International Marketing Analysis: Tesco's Brazil Entry Strategy

This report analyzes Tesco's international marketing strategy, specifically focusing on its potential expansion into the Brazilian market. It begins with an introduction to international marketing and then delves into the need for market research, emphasizing the importance of understanding Brazilian consumer preferences, market size, competition, and the political and legal environment. The report highlights the business case for international marketing for Tesco, including increased market share, brand image enhancement, and lower labor costs. It then addresses the risks involved, such as market, economic, and operational risks. The report further explores different methods of international marketing, pricing and financial issues, and the features of the international market. It also examines operational considerations, characteristics of international marketing strategy, and legal implications. Finally, the report discusses factors affecting marketing communications, the role of technology, and the implications of various marketing and sales communication strategies, including glocalization.

INTERNATIONAL
MARKETING

Table of Content
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Market research need for international marketing............................................................3
1.2 Business case for international marketing........................................................................6
1.3 Risks involved in marketing at international level...........................................................7
M 1 Different methods of international marketing.................................................................8
D 1 Pricing and financial issues impacting international operations.....................................8
TASK 2............................................................................................................................................8
2.1 Features of international market.......................................................................................8
2.2 Operational consideration for developing international marketing strategy....................9
2.3 Characteristics of international marketing strategy..........................................................9
M 2 Legal implications.........................................................................................................10
D 2 Evaluation of international marketing strategy.............................................................10
TASK 3..........................................................................................................................................10
3.1 Different factors which affect marketing communications............................................10
3.2 Role of technology in communication of international marketing.................................11
3.3 Need and implication of various marketing and sales communication strategies..........12
D 3 Glocalization and its effect on communication.............................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
International marketing can be defined as applying of principles and strategies of
marketing to satisfy needs of the international consumers. In this modern and globalized era, it is
of utmost importance to do international trade and marketing. The present study is based on
Tesco which is British multinational retailer planning to expand trade in Brazil (13 Global
brands that are not in Brazil, 2019).
The report will outline need of market research to know the trends of international
marketing. Further it will discuss in a formal brief implication of international marketing for the
company. Next the assignment will apply some knowledge to understand and develop
international marketing strategy. At last the report will highlight the requirements of
international marketing communication.
TASK 1
1.1 Market research need for international marketing
When establishing the business at international level it is very necessary to conduct a
market research of the country. International marketing research needs of Tesco can be justified
with a systematic method of analysing, evaluating, collecting and recording relevant information
related of host country. The requirements of market research are as follows-
 As Tesco wants to trade with Brazil so it needs to do a proper market research of Brazil.
It is so because of the reason that people of Brazil will have different taste and culture
different from UK and other countries where it operates. This market research is
important as it will help in understanding trends and preferences of society of Brazil.
 The market research will help Tesco in studying about the market size of Brazil and also
about the existing competitors and what strategies they used to market their products in
that particular market. This will help Tesco in analysing the strategies of competitors and
then accordingly design their strategy to get a competitive advantage (Papadopoulos and
Heslop, 2014).
 The political and legal environment of all the countries are different. Therefore, with the
help of proper market research Tesco needs to study about the laws governing the retail
sector of Brazil, the employment contract act prevailing in Brazil, the taxation policies
applicable on the retail sector of Brazil.

