Living Space: Evaluating International Marketing in the Indian Market

This assignment provides a comprehensive analysis of international marketing strategies for Living Space, a luxury furniture company, as it considers entering the Indian market. It begins by defining the scope and key concepts of international marketing, highlighting the differences between local and international marketing, and outlining the various routes to market. The report then evaluates the key criteria and selection processes for choosing an international market, focusing on market demand and competition in India. Different market entry strategies are explained, including their advantages and disadvantages. The assignment further investigates how elements of the marketing plan can be adapted or standardized across international markets, addressing the global versus local debate and examining product, price, and promotional distribution approaches. Finally, it analyzes various international marketing approaches that Living Space can adopt, comparing home and international orientations and assessing competitors. The report concludes with recommendations for Living Space based on the analysis.

Tomescu Business International Marketing
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Table of Contents
Introduction......................................................................................................................................3
LO1 Demonstrating an understanding of how marketing contributes to business strategies in an
international context........................................................................................................................3
Analysing the scope and key concepts of international marketing [P1]..........................................3
Explaining the rationale for it to want to market internationally and describe the various routes to
market the organisation can adopt [P2]...........................................................................................5
LO2: Evaluating entry to a selection of international markets and define the key success factors.7
Evaluating the key criteria and selection process to use when considering which international
market to enter [P3].........................................................................................................................7
Explain, using examples, the different market entry strategies, including the advantages and
disadvantages of each [P4]..............................................................................................................9
LO3 Investigating how elements of the marketing plan can be adapted or standardised across
international markets.....................................................................................................................12
Presenting an overview of the key arguments in the global versus local debate [P5]...................12
The management team of your client organization would like you to investigate how the product,
price, pricing and promotional distribution approach differs in a variety of international contexts
[P6]................................................................................................................................................14
LO4 Demonstrate an understanding of how to organise and evaluate international marketing
efforts (multinational, global, transnational, meta-national, etc.)..................................................15
Explain and analyse the various international marketing approaches your client organisation can
adopt [P7].......................................................................................................................................15
Comparing home and international orientation and ways to assess competitors, outlining the
implications of each approach [P8]...............................................................................................16
Conclusion and Recommendations................................................................................................17
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Reference List................................................................................................................................19
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Introduction
The particular assignment would consider application of several market entry strategies for
Living Space to conduct international business in India. Living Space offers luxurious lighting
and furniture crafted by the most respected and the best furniture brands in Italy. The quality
products can be purchased from any of the showrooms in Central London. Apart from offering
beds, sofas, dining set, TV set etc. the company also deals in modular storage, kitchen, bathroom,
office, mirror rugs etc. A complete renovation of the house is also done by Living Space with the
help of its professional team. Living Space is the first choice of many customers when it comes
to buying luxury furniture because not only the price of the products is competitive in
accordance with the UK market, but also the installation is free of charge.
The company has partnership with some of the well-known house improvement service
providers to reduce the burden of clients. The company and its partners offer services like project
and constructional management for residential and commercial requirements, architectural
planning, designing the interior based on the need of the client, team of professionals to handle
pre-sale and post-sale enquiries and many more. There’re many satisfied customers in the UK
who recommend purchasing from Living Space by sharing their reviews in Google.
LO1 Demonstrating an understanding of how marketing contributes to business strategies
in an international context.
Analysing the scope and key concepts of international marketing [P1].
When a company expands its business across the national border of the country, it applies its
marketing strategies to more than one country. Though many European and American authors
say that international marketing is nothing but exporting, it’s all about tracking the differences
and requirements of the consumers and delivering as per their needs. Some authors see
international marketing as the capability of implementing marketing principles to an
international market (Eteokleous, Leonidou and Katsikeas, 2016). Living Space must focus on
various points like the presence of multiple languages in India, the effect of politics and culture
on the targeted market, ideological differences and many more before it starts its business in
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India. It’s obvious that there are some differences between the international and local marketing.
