BTEC HND International Marketing Assignment: Sainsbury's Case Study

This report provides a comprehensive analysis of international marketing, focusing on the case of Sainsbury's. It begins with an introduction to international marketing concepts and the rationale for businesses expanding globally. The report then explores the criteria and processes for entering international markets, including various market entry strategies such as franchising, direct exporting, licensing, and partnering. A significant portion of the report is dedicated to applying market evaluation criteria and recommending market entry strategies for Sainsbury's, supported by PEST analysis and other market research methods. The local versus global marketing debate is examined, along with ways to adapt the marketing mix. Finally, the report evaluates competitor analysis and various international marketing approaches. The report offers a detailed examination of the challenges and opportunities in international marketing, with a focus on Sainsbury's and provides practical recommendations for its global expansion.

INTERNATIONAL
MARKETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P 1 Concept and scope of international marketing......................................................................1
P 2 Rationale of marketing internationally and different routes of marketing............................2
M 1 Challenges and opportunities of marketing internationally presents to Sainsbury..............3
LO 2.................................................................................................................................................3
P 3 Criteria and process of entering into international market....................................................3
P 4 Different types of market entry strategies.............................................................................4
M 2 Apply criteria of market evaluation and strategies for entry, with recommendations for
Sainsbury.....................................................................................................................................5
LO 3.................................................................................................................................................5
P 5 Overview of local versus global debate.................................................................................5
P 6 Ways in which price, product, promotional and pricing distribution approach differs.........6
M 3 Evaluation of circumstances and context in which Sainsbury should adopt local or global
approach.......................................................................................................................................7
M 4 Ways to adapt the marketing mix of Sainsbury...................................................................7
LO 4.................................................................................................................................................8
P 7 Various approaches of international marketing that can be adopted by the organization.....8
P 8 Comparison of international and home orientation and ways to assess competitors............8
M 5 Evaluation of competitor analysis and marketing approaches.............................................8
CONCLUSION................................................................................................................................9
REREFENCES..............................................................................................................................10

INTRODUCTION
Global marketing is a kind of an application of marketing which helps an organization to
satisfy their customers wants, desires and needs across national border. With the help of global
or international marketing organizations can undertake marketing activities in more than one
organization (Cateora and et. al., 2020). It helps an organization to meet their global objectives
and gain competitive advantage which further helps them in sustaining their business across
borders in an appropriate manner. there are various kinds of reasons that attract an organization
for taking their business at international level, such as: increased economies of scale, huge
market share, increasing opportunities to make huge profit and many more. Organization chosen
for this assignment is Sainsbury. Sainsbury is the largest supermarket chain present in the UK.
They have approximately 16 percent of supermarket share. Sainsbury was founded in 1869
whose headquarter is in London, UK. Area server by Sainsbury is only UK and have
approximately 1415 shops in UK. They have approximately 116,00 employees working for
them. They sell products such as food products, children’s products, home products and many
more.
LO 1
P 1 Concept and scope of international marketing
International marketing can be defined as performance of business activities that are
majorly designed to promote, price, plan as well as directing organization’s flow of their services
and goods to buyers or customers internationally for increasing revenue and profit (Hult and et.
al, 2018). In other words, it can also be defined as performance of business activities
internationally for fulfilling needs and wants of their customers present both nationally and
internationally by coordinating all kinds of marketing activities with constraints in global
environment.
International marketing today has earned a great scope. Today it is next to impossible to
sustain within international market without having an international plan. Scope of international
marketing have been explained below: Importing products or goods for manufacturing so that it
can be sold to potential customers. most of the organizations import products and sell it to their
potential customers but many of them develop their own manufacturing and production so that
those products can be sold to their target customers. Organizations export their final goods or
products in international market for selling to generate huge revenue. Revenue generated from
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exporting products to international market can help them in covering cost of manufacturing and
production as well as also helps them in increasing profit. This exporting and importing products
help the company to expand and sustain within international market (Morgan, Feng and Whitler,
2018). Whenever an organization focuses upon expanding their business at international level,
they can make contractual agreement with other organizations for business expansion with the
help of technical assistance, licensing, co-production and many more. Other than contractual
agreement, an organization can also collaborate with other organization for expansion of
business. Many times, this merger give rise to new firm that work with parent organizational
goals and objectives.