For doing market research it is very necessary to collect relevant and valid data for the
establishment of the business in Brazil. It is due to the reason that if the data will not be correct
then the business will be a failure. TESCO carries a renowned brand name thus, they carry the
crucial information which if hacked can dispose their brand image (Leonidou and et.al., 2018). In
developing countries, the validity of data is to be produced through high tech security. So that
TESCO can easily trade their business in Brazil without any barriers.
Therefore, for doing the market research installing international marketing information
system is very necessary. Marketing information system is a type of setup wherein the company
tries to scan the whole environment before entering into a new market. For this it uses different
types of tool like SWOT analysis and PESTLE analysis which helps in analysing the whole
market before entering into it.
Through the international marketing information systems in TESCO, it helps company to
increase customer base through their respective techniques and also improve accuracy to
interpret any task. As by undertaking any international information regarding the local
competitors of Brazil and the strategies which they use to attract the interests of customer helps
TESCO in motivating employees to concentrate more on achieving high level functions in
organisation at international level. Marketing research is mainly conducted by TESCO company
in context of determining the needs of customers, strategies of competitors and also market
competencies (Baker and Saren, 2016). Thus, to examine the suitability of the different
marketing research methods at global level, interviews and survey is the best policy which is
adapted by TESCO in determining the actual position of Brazil market and preference of people
choice regarding choosing such products. By conducting interview from the people helps
TESCO in determining more culture and taste differences which helps them to grab their interest
through their innovate products and services.
Business plan mainly depends upon the internal and external factors of the company.
Thus, by preferring the environmental scanning tool of TESCO, its basic use is reflected in
respective of gathering information which is occurring in Brazil regarding trading of import and
export of goods and services. At international level, various issues and barriers are also occurred
which is reflected through environment scanning and also TESCO can scan the internal working
through preferring SWOT analysis. This helps them to identify various aspect regarding their
internal management and also trained employees to achieve targets within the stipulates time.

Resources Investment mainly conducted on investing the resources in form of case, liquid
securities or any other investment related loans. It can be on the bases of financial investment
which helps company to plan their activities, so that they can operates the business effectively at
international level (Hapsari, Stoffers and Gunawan, 2017). The main advantages of preferring
the resource investment for TESCO is that in respective of raising income it helps TESCO to
trade their business into Brazil which results in increasing the profits ratio. The disadvantage of
the resources investment is that it carries market risks. As TESCO carries competitors in market
regarding their products and services. Thus, there are more chances of reducing the reputation in
market regarding the products.
The methods are required to enter into different market are in respective of preferring the
Franchising, joint ventures and licensing. Through this TESCO can expand their business into
different countries and also carry their brand name to attract large interests of people. In context
of international agencies they played the major role on behalf of government (Butler, 2015). The
rules which are implemented by them are majorly focused on protecting the interest of customers
and also secure the creativity and innovation to sustain the economic development of country. In
case of TESCO, the multinational trading groups are used in references to managing the
accuracy of suppliers and study of products to be undertaken by customers in adapting the
services of company. Thus, it indicates that they are engaging their business into multinational
companies to operate their business and carry such activities at large scale.
The role of UK trade and investment in respective of TESCO to trading with Brazil in
respective of dealing their goods and services in respect of reducing any barriers which occurs
through government norms. In respective of BIS (Business innovation and Skills) it is important
in preferring the overseas trade as it carries the company brand image. By expanding the
business operation, they are also giving opportunities to employees to innovates such products by
keeping in mind the needs of the customers. In respect of TESCO company expanding their
trading with Brazil, the major factors which is to be carried is in respective of the local labour
which further carried the business and also it requires skilled person to handle the consequences
if any. The place also matters as customers prefer such places which is easily reachable and also
hygienic environment (Gbadamosi, 2019). Thus, it is the duty of the TESCO managers to plan
and prepare the proper management regarding inflow and outflow of goods from company to

customers. In this the international logistics is required to prepare the supply chain management
regarding such flow of goods and services.
In the matters related to distribution channel, it determines the overall planning which is
interpreted by company regarding reaching to large number of customers. It also helps TESCO
to protect the products from any errors in respect of finalising or manufacturing such products.
1.2 Business case for international marketing
In the present case Tesco wants to trade with Brazil. The reason behind choosing the
market entry is that they had to target the new market. The business world has become
globalized and to be in the competition and run business successfully it is necessary for company
to adapt to the latest trends increase market share. There is a need to go for international
marketing for Tesco because it is helpful in increasing its scale of the business. This will help
Tesco in increasing its market presence of Tesco in Brazil as well (Vellas, 2016). As the market
will increase for Tesco, it will increase its base of customers and this in turn increases the profits
for the company. Another need of international marketing for Tesco is that it will increase the
goodwill and brand image of the company at the international level so it will be helpful in raising
the market position of the company at the international level.
It is very necessary to consult international development agencies before entering into a
new market as these agencies helps in collecting information relating to the intended market
where Tesco wants to expand. It wants to enter into the market because there the labour cost is
very low as compared to UK. Therefore, Tesco can operate with low labour cost which will
eventually increase the profits for the company. Also the local market of Brazil is very good and
the products of Tesco are preferred to a much extent by the population of Brazil.
Brazil varies under the top 10 country and is covered under the 8,515,767 total sq. km
area. As Brazil carries the large investors bases and maturity structure for both public and private
sectors. The barriers which the TESCO can faces at the time of trading are in respect of
government norms which they impose in respect of importing and exporting of goods and
services (Agarwal and Wu, 2018). The fluctuation in market depends upon the environment
condition and also the government involvement is to be identifies in respect of committing any
barriers in respect of country norms. TESCO wants to trade the goods and products in Brazil
which result in imposing the taxes along with purchases and delivery of goods and services.