Local marketing is more convenient for the companies as they target a local economic market
that has only one set of economic issues and competition. Language is not a barrier in this case,
rather it’s easy for the companies to plan their marketing strategy as per the requirements of the
customers. Investing in local market is less risky and companies need less resources to start their
venture (Samiee, Chabowski and Hult, 2015).
On the other hand, international marketing involves promotion and sale of the products of a
company in different countries. The procedure isn’t only complex, but the company also requires
to invest a huge amount of money. While Living Space has been trying to enter the Indian
market, it must know the foreign business law of the country (Mathews et al. 2016). Besides, the
marketing strategy of the company also differs based on the tastes and requirements of the
consumers. As the international market is uncertain, the companies that choose to do business
internationally face huge risk. In order to succeed in international marketing, the companies need
be patient, committed and have to invest a lot of time and effort.
Although international marketing and global marketing are considered as different terms by
many authors, the meanings of both are same. The scopes of international marketing are as
follows:
 Export: A company ships the produced goods from one country to another for sale which
is known as export. Though Living Space isn’t expert in export, it can be able to export
the furniture to India (Katsikeas et al. 2016).
 Import: Living Space already deals in furniture that are built in Italy and import those to
London for sale. However, when they’re targeting the Indian market, importing isn’t
something that they need to focus on.
 Re-export: Some of the companies import products that are semi-finished from one
country and after further processing, export the goods to another country.
 Contractual agreement: Companies need to sign several contractual agreements for
licensing that allows them to access the intangible assets like trade secrets, patents, know-
how, brand names and trademarks against a fee (Griffith and Zhao 2015).
The nature of international marketing:
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 Availability of broader market: The companies can offer their products outside the
local market. Living Space has targeted the Indian consumers for expanding their
business (Ahmed, Coulibaly and Zlate, 2017).
 Broader competition is required: As Living Space has planned to invest in the
international market; it must ensure that the company is ready for broader competency
with needed management skills.
 Minimum two sets of ungovernable variables: While the companies dealing in local
markets deal with one set of ungovernable variables, the companies that focus on
international market must tackle at least two sets of ungovernable variables.
 Intense competition: The reason behind the intense competition is that Living Space
must compete both with the domestic as well as the international furniture companies
(Marsden and Arce, 2017).
 Involve challenges: The risk factor is high in international marketing as the companies
may face challenges like cultural differences, political risks, changes in the government
and law, changes in the requirements of the foreign clients etc.
Explaining the rationale for it to want to market internationally and describe the various
routes to market the organisation can adopt [P2]
Different industrial sectors in India have witnessed a significant growth in infrastructure and
many foreign companies have invested in the Indian market as well. The emerging middle class
and the upper-class society offer a strong market for the foreign investors (Stern and Li, 2016).
Besides the size of the Indian market, India is presently the hub of tech start-ups. Instead of
being dominated by e-commerce companies, the start-up ecosystem is growing rapidly.
However, if the Indian customers do not recognize the brand name of a foreign company, it
might be hard for the company to get a strong foothold in the Indian market. Besides, some
foreign companies may face stiff competition while launching their products because of the
presence of similar products (Ormond, 2015).
Indian market allows selective modernization depending on the cultural influence of the country.
While some group of people opt for modernization, some are against it, which makes it hard for
a foreign company to measure what kind of products will succeed in the Indian market. In spite
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of having enough resources, the larger companies often fail to become successful because they
didn’t understand the market before investing in India. Companies that come up with Western
values may find it hard to get hold of the Indian market because the Indians are influenced by
culture and politics that are totally different from the Western culture and politics and it reflects
greatly on the market. However, as more and more Indian companies are targeting the foreign
markets, it’s becoming easier for the foreign companies to explore the Indian market as well.
Many companies have invested in the Indian market bay either partnering with some Indian
company or by direct exporting (Katsikeas et al. 2016). Most of these companies became
successful because these were committed to the Indian market. Besides, the companies have built
local teams to make the process of trading fast and easy.