P 2 Rationale of marketing internationally and different routes of marketing
There are various reasons because of which an organization wants to market their
products and services internationally. International market helps in providing more opportunities
for growth of the organization. One of the main reasons because of which organizations want to
market internationally is increasing industry rivalry and competition with local organizations.
today because of increasing competition it is becoming difficult for organizations to sustain
within the organization, gain competitive advantage and enhance their business. Marketing
internationally helps an organization to expand their business, enhance their customer base, gain
competitive advantage within local market. Not only this, entering into international market
helps in providing various kinds of opportunities to the organization with the help of which
scope of operating for the organization increases (Kotler and et. al.,2018). There are many ruts
that can be used by firms but some of the most commonly used strategies or routes with the help
of which that can be adopted by organizations to enter into international market are as follows:
First route is to set marketing objectives for the organization one the basis of which they can
choose and develop their international marketing plan. After developing a marketing plan,
organization should focus upon identifying risk associated with entering into the chosen
international market so that for those identified risk a contingency and risk management plan can
be developed.
1. International marketing will help Sainsbury to enhance their customer base and generate
more revenue and profitability.
2. It will not only help Sainsbury to achieve economies of scale but will also help them to gain
more stability for long term.
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M 1 Challenges and opportunities of marketing internationally presents to Sainsbury
Marketing internationally opportunities can be brought to Sainsbury are: Cost benefit is one of
the of the main opportunity that can be brought to Sainsbury i.e. many countries have cheap
labour and manufacturing cost because of which manufacturing cost of the organization reduces
and as a result their profit margin for products and services can increase. Availability of foreign
exchange increases like importing capital goods, modern technology and many more
(Eteokleous, Leonidou and Katsikeas, 2016).
Challenges that marketing internationally that can be faced by Sainsbury are: one of the main
challenges in operating internationally can be faced by Sainsbury are difference in legislative
polices and procedure. There might be difference between legislative rules, regulations and
polices of host and guest country because of which Sainsbury might face some difficulties.
Political instability of the target country is another challenge that can work as a barrier for
Sainsbury to operate internationally.
LO 2
P 3 Criteria and process of entering into international market
Operating internationally helps an organization to enhance revenue and make profit in a
particular chosen market. But for that it is important for organizations to choose correct
international market for entering into international market. Criteria of choosing a specific
international market are: first of all, the organization should have complete knowledge about the
chosen market place, they should first of all develop a marketing plan to enter into the chosen
market. It is important because it helps in ensuring success of entering into chosen market (Yang,
2018).
There is a specific process that can be used by organizations to enter into global market.
 First step is to determine main objectives of international marketing that are required to be
achieved by the organizations.
 Second step is to set parameters to select and evaluate market. These parameters help the
organization to evaluate availability of resources, environment of the chosen market,
government policies, competitive nature, market condition and situation of chosen market
and many more.
 Third step is screening of markets so that market that do not have growth potential for the
organization can be eliminated.
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 Evaluation and market testing in which feasibility study and cost benefit analysis of the
market is done and testing of the market is done so that it can be identified that whether that
market is feasible to be chosen and will help the organization generate huge revenue and
profit.
P 4 Different types of market entry strategies
There are various kinds of strategies of entering into a market that can be used by
organizations entering into chosen global market. All of these strategies have their own
advantages and disadvantages as well. Some of the most common market entry strategies are as
follows:
 Franchising: it is one of the most common routes of entering into international market.
Organizations can pay a certain fee or cut from overall profit to a local organization so that
they can manage their business operations in that particular country. Some of the mad
advantages of this strategy are: it is one of the most common low risk and low- cost mode of
entering into a new market. It also helps the organization to gain cultural knowledge and
ways in which local marketers operates. But this strategy has some disadvantages as well,
such as: As a franchiser, organization is liable to support the chosen franchisee even after
one-time transfer of the property is complete.
 Direct exporting: With the help of this method organizations can directly sell their products
and services in the target market directly with the help of agents and distributors. Chosen
distributors and agents work closely with the organization so that they can handle selling of
their products and services in international market. This strategy has its own advantages such
as: using this strategy profit margin increases as intermediaries are eliminated, control over
business processes and transaction increases. But it has some disadvantages as well such as:
this strategy require investment of more time, energy and money (Paul and Mas, 2019). It
requires more men power to enhance customer base and attract customers. organization
might face difficulty in communicating with the customers.
 Licencing: using this rout organization transfer service and product using rights to another
organization. One of the main advantages of this strategy is that it helps in providing
effective way of financing international expansion and also reduces risk of operating.
However, this strategy has its own disadvantages such as: this strategy can restrict future
activities and can reveal organizations information to future competitors.
