International Marketing Report: Strategies for Ocado's Global Growth

This report analyzes the international marketing strategies for Ocado, an online supermarket based in the UK, with a focus on potential expansion into the Swiss market. The report begins by defining international marketing and key concepts such as domestic, export, and global marketing, highlighting the scope of international marketing and its benefits for companies like Ocado. It then provides a rationale for Ocado's international expansion, discussing opportunities and challenges, especially in the Swiss market. The report then delves into market entry strategies, including import/export, joint ventures, and licensing, recommending a joint venture and licensing approach for Ocado's entry into Switzerland. It explores direct and indirect entry routes, suggesting distributorship as a suitable option. The report also examines the differences in product, pricing, promotion, and distribution strategies across various international marketing approaches. It also contains recommendations for Ocado to maximize its opportunities in the international market.

INTERNATIONAL MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
Analyse the Scope and key concepts of International Marketing..........................................1
LO 2.................................................................................................................................................4
Evaluate entry to a selection of international Markets and define the key success factors....4
Difference between global and local marketing.....................................................................8
LO 3.................................................................................................................................................9
How product, pricing, promotional and distribution is different various internation marketing
approaches used by companies...............................................................................................9
LO 4...............................................................................................................................................11
Different marketing approaches company can adopt...........................................................11
CONCLUSION..............................................................................................................................13
REFERENCES ................................................................................RECOMMENDATIONS on14

RECOMMENDATIONS onINTRODUCTION
International marketing is an application of marketing which focuses on satisfying the
needs and demands of the customer but in the foreign country (Armstrong and et. al., 2015).
Only difference between domestic and internal marketing is that in latter part, all the marketing
activities are done for the people who resides in other country. For this report, Ocado is taken for
discussion which is a online supermarket chain and has headquarter in Hertfordshire UK.
Rationale would be provided for the company that why they should enter in to international
market by describing its entry barriers. Different strategies would be elaborated which company
could use to enter into international market will be explained. Various elements of marketing
plan will be discussed and how organisation can adapt it will be given below. At last,
recommendation and suggestions will be provided so that company can maximize its opportunity
would be explained.
LO 1
Analyse the ScopCommunication and caree and key concepts of International Marketing
Ocado is English online supermarket whose focus is on home delivery high quality
products like, drinks, foods and household goods. Firm has no chain of stores and does all
delivery of products to it's customers from it's warehouse. The CEO of the organization is Tim
Steiner and was founded on April 2000. This company is located in United Kingdom, Hatfield
and the revenue generation is 159 million GBP (2018). Here are some of the food items firm is
dealing in Ocado gold sliced Pancetta, Ocado Flat Leaf parsley, Ocado Original Blend Coffe etc.
The online site on the firm is ocado.com (Rosson and Ford, 2016).
International Marketing- International marketing a process of planning and
execution of elements which is related with the products and services like price, product, place
etc in the foreign company with the aim of satisfying needs and demands in exchange of
monetary value (Morschett, Schramm-Klein and Zentes, 2015). In other words, it can be said that
it is a expansion of business in the foreign countries so that more market and customers share
would be attracted to them. For instance, if Ocado starts providing their services in the new
market then their revenue will automatically increased as new customers will be added in their
portfolio of customer.
1

Key Concepts of International marketing
There are various concepts of international marketing which is explained below with
functional example,
 Domestic Marketing: Main focus of this concept is to target the customer which is in the
same country as company. Domestic organisation only operates their business in the
specific territory and after they reach their saturation point, company starts diversified
their product range so that continuous flow of revenue would be attain by them. For
instance, Ocado follows domestic marketing as their operations of work is limited within
the UK only.
 Export marketing: This is the phase in which company starts grounding their operations
in the foreign country with the aim of enhancing customer share in the future.
Organisation uses this step when they are getting high demand from the foreign countries.
For instance, if Ocado is planning to export their product in to other market then they
should deal with the local companies of that country or agents as without it it would not
be possible for them to sell it.
 Global marketing: It is a tactic used by the companies to reach their potential customers
in foreign countries. Main motto of the organisation is to make the strategies according to
the country where they are operating as each have different buying behaviour, culture and
beliefs etc (Basic Global Marketing Concepts, 2018). For instance, their will be vast
different between the marketing strategies of Ocado in UK and in Switzerland as both
have different behaviours which directly impact the strategies of company.
Scope of international marketing is given below,
 International marketing assist company to enter into territory which they have never been
which results in new customers for the product and services they offered. For instance, if
Ocado enters into other territory then there will be potential customers who are already
buying their products from other competitors or visiting shops physically to buy it. So by
providing them lower price or high quality products, they would be attracted towards
Ocado which will leads to higher sales in the future.
 Internal marketing will help Ocado to get more new customers into new country where
which ends up in enhancing sales of the product and service thus higher profitability in
2

