International Marketing Strategies for Lancia: China & USA Analysis

This report provides a comprehensive analysis of Lancia's international marketing strategies for entering the Chinese and US markets. It begins by identifying and applying Porter's generic competitive strategies to analyze market opportunities. The report then delves into a detailed examination of macro-environmental risk factors in both countries using PESTLE analysis, assessing political, economic, social, technological, legal, and environmental influences. A comparative analysis of the marketing mix for each country is conducted, highlighting opportunities and threats. The report concludes with a justification for choosing one country and proposes a recommended market entry strategy for Lancia. This includes a discussion of the advantages of adopting a differential focus strategy, particularly in the context of luxury and classic car sales. The analysis emphasizes the importance of understanding consumer needs and preferences, leveraging unique product differentiation, and building a strong brand image to achieve competitive advantage in the international market. The report also underscores the role of external factors in shaping marketing decisions and the need for adaptability in response to changing market conditions.

International
Marketing
Management

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Critically determine theoretical model and tools to analyse market in both countries..........1
Analyse macro environmental risk factor of both country.....................................................4
Analysis and comparison of opportunities and threats related to a successful marketing mix
for each country. ....................................................................................................................7
Justification for choice of one country and recommended market entry strategy proposed 11
CONCLUSION .............................................................................................................................14
REFERENCES ............................................................................................................................15

INTRODUCTION
In current time, companies are looking forward to expand business at internatioaml
market for gaining higher level of sales and profit margin. For this purpose, it has become
important to adopt international marketing practices so that organization can sustain in the global
market place for longer period of time. International marketing is a market where organisation
sell their goods and services in other country by complying all legal rules and regulation relevant
to that country where they are operating. As there are various benefits for expanding business in
international market as they can attract customer which help them to gain competitive advantage
(Baack, Czarnecka and Baack, 2018). According to this report, Lancia is taken as base company.
It is an Italian manufacture and operating as an automotive industry which is formed in January
2007. It is a company which deals in luxury cars and currently looking forward to expand
business at international level. It is headquartered in at Turin, Italy and also exports in other
country which are United Kingdom and Japan. In this report, they are entering to sell their
product in international market which are China and USA. In this report, there are two countries
and which strategy is useful as it include model which is Porter's generic strategy where they can
easily identify which strategy is useful in order to maintain their position in international market
with the help of this Lancia can easily enter into market in both countries which are China and
USA. There are macro environmental risk factor of both country so before entering into
international market they can analyse what are the factors that can affect their business. The
report also include marketing mix of both countries with comparison of their opportunities and
threat involved in it. In last, it last one country is selected and recommendation for entering into
market with strategy. There are some issues, opportunities and threats in marketing mix because
in the report there is comparison between two countries.
MAIN BODY
Critically determine theoretical model and tools to analyse market in both countries
The best model to analyse the market of both country which is china and USA that should
be adopted by selected organisation is Porter's generic competitive strategies. The Porter's
generic strategies means the organisation analyse whether both are earning profit as compared to
their competitor in market (Dam, Le Dinh and Menvielle, 2019). As there competitive market
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are other brands that are already present in China and USA so they have to develop strategies in
order to remain competitive in market for long period of time. As both countries can adopt
different strategy as where they are operating because different counties have different operating
system in order to attract customers in market. The Porter's generic strategies is adopted because
it is important model for organisation as the selected organisation is entering into international
market for first time so it help them to develop strategies in order to gain competitive advantage.
With the help of this model, they can easily enter into international market without any
difficulties because before entering they have adopted which strategy is useful for competitive
advantage (Deepak and Jeyakumar, 2019).
