International Market Entry: A Strategic Report for Terry's Cafe, UK

This report provides a comprehensive analysis of international marketing strategies for Terry's Cafe, UK, established in 1982. It explores the scope and key concepts of international marketing, highlighting the differences between local and international marketing, and discusses various routes to mar...Read More

International Marketing
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Table of Contents
Introduction...................................................................................................................3
Task 1...........................................................................................................................4
Task 2...........................................................................................................................7
Task 3.........................................................................................................................12
Task 4.........................................................................................................................14
Conclusion and Recommendations (200)..................................................................17
Reference List:............................................................................................................18
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Introduction
The Terry’s Cafe, UK was established in the year 1982 by Terry in 158 Great
Suffolk Street, London. The Cafe serves the nation with exotic tea, coffee, pastries
and other delicacies within its stores in London. The owner came from the family that
had background of a cook as his father was a chef in the army and mother was a
pastry cook. This is how he develops a passion for starting up a cafe business and
become famous as a successful entrepreneur in UK (Time for Terry's, 2018).
In this report, four tasks states how and why there is a need for Terry’s Cafe, UK to
establish the business in the international market. In the first task, there is detailed
analysis of scope and concepts of international marketing essential routes to it. The
second task, describes about the criteria of the nation and their significance for
choosing it to expand the business. The third task cites the essential elements of the
marketing mix that has to be adopted by Terry’s Cafe, UK to be considered. The final
task explains the various marketing approaches for the cafe.
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Task 1
Analyse the scope and key concepts of international marketing
International Marketing is defined as the application of marketing conducted more
than one nation. It is often termed as Global Marketing. Most of the organisation that
has its business operation globally normally uses internet, social media platforms,
advertisements and others, so that they are able to conduct their business processes
with the help of marketing and can grow their organisational size and brand image in
the international market.
Use a range of sources to define international marketing and highlight the
main differences to local marketing
Local marketing within the geographical regions of the nation while international
marketing includes the marketing procedures such as production, distribution,
promotion and others outside the national boundary.
Is the marketing Terry’s Cafe, UK has its branches only within the national boundary
of United Kingdom. In order to take business to the global market, the cafe needs to
consider the factors that will enable it to expand its business in the international
market (Brown et al., 2016). Some of the major factors are as follows:
Export
In order to take the business in the global market, Terry’s Cafe, UK needs to start
export its goods manufactured within the cafe to more than one country. This way
the people all around the world will be able to experience the tastes of the exotic
foods and beverages that are made within the cafe. The Cafe needs to abide by all
the rules and regulations in respect to both UK and the foreign countries, so that they
will be able to export their food products efficiently.
Import
Terry’s Cafe will be able to increase its stand prominently in the global markets if it is
able to import some of the unique food products that are not available in the nation
and in some countries for the external sources in other countries.
Joint Endeavour
In order to promote the product portfolio and brand image in the international
marketing, Terry’s Cafe needs to collaborate with top restaurants and hotels, so that
they are able to increase its influences both in the local as well as global markets.
Contractual manufacturing and Agreements
With the help of contractual marketing, Terry’s Cafe will be able to reduce the
production costs of the food products by exporting the raw materials to the
organisations in other countries in collaboration and the producing the food products
to serve the tastes of the customers in those countries.
Fully owned manufacturing
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With the course of time, Terry’s Cafe shall build its own retail cafe stores in other
countries, so that they are able to manufacture food and beverages products
particularly under their brand name, so that they are able to build long-term interests
in increasing and maintain the quality of products in other countries.
Figure 1: Conceptual map of International Marketing
(Source: Business Jargons, (2018))
Explain the rationale for it to want to market internationally and describe the
various routes to market the organisation can
Any local organisation can reach to the customers in the global market through many
routes. Some of the major routes or rather methods are Direct Selling, Selling as
wholesell, Distance Selling, Online selling and combination of mentioned selling
methods.
Out of the above-mentioned routes, it will be convenient for Terry’s Cafe, UK to
adopt Direct Selling route for reaching the customer in the target international
markets. With the help of this method, the company will be able to sell the food
products as well as beverages that are produced within the cafe without any
organisational medium, directly through company owned website and door-to-door
company owned logistics services (Coughlan et al., 2017). This will help the
organisation to develop relationship with the customers abroad and will be able to
get direct feedback, so that there are improvements in the food products. The
strategy is good for solving the complexity of the products sold by the cafe.
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Figure 2: Direct Sell Mechanism
(Source: Slideshare.net, (2018))
Opportunities in International marketing
Some of the key opportunities the Terry’s Cafe, UK will have in establishing its
business in the international marketing are as follows:
 When the Cafe will start its business in the international market, with the
course of time, there are chances that the demands of its food products will
increase and that will lead to growth in its industrial economy.
 Terry’s Cafe will be benefitted with comparative costs by switching its
business to the target international markets (Solberg, 2017).
 Building the business globally, the cafe will be able to help the nation build
good relationships among UK and other countries, promoting peace globally.
 The influence of international marketing will help Terry’s Cafe, UK to utilize
surplus domestic manufacturing, production of new food variants, quality
upgradation of the existing products and increased cooperation among
countries.