future. . As mentioned above, if higher sales is attain by Ocado then revenue of the
company will automatically increased which leads to higher profitability in future.
 Marketing assist company to get new customer in the market which ends up in increasing
brand name in the mind of potential customers. For example, after entering in to foreign
country, Ocado will spend their funds in marketing their products and brand in the market
by advertising, promotion, sales promotions, CSR activities etc. All these factors will
assist Ocado to enhance their brand awareness in the market as by seeing the
advertisement, customers would be aware about the brand.
Rational
Today business has so many opportunities that can provide them many advantages to
grow fast and move from one place to another that can help them to explore new markets some
purpose which is discussed below why company should go internationally.
 If a company business is growing successfully in domestic market, then they should try to
expand themselves into international market. First it increase the revenue of a business by
increasing the sell of their products and with these the value, quality, and price of there
products is also increased.
 If a business have to face recession or there is low sale of their products in domestic
market because of any economic issue than they should earn profits by exporting their
products.
 When a business expand themselves internationally they learn many more things like
innovation because the demand of products is not similar between two countries so they
should innovate their products as per demand of international customer.
 Last reason is that when a business expand themselves for the international market at
that time they gain the competitive advantage and other fact is that if a competitive
company is entered in home market of other company then they should find solution to
defence their home market.
Opportunities Challenges
Ocado has large number of customers in
Switzerland as there are few companies which
are operating in this industry. So company has
Switzerland has many big players in the market
which are also doing the same business as
Ocado like Farmy.ch, LeShop.ch, Swiss Rasoi
3

the chances of enhancing sales and profitability
to a certain level. To attain this, marketing
activities should be plan according to the needs
and demands of the potential customer.
etc. So company has to make their strategies in
respect of the competitors and the environment
as then only strategies would become effective
and efficient.
By using the Brand image, Ocado can diversity
their products in to Switzerland market with
the aim of getting higher ROI from it. By
diversifying the product, customers from
different sector would also attracted towards
Ocado which leads to higher sales and revenue
for the company.
As Brexit is on the verge, Ocado has to change
their rules and regulations while entering in to
Switzerland which could affect their
performance in a negative way. For instance,
Ocado has to modify their import and export
rules, or hiring of people which could be risky
in nature if does not implement properly.
LO 2
Evaluate entry to a selection of international Markets and define the key success factors
International marketing makes a favourable impact in the performance of the company if
strategies opted by them is according to internal as well as external market (Demangeot,
Broderick and Craig, 2015). Various ways through which Ocado can opt to enter in to
Switzerland is given below,
 Import and Export: It is way of entering in to foreign countries by start selling their
products through agents or companies. In export, companies sell their product oversees so
that more revenue would be generated for the company. On the other hand, import refers
to when foreign companies products are sell in to their homeland according to the
demand of potential customers.
 Joint Venture: It is an collaborative approach in which more than two companies comes
together to sell specific product with the aim of satisfying the needs of customer.
Sometimes, collaboration often provide new company in the market while considering
the mission and vision of both the organisation.
 Full Owned Manufacturing: If any organisation has long term strategies related to the
country they are visiting then full owned manufacturing is one of the favourable way of
doing so as whole profit goes in the balance sheet of company which they does not have
to share with (Kotler and et. al., 2015). But on the other side, there are various factors
4

