Poundland's Global Expansion: Market Entry Strategies and Adaptation

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MARKETING ON A GLOBAL PERSPECTIVE
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MARKETING ON A GLOBAL PERSPECTIVE
Table of Contents
Introduction......................................................................................................................................4
LO1: Explanation of the process of marketing and its impact on the business strategies in the
international market.........................................................................................................................4
P1: Analysis of the scope and major concepts of international marketing..................................4
Concepts and Scope of International marketing......................................................................4
P2: Reason for marketing of the product in the international market and various routes of
marketing the organization may use............................................................................................6
LO2: Analysis and evaluation of the entry of organization in the international markets and its
success factors.................................................................................................................................7
P3: The main criteria and selection process needed to select and enter into the international
market..........................................................................................................................................7
P4: Explanation of market entry strategies and analysis of advantages and disadvantages........9
LO3: Adaptation of marketing plan based on the factors of international market........................10
P5: Critical analysis of global versus local marketing plans.....................................................10
P6: Analysis of the product, pricing and promotional approach according to various
international markets.................................................................................................................11
LO4: Adoption of international marketing approach organization can adopt..............................13
P7: Explanation of international marketing approach and best fit for client.............................13
P8: Comparison of home and international orientation and different method to analyze
competitor’s attitude..................................................................................................................14
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Recommendation...........................................................................................................................16
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
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Introduction
Globalisation is the current trend that is being followed by most of the organization around the
world. Due to globalisation establishment of business in foreign soil is becoming easy due to
global ventures. On the other hand, competition has also increased due to the intense effect of
globalisation. It is becoming necessary for the domestic organization to formulated an efficient
internationalization strategy to survive in this fiercely competitive market. Moreover, efficient
internationalization plan and marketing strategy are necessary to properly perform the business
operation in foreign soil. This study will mainly focus on internationalization strategies and their
impact on the business process in a prominent manner. Scope and concept of international
marketing will be discussed. Additionally, analysis of the different routes of marketing and
analysis of various markets will be performed in the study. The basic selection process needed to
enter into the market will be evaluated. The critical analysis of the advantage and disadvantage
of different market entry strategies will be done. Critical analysis of the global versus local
marketing strategies will be provided so that the company may adopt the best-fit strategy to
enhance business development in an essential way. Moreover, at last, the recommendation will
be provided in an efficient way.
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LO1: Explanation of the process of marketing and its impact on the business strategies in
the international market
P1: Analysis of the scope and major concepts of international marketing
Concepts and Scope of International marketing
International marketing is the main concept that is regarded as the approach to use basic
marketing principles to analyse the demands and needs of international consumers in an efficient
manner. Moreover, the demands of the consumers in the different international market are
different and changes in the marketing procedure may be done according to the needs of the
specific market. The international marketing is required to upscale the economic growth of the
organization in an efficient manner (Zhu, and Sarkis, 2016). The main concept of international
marketing includes the principles of global web, licensing and franchising, by performing joint
ventures and direct investments and exports to other countries to enhance business growth in an
efficient way. It is seen that Poundland is a UK based retail organization and if the organization
efficiently use the concept of global web and joint ventures in an efficient manner, it may
establish its business effectively in the Asian and American market to enhance level by almost
15%. Franchising and performing joint ventures in an essential international marketing concept
that enables the organization to establish a market by collaborating with the local firm of the
country in which it is establishing its business.
Moreover, there is a huge scope to perform direct investment in the Asian market, as there is a
high consumption rate of almost 20%. The concept of direct investment is the organization may
establish its own setup in the foreign market after conducting extensive background research to
forecast the scope of the organization in the specific market. At present global web is one of the
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most important international marketing concepts that may be established by Poundland in the
Asian market in an efficient manner. According to Varela et al.,(2017), the use of the global web
as the international strategy has a huge advantage as it helps to connect to international
consumers in a prominent manner. Furthermore, it is seen that the scope of performing business
is very high if the global web is used by the Poundland in an efficient manner. As the global web
concepts, include different languages to describe the products so that consumers in the
international market may read the product description and buy it according to the need.