In other words, Porter's generic strategies is an strategy because this model is applicable
to any product or services and can be used by any type of industries in world. The Porter's
competitive strategies is useful and can be adopted by every organisation as they can analyse and
apply that strategies in market. In context to Lancia, they have to first understand all strategies so
that they can adopt the best strategy and apply them in China and USA. In this model there are
four strategies which are cost leadership, differentiation, cost focus and differential focus. These
strategies are discussed in detail in context to both countries which are China and USA in context
to selected organisation which is mentioned below: Cost Leadership: The first strategy is cost leadership which states that to produce a
luxury and classic cars in low cost which help them to gain cost advantage (Hüttner,
2018). The main aim of this strategy is to reduce the unnecessary cost involved in
manufacturing so that they can lower their price of car in market. The selected
organisation which is Lancia there are many competitor in market which are using this
strategy so for many companies it become difficult to run for long period such as there
are many problem which include change in value of currency, increase in labour cost and
many more. Differentiation: This is another strategy where selected organisation have to introduce a
luxury and classic cars as they have to make their cars in an attractive way to gain
competitive advantage in both countries. This strategy is used by those organisation who
target to large number of customer in market for this they have to manufacture different
types of product or services which offer attractive products which include features,
functions and many other (Ihejirika, Goulding and Calvert, 2021). For adopting this
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strategy they have to do more research, innovate, branding and channels to distribute
product in market. By considering this the organisation can easily gain competitive
advantage and can retain customer and maintain their position for long period of time. Cost Focus: The cost focus is another strategy where only small market segment
organisation adopt this kind of strategy for low cost advantage. In this the companies sell
similar product which are sold by the other companies so in this strategy the products can
be sold at higher price. In other words, it can be said that cost focus is that strategy which
target only specified segment. The organisation when using this strategy they have to
target small market. For example, any organisation is selling same product which is
mostly used by organisation so they can adopt this strategy.
 Differentiation Focus: The last strategy is differential focus as in this they make product
which are differentiated from other product in market as they organisation have small
number of market segment (Jafarzadeh and ALAVI, 2017). They introduce product
according to needs and requirement of product in market and can be target to large
population. So, organisation have to monitor at which target market and consumer they
want to sell their product.
From the above analysis of Porter generic strategies is that Lancia and auto mobile
industry sell luxury and classic cars as they have to enter into international market so they have
to first analyse which strategy will be useful for them. As they want to explore their market into
China and USA so they have to analyse according to their product they are dealing with. They
can adopt differential focus strategy because they want to expand in international market and can
apply this strategy in both countries (Rana and et. al., 2020). Lancia by adopting this strategy can
analyse the market of both countries and monitor the need and requirements they want in luxury
and classic car such as nowadays customer are purchasing an electric car so they should focus on
introducing car in the market for China and USA. The strategy can be adopted by them if they
are launching or introducing new product as they can introduce electric vehicle luxury and
classic car which help them to achieve success in both countries. They have to first verify what
are need and requirement of customer which will help them to introduce a new car in market.
This not only help them to earn profit and increase sales as they can protect the environment by
reducing pollution in countries.
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The main benefit of adopting differential focus strategy is that it reduce competition in
prices, as they are selling unique cars which help them to retain customer and can gain
competitive advantage in market (Katsikeas, 2018). The other main advantage of differential
focus is that they can earn large profit margins and can produce high quality cars in market.
These benefits lead to build brand image, create customer experience and loyalty. The Porter's
generic strategies is important because it help organisation to identify which strategy is useful at
which market with the help of this they can easily analyse that which strategy will be useful for
them to gain competitive market in organisation.
Analyse macro environmental risk factor of both country
Macro environmental factors are the factors which affect organisation directly so they
have to focus on external factors. This macro environmental factor affect organisation when
taking decision, introducing new as well as existing product in market, expanding their business
in other countries and so on (Kotler, 2017). The analysis of external factors can be done with the
help of PESTLE analysis. PESTLE stands for political, economic, social, technological, legal
and environmental factor. This analysis help an organisation to identify the factors that can
hinder their performance. In context to Lancia, before entering into international market they
have to take knowledge of all these factors so that they can effectively introduce their product in
competitive market. With the help of this they can easily monitor and take measure to improve
the performance of business. The external factors are discussed in detail of two countries which
are China and USA which is mentioned below: Political Factor: Political Factor is defined as factor where there is intervention of
government and this include political stability, tax and trade policy as this factor directly
affect the performance of organisation.
China: There is a government market in china and have various rules and regulation to follow
and policies of china changes anytime which adversely impact market and foreign traders. The
another political factor is that if any organisation is advertising their product so they have to
revise when they are operating in china market.
USA: The political factor is that USA has a stable political and recently they have face an issue
related to international policies as they have stable infrastructure, technology and known as best
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for foreign direct investment because many international organisation are operating in that
country. Economic Factor: The economic factor refers to change in purchasing power of
customer because this is the main factor where the selling point is affected (Krasyuk and
et. al., 2017). The factor include disposable income, rate of interest and inflation rate
and many other factors.