which must be considered by them like trade barriers, cost of production, rules and
regulations, government stability etc.
 Alliances: Licensing is also one of the effective way which is used by companies to enter
in to market. Partnership with other companies or providing licensing to local companies
is a way of expanding business operations. The one leases their rights are known as
licensor and those who gets it is known as licensee.
So it can be said that Ocado should use Joint venture as well as Licensing to enter in to
Switzerland market as company has start growing their operations in the UK market as it is not
possible for them to invest that much of amount for internal marketing.
Different type of entry routes which Ocado can opt is given below with functional examples of
it,
 Direct route: It is a type of approach in which enterprise comes directly in contact with
the potential customer. There are various ways through which direct could be achieve like
face to face selling in which seller is appointed by the company and then they have to sell
their product by meeting customers in person. Other technique is online selling in which
company sell their product through online platform. Main motto of this approach is meet
the customer in person so that customer engagement experience would enhance to a
certain level which will leads to better profitability in the future.
 Indirect route: It refers to approach in which company sell their products with the help of
middleman. Advantages of using this approach is that it will enhance Ocado sales to a
certain level beside this, expansion of target would also achieve with this approach.
Various techniques comes under this is retailers, distributors etc. Distributors are those
who supplies company's product to the retailers and agents so that they can perform their
work accordingly. For instance, wholesalers comes under this whose work is to buy the
product from the company directly and then distribute in the territory according to the
requirements. Other is retailer who has small shops in the area and sell products in retail
with the aim of satisfying customers demands.
Ocado should opt distributorship while entering in to new market as they have proper
knowledge about the market due to which it would be easier for them to identify the needs and
demands of customer accordingly. In context with Ocado, business firm is required to do
analysis of all of the suitable option and select one, on a basis of prevention of the cost
5

consumption and less impact on pricing ratio to build profitability at a productive stage. This is
necessary to develop planning process in order to enhance operations of the Ocado in success of
business accomplishment or defined objectives.
Key criteria and selection process of international market
It is important for foreign companies to choose entering countries according to the
strengths and weakness they already has as success factor is directly linked with that only.
Selection process which could be used by Ocado is explained below,
 Marketing Objective: Before internalising business operations, company first analyse
their objectives and how it is matched with the foreign country. Reason behind
conducting this is to find out the actions of organisation with company's mission and
vision. For instance, if Ocado objective is to capture half of European union with their
products then Switzerland would be the favourable option for them.
 Selection method: Various aspects which must be check by Ocado before starting their
business is infrastructure for their warehouse, internet speed as whole company is
operates through internet only, labour and skilful candidates for jobs, availability of auto
mobile for delivery, inflation rate etc. All these factors must be analyse by them as it is
directly linked with the performance and profitability of company.
 Screening: In this phase, various opportunities and threats which could affect their
business in a positive or negative way is identified. For instance, number of customer,
competitors list, disposable income, economic conditions, per capita income etc.
 Analysis and selection: After collection all the information which is important for
company, analysis is done by using different mathematical formulas and software so that
future related to Ocado would be predicted. Various mathematical formulas like time
series regressions, cost analysis, linear regressions, feasibility study etc is used by
company to predict their future. All the countries which company is planning to get into
is ranked according to these factors and one who gets the higher number will be
favourable and suitable for Ocado to enter.
 Marketing test: It is the initial phase in which company launches their beta version of
services to check the particular segment. This phase is important because if company fails
then they opt for quitting the international marketing instead of investing more into it. For
instance, Ocado will launch their online supermarket business and check the number of
6

order they are getting for a shorter period of time. If they succeeded then Ocado will
carry their business operations and if they did not then they will opt for other strategic
options (International Market Selection Process, 2019).
 Production: This is the last stage in which company starts their operation if they succeed
in the initial phase of the selection process.
Criteria of selection
 Environmental analysis: It includes various aspects like political, sociological,
technological, legal etc. All these factor should be considered by Ocado before entering
in to foreign country as it is linked with the profitability of the company. For instance, if
there are high tax rate in the country then it will affect negatively as profit would be
reduced to a certain level (The main criteria for selecting international markets, 2019).
 Analysis of competition: In this criteria, number of competition in the market and their
pricing strategies is analysed as visiting companies have to set their strategies
accordingly. For instance, if competitive company is selling their product in low prices
with the aim of getting high customers then Ocado should make their strategies
accordingly as then only it would be possible for them to succeed in the market.
 Demand generation: It is related with the demand the product has in the market in the
current scenario and what will be the future prediction of the industry in the country. For
instance, in Switzerland there is only 2% share of the food retail sector in the overall e-
commerce industry. So it depicts that Switzerland market is still untapped in nature and
has favourable future for the companies like Ocado (TRENDS IN E-COMMERCE:
SWITZERLAND, 2019)
Marketing entry strategy with advantages and disadvantage
Export route can be opted by Ocado as their work is to sell the grocery over internet so
that local customers does not have to physically visit stores. There are various advantages of this
like low cost of investment is required to start their business which implies higher rate of return
to the company. On the other hand, lack of consumer buying behaviour will affect their sales as
organisation is not physically present. So it wont be possible for them to sell their product from
UK as various taxes which company is legally to pay will increase the cost of the product due to
which they can not compete with companies like LeShop.ch.
7

