Analyzing Sainsbury's International Marketing: Strategies and Entry

This report explores the concepts and scope of international marketing, using Sainsbury's, a leading UK supermarket chain, as a case study. It examines various routes to enter foreign marketplaces, including exporting, licensing, franchising, joint ventures, and foreign direct investment, highlighting selection criteria based on economic, social, cultural, and legal factors, particularly within the Indian market. The report discusses market entry strategies like direct exporting, licensing, and franchising, outlining their advantages and disadvantages. It also contrasts global and local marketing approaches, analyzes the impact of the marketing mix distribution approach in international contexts, and covers different international marketing orientations. The analysis aims to provide insights into how organizations can effectively expand their operations globally and achieve success in diverse international markets, with Sainsbury's strategic decisions serving as practical examples. Desklib provides students access to similar solved assignments and study resources.

INTERNATIONAL
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Market entry strategies their advantages and disadvantages.......................................................3
Global and local marketing..........................................................................................................5
Impact of marketing mix distribution approach within international contexts............................6
International marketing approaches.............................................................................................8
Home and international orientation.............................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
International Marketing refers to the various methods and techniques which is used to sell
the different products and services in many countries which is in the form of franchising, import,
export, licensing etc. Each country has its own framed strategies to enter the international
market, laws, languages and cultures(Gao, et.al, 2018). It also involves the process of
distribution of ideas, promotion of products and services that satisfies the objectives of an
individual and the organization. It also helps the company to promote its brand and boosts its
reputation as the customers purchase the brand of goods which are available globally.
Its main function is to help the countries in the development of economic growth through
marketing strategies and reduce the distance between the developed and developing countries
and promotes cultural exchange among the different nations(Song, et.al, 2018). In order to
describe the various aspects in this report, Sainsbury will be chosen which is the second largest
unit of supermarkets and headquartered in UK, London.
The report will illustrate the scope and concepts of International Marketing, different
routes to enter into the market and various strategies adopted by the organization. Apart from
this, the study will cover the various international marketing approaches they can adopt for the
growth and success of the organization.
MAIN BODY
International market
International market refers to the marketplace in which the company deliver their
business product and services outside the regional boundaries of nation. In other language when
any company or buyer exchange the commodity outside the nation is called international market
(Watson et.al 2018). The market is generally larger than global marketplace. It gives assistance
in expanding business all over the world. It increases the scale of the growth as well as
competition in the market. International market involve the functions of export and import of
commodity and services. Due to ample market segmentation customers are highly aware about
the companies services. In this marketplace company deal with more than one country in order to
fulfil the demand and supply of the people living outside the nation.

Scopes and concepts
The scopes of international marketing cover wider area which involve researching, planning and
coordinating.
 Marketing research: it is consisted of research on taste and preferences of consumer,
demand of individuals as well as analysis the behaviour of consumer. It plays vital role in
international market as it analysis and help in delivering the services in effective and
efficient manners. It involves how a company can satisfy the customers needs in order to
achieve organizational goals. It will identify the position of the firm outside the nation
(Leonidou, et.al. 2018).
 Planning and development of commodity: it is the most appropriate scope of international
marketing. As every person of nation has different taste, the organization suppose to plan
according to market demand. The development and modification of product according to
the customer is necessary. It will assist in dealing with new customers and maintain good
relationship with older customers. It will increase surplus of the organization inside as
well as outside the country (Baack, , Czarnecka, and Baack, 2018).
 Pricing schemes: pricing of the product is important because international market cover
whole geographical area. Each and every country have different price and currency value.
Pricing of product is decided by the capability and willingness of the customer to invest
money on particular product. Adequate pricing of commodity increase productivity and
market value. In international market fixation of price is depends on manufacturing
expenditure and investment done on export as well as import of product.
 Promotion: this plan of action play major role international market. Promotion helps to
increase awareness among people who are living in different country(Tien, et.al 2019). It
consists of advertisement for product with assistance of different platforms such as social
media, television, radio, newspaper etc. it increases brand value in different countries and
attract new customer as well old customers. It will increase the reputation of organization
in different markets.
 Distribution: it is the basic source of delivering services to the customers . The
distribution consist of various channels which involves industry, distributor, retail
merchant and consumer. It gives assistances in delivering the services directly or
indirectly to the customer. Through the various channels company can provide product