Challenges in International Marketing
Some of the key challenges the Terry’s Cafe, UK will have in establishing its
business in the international marketing are as follows:
 When the Cafe will start its business outside the national boundary of UK, it
will face difficulties to earn sufficient profits while selling the food and
beverages products in other countries due to the Traffic Barriers (Rallapalli
et al., 2015).
 There are certain bureaucratic and administrative processes and regulations
in other countries that may appear as challenges for the cafe, leading to
difficulties in imports and exports of their products.
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 It is obvious that every country has their currencies that are significant while
marketing of the business. It may be challenging for Terry’s Cafe, UK if there
are extraordinary and unexpected changes in exchanges rates since it will
create serious agreement problems.
Task 2
Evaluate the key criteria and selection process to use when considering which
international market to enter
Some of the major criteria that are responsible and are essential to consider while
choosing the country to increase its business scope in the international market are
as follows:
Economic scenarios
It is essential for any company to research upon the economic conditions of the
nation before setting up its business in that nation (Ozturk et al., 2015). With
Economic Scenarios, it means that the country shall be economically efficient such
as good job employment, better Inflation rates, lower currency rates, lower Interest
rates, equal balance Trade, effective value of commodity and others in that country.
Labour wages
The country shall have a good employment ratio with proper salary scales and
offering sustainable employee benefits to the people in the nation (Ozturk et al.,
2015).
Infrastructures
There shall be proper communication, efficient transportation modes, and lower
exchanges at the toll tax units and other infrastructures within the country, so that it
becomes convenient for the foreign country to build up their business in that country
(Ozturk et al., 2015).
Government Cooperation
It is very essential for the particular government of the nation to be supportive
towards the companies who prefer of establishing their business in the international
markets (Ozturk et al., 2015).
The economic conditions, labour treatment, quality of infrastructures and cooperation
from the government are well maintained within the national boundary of China.
Therefore, it will be convenient for Terry’s Cafe, UK to choose China for establishing
their business in the international markets.
Explain, using examples, the different market entry strategies, including the
advantages and disadvantages of each
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Figure 3: Market Entry Strategy
(Source: daryl10, (2018))
Many ways will help Terry’s Cafe, UK to enter the international markets. Adopting
only one would not help the cafe to enter the global markets. Every strategy has its
own characteristics features and limitations. Therefore, it is necessary for the Cafe to
consider the following entry processes and then developed or rather follows a
combination of strategies so that it becomes easy for the cafe to establish its
business successfully in the global markets (Karakaya et al., 2018). Some of the
major market entry strategies are as follows:
Market Entry Strategy Advantages Disadvantages
Exporting  The Terry’s cafe,
UK will not have the
need for operational
facilities.
 The cafe will have
the advantages of
setting up of
scalable economy
in the countries
where it will
establish its
business.
 With the help of
internet, the Cafe
will have a merit
and convenience
while exporting
goods from UK to
the countries in
 Some of the
advantages with the
supply of products
the cafe is currently
having in its home
country that is UK
will not be available
in the other
countries.
 The Cafe will have
to rely upon the
export
intermediaries such
as Export
Management
Company (EMC)
and Export Trade
Companies (ETC)
for the exports of
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which they open up
their branches.
the food and
beverages as well
as raw materials
away from its home
country.
 Many export
barriers will make
the carrier in
exporting for the
cafe difficult.
 The cafe will have
the disadvantages
in dealing with the
huge transportation
costs.
Joint Ventures  The risks that may
occur while
collaborating with
the other
companies in the
international
markets will be
equally distributed
among them.
 The cafe will have
an advantage of
using
complementary
resources from the
companies with
which they have
collaborated.
 As the country to
which the Terry’s
cafe, UK is
completely new, it
will very difficult for
the company to find
a good and
trustworthy partners
with whom they will
make collaboration.
 There may be rise
of many issues in
managing efficient
relationship with the
partners.
 The cafe will be
able to lose the
competitions and
the merits
associated with it
after make
collaboration with
partner in other
countries since
there may be many
challenges in
building integrity
and coordination.
Licensing or Franchising  The cafe will have
the advantage to
have the
contractual source
of income while
 The Cafe will get
very low assistance
in licensing the food
products that are
manufactured
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establishing its
business in the
global market.
 The economic and
financial will be
limited with respect
to licensing its food
products in other
country and that is
a merit.
within its
organisational
boundary in UK, in
the host countries.
Foreign Direct
Investments
 With the help of
foreign direct
investment, the
Terry’s Cafe, UK
will have the full
control over its own
food products in the
countries where it
chooses to
establish.
 The foreign direct
investment will
provide the Cafe
with integration and
coordination from
the other countries.
 It is possible that
this entry strategy
will enable the Cafe
to have Greenfield
Investments that
will help the
organisation to
build its own
operation in other
countries.
 The Terry’s Cafe
will have to face
limitations from
substantial
investment and
obligation.
 Greenfield
Investments are
often time
consuming and
unpredictable in
nature thus,
keeping the Cafe in
a disadvantage.
Merger and Acquisition  With the help of this
market entry
strategy, the Cafe
will be able to make
rapid expansion in
the foreign
countries.
 The acquisition
sometimes creates
integration and
coordination issues
that might limit the
Cafe in operating its
business protocols
in foreign countries.
Table 1: List of Market Entry Strategies
(Source: created by the leaner)
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From the above evaluation of the different market entry strategies, it will be beneficial
for the Terry’s Cafe, UK to adopt the Merger