Joint venture can be used for instance if Ocado has planned to enter into Switzerland then
they should find out the local partner and makes association with them. As it assist them to
identity circumstances of country where Ocado is planning to enter. It assist Ocado to reduce
their burden of investment as it is done according to the equity shared between the partners. It
provides proper access to the potential market, new technology which could assist them to
improve their quality and quantity etc. For instance, if Ocado is doing JV with local companies
of Switzerland then both will invest the same amount of money in the starting and losses and
profits are disseminate accordingly. Moreover, technology will be shared among the partners due
to which chances of enhancing performance would increase to a certain level. On the other hand,
conflicts between partners may arise as both have different vision which they have to attain with
the help of JV. Along with this, JV is for a shorter period of time so it becomes hard for visitor
company to make their brand identity or awareness in the mind of customer.
Other way is full owned manufacturing, for instance, if Ocado planned to enter into other
country then they would start their own warehouse in that place. Besides this full time employees
have to hire by them who will manage the IT functions of Ocado. Pros behind using this is that
Ocado has then the full power of handling the operations of business which can make a positive
impact on company's performance. Moreover, all the decision taken by them would be fast as
they does not have to ask other partners opinions while doing it. On different side, high cost of
investment would be required which is not possible for companies like Ocado as it is a local
company of UK. Plus, chances of getting success is lower as organisation first have to conduct
market research for the market which incurs time and cost (Advantages & Disadvantages of a
Wholly Owned Subsidiary, 2019)
Ocado can sell their selling rights which includes company name, trademark, logo, brand
name etc to the local company so that they can start their own of business of selling of grocery
over internet. In return, Ocado gets the royalty amount with sum percentage of profits of the
licensee. It is a easy way of entering as no or less investment is required to accomplish this task.
Besides this, Ocado will get the amount without doing any thing which ends up at enhancing
profitability of a company. But if the brand image hampered in a negative way due to which
licensee then it will also have a unfavourable impact in the working of the licensor (Modes of
Entry, 2019).
8

According to the rmstrong and et. al., (2015) For Ocado, this is majorly prominent to do
critical analysis of market in which they are operating and what are their major preferences while
in the case of business operation. Ocado must do analysis of their environment in which they are
operating and also how they can go for longer period of time. Ocado must do analysis of strength
and weakness of their current business operation to develop strategic planning which consists of
the structure of the market, establishes the customer base to develop opportunities for Ocado to
expand their business operations for accomplishing productive goals or objectives.
Conclusion and recommendation
It can be said that company should properly opt entry modes and routes as most of the
business performance is based on this factor only. Moreover, country where company is planning
to get into must be properly analysed and evaluated by them as company strategies are modified
according to the external environment.
Recommendation
 Ocado should opt global marketing while entering into Switzerland as then only it would
be possible for them to enhance brand awareness in the market.
 Two different types of entry routes i.e., joint venture and licensing should be opt by
Ocado to enter in to untapped market as if various ways has been used by them while
entering then chances of getting success becomes higher.
Difference between global and local marketing
Basis Global marketing Local marketing
Meaning Global marketing means
planning, placing, creating and
promoting the company's
product in the global market.
Local marketing means
consumers located within the
area where product is made
available.
Payment mode In Global market payment
mode is online transaction like
Paytm, net banking etc.
In local marketing mode of
payment is cash payment like
by cheques.
9

Risk factor Global market has high risk
factor regarding hacking of
data and information.
Local market has less risk
factor as compared to global
market.
Accessibility In global market product
purchased by the customers
can not be touched, or seen
before purchasing the product.
In local market product can be
touched and can be seen before
purchasing the product.
Availability of service Global market trade for 24 /7
hours.
Local market trade only during
the day as 24/7 hours service is
not available in local stores.
Goals Global market main goal is to
satisfy customers with their
services or product
availability.
Local stores main goal is to
sell the product to the
customers by any means.
Profit maximization Global market has large
chances to earn or maximize
huge profits as it deals
globally.
Local market has less chances
to earn huge profits as it deals
locally or within the region.
Market share Global market has more
market share as it's products
are served across the nation
(Tan and Sousa, 2015).
Local market market share is
limited to local region only as
firm is selling it's product in
local region.
Expansion In global market expansion of
business is more as compared
to local as it product is served
across the boundaries.
In local market expansion is
possible but at a smaller level.
Business operation In global market business
operation is more than one
country.
In local market business
operation is within single
country.
10