International Marketing Strategies for Sainsbury's Expansion

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International Marketing
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Contents
Introduction....................................................................................................................................2
LO1 Demonstrate an understanding of how marketing contributes to business strategies in an
international context.......................................................................................................................3
An introduction to the Organisation and their current market.....................................................4
Use a range of sources to define international marketing and highlight the main differences to
local marketing...........................................................................................................................4
Assess the scope and key concepts of international marketing...................................................5
Explain the rationale for an organisation to want to market internationally................................6
LO2: Evaluate entry to a selection of international markets and define the key success factors.....7
Evaluate the key criteria and selection process that the company should use when considering
which international market to enter............................................................................................8
Define and explain what a market entry strategy is, using examples of the different strategies
that are available to an organisation, and include the advantages and disadvantages of each.....9
Conclusions and recommendations on how and why the company should enter the international
market.......................................................................................................................................11
LO3 Investigate how elements of the marketing plan can be adapted or standardized across
international markets....................................................................................................................12
Explain the difference between global and local marketing, using examples where appropriate
..................................................................................................................................................12
Present an overview of the key arguments in the global v local debate....................................12
How does the product, pricing, promotional and distribution approach differ when using a
variety of international markets?...............................................................................................13
LO4 Demonstrate an understanding of how to organise and evaluate international marketing
efforts (multinational, global, transnational, meta-national, etc.)..................................................15
Explain and analyse in detail the various international marketing approaches the company can
adopt. Use examples from other organisations to further enhance your answer........................15
Compare home and international orientation and ways to assess competitors, outlying the
implications of each approach..................................................................................................16
Conclusions and recommendations for the company................................................................16
Conclusion....................................................................................................................................18
References....................................................................................................................................19
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Introduction
Marketing is an important concept in the business which generates awareness about the
products and services to the target audience. When considering the term marketing it is
associated with many concepts, theories and philosophies. The marketing approach in the
national market and in the international market is different. The similar or the same
marketing strategies cannot be applied in the international markets in order to achieve
success and competitive advantage. In the global market the business Organisation will
have to consider many factors like the culture, attitude, preferences etc of the target
audience. The marketing approach should be confined to these factors in order to
persuade the customers (Morgan, Feng and Whitler, 2018).
This report highlights the various factors associated with the international marketing by
considering the local Organisation operating in UK. The Organisation which has been
taken into consideration is Sainsbury which is a leading super market chain in UK. This
is a leading super market chain which is operating in UK and has many branches
throughout UK. This report speaks about the various opportunities and the challenges
which the Organisation Sainsbury can face if it enters into the international markets.
Some of the changes which it has to adopt in its marketing strategies are also highlighted
effectively.
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LO1 Demonstrate an understanding of how marketing contributes to
business strategies in an international context
An introduction to the Organisation and their current market
Sainsbury is considered to be the second largest supermarket chain in the UK. This
Organisation competes in the most competitive retail industry and contributes to the
national GDP to a great extent. The Organisation exhibits a wide range of groceries
which provides a onetime shopping facility to the UK population. The Sainsbury has
various subsidiaries like the Sainsbury bank, Sainsbury energy etc. The Organisation
holds a good customer base and brand reputation in the UK market (Javalgi and Toya,
2018).
Source: The Sainsbury, The telegraph
When considering the UK market, it consists of the population who are economically
stable. The economic condition of the UK market is also favourable which makes the
operations of Sainsbury smooth in UK. The political factor or the government provides
sufficient support to the retailing Organisation as it generated lots of employment
opportunities. The customers are highly savvy and accept the changes and the product
lines introduced by the Organisation. The retailing industry in the UK market is highly
competitive.
Use a range of sources to define international marketing and highlight the main
differences to local marketing.
Marketing is the process through which the Organisations makes its products and services
exhibited to its target audience through implementing various strategies. This persuades
the target customers to enquire or buy those product and services. When considering the
marketing in the national and in the international market there exist a lot of differences.
Some of the differences are discussed here.
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National Marketing International Marketing
The marketing activities are performed
within the geographical limits of the nation.
Here the marketing operations are
performed beyond the geographical
boundaries.
The area covered under this marketing is
small
The area covered under this marketing is
large
The interference of the government is less Here the government interference is higher
Risk factors like the social, cultural, etc are
less
The risk factors associated with social and
cultural values are higher
The nature and preferences of the customer
are similar which makes the marketing easy
The customers have different tastes and
preferences which makes the marketing
complex.