1.3 Risks involved in marketing at international level
As the business environment is very dynamic in nature so there are many types of risk
which may affect the business while marketing at international level. Some types of risk which
may affect Tesco in trading with Brazil are discussed in the adjoining points below-
Market risk- This is the major risk involved while going for international marketing. This
is majorly because of the reason that the markets of UK is completely different as compared to
Brazil. The business continues in a dynamic environment where changes takes on frequently.
And apart from this market risk increases due to increase in competition, changes in the
consumer trends and buying behaviour, and many organisation-wide systematiser factors.
Economic risk- It is a type of risk which occurs due to changes taking place in the
economy of the country which impacts the working and profits of the company negatively. The
economic conditions of both the countries are very different like economy of UK is much
developed as compared with Brazil so it might be possible that there may be changes in interest
rates, inflation, deflation, recession or depression, currency fluctuations, changes in taxation and
many other related factors which may affect Tesco.
Operational risk- Both the countries are different in the use of machines and tools and
materials used for operating the business. Therefore, it includes the risk with the production and
operations of the company. For example, UK is much advance in technology but it is not
possible that it many be the case with Brazil as well. So there can be other risk like limited raw
materials available in another country, or there may be high priced raw materials and inputs,
more cost fluctuations in machineries and tools and many other related factors (Demangeot,
Broderick and Craig, 2015).
Legal risk- it is also a common risk which needs to be taken care of because every
country has its own rules and regulations which every new entering company has to follow.
Financial Risk: Brazil is not considerer to be the developed country as it carries the low
GDP rate which results in low livings standards of the people. As compared to UK it is much
developed country and also it charges minimum taxes in respect of import and export of goods
and services (Leonidou and et.al., 2018). The difference also occurs in case of exchanges rates in
respect of transferring the goods and products in international markets.

M 1 Different methods of international marketing
There are many methods of international marketing such as exports, imports, licensing,
joint ventures, franchising and many other different types of methods.
Strengths
 As the company now trades at large scale so it reduces the cost and is benefited with
economies of scale. It is also advantageous for the government also as it can earn foreign exchange because
of international trade (Shenkar, Luo and Chi, 2014).
Weakness
 The major problem is the difference in the culture of different countries which may pose
problem to both home and host countries.
 The another problem can be different government rules and regulations which it has to
follow while trading in other country.
D 1 Pricing and financial issues impacting international operations
The pricing and financial differences will impact the operations of Tesco because of the
reason that it is not possible that all the countries have same standard prices or any other
financial charges like high rate of interest on loans and borrowings. Like if the price of raw
material is high in Brazil then it will negatively impact the international operation of Tesco. It is
so because if material price will be high then it will not buy material from there and will find an
alternative to minimize its cost.
TASK 2
2.1 Features of international market
An international market can be defined as the place where any country can trade that is
buy and sell goods and services with any other across the globe. Some different features and
characteristics of international market are discussed in the connected points-
Broader market- Due to good geographic position Brazil is a very good market and has a
wide area of market in retailing sector. Also, the maximum part of population of has moved from
poverty level to consumer level. So it increased the consumption level of the economy.
Intense competition- As the consumption level of Brazil has increased so for catering to
the increased demand many companies have entered into the retailing sector. And because of this
reason the competition has increased and intensified.