and services to different markets outside the nation. Through the distributional channel
organization circulate the product all over the world in context of increasing production
and sales of the company. It involves wide network of business concern as it supply the
commodities globally.
Routes to enter into foreign marketplace
International market offer great opportunity for the company to enter in foreign market.
The company aim to deliver services and products all over the world. The organization has
various perspective to enter into the market. Company want to increase the profit margin by
attracting customer globally. Domestic market provide less client base to the company as
compare to foreign or international marketplace. It also helps in producing more product at lower
price. To provide cheaper services to the customer the company want to enter the new market. It
will increase awareness and build reputation of the company (Adhiambo,2019) . In order to
increase the scale of growth the company prefer to go for international market. With the help of
international market company can boost up the sales of company's product. In order to develop
their own entity and trade worth. The company want to increase competition in different
country.
Entry into international market highly impeccable for the companies' growth. Therefore,
company can use various routes to enter into international markets. Exporting of the good and
services to different countries through various channels can be the best way to get into market.
Under the export and import of product company can lower the risk of organization. The
manufacture product can be delivered to other countries market. The company are not supposed
to invest in production cost of another nation( (Espinoza, Smith, and Pitti). Exportation includes
various parties such as importer, transporters, wholesaler, retailer etc.
Licencing is one of the appropriate method to increase brand value in other country.
Because licensing permit other organization to utilize the property in targeted market segment.
The other organization give monetary values in exchange for using patent, copyright, trademark
and techniques of particular company. In foreign market licensing provide concern on
merchandising and manufacturing expenditures. Although in franchising method the authorized
person of the organization sell the rights of the company. It will make easy way for the firm to
increase brand values in different countries market. Franchising process required less investment
but involve another person in business. It increases the opportunity option for the organization.

Joint venture is different alternative for the company to enter into the market. In this method two
or more then companies can work together. This method leads to cooperation between two
parties. Under joint venture one companies owner is local to the another countries market. In this
both parties manage and control the function together. The investment done on the bases of
profit ratio decided between both the companies. Another person have complete knowledge of
targeted market to enter into international market. It will increase the market value globally.
Lastly the owner of the organization can invest the capital in foreign direct investment to
increase the production of the company. It will provide new ventures to the company (Morasch,
2019).
Selection criteria in international marketplace
The company select the market wisely to enter into foreign market. The process of selection
play critical function in international market. The process of selection is based on the targeted
market discussed by the company. Every country has its own criteria due to presences of various
rules and regulation of different boundaries. It required lots of market research of different
country as every market have different value system. The largest retail company Sainsbury is
trying to launch the product into market of India.
Factors of selecting criteria
There are different factors which affect the company when willing to enter into specific market.
 Economic factor: it refers to the component which impact the economic system of the
market. The factor consist of interest rates and taxes lies in the market. India is having
sixth largest economy in the world. The people of India prefer low economic product as
compare to other country. The Indian people like to invest the money on retail product or
the company who deliver good quality product into less price. If there is less interest rate
people wiling to invest money in order to fulfil their needs. Rear people of the India
prefer to buy high price of product because of inflation. Inflation affects the profit
margin of the company. India is leading around 10% of GDP in the market (Azlarova,
2018).

 Social and cultural factors: as people of India follow traditional system. But in the
modern era people are shifting toward western lifestyles. The population of India is very
high so it will provide great market to the company. Indian peoples are Highley concern
with trends and quality of product at lower cost. They would life to buy fresh products
from traditional stores. According to recent time period people are shifting toward online
platforms.
 Legal environment: the most affecting factor is legal political in democratic country like
India. In India rules and regulations are passed by the government body. It will reduce
the political risk of the country. The tax structure and legal system is cleared in India.
The country open the opportunities for the foreign countries to enter into the market in
order to increase the scale of growth. Licencing and franchising can be done easily in
India so the company have liberty to join hands with different local business enterprises.
Adoption of marketing strategy to enter into Indian market
The Sainsbury will adopt licensing and franchising marketing strategy. The organization give
patent, copyright, trademark to other business enterprises. The organization analysis and identify
the knowledgeable person who has complete knowledge of the market. The company will
transfer the responsibility of the company to the responsible person. The Indian person who
willing to take licencing and franchising will invest in business on the behalf of Sainsbury. The
responsible person will allow other party to use companies material, name, logo, product and
business model in India. The company will sign a contract with the party for the security reason.
Hence, the company will enter into market with marketing strategy in order to increase
production of the organization.
Market entry strategies their advantages and disadvantages
When the company expand its operations in local market, they seek to diversify their
operations globally in order to gain success in the overseas market. In order to grow the
organizations adopt for various methods to enter into the market in connection with the factors
like the scale of the business whether it is small or large scale, demand of their product in the
international markets, and factors affecting the business environment(Jeong, et.al, 2017). The
reasons company wants to enter into is that the purchasing power in abroad is high as compared
to the domestic market as for the same product profits can be earned from foreign markets.