The requirement of market research is
lower
The requirement of market research is
higher.
The capital required for marketing is
comparatively lower
The capital required is comparatively
higher
From the comparison it can be identified that even though the definition of the marketing
is same for national and international marketing, there are lots of differences in its
implementation and strategies utilized.
Assess the scope and key concepts of international marketing.
The international marketing can be defined as the process of communicating or
presenting the products or services to the selected target market in order to gain the
international marketing community and to establish its business operations in the
international markets successfully. The scope of the international marketing is mentioned
below.
 The international marketing would enable the expansion of the business to the
world market which generates brand image, reputation and competitive advantage
for the Organisation.
 The international marketing contributes to exports and imports which enhances
the relationship between two nations and also could contribute to the national
development (Yang, 2018).
 The international marketing will expose the Organisation to the global market
which reduces the risks of single market dependency and enhances more
opportunities for the Organisation.
The key concepts of the international marketing include the globalization which
highlights the global reach for the product and services of the Organisation. It explains
that techniques of marketing would be similar to the domestic marketing but the risks and
marketing researches associated related to international marketing would be higher. The
concepts of the international marketing highlight the export marketing, multinational
marketing etc
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The international marketing includes the exports, imports, re-exports, contractual
agreements etc which highlights its complexity and the challenging nature. The
international marketing environment includes the internal, global and the domestic
marketing factors which impacts the international marketing mix of the Organisation.
The market research and market analysis is the other key concepts of the international
marketing. The tools which include the PESTLE analysis, SWOT analysis, porter’s five
force analysis etc are considered for conducting the market research which can be utilized
for the international marketing decisions. The market entry modes like the joint
venturing, direct entry; licensing, franchising etc provides various options for the
Organisations to enter into new market. The pricing strategies, marketing mix,
promotional techniques etc forms other concepts for the international marketing.
Explain the rationale for an organisation to want to market internationally.
Some of the rationales for which the Organisation Sainsbury can market its products and
services internationally are discussed below.
 The UK market is enriched with the supermarket chains and the retailers which
provide the similar products and services of the Sainsbury. Even though the
Organisation has sufficient competitive advantage and loyal customers they
cannot be considered as sustainable considering the current competition. Hence
the international marketing can open up new opportunities for Sainsbury to
achieve competitive advantage.
 Through international marketing the Organisation can spread its name and
reputation which enhances the credibility. The international presence is relevant
for Sainsbury to compete with its international competitor Tesco PLC which has
its operations in UK also (Sapouna, Dimitratos, Larimo and Zucchella, 2018).
 The Sainsbury can eliminate the risk on depending on the UK customers alone
which can risks its operations under critical situations.
Some of the market routes which the Sainsbury can adopt is mentioned below
 Joint Venturing: This includes the marketing of the products and services of
Sainsbury along with the products and services of the leading Organisation in the
target market. This can provide a better exposure or vision for the products and
services of Sainsbury in the new market.
 Retailing: The Sainsbury can utilize its own brand image and reputation in the
target market to market its products internationally. This can be done through
social media marketing, digital marketing etc through which the responses can be
obtained easily.
 Franchising: This method can be utilized where the local franchisee adopts the
standards and procedures of the Sainsbury and market the products and services
accordingly. Since they are local Organisations they can understand the
characteristics of the market and can market the product without any risk.
Some of the challenges and opportunities which the Organisation Sainsbury can face
during the international marketing are mentioned below
Opportunities
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 The products and services of Sainsbury will be exposed to the global market
which enhances the customer base.
 The competitive advantage will be increased.
 The credibility and reputation will be enhanced.
 The international exposure will provide the international integration which
provide opportunities for Sainsbury to expand its size and business.
Challenges
 The political and the legal factors related to the international trade policies,
Foreign exchange problems, foreign direct investment which is subjected to
change is a challenging aspect which the Sainsbury will have to face during
international marketing.
 The culture, belief and attitudes of the people of the international market which
varies in each geographical location is challenging and requires more research
based on it.
 When Sainsbury enters the international market it will have to deal with the
political situation, laws, rules, unstable government, political restrictions and
regulations of the target nation.
 Tariffs and other trade barriers, incompatibility and pirating of the technological
factors.
 The cost of production may increase.
 The communication barrier is the major challenge (Wanda. and Razak, 2018).