High risk- With increased exposure to international market the risk of dealing at
international level also increases (Gnizy and Shoham, 2014). This is because of the reason that
the market conditions of Brazil are different as compared to UK. Therefore, it is not possible that
the techniques used by Tesco in UK will also be applicable on the Brazilian market.
2.2 Operational consideration for developing international marketing strategy
For developing an international marketing strategy some key considerations need be
taken into consideration which are discussed in the following points below-
Market research- This is the first consideration to be taken care of because the business
deals in dynamic environment so it is very necessary to study the market in depth to analyse and
evaluate the market conditions (Hoppner and Griffith, 2015). The market research will help
Tesco in knowing the preferences and taste of the people living in Brazil. It will help company in
doing strategic planning before entering into the market.
Financial aspect- It is very necessary for the company to evaluate the financial position
of itself before operating in international market. Tesco needs to evaluate all the cost that is the
cost of raw materials and other inputs of Brazil so that it can arrange for the money required to
meet all the cost of production.
Legal consideration- This is another consideration which company needs to focus. This
is majorly because of the reason that different countries have different types of laws, rules and
regulation. It is not necessary that law governing the retail sector of UK is also applicable on
Brazil. Therefore, before establishing business it needs to study the legal implication of Brazil.
2.3 Characteristics of international marketing strategy
For entering into the BLeonidou, L. C. and et.al., 2018razilian market Tesco will use the
strategy of joint venture. Joint venture is a strategy for international marketing wherein two or
more companies come together for accomplishing a common goal. And as the goal is
accomplished the joint venture comes to an end. The characteristics of joint venture are
discussed in the following points-
Sharing of loss and profits- With help of working jointly all the profits and loss are
shared in between both the companies in an agreed ratio.
Less investment- Both the companies pool their resources and expertise so the company
need not invest much in technology, raw materials, capital and other resources required to run
the business (Gillespie, 2015).

advertising taboos Dissolution- It is another characteristic that as and when the goal is
accomplished the business venture comes to an end and both the companies are free to run their
business individually according to their own choice.
M 2 Legal implications
There are many legal implications which the company needs to take into consideration
for implementing international marketing strategy (Tiago and Veríssimo, 2014). The underlying
fact behind this legal implication is that every country has its own specific rules and regulations.
Therefore, the company need to comply with different laws and rules and regulations to be
successful. The laws applicable in UK are totally different as compared to Brazilian law.
D 2 Evaluation of international marketing strategy
Strengths
 With help of joint venture company can have access to new market with very low cost
and also its distribution network increases. Joint venture with big and established company will increase the good will of another
company joining with it.
Weakness
 The difference in the culture of both the companies and use of management styles can
impact the operations of business.
 This venture is only temporary as the objective will be achieved the venture will come to
an end.
TASK 3
3.1 Different factors which affect marketing communications
There are many factors which affects the marketing communication, some are as follows-
Local customs- The customs of UK are different from that of Brazil. Customs are the
tradition which are being followed since ages. Like people of UK likes to communicate in formal
way. But Brazilians love to interact with each other in relaxed and informal way.
Culture- It also affects the communication among people. It is so because of the reason
that culture of different countries are different from one another. Like the UK culture is mostly
based on its history on the other hand Brazilian culture is majorly western and is a mix of diverse
cultures.