China: The economic factor of china is that purchasing power in this country is increasing and
labour cost is low where foreign market hire worker from china whereas there is current inflation
in economic growth which affect the growth of small scale industries.
USA: The main criteria is that the cost of labour in USA is high as compared to china and there
are large population so customers can purchase products at high rate. Social Factor: The social factor include age, income, distribution and many more as
this factor is important for marketer because they can target to customer in which
product they are operating in market.
China: In china there are many factors in social trends as this is affected by size of population
whereas they have to ensure that the values have in their culture trend (Solberg, 2017). There are
many population in china so selected organisation which is Lancia can identify behaviour of
consumer and can launch product of luxury and classic cars accordingly.
USA: In USA there is also many population and they want new product accordingly to changes
in business environment. All people access to their internet with the help of this they can easily.
So, they have to manufacture cars as per the needs and requirement of customer in market. Technological Factor: This is the another factor where there is rapid change in
technology so organisation have to adopt those changes quickly (Lepkowska-White,
Parsons and Berg, 2019). These changes can positively and negatively affect because if
changes adopted but doe not operate as per requirement then it negatively affect the
performance whereas on the other hand, before adopting technology companies should
take knowledge about the technology which exist in business environment.
China: China is the biggest one to adopt and invent technology fast as the usage of internet is
very big in this country. The purchasing pattern of china is strong which help industries to
sustain in market. But in china there is no stable technology used regarding online payment.
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USA: The factor of technology is important as USA is a leader in technology where there are
many company is this country and have achieve success all over world. The technology is
adopted by America as people are transferring from their for production facilities. This lead to
reduce the cost of production but these cost changes many times as per the technology. But USA
face challenge from other competing countries which are China and USA. Legal Factor: Legal factor is the factor where every organisation have to follow all the
legal rules and regulation where they are operating. Some common laws are customer
protection, employment laws, health and safety laws for staff members and many other
law (Marinchak, Forrest and Hoanca, 2018). By following laws companies can prevent
them to involve in any illegal activities whereas if any organisation is operation
worldwide for them it become difficult for them to follow all rules and regulation which
is set by government.
China: The legal factor in China is that nowadays there is legal issue and another one is trade
issue where legal issue is related to the formation of e- commerce as there are different
legislation which include consumer right, tax policies, intellectual property and many other laws
that is to be followed by organisation who are operating in china. The another issue which is
trade issue which tells that the government will reduce import tax.
USA: The legal issue in USA is that the government of this country issue laws which is same for
foreigner and nationals. This country have proper laws and regulation, if these laws are not
followed then it lead to penalty and punishment (Tang, 2017). They have a strong system which
is to protect the law which is of Intellectual property. Environmental Factor: The last factor is environmental which means to protect the
environment globally which is a significant factor as this include change in climate,
pollution, increase scarcity of raw material, carbon footprint and there are various other
factors (Mohtaram and Movasagh, 2018). In this way to protect environment every
organisation should involve CSR which stands for corporate social responsibilities.
China: The environmental factor of china is been positively impacting society as they have
introduced electric car which is the biggest protection of environment which means they are
trying to reduce pollution level in there country.
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USA: The environmental factor of USA is that there is diverse climatic condition and geography
as the diversity include natural attraction, little city as there are many visitors in USA which
impact the environment in this country.
Analysis and comparison of opportunities and threats related to a successful marketing mix for
each country.
It is defined as the process of using various techniques by the marketer in order to make
consumer aware of the brand and product. It is tool used by the company to enhance their
productivity and helps to achieve their marketing objective in the targeted market. The marketing
mix is the effective tool used by the marketing manager to enhance their productivity and
profitability. The marketing mix involves 7Ps which stands for product, price, place, promotion,
physical evidence, people and processes. These factors helps in analysing what kind of product
to be launched at what price, what place and what all strategies to be used in order to make
consumer aware of the brand and product and services also in addition to this it also helps in
analysing who are the people involved and what kind of process is followed by the marketing
manger needs to take in order to add value to its product and services. In context to Lancia, the
opportunity and threat of the marketing mix for China and USA is highlighted below:
Factors  China  USA
Product
 Product is any object
which is made and used
to satisfy the needs and
wants of the customer in
the marketplace. China is
the flourishing market for
luxury brands and mostly
considered as the biggest
market to expand. In case
of Lancia has greater
opportunities for their
product to be launched in
the Chinese market as it is
 The product strategy of USA
luxury market is that, as
compared China, the USA
market for the luxury
products is still growing, the
demand for the luxury
product in the US market is
less as compared to Chinese
market. So it can be threat
for the Lancia to enter into
USA market as the demand
for luxury product is less.