The route of marketing an organization describes the various ways of planning the product
selling. Consumers always perceive to purchase the products according to their wish (Brewster,
2017). The various routes of marketing an organization are as follows:
 Direct Selling: Direct selling refers to a process which reflects upon directly selling the
products to the respective consumer without the assistance or involvement of a middle
man. Direct Selling could be initiated through websites, direct marketing, advertising or
selling through own shop of the seller. While forming a Joint Venture with any reputed
Indian furniture brand the company could directly sell their products and services to the
target consumers through direct selling (Terho et al. 2015).
 Selling Whole sale: In this case, the manufactured goods are primarily sold to a retailer
or a whole seller who in turn sells it to the consumers. The products of whole sale are
sold at a lower rate in comparison to direct selling. However, living space won’t indulge
into whole sale marketing route as there is a risk factor involved in getting the margin of
profit being reduced and the price setting could also be complicated by nature.
 Distance Selling: This type of selling relates to selling to products to a consumer rarely
through the application of telesales or direct sales. Tangibility is one of the major
preferences for consumers purchasing furniture. This is one of the major cons associated
with distance selling, hence not opted by Living Space.
 Online Selling: This type of selling allows the company either to sell their products
through company websites or through affiliate marketing such as Flip kart, Amazon etc.
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This type of selling is one of the key areas of interest for Living Space (Winer, 2017).
This is because online selling not only takes active participation in providing service 24/7
round the clock, but also reduces the cost involved in managing staffs and shop premises.
Furthermore it has a mass appeal addressing the desire of the consumers in a successful
manner.
 Combination of Channels: This type of marketing takes into consideration application
of more than one marketing route for reaching its consumers. Despite having the
advantage of developing effective sales strategy, this type of selling will not be included
by Living Space as it may create difficulty in managing various types of channels.
LO2: Evaluating entry to a selection of international markets and define the key success
factors
Evaluating the key criteria and selection process to use when considering which
international market to enter [P3]
Living space has to abide by certain criteria and selection process before entering the
international market so that they can have a positive influence on the overall consumer behaviour
and organizational productivity.
Market demand: The Indian market is huge and the potential of growth for a furniture company
like Living Space is expected to reach a height because of the increasing demand for the modular
home decor and unique designs.
Level of competition: It might be hard to experience profit initially because of the stiff
competition in the Indian furniture market share. Most of the established companies offer quality
products in competitive price range and these companies enjoy loyal customer base as well
(Aragones-Beltran et al. 2014). However, given the pre-sale and post-sale service of Living
Space, it can overcome the barriers over a period.
Country performance: As mentioned before, the emerging middle class provides a great market
for any new venture including the furniture industry. As the transportation is well-available and
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the labour cost is significantly low, it’s easier for the foreign companies to cut their expenses on
these factors and invest the resource for the development of the business.
Political risks: The constitutional system of India and the stability of the government may affect
the business venture of Living Space. As the Indian government wanted to welcome foreign
direct investment in the retail sector, most of the political opposition parties voiced against it and
the propaganda was cancelled.
Infrastructure: The Indian furniture industry has already flourished in the last few decades,
which in turn has improved the infrastructure for any foreign furniture company like Living
Space as well. The raw materials are available easily and the cities are well connected via wither
railways or roads.
Cultural knowledge: India is a country with diverse cultures, several caste and creed and
different languages. Therefore, if Living Space want to survive in the Indian market, it must
come up with a universal appeal in designing the furniture. The language might be a barrier and
understanding the cultural difference can be tough. Therefore, many foreign companies partner
with Indian companies and Living Space wish to do the same to target the Indian market
effectively.
Legal environment: Before entering the Indiana market, Living space must go through the
employment law, consumer law and discrimination law of India as these are the rules needed to
be maintained. The Indian government has also relaxed the rule for the foreign single brand
retailers.