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LO2: Evaluate entry to a selection of international markets and define
the key success factors
Evaluate the key criteria and selection process that the company should use when
considering which international market to enter
When the domestic Organisations like Sainsbury tries to enter into the international
market it has to consider various factors related to the selection of the international
market. Some of the selection criteria and the international market selection process
which can be adopted by the Organisation Sainsbury are discussed below.
Firm related factors: Here the Sainsbury should consider three factors which are the
ethno centric, poly centric and Geo centric factors. In the ethno centric perspective the
firm’s domestic market UK is provided importance and think of the markets in which the
already existing products and services of Sainsbury can be exported or marketed. The
entry modes like the agency, licensing etc can be adopted here. In poly centric factor each
foreign market is considered to be independent and unique. The markets in which
Sainsbury’s subsidiaries can be opened up are selected. The decentralized management
approach can be selected here. The market entry modes like the joint ventures will be
well suited here. Finally in the geocentric factor the whole world market is considered as
common and strategic alliances have been adopted here (Ibeh, Crick and Etemad, 2019).
Market related factors: When the Organisation Sainsbury wants to enter in to an
international market it should consider the following factors of the market.
 Economic and political factors
 Business regulations
 Social and cultural factors
 Trends in domestic market
 Trends in the exports and imports
 Competitive rivalry
 Accessibility of the resources
Some of the other key factors which the Organisation should consider when entering or
selecting the international markets are the following
 Political restrictions
 Special requirements
 Product specifications
 Distant locations
 Market accessibility
 Business community
The international market selection process has been explained below which the
Organisation Sainsbury can adopt in order to evaluate the markets and reach a final
decision about the target market
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Source: International market selection process, the world press
The steps which are involved in the international market selection process has been
discussed below
 Setting up of the international marketing objectives through considering the
rationale of the international operations. For Sainsbury it is to achieve competitive
advantage, more exposure etc.
 The parameters for international markets has been set which includes the political
and economic conditions, social and cultural values, the accessibility of the
resources, size of the population, per capita income etc.
 In the preliminary screening step, for each panned target international market, the
parameters have been evaluated. For Sainsbury the planned international markets
can be Canada, Australia, US, and china.
 Next come the short listing of the international markets though considering the
parameters as the filters (Cheng and Huang, 2019).
 Finally the evaluation and selection process can be done
 Test marketing can be done for the experimental purpose
 Commercial production can be performed in the selected international market.
Define and explain what a market entry strategy is, using examples of the different
strategies that are available to an organisation, and include the advantages and
disadvantages of each
The market entry strategy is the approach which has been adopted by the Organisations
operating in the domestic market to exhibit their product and services in the international
market of their choice. It includes a planned method of distributing the product and
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services to the target market. Some of the market entry strategies which can be adopted
by the Organisation Sainsbury to enter into the international markets are discussed along
with its advantages and disadvantages.
Exporting
This is the traditional market entry method where the product and service can be exported
to the target market depending on the order and demand.
 Advantages: Since the supply is from the domestic country the risks associated
with the international marketing will be less. This market entry mode the
opportunity for the Organisation to learn more about the target market before
establishing it further.
 Disadvantages: The primary disadvantage is that the Organisations will have to
bare the policies and procedures of the agencies which can sometimes hinder the
international operations. The Organisations may to establish their own policies
and standards in a perfect manner (Chen, Sousa and He, 2019).
Licensing
This is the method of the market entry method where the Sainsbury can provide license to
the selected company of the target market to distribute their products and services and use
the Sainsbury’s trade mark in the target market. For example Sainsbury can provide
license to Wal-Mart in US which is a leading super market chain to distribute its product
and services.
 Advantages: The expenses and the costs involved in the international marketing
will be less through licensing. The involvement of the Sainsbury in the
international operations will be less.
 Disadvantages: The potential returns from the international operations will be
less. The threat of information sharing is very high.
Joint Venturing
This the method through which more than two investor’s combines together to share the
ownership, control over the property rights etc. For example Morrison’s, Asda, Aldi etc
are the leading supermarket chains operating in UK. Sainsbury can joint venture with any
of these Organisation and launch its international operations in the international market of
choice.
 Advantages: The risks involved in the international marketing will be shared. The
strength of the potential Organisations will be shared which will yield good
returns.