Fig: 1 Concepts of international marketing
(Source: Jansson et al., 2017)
P2: Reason for marketing of the product in the international market and various routes of
marketing the organization may use
The main rationale to enter the international market is to make a holistic profit of the
organization Due to globalisation the internationalization of the companies has become easy.
One of the main reasons is the survival of the company. In the opinion of de Oliveira Cabral
(2016), the competition in the retail domestic market of UK is increasing at an exponential rate
of 10%. It is important to enter into foreign markets so that sales of the company may be
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enhanced and the revenue generated in the international market may be used as a backup for the
loss incurred in the domestic market. There are various routes to enter the market in foreign
countries. One of the major routes to enter the global market is the use of franchising the brand
in an efficient manner.
For example in Asian countries, franchises of Poundland may be established in an efficient
manner to enhance the sales by almost 10 %. The franchisee should pay a certain amount to
enhance the profit level of Poundland by approximately 5% (Zhu, and Sarkis, 2016).
Additionally, another route to enter the international market is by collaborating with an
organization, which has an excellent brand image in the targeted country. Poundland may
partners with a big retail organization like Alibaba to enter the Asian market in the initial stages
so that the market penetration and the demand of the consumers may be comprehended in an
efficient manner by the guidance of the partner organization. Moreover, another significant route
to enter the foreign market is by the establishment of a joint venture project in an efficient
manner. In a joint venture, the company profit is divided among the partnering company by 50
%. Joint ventures should help Poundland to make a market penetration in the Asian market by
performing joint venture in an efficient manner. In the words of Malan (2015), should help the
organization in a foreign market by almost 20 %.
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LO2: Analysis and evaluation of the entry of organization in the international markets and
its success factors
P3: The main criteria and selection process needed to select and enter into the international
market
The selection procedure is one of the most vital components that are needed to fix a target
market to establish the organization in an efficient manner. The first step includes country
identification to perform the business. The country Identification is important as the cultural
heritage of the country may have an effect on selling of the products. The level of consumerism
is another important point (Jansson et al., 2017). Countries like India and China have a high level
of consumerism more than other countries by almost 30 %. In the American market, the USA
and Canada may be the prime target for the Poundland to increase its business by almost 10 %.
The next step involves the preliminary screening that includes more detailed research about and
pattern of needs of the consumers.
The buying pattern should help in restructuring and designing the product according to
customer's requirement (Vellas, 2016). For example, the perception of Chinese consumers is that
some part of the company should be owned by the domestic organization so joint venture may be
an ideal solution for Poundland to enhance the sales by almost 10%. Next, comes the vital
process of in-depth screening where the micro and the macro factors that include the political,
economic, technological, environmental, legal and social factors should be analyzed in an
efficient manner. This in-depth screening should help Poundland to analyse the holistic factors
that may have a huge impact on the business. The country should be decided on the basis of this
in-depth research so that maximum profit may be acquired from the international market. In the
opinion of Zhu, and Sarkis, (2016), the evaluation process is necessary as the country with
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political stability and high GDP should be the target of the Organization. For example, in Asia,
the GDP of India and China is much more compared to the neighboring Asian economies and
political stability is present that defines the business environment. Subsequently, after critical
evaluation of the macro and the micro factors, the decision-making should be done in an efficient
way. If this process is followed then the business process should be established in a country with
a proper business environment.
Fig2: Analysis of the country to perform business
(Source: Alonso et al., 2017).
P4: Explanation of market entry strategies and analysis of advantages and disadvantages
There are various market strategies to enter the foreign market is an effective manner. For
example, there is the presence of the Joint venture strategies that may help Poundland to enter
the foreign market. In the word of Grant, (2016), International joint ventures help in mitigation
of discrimination and it is very much flexible in nature. On the contrary, it is expressed by
Eriksson et al., (2017), different organizations business objective may differ so it is very
complicated to perform joint venture as the business objectives are jumbled due to this. In joint
ventures, the risk may be divided among the organization in an efficient manner, Moreover, the
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cost of business setup should be shared by the organization in a joint venture that mitigates the
input cost of both the companies.