The strategies to enter into the market is different from one another in terms of cost, level
of risk and following are the various mode of entering the international market are:
1. Direct Exporting: Direct Exporting is one of the methods of entering into the market and
includes exporting the products and goods directly in the foreign markets as some organizations
consider as easiest mode of entry in the overseas market(Acosta, et.al, 2018). Example:Tesco has
adopted this mode to boosts the profits of the company and to communicate directly with the
customers.
Advantages of direct exporting:
 Through direct exporting it avoids the confusion of mediator and independent control
over the sales and direct communication with the clients.
 It will help to know the status of the products before making investments in the foreign
markets.
Disadvantages of direct exporting:
 There will be communication barrier as the local agents cannot respond to the customers
quickly. High level of risk is involved as the company will have to bear the burden of marketing
their overseas and manufacturing the products.
2. Licensing and Franchising: It is mode for entering into the international market for a local
company and through an agreement the company enters into the market and is often used
adopted by the firms having patents. Licencing gives the right to the overseas company to sell
their products(Mbalyohere, and Lawton,2018). Companies adopt this policy to empower to
produce the other company's products. The profits generated from the sale of the products are
distributed in proportion.
Advantages of licencing:
 Less cost is incurred in packaging, producing and selling the products.
 It is less risky method for diversification as compared to other modes in overseas market.
Disadvantages of licencing:
 It creates competition in the market as the licensees become the competitors. The licensor exercise limited control on licensee regarding the marketing and production
of the products sold in the international market.

3. Foreign Direct Investment: Companies can enter into the foreign market by making the
considerable investments by way of Foreign Direct Investments into the country which
includes the following such as mergers and acquisitions and joint ventures.
Advantages of FDI:
 Benefits are that it puts restrictions on the import of certain products and goods.
 There will be low labour costs and cheap raw material in order to decrease the cost of
production of products to gain competitive advantage.
Disadvantage of FDI:
 Its main demerit is the interference and influence of politics as the government will
support and protect the local products over the foreign goods.
It can be concluded from above study that International Marketing is important for those
organizations that wants to expand its business operations globally in order to increase their
profits and to hold place in the overseas market and involves various methods and techniques to
sell their products in foreign markets. By selling them in international market it helps to increase
the reputation of that brand(Young, 2017). For entering the international market, the company
should carry out researching and demand of their products in the overseas market. Sainsbury
should adopt proper modes for entering the market which includes direct exporting, licensing,
Foreign direct investment etc. The company should carry out researching and demand of their
products in the overseas market.
Global and local marketing
In the modern business world, there are various aspects within business that are changed.
This makes it important for the companies such as Sainsbury to make use of marketing tools to
promote the business within the international market. These tools help in spreading the message
of the company across the globe. Global marketing is the process of producing generalized
messaging that is in intention for everyone (Wei, Ang, and Liou, 2020). It involves marketing on
worldwide basis while conducting the different global operations. The concept of globalization is
related to produce a marketing framework that an international firm can adapt to promote its
products and services in the global arena. This way people will understand the business of the
organization. These global marketing campaigns are essential in building good profile for the
company including its services that will drive the sales of the organization. In addition to this,

company must have an optimized search engine operation that will rank the company high within
the global search engines. Global marketing helps in reaching across multiple markets at once.
Localized marketing, on the other hand, is about producing content that is well suited in
accordance with the target audience present in that particular local area. This marketing is aims
towards much smaller target audience. Example of local marketing includes sending emails to
potential customers present within a particular area. It is important to take account of norms and
regulations of that certain area while focusing on the specific international market. localize
marketing includes the process of running the campaign in the local language to make the target
audience feel respected while ensuring that the message is properly tailored in consideration with
their cultural norms. Local language is used to ensure that potential customers are understanding
both the language and convention by the company.
The rise of globalization has transformed the way of marketing the products and services
from the company on international grounds (Steenkamp, 2019). Global marketing approach
provides an approach to assume that customers from around the globe are having identical needs
and requirements. This results in standardization of the product. On contrary, local marketing
approach is aimed towards segmentation of different customers and their products. Globalized
marketing states that the world is becoming standardized as well as homogeneous and therefore,
company must market same type of product in same way throughout various areas of globe.
Technology has created the need for setting different needs and preferences that will converge
throughout the world. With the help of standardization, company can reduce the cost of
production and marketing. However, critics say that standardization is not the best strategy to
market the product (Westjohn, and Magnusson, 2019). Company can use the localized approach
with the help of adapting to the local cultures and leveraging their unique image into gaining
market share of the local markets. Localizing the content of the company must be based on the
target audience.
Impact of marketing mix distribution approach within international contexts
The distribution approach of the company on international level comprises various
parameters and are affected by the different phases of the company in order to maintain the
dominance as being a global company.
Promotion becomes an important part in the positioning company with a single product.