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 Partnering: it is another rout with the help of which organizations can partner up with other
organization that are already operating in chosen international market. It has some
advantages such as: it is one of the best strategies that can be chosen by organization to enter
into a market whose culture is completely different from local market and also helps in
enhancing knowledge of local market. But it has some disadvantages as well such as:
M 2 Apply criteria of market evaluation and strategies for entry, with recommendations for
Sainsbury
Sainsbury can adopt direct marketing strategy for entering into global market. This is
because Sainsbury has developed a name and brand reputation within UK which will help them
to enter into a chosen market. Not only this choosing direct marketing strategy will also help
them to gain cost advantage which will further help them to increase their overall profitability.
Market evaluation for Sainsbury
In order to analyse the market in which Sainsbury wants to expand organization can be
understood with the help of PEST analysis (Pedada, Arunachalam and Dass, 2019).
 Political factor: Sainsbury need to analyse taxation system of chosen country in order to
analyse ways in which their system can impact overall business of the organization. They
also need to analyse political imbalance of the country.
 Economic factors: Sainsbury need to analyse unemployment rate and inflation rate of the
chosen country as well as their economic stability of the chosen country.
 Social factors: Sainsbury need to analyse all kinds of social, cultural, and language barrier
that can impact their operability within the country.
 Technological factors: technological barrier is one of those barriers that can impact success
of operating in international market.
LO 3
P 5 Overview of local versus global debate
Marketing is one of the most important factor which is required to be focused upon by
organizations in order to increase knowledge about their products and services among their
customers. Today due to advancement in technology has increased competition for the
organizations and made it difficult for the organizations to sustain within the market (Souchon
and et. al., 2016). Global marketing can be said that global marketing is an extension for the
organization so that they can operate at international level. When an organizations operations and
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processes are extended across local borders ten it is known as global marketing whereas, local
marketing can be defined as a kind of marketing of products, services and solutions to the
customers locally. Local marketing provides an advantage to organizations where they can easily
analyse and understand needs and requirements of their customer segment.
Global marketing however provides various kinds of advantages to an organization such
as it provides an access to large customer base which helps an organization to generate huge
profitability and revenue. It further helps an organization to provide long term stability within the
market in which they are operating and also provides global level brand recognition to the
organization. But there are some advantages that are provided to the organization by local
marketing as well (Christofi and et. al., 2018). First is that with the help of local marketing
organization can interact with their customers in a much better manner, cost associated with
analysis of needs and requirements of local customers is also lower. Global marketing will help
Sainsbury to enhance their overall economies of scale, generate huge revenue and profitability. It
will also help them to enhance their customer base and gain global level brand recognition.
P 6 Ways in which price, product, promotional and pricing distribution approach differs
Pricing, distribution and promotion are one of the most complex functions of marketing.
But with the help of availability of new tools, technologies and methods it has become much
easy for the organization to sustain within the competitive market and promote their products and
services internationally.
International product strategies includes all kinds of decisions that are related to products
and services offering of the organization within international market. There are many
international product strategies that can be used by Sainsbury in international context are as
follows: First is home ground product strategy in which same local product is sold in foreign
market (Asseraf and Shoham, 2019). Second is invention strategy in which new product is
invented to be introduced at global level. Third is flexible product design in which a standardized
product is developed with additional features so that it is flexible enough to be introduced into
international market.
Pricing strategies adopted by the organizations largely impact profit and revenue of the
organizations it is important for organizations to adopt effective international pricing strategy as
it helps the organization to gain competitive advantage over their current competitors.
International pricing strategies refers to different options with the help of which organizations
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like Sainsbury set prices for their products and services for foreign market. Some of the most
common international pricing strategies that can be used by Sainsbury in international context
are: First is rigid cost-plus pricing strategy in which a mark-up cost is added to cost of products
and services to arrive at selling price. This strategy helps in adding direct labour cost, direct
material cost and overhead costs for goods or products to final cost of the product. Second
strategy is variable cost pricing strategy in which selling pricing is established by adding mark-
up to total variable costs.
International distribution policy for an organization like Sainsbury includes size of the
margin, control cost, length of channels, terns of channel and sales ownership (Kraus and et. al.,
2016). It also includes resources commitment plan for distribution function management which
can help the organization to keep profit goals in foremost position.
M 3 Evaluation of circumstances and context in which Sainsbury should adopt local or global
approach
Sainsbury has already established themselves in market of UK and has also gained
stability within the domestic market of UK. New in order to enhance business and increase
overall revenue and profitability they should focus upon untapped global market. Sainsbury
should focus upon acquiring knowledge about untapped markets as it would help them to
flourish in the international market and will also help in increasing changes of successfully
entering into international market.
