock Coffee has to adopt while establishing a successful
route to market are as follows:
Evaluating the distribution scenario: The various distribution options in the new
market need to be properly identified and analysed. Significant amount of stress needs
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to be given on the retail chains and trying to understand where customers go in order to
buy the product (Johanson et al., 2015).
Identifying the strongest distribution channels: After realising the best channels of
distribution for the goods and services, it is necessary to decide about which channel
would be the best for the business. After realising the huge share that supermarkets
and hypermarkets have in a country, the strength of the channel needs to be realised.
Other areas of emphasis are the leading retailers as well as trying to understand to what
extent the market is fragmented.
Prioritizing the potential retail partners: After deciding on the appropriate business
channel, it is important for the organisation to decide who would be it’s appropriate retail
partner. It is for the company to examine whether the retailer has an active presence in
other channels, which could help the company to expand (Mathews et al., 2016).
By effectively emphasising on these issues, companies like that of Prufrock Coffee will
conduct international marketing to ensure more sales and revenue and aim at profit
maximisation.
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LO2: Evaluate entry to a selection of international markets and define the key
success factors
Evaluate the key criteria and selection process to use when considering which
international market to enter [P3].
While entering a new international market, there are a number of factors and selection
criteria which influences the organisation. The primary steps involved while evaluating
which international market provides the best opportunities for growth may be discussed
as follows:
Objectives of international marketing: The first step in the process of market
selection is determining the organisational objectives for export marketing. It is essential
to identify and analyse the objectives first in order to achieve them effectively.
Parameters of selection: In order to conduct proper evaluation and selection of
markets, it becomes important that the organisation establish clearly the parameters as
well as criteria for such an evaluation. These different parameters are the resources of
the firm, the international environment, the current market situation, competition in the
market along with different policies of the government.
Preliminary screening: This helps in eliminating the markets that do not have much
potential and the parameters for this kind of preliminary screening vary from one
product to another. The commonly used parameters are the size of population,
economic structure, per capita income and different infrastructural and political factors
(Morschett et al., 2015).
Short listing markets: The process of preliminary screening helps in eliminating
markets that do not have much strong potentials. There is further screening done by
taking more additional information than is done at the preliminary screening steps.
Identification and selection: After short listing of the markets, they are evaluated
further taking into consideration factors such as cost benefit analysis as well as
feasibility. Then these markets are ranked according to their potential. The best one
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from the markets is selected as the one to be used for launching the product. Effective
consideration is done about the resources of the company as well as the external
environment.
Test marketing: The market is initially tested on a smaller scale by the process
involving the launch of the product in certain parts of the market. This helps in offering
effective review and feedback about the market to the producer. The producer is
benefitted as he gets an estimated response from the customers in a specific market
and if it is found to be encouraging, production operations are conducted on a large
scale.
Commercial production: When the product is tested in the market that has been
chosen and selected, the company begins its process of mass production. It is at this
stage, that various modifications are introduced as might be necessary.
Explain, using examples, the different market entry strategies, including the
advantages and disadvantages of each [P4].
The various market entry strategies that are usually undertaken by organisations can be
classified into franchise, export, licensing, merger and acquisition.
Franchise: This implies a branch of an organisation that is present in another country
for establishing and promoting a product.
Advantages of franchise: Under franchise, there are fewer chances of failures. It also
provides an experience of new markets and the products get favourable sponsorships
by franchiser.
Disadvantages of franchise: Disadvantages of franchise includes increased costs, and
the franchise’s rigid nature (Sousa et al., 2015).
Export: This implies the give and take relationships between two countries where the
products of a country are sold in overseas countries.
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Advantages of export: It helps in expanding the market and attaining increased
production. It also assists in controlling budget.
Disadvantages of export: It increases the overall administration costs. Exports also
results in losing of the home markets.
Licensing: This refers to an agreement that is done with another country in order to
establish its brand and to commercialise the goods for attaining increased revenues and
profits.
Advantages of licensing: Licensing creates opportunities for generating revenue. It also
helps in commercialising the goods and services.
Disadvantages of licensing: Licensing results in losing of control along with damaging
the product success apart from chances of damaging the reputation of the product.
Merger and acquisition: This implies a joint venture by two companies who come
together in order to attain more facilities and convenience in various production
operations (Tallman, 2017).
Advantages of merger and acquisition: This process involves cash investments and
ensures effective recovery of loss.
Disadvantages of merger and acquisition: The practice of merger and acquisition
involves a number of risks related to overpricing along with employee integration.
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LO3 Investigate how elements of the marketing plan can be adapted or
standardised across international markets.
P5 Present an overview of the key arguments in the global versus local debate
Companies or organizations, which focus upon marketing their products or services in
foreign countries also, have to keep in mind and stress upon the various aspects related
to the adaptation or standardization of products in international markets. The product
adaptation and standardization are important features associated with marketing plans
in the global and local market. Product adaptation is the process or method by which a
product, which exists in the market, made suitable or proper for the use of the
customers (Eastman, 2018). The product adaptation is done by following different
approaches in case of local and global markets. Product adaptation depends upon four
factors. They are the organizational or workplace culture, development of the market,
competition prevailing between the companies in the market and the different
legislations and laws, which help in driving the market policies.
Any sort of product adaptation will bring about an increase in the expenses of the
company. The product adaptation strategies differ in case of global and local markets.
Product adaptation strategy in global
market
Product adaptation strategy in local
market
Product adaptation strategy is useful and
beneficial for a company venturing into
global markets as it helps the company to
increase their sales and revenue.
Product adaptation strategy in the local
market is done within a small sphere
catering to the needs and requirements of
the local community (Bennett et al., 2016).
The maintenance of the sales and revenue
of the products are kept within a limit.
Product adaptation strategy in the global
market must cater to the needs and
requirements of a varied range of
customers belonging to different age
Product adaptation strategy in the local
market must cater and look after the needs
and requirements of the people belonging
to the local community. Prufrock Coffee
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