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one of the world's largest
auto market.
 Price  The price is the value or
the amount that customer
has to pay in exchange of
goods and services. The
pricing strategy in
Chinese luxury brand is
different for different
product. Affordable price
is the best possible way
because of high degree of
competition china luxury
brand market. Lancia
needs to keep affordable
price for their product in
order to gain competitive
advantage.
 Whereas in case of pricing
strategy in the USA luxury
brand market is
comparatively high, which
can work as threat for the
company as high prices will
lower the demand for the
product in the marketplace.
 Place  Place is the physical place
of where and how the
company will outline its
product and services for
the consumer. Auto-
mobile market of china is
the growing market
which makes best place
for Lancia to chose as
opportunities for it
product and services.
 As compared to the Chinese
market, the USA luxury
brand market is less growing
as compared to Chinese
market so selecting USA
luxury brand brand for
Lancia can be less profitable
and can reduce their
productivity.
 Promotion  Promotion is define as the  The promotional strategy in
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use of various tools by the
marketing manger in
order to make consumer
aware of the brand and
product and services. In
case of promotional
strategy in Chinese
luxury brand is that china
puts lots of focus on
marketing, uses high
quality advertisement as
well as CSR activities
which involves rising
brand image, use of this
type of activity can help
Lancia company to
promote their product in
Chinese market more
effectively.
the USA luxury brand
market involves more use of
social media and event
planning to promote their
products. The USA luxury
market can effective when
the brand is already
established in the market, in
other cases company will
face huge competition for the
already existing brands, and
promotional cost is
competitively hight in USA
market.
 Physical
Evidence
 Physical evidence are the
proof or living examples
of the products and
services. The physical
evidence for china luxury
brand are banners,
posters, creative punch
lines and billboards used
by the company across
the city in order to make
consumer aware of the
product and services. In
 The physical evidence
strategy in the USA market
use of various promotional
strategies like big events,
banners, posters and
billboards. In case of Lancia,
the USA luxury market is
less emerging as compared to
Chinese market, so investing
on the physical strategy can
be a disadvantage for the
company, and can reduce
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case of Lancia, company
can use banners, posters,
banners to make their
consumer aware of their
in the Chinese market.
their competitive advantage.
 People  The china has vast
number of population, the
people strategy of china
luxury brand mainly
focuses on skilled
workers delivering value
added services also
availability of large
customer base for the
company. In case of
Lancia, the company can
get skilled and
professional workers
providing value added
services and also
company can get large
customer base for their
product and services.
 The people strategy of USA
luxury brand focuses on
increasing their customer
base only. In respect to the
chosen firm, the USA luxury
market can be threat for the
company because of the
changing taste and
preference and availability of
less customer base as
compared to china luxury
brand market.
 Processes  The process strategy of
china luxury brand
involves following
number of processes like
inception, testing and
final decision so that
smooth functioning of
 The process strategy of USA
luxury brand does not
involve number of process
for carrying out their
business operations. So in
case of Lancia, they
company and the customer
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functioning of the
business operation can be
carried out. In respect to
Lancia, going through
these various process
allows business to deliver
quality product and
services to their customer
and enhance their
productivity and
profitability in the
marketplace
will not be sure of smooth
functioning of business
operation. Processes can be
disadvantage for the the
functioning of the company.
The USA luxury brand
market can be profitable for
the brands if the have already
established in the
marketplace.
From the above discussion it is analysed that china's luxury market is an emerging auto
mobile market and providing great opportunities for the auto mobile sector to expand their
business, the Lancia company can select the china market to launch their product as auto-mobile
sector in china is attracting larger amount of investment from the domestic as well as foreign
companies. As Chinese market is the growing market proving various benefits like number of
promotional benefits, great opportunities for increasing profitability of the business, providing
opportunities for physical evidence and also Chinese market is a huge platform for the company
to promote their product and services and enhance their their productivity. Also as the population
of the china is comparatively huge which provides another opportunities for the company to get
skilled and professional employees and gain huge customer base. The company can also get
competitive advantage as the chines market is growing in the auto-mobile sector. The
promotional strategy of china luxury brand focuses on using high quality advertising services
and using effective CSR activities which can help company in their promotional activities to be
more effective and make consumer aware of their product and services and enhance their
productivity and profitability at the marketplace.