M 4 Ways to adapt the marketing mix of Sainsbury
Ways to adopt marketing mix of Sainsbury in different international market are:
 Product: An international organization can product products according to needs and demand
of their customers. they provide various kinds of products and services as per the needs and
wants of their customers.
 Price: Sainsbury can adopt their pricing strategy according to their customer side products
and services preferences and according to the profit making approach of the organization.
 Place: Currently Sainsbury operates only in UK but they can focus upon entering into
untapped international market in order to make their products and services available to
international customers as well.
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 Promotion: Sainsbury can use social media marketing for promotion and marketing of their
products and services at international level.
LO 4
P 7 Various approaches of international marketing that can be adopted by the organization
There are various kinds of international marketing approaches that can be adopted by
Sainsbury that can help them to make their products available at internal level. Various
approaches of international marketing an organisation may adopt include the following:
Centralized marketing approach is another approach that helps in marketing of headquarter
organization does most of the decision making and marketing planning though which marketing
program is planned and executed. Decentralized approach is an approach in which decision-
making and marketing functions are primarily pushed out into the field i.e. marketing team is
divided into small distributors or representatives (Perera and Hewege, 2016). Bring changes
within organizational structure is extremely important to be considered whether centralized or
decentralized approach is considered as though organizational structure an organization can
operate in international market. There are various kinds of organizational structures that can be
adopted by Sainsbury, one of them is geographic organizational structure that helps an
organization to bring several workers together in different geographical divisions. This can be
adopted by Sainsbury as it helps them in establishing themselves in geographical area they serve.
Adoption of centralized and decentralized marketing approach completely depends upon various
factors such as international market chosen for expansion, operations of organization and its
structure.
P 8 Comparison of international and home orientation and ways to assess competitors
Some of the most common orientation are:
Home orientation: it is home country orientation. It is also known as an unconscious belief that
home country approach used by business is superior (Leonidou and et. al.,2018). It is basically
expanding domestic products into domestic market and primary focus of organizations is on
local market. So, organizations majorly develop strategies in accordance with domestic market.
International orientation: this orientation helps in identifying orientation towards
internationalization which is associated with stages of successive international operations of an
organization. it refers to various management planning and strategies procedures with regards to
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global operations. In this whole world is considered as a single market by the marketers. Most of
the companies today are focusing upon adopting this orientation for having maximum share.
M 5 Evaluation of competitor analysis and marketing approaches
Marketing approach that can be used by Sainsbury is centralized marketing approach i.e.
all the marketing plan, decision making and operability of marketing plan in international context
can be done centrally. It will help them to manage their operations both locally and
internationally in a much easier manner.
Competitor analysis
Competitor analysis of Sainsbury can be done with the help of porters five force model:
Threat of new entrant: Threat of this factor for Sainsbury is low as it require large amount of
investment for starting a new business. Additionally, Sainsbury has developed a strong brand
equity over years.
Bargaining power of supplier: Threat of this factor is also low because there are wide number of
suppliers who can readily supply material required to Sainsbury at lower prices.
Bargaining power of buyers: Threat of this factor is high because there are large number of
brands that provide similar products at lower prices with high quality to customers. So switching
cost for customers is low.
Threat of substitute products: Threat of this factor is high because there are various number of
companies that provide same products with high quality and lower price.
Rivalry against existing players: Threat of this factor is high because Sainsbury faces high and
tough competition with Tesco, Aldi, Morrison’s etc.
Recommendations
Following recommended ways can help Sainsbury in maximizing opportunity in
international market: Sainsbury can focus upon increasing penetration in existing market. They
should not limit themselves in the existing market selling same products and services. For this
first of all they should conduct a marketing analysis in order to understand current situation of
chosen internal market. They can also focus upon opening up to new channel distribution. Both
the ways can help the organization in maximizing their opportunity in international market.
CONCLUSION
From the above assignment it has been summarized that there are various kinds of
opportunities can be gained by organizations by entering into international market. International
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marketing helps an organization to gain sustainability, enhance customer base, gain competitive
advantage and many more. However, in order to enter into international market there are various
kinds of challenges that are faced by organizations when they try to enter into international
market and in order to enter successfully within international market then it is important for
organizations to overcome those challenges. It has also been analysed that there are many
different kinds of market entry strategies that can be used by organization to enter successfully
into international market that can help an organization to gain economies of scale, enhance their
profitability and revenue.
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