Product: With the increase in globalization, there is distinction created between different
channels for marketing the product within the home and host country of the organization.
Marketing products of the company are aimed to fulfil the needs of the target market and in
within the international context, it changes on the terms of cultural backgrounds, religion,
purchasing patterns along with the economic level of the company. organization is supposed to
adapt their product suitably to meet the local requirements that cannot be changed. The process
of adapting the product within the local markets adds overall costs within producing the product.
Customized products works well in various international context and strengthen the brand within
the same market.
Promotion: It is a crucial aspect within the global marketing mix and helps in easing the
process of globalization of the company by producing same message across the world.
Promotions will include the ways by which customer behaviour is shaped across internal as well
as external conditions (Ungerman, Dedkova, and Gurinova, 2018). It is essential to adapt
towards the local market trends within its promotional campaign. Most importantly the language
of the promotion is changed within the different international context. Brand is build will one
voice and using creative process within developing economies. The availability of media for the
purpose of advertisements is taken into consideration. Cultural consideration of the host country
are important to avoid causing any offence to anyone while promoting the brand.
Place: this category is important for the company in distributing the product from the
company at right place and right time. Distribution of products within national markets includes
the goods that are moved within the chain that begins from manufacturer and ends at the
wholesalers and then to consumers from there. However, in the international context there are
more parties involved as the goods are supposed to be moved from around international markets
where the business practices are different when compared to the home markets. Company will
have to investigate the distribution chains present in different countries where the company wish
to operate. This strategy for distribution is different on the terms of profit margins and
transportation costs.
Price: Pricing on international level is a complex task as it involves taking the traditional
prices in considerations. It includes fixed along with variable costs and the level of competition
within the market (Katsikeas, Leonidou, and Zeriti, 2019.). Pricing includes the costs of
transport, tariff and import duties within the international market along with the exchange rates

of the host country. Personal disposal incomes within the target market are important to consider
as well. Pricing include the currency in which company is looking to be paid along with its
economic condition. Moreover, the use if interest has lead to several challenges as customers can
view global prices along with having access to purchase any item from across the globe.
International marketing approaches
Global marketing comprises various approaches that will be adopted to attain the global
perception and work well within the international markets. Each of these approaches are
associated with the different decisions within the international marketing strategy and related to
the differences coming from international markets. These approaches include:
Transaction cost approach: It focuses on making appropriate choice within the mode of
entry within the international markets while considering about the decisions related to trade- off
between controlling and cost of the resource commitments in the transaction cost economy.
Control will help in coordinating the actions while implementing strategies that will assist the
company in attaining higher return value (Watson and et.al., 2018). It brings commitment
towards the resources and exposing to risks within uncertain environment. This approach is used
to assess the entry decisions made while considering exporters along with the service firms.
Standardization: It includes analysing the potential benefits related with the
standardization of the products in various different elements present within the marketing mix.
This is opposed in the process of adopting to the local strategies. Company on international
grounds is successful by standardized approach as by taking the advantage of the economies
within the operations of production, distribution and management of the products and services.
Global configuration: Configuration and coordination is very important within the
activities performed by the company at different levels within the value chain process. Thus
increasing and improving the efficiency that will help in gaining more competitive advantage.
Activities of the company on upper side of the value chain process is related to sourcing, design
and focusing on the working in cost effective manner (Soares, 2018). These activities include
setting high coordination at different levels within value chain process and therefore, optimizing
the cost efficiency. It helps in maximizing the results from changes in demands of the products
and working in accordance with the moves of competitor companies.
Evolutionary perspective: The perspective towards the operations of the company is
evolving at a continuous rate over the time when the firm will have to gain more experience