Justification for choice of one country and recommended market entry strategy proposed
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With the analysis of above stated factor, it is asssed that market of China is best suitable
for selling and expanding business of cars for company. It is analyzed that political, economical
conditions of country are favourable which will help organization to sustain within country for
longer run. Further, external environment of country is also favourable for respective entity and
will provide significant opportunity of growth in future period of time. For this purpose, market
segmentation and strategy is given as under:
Market Segmentation
It is analyzed that respective company is producing as well as selling luxury cars at wide
level so they need to divide market in different segments on the basis of different factors such as
demographic which comprises elements such as age, income, level and more. Apart from this,
they also apply geographical factors in order to stay in the market place of China for longer
period of time. There are various geographic locations in China such as Beijing, Hong kong,
Shenzhen and more which will help company in order to target huge audience in an efficient
manner.
Marketing strategy:
Market strategies is the strategies where they have to enter into market and they plan to
distribute their products in new market or in which country they have to operate. For entering
they have to analyse what are the products they are dealing with as the selected organisation
which is Lancia have to enter into international market and have to expand in two countries
which are China and USA so they have to analyse what are the legal laws and regulation tyo
enter into new market. The one country is China where the selected organisation is can operate
and sell their luxury and classic car which help them to operate effectively and efficiently (Naeej
Haghighi and Salarian, 2018). There are different market entry strategies available which are
direct exporting, licensing, franchising, partnership, joint venture and so on.
Entry into a foreign market is very much different from expanding business in home
country as there is will lot of barriers which make companies difficult for entering. In reference
to the selected company, they are trying to cater markets of China for marketing for their cars.
The selected organisation can face many problems while entering such as culture distance,
administrate distance, economic distance and the market potential. They can use partnership for
entering into the markets of China. Partnership refers to that arrangement of two different parties
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which helps in managing and operating of the business. This is the most important strategy for
entering into new market because this help Lancia to enter into international market. This is very
important strategy when organisation is operating into different culture and business is alos
manufacturing their product in another country. Lancia can establish their company in China
with making partnership business with two or more Chinese parties in which the all the partners
will share liabilities and profits equally. The parties who will be partnership with Lancia can be
government, non profit organisation, businesses or private individuals. Partnership is an
important strategy for entering into such countries where culture, social and business is different.
It will help in creating more accurate and appropriate products and services and it also allows in
reduction of prices as it is shared by the partners (Park, 2020).
Another type of marketing strategy that can be used by Lancia for entering into China can
be joint venture which allows the formation of two or more business together and forms a single
business to achieve a common goal. Joint ventures allows access to better and different resources
and also both the parties can enjoy the same amount of profit and bear the losses. Joint venture
refers to marketing entry strategy where two organisation agree to enter into particular market
either as per the geographical and form a third party (Pegan,Vianelli and Luca, 2020). Lancia
have also the access to customer's database from the existing company to market the product.
Also they have the flexibility to cover the market and then exit from the joint venture and can run
individually in China.
The two strategies which are Partnership and joint venture help Lancia to enter into
international market which help them to sustain in market for long period of time. In this they
they have to partner with one company and have mutual understanding between these two
organisation so that they can effectively corporate with each other.
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CONCLUSION
From the above discussion, it is analysed that international marketing is important as this
help many industries to explore more opportunities. With the help of this companies can sustain
in market for long time. There is strategy that deals with market and before entering into market
the selected organisation should analyse the strategies and adopt the best which is applicable in
both countries which are USA and China. In the report it is discussed about Porter's competitive
strategies which are cost focus, differentiation focus, differentiation and cost leadership. The
porters generic strategy should be adopted because it help organisation to remain competitive in
market and sustain for long period. After analysing all generic strategies it is analysed that
differentiation focus is the best strategy to be adopted by selected organisation which also help
them to attract customer in market. There are some macro environmental factors which are
political, economic, social, technological, legal and environmental of both countries of china and
USA. There are marketing mix of two countries while describing their opportunities and threat as
china is one of the country who sell and manufacture luxury and classic car. The factors that they
have monitor is price, place, promotion, process, physical evidence, people and many other. In
last there is some recommendation which is of marketing strategy which is suggested is
partnership and joint venture which help Lancia to explore their market internally which will
help them to generate and earn revenue by selling luxury and classic cars in China.
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