Environmental concerns: Unlike the UK, Indian is a sub-tropical country where the weather is
mostly humid. Thus, Living Space must manufacture furniture that are durable even in the humid
weather and can withstand the climate changes.
Distribution accessibility: Many of the Indian furniture brands have outlets as well as offer
online shopping. More customers are willing to buy furniture via e-retailers, which may provide
Living Space a greater market than anticipated.
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Explain, using examples, the different market entry strategies, including the advantages
and disadvantages of each [P4].
There are multiple ways of entering a foreign market and each of the companies may need to
include one or more marketing strategies depending on the requirement of the consumers,
transportation costs, tariff rates and a lot more. Primarily there’re nine market entry strategies
and the companies may use any of these.
Direct export: Many companies directly export their goods to the distributors or agents to enter
the market of the country they have chosen to expand in. The agents and distributors work like
the employees of the companies instead of becoming partner.
Advantages Disadvantages
 Chances of greater profits
 Allows the identification of potential
clients
 May involve extra expenses at times
 Hard to handle the clients without
any agents
Licensing: Some companies transfer the rights of using their services or products to another
company by signing contractual agreements which is known as licensing. It’s useful when the
license purchaser has a huge market to offer the product in.
Advantages Disadvantages
 Any competitor can be turned into a
licensed partner
 Allows to enter a market that is
otherwise not accessible
 The licensor must depend on the
abilities, skills and resources of the
licensee
 The licensor may face extra
expenses if the licensee asks to train
the employee, provide technical
assistance etc.
Partnering: It’s one of the most fruitful methods of entering a foreign market. As foreign
company partners with a domestic company, the latter takes the responsibility of targeting the
appropriate consumers given its knowledge about the local market.
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Advantages Disadvantages
 Low start-up cost as its divided
between two companies
 Availability of more financial
resources
 The debt liability is unlimited for the
partners
 Risk of disagreement between the
partners
Joint venture: Though it’s a type of partnering, joint venture is a little different. Two firms
become equal partners to target either a product market or a geographical market and create a
third independent company that undertakes the venture.
Advantages Disadvantages
 Availability of better
employees, financial
resources and technological
equipment
 The profits and losses are
shared equally
 Building new network offers
virtually endless potential
 Restricted flexibility
 Exiting the partnership can
be difficult because of the
signed contract
Franchising: Started by some North American companies, franchising has gained popularity
among the companies that offer repeatable businesses like supermarkets, food outlets etc. The
companies that are willing to create their franchisee should either have a strong recognition of
their brand or should offer unique products.
Advantages Disadvantages
 Targeting an established market
share
 Brand name recognition offers better
profits
 Constant need to monitor the
franchisor
 Specific franchisor may cause bad
reputation for the brand
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Buying a firm:
Sometimes, buying a local company can be effective way to enter a market. Either the local
company may have a huge market share and it’s the direct competitor or the law of the country
leaves no other choice than buying a domestic company.
Advantages Disadvantages
 Enjoying immediate profit
 Acquiring existing suppliers,
employees, customers etc.
 May need improvements that can be
expensive
 The firm might be inadequately
managed or poorly located
Piggybacking: Some companies that produce unique products and sell them for the local market
to companies that have both domestic and international market, may approach the companies to
sell the products in international markets as well.
Advantages Disadvantages
 No need to invest in additional
production facilities
 Excess product can be sold in
international and domestic markets
 Difficult to understand the
requirements of the consumers
 May have no control on pricing of
the products
Greenfield investment: The riskiest and most expensive strategy to enter a market is to purchase
land in the foreign country, built facilities and start running the business.
Advantages Disadvantages
 Easily adapt the changing
technologies
 The huge expense can hamper the
productivity
Turnkey project: It’s beneficial for the companies that offer services like engineering,
architecture, environmental consulting and construction. The companies build the project and
turn it over to the client, which is a government in most of the cases.
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