Language- It is the medium through which the people communicate with one another. In
communication at international level it poses a major problem because every country has its own
language. Like in UK the official language spoken is English whereas the official language of
Brazil is Portuguese.
Ethical consideration- This also impacts the communication because what is ethical for
one country may not be possible that it is also ethical for other country (Martin and Javalgi,
2016). Like for example eating non- vegetarian food is popular in UK but is not prevalent in
Brazil then promoting it in that country is waste of time.
It is very necessary for the community to accept the product within the country. It is
mainly because of the reason that if the product will not be accepted by the country then it will
have to face losses. So for this the company will have to go for advertising. Through the concept
of advertising, the various barrier are resulting on the bases of taboos which are conducted on the
bases of culture. Thus, the process of advertising is to be chosen along with the laws and the
keeping in mind the culture of society (Rindfleisch and Malter, 2019). The culture of UK and
Brazil are different, thus to promote the TESCO company, positive attitude is to be maintained
regarding producing ads. Leaders had power to influences the employees and also carry company
stability in better way. Thus, the role of leaders in TESCO had the ability to turn the company
profile and reputation at international level.
3.2 Role of technology in communication of international marketing
As the communication at the international level might be confusing and not clear so here
technology helps in communicating more clearly and effectively. The role of technology in
communicating as international level are discussed below-
In general the technology plays a vital role in international marketing as it helps in
assessing the reliability of the data collected and communicating the information to the
consumers.
Social media marketing- With advancement in technology commination at international
level has been increased. The social media marketing is the best method of communicating
internationally. With the help of this method any country can communicate with any other
country at any distance with just one click.

Telecommunication- It is another method of communicating over the globe. Under this
technique people use many modes of communication like, cell phones, beepers, fax, video
conferencing and many other modes.
Implication of language and cultural factors are on the operational management that is
recruitment and training of staff is necessary because of the fact that in marketing in different
country the difference in the language of the countries poses a problem in marketing the product
in different country. The information which is provided by company in respective of
international marketing are based on the company marketing techniques in respect of promoting
through advertisement (Baker and Saren, 2016). As the original information is to be disclosed on
company profile which attract the company interest for longer time period. Through the process
of technology, TESCO carries the reliable information which is disclosed in company profile and
through technology they reach to large number of customers. The alternative methods of
marketing communication which the TESCO can used in respective of Buzz marketing which
reflects by communicating through mouth (Hapsari, Stoffers and Gunawan, 2017). They directly
interacted with customer and identifies the needs and demands regarding the availability of such
products. They can also prefer the Guerilla marketing through which they can bring or alter the
innovate ways to bring more effective tactics.
3.3 Need and implication of various marketing and sales communication strategies
Marketing and sales communication strategy are different techniques which company use
to interact with the consumers in order to promote the products and services of the company
within the market. The different strategies used by Tesco are as follows-
Social media advertising- It is a method of advertising which Tesco uses to promote its
product and services in Brazil. This method is used prominently because it is most popular and
cheap method of marketing and communicating with others. It is cheap because it covers a large
portion of population.
Blogging- It is also a newer concept of marketing communication. Under this method
experts of company writes blog articles relating to the products and services outlining its features
and quality of product. This method is used because the blogs from experts and authentic sources
builds trust in consumers and it increases the sales (Amankwah-Amoah, Boso and Debrah,
2018).

Operational management: This is also the beneficial concept which TESCO can choose
in respect of recruiting or providing training to the local staff of the Brazil. This helps them in
communicating more effectively and also interact with large number of customers regarding their
needs and demand in preferring the particular products (Rosson and Ford, 2016). By choosing
the local facilitator in promoting the sales and marketing communication, helps the TESCO
company to interact with more local customers in Brazil.
D 3 Glocalization and its effect on communication
It is a combination of localization and globalization which is used to describe the
development of product and services and its distribution at global level but it also takes into
consideration the local consumers as well. Communication for glocalization is very necessary
because in glocalization the company has to correctly assess the needs of both the local
consumers and global consumers. If the communication will not be proper then Tesco will not be
able to assess the needs correctly.
Advantages
It helps in facing high pressure and meeting the requirement of the local consumers.
It also helps in connecting the consumers with the companies at the global position.
Disadvantages
it requires a lot of time in doing research for entering into a new market.
CONCLUSION
With the completion of the report it can be concluded that for international trade it is very
necessary for the company to properly plan and execute a market research to know the trends of
another country. The report outlined that many risks are involved in international trade like
market risk, economic risk and many more. Next it outlined the operational consideration
required for international trade like market research, financial stability and many others. Further
it outlined the characteristics of international marketing strategy that is joint venture. Next it
outlined some factors which affects the communication like customs, language, culture and many
others. At last the report discussed the role of technology in marketing communication. Along
with a discussion on need and implication of marketing strategies like social media advertising
and blogging.

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