Aggressive export is another important strategy used by the organization to make a dramatic
entry into the foreign market in an efficient manner. Export of material according to the demand
has some advantage as it may help to establish a brand image of Poundland in the Asian market.
On the other contrary, in the words of Shaw, (2016), aggressive export may have some legal
complexity that may reduce the profit of the organization. It is observed that sometimes
aggressive exporting may hamper the domestic market of the company due to that almost 10 %
loss may be incurred by Poundland. The balance between the domestic and the international
market should be performed by the company. Countertrade is another important method that may
be used to penetrate the foreign market in a prominent way. Countertrade is a process where
trade is performed in countries with less competition and currency exchange may not be
performed. The competition may be avoided by the use of countertrade process. On the other
hand, according to Lasserre, (2017), the profit margin in the counter trade process is low.
LO3: Adaptation of marketing plan based on the factors of international market
P5: Critical analysis of global versus local marketing plans
The marketing plans for the local and global market are different in many aspects in the sense
that the approach towards attracting potential customers become different in these two
approaches. In case of local approach, the marketing plan is designed while keeping in mind the
unique preferences or cultural traits of the target customers, which helps in earning their trust
(Dost et al., 2019). On the other hand, the global marketing plans aim to bring a specific standard
that is maintained in the organizational business strategies, aiming to take advantage of rapidly
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spreading globalized culture attract those customers. Even though it may seem that this strategy
is not very suitable to attract local customers, in reality the local customers are also attracted to
the products of the globally standardised organisations. This is because the quality of the
products or services of a global organisation is usually that of an international standard, therefore
it may be preferred more that the cheaper low-quality local products by those customers who
prefer quality over cost. On the other hand, Othman et al. (2019) argued that the local products
may also contain some elements that are unique to the traditional culture of its target customer
segment, which may make them more attractive than high quality global products. This may
allow a local product to win the market competition against a rival global product.
In case of Poundland, since they are a variety store chain based on the UK, they can use both the
global and local marketing strategy according to the nature of their target market and business
competitions. For instance, if Poundland aims to expand in the other European countries, they
can adopt the global marketing plan, since these countries are the ones having the most
globalized and modern culture, which makes the preferences and demands of the markets of
these countries quite similar to that of the UK. However, in case Poundland aims to expand their
business in the Asian countries like China, Japan or India, they will have to adopt a suitable
combination of local and global marketing plans. For instance, the demand of rice is much higher
in the Asian market than in the European market due to differences in food culture (Pantano,
Priporas and Migliano, 2019), which indicates that despite having globalized elements in their
culture, the potential customers in these countries still have their own traditional cultures which
heavily dictate the preferences and demands of those markets.
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P6: Analysis of the product, pricing and promotional approach according to various
international markets
Among the various elements of a marketing plan, the most significant ones are derived for the 4P
marketing mix, namely the product, price, promotion and place. The place in case of
multinational expansion of Poundland is the international market, hence the proper
implementation of the other three factors will decide the success of their marketing strategies.
 Product: The type and quality of the products or services offered by the organisation
leaves significant impact on the marketing success of the organisation (Astuti et al.,
2019). In case of Poundland, since they are a variety store chain, they sell a lot of
different items, ranging from food items to toys and garments. However, since they have
been designing their products according to the tastes and preferences of the UK residents,
they will have to change their products strategies while aiming to grab the international
market. For instance, the food items and designs of their garments will have to
conforming to the globalized culture and not the regional culture of the UK, which will
allow Poundland to gain more sales and have a larger segment of customers worldwide.
Moreover, the guarantees, warranties and return policy of a company is also perceived
differently by different culture, so Poundland will have to keep these factors in mind
while devising their product marketing strategies in the international context.
 Price: The pricing approach of any large international company is always designed
according to the purchasing power of their target customer segment. As Poundland is a
variety store chain in UK, they purchase retail products in wholesale from their suppliers.
Naturally, the international prices of their products largely depends of the international
wholesale price of their products. Since the products of Poundland are aimed towards all
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