International Marketing Strategies: Pret Coffee in Indian Market

This report analyzes the international marketing strategies for Pret Organic Coffee's entry into the Indian market. It identifies three key issues: political factors, economic threats, and investment-related challenges. The report applies relevant marketing theories, including the diffusion model of innovation and Maslow's hierarchy of needs, to understand consumer behavior. It assesses the impact of these factors on the organization, highlighting the need to navigate trade policies, foreign exchange risks, and government regulations. The report also examines the impact of environmental factors, particularly technology, on product development, cost-cutting, and food delivery systems in India. References supporting the analysis are also provided.

Running Head: International Marketing 1
Pret organic coffee entering in India

International Marketing 2
Contents
Ans. 1: Three Key issues.................................................................................................................3
Ans. 2: Relevant marketing theories................................................................................................4
Ans. 3: Impact on the organization..................................................................................................6
Ans. 4: Impact of environmental factors.........................................................................................6
List of figures
Figure 1: Diffusion Model...............................................................................................................4
Figure 2: Maslow hierarchy.............................................................................................................5

International Marketing 3
Ans. 1: Three Key issues
There are three key issues identified in the discussion. These issues are affecting the
business process of the company in the new market. Pret organic coffee needs to enter in the
Indian market and there are some issues in the Indian market which need to be addressed on the
urgent basis.
Political issues-
There are some political factors which have strong impact on the operation of the
companies. The political system in India is affecting the food and beverage industry like Pret
organic coffee. There are bureaucracy complications in the country which affect the political
environment of India. Along with this, India has FDI controls and policies which encourage the
Pret organic coffee to enter in the Indian market. The company can do this by the strategic
alliances and joint ventures with any established country in India. To reduce the political tension,
strategic alliances will be helpful for the company. For this manner, Pret organic coffee can joint
venture with some companies like Barista and Café Coffee day and use their marketing tactics to
enter in the market. The Indian market of food and beverage is enough to have many companies
(Cadogan, 2009).
Threats of economy-
In India, there can be some issues related to the economy of the country. The share of the
foreign investors in the market is 51% and on the other hand, local companies have to invest only
49%. The reason is that the Indian government is focused on providing business advantage to the
local companies. Further, Pret organic coffee is going to invest huge amount of money in the
Indian food sector but the company has to face challenges in terms of foreign exchange. Due to
unstable exchange rates in the Indian economy, Pret organic coffee has to face threats and
challenges. This type of risk can affect the business of the company in terms of revenue and sales
in the market (Ferrell & Hartline, 2011).
Investment issues-

International Marketing 4
In India, tariff barriers can be a big issue for the foreign investors while investing in the
business in the Indian market. There are rules and regulations in the commodity and products
which have rules regarding the restrictions and prohibition on the product unless they have
standard quality which are important for the business. Along with this, these situations can create
various challenges for Pret organic coffee to operate the business in Indian market. There are
food safety regulations so that the packaging of the food can be done in the safe manner. Apart
from this, some safety regulations are imposed by the Indian government in terms of technology
equipments, safe testing requirements, telecom equipments and amendments for Hazard waste
etc. These barriers affect the business of beverage companies and their import process in the
Indian market (Yusuf, Fatih, & Hayrettin, 2013).
Ans. 2: Relevant marketing theories
The marketing theories are important and effective for the success of the business in the
global level. For the company Pret organic coffee, there are marketing theories and models
which would be helpful for the company to stay connected in the Indian market.
Diffusion model of innovation-
This model is crucial for the global marketing when a company is going to expand the
business at the global level. This model is focused on understanding the buying behavior of the
customers with the new products in the market. This model reveals that there are five different
catagories by which the customer can engage with the product. Those five catagories include
innovator, early adopters, early majority, Laggards and late majority (Kazmi, 2012).

International Marketing 5
Figure 1: Diffusion Model
Maslow hierarchy theory-
This theory basically provides an understanding of the needs of the customers which
affect their buying behavior pattern. There are basically five needs of the consumers which must
be fulfilled by the marketers while providing the products and services in the market. Those
needs include physiological, safety; social, external and internal esteem and then self
actualization need of the customers (Stávková, Prudilová, Toufarová & Nagyová, 2007).
Figure 2: Maslow hierarchy

International Marketing 6
Ans. 3: Impact on the organization
Based on the discussion of the points, it is analyzed that the company Pret organic coffee
has to deal with some challenges while entering in the Indian beverage market i.e. challenges
with exchange rates and share in the market. Due to the trade policies related to food safety,
company has to deal with the regulations imposed by Indian Government. It is observed that
Indian market has privatization culture that motivates the foreign investors to enter in the market.
Pret organic coffee will do the business in the ethical way to get growth and success in the
market. It is evaluated that the Indian market is experiencing growth in FDI and GDP rate which
will be good for the company. These all factors will affect Pret organic coffee in terms of
business process. So, it is important for the company to analyze various policies which are
imposed by Indian government so that business operations can be done effectively (Kukar,
Nancy & Kent, 2012).
Ans. 4: Impact of environmental factors
Technology has significant impact on the business operations of a country. In India,
technology impact on the product development process along with the cost cutting process.
There is 3G and 4G technology in India which is very useful for many technological projects.
Along with this, the country is also considered as one of the strongest IT sector along with the IT
development, technological advancements and software upgrades. Further, technology is also
helpful in the food delivery process. The food delivery system depends upon the industry
creativity by the technological access. Customers are now demanding safety products so
technology is helpful in changing the warehouse strategy and transportation methods (Burge,
b2013). Technology has now made the modern food possible in the market. It provides delivery
chain to fulfill the needs of the customers as quick as possible. Because of the technological
innovations, the safety challenges such as changes in the food delivery system can be reduced
effectively.

International Marketing 7
References
1. Stávková J., Prudilová H., Toufarová Z., & Nagyová L., (2007), Factors influencing the
consumer behaviour when buying food: Agricultural Economics – Czech, 53 (7), 276–
284
2. Yusuf, A., Fatih, G., & Hayrettin, Z., (2013), Examining Perceived Risk and Its Influence
on Attitudes: A Study, 9(4)
3. Kazmi, S. Q., (2012), Consumer Perception and Buying Decisions: International Journal
of Advancements in Research & Technology, Volume 1(6)
4. Ferrell, O. & Hartline, M., (2011), Marketing management strategies, New York: South-
Western.

International Marketing 8
5. Cadogan, J., (2009), Marketing strategy. London: SAGE
6. Burge, S. A., (2013), The Motivational Reasons behind Consumer Choice in Branded
Coffee Shops, accessed on 9th November 2017 from
http://www2.warwick.ac.uk/fac/cross_fac/iatl/reinvention/issues/bcur2013specialissue/
burge/
7. Kukar, K., Nancy M, R., & Kent B, M. (2012), The Role of Price in the Behavior and
Purchase Decisions of Compulsive Buyers: Journal of Retailing, pp 63–71
8.