 Disadvantages: The ultimate control for the management will not be available to
the partners. The risk of information sharing can affect the individual
competitiveness. The differentiated views and perceptions of the partners can
impact the sustainability of joint venturing.
Mergers and acquisitions
This is the method of market entry strategy through which the Organisation would
combine with the functions and operations of the already existing Organisations in the
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target market. For example the subsidiary of the Sainsbury, which is the Sainsbury
banking can be merged with the banking sector of the target market and hence can enter
into new market.
 Advantages: The market power for the Organisation will be increased. It enables
the optimum utilization of the resources. The risks involved in the business
operations will be reduced along with the gaining of the tax benefits.
 Disadvantages: labour problems like de-motivated and uncommitted human
resources can be a serious issue. Lack of expertise in the management of the
Organisations in the foreign market can create risks and issues (Samiee and
Chirapanda, 2019).
Fully owned facilities
This is the approach through which the Organisation opens up its own facilities in the
target market. For example the Organisation Sainsbury can open its branch or the outlet
in the potential markets like US, Canada etc.
 Advantages: The policies and procedures can be implemented effectively. The
standardized and quality service can be exhibited. The direct entry will enable the
Organisation to achieve full benefits of the international operations
 Disadvantages: The cost of implementation of this strategy will be high.
Conclusions and recommendations on how and why the company should enter the
international market
The evaluations on the market entry strategies for the Organisation identify various
market entry modes which the Organisation can adopt for its international operations.
Considering the advantages and disadvantages of the market entry modes two different
strategies are recommended for the Sainsbury in different international market context
 For the international market Canada: This is a market with potential customers
with dual income. The population is having enough potential to spend on the
groceries and the products and services exhibited by Sainsbury. In this market the
Sainsbury can initiate the international marketing through joint venturing so that it
can enter into the market successfully without facing any potential risks. This
method will enable the Organisation to reach its target audience in Canada with
the support and strength of the partnering Organisation. After successful joint
venturing the Sainsbury can also plan to open up new facility in Canada as the
political and legal factor of this market accepts and promotes foreign direct
investment.
 For the international market china: This market is a potential market with
relevant population which can be targeted by the Sainsbury. The entry mode
which can be recommended for this market can be exporting. Since the political
and the economic condition of this market are not stable exporting can benefit the
Organisation to reach the target audience of the China. The other entry strategies
cannot be recommended for this market as there is instability in the political
situation, corruption etc.
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LO3 Investigate how elements of the marketing plan can be adapted or
standardized across international markets
Explain the difference between global and local marketing, using examples where
appropriate
In the international marketing perspectives the dilemma between the local and the global
marketing prevails and makes the marketing process more challenging. Even though
there is an argument present globally that the products can be marketed globally under
standardization, Kotler argues that the Organisations cannot market its products and
services globally following a specific standardization as the customer behaviour and
perceptions changes from country to country. For example the Organisation KFC slogan
of Finger licking food products are perceived as eating the fingers itself in its potential
market China.
The global marketing involves the standardization whereas the local marketing is not
confined to the standardization. The standardization and adaptation of the marketing
strategies locally and globally depends on the understanding of the needs of the
population of the market in which the Organisation is operating. When going global with
global marketing strategies the Organisation will have to consider the local differences.
According to the contingency approach of the international marketing these is not
specific approach for the managers for adopting specific strategies (Steenkamp, 2019).
In the global marketing through implementing standardization in the marketing mix
across the target international markets the Organisations could achieve cost management
due to the economies of scale. In the local marketing the cost would be higher through
considering the local differences. According to the view of Mooij the global
Organisations have to consider the economic pay offs before the adaptation of the
marketing strategy (Steenkamp, 2019).
Present an overview of the key arguments in the global v local debate
The key arguments in the global Vs. local marketing debate highlights that the globalized
marketing should consider the local factors like the customer behaviour, geographical
conditions, political and economic situation of the local market etc. This identification
highlights the dilemma of selling the same products across the countries considering the
local differences.
When considering the Organisation Sainsbury and its international operations it can be
recommended that the Organisation can adopt the local marketing strategy meanwhile
maintaining a global reputation for achieving the competitive advantage.
The Sainsbury being a grocery retaining Organisation it is essential for it to consider the
local constraints in order to establish in a specific target market. Through understanding
and providing importance to the economic, political and consumer behaviours of each
country specifically, Sainsbury can identify the potential risks and opportunities of each
country and can formulate strategies accordingly. This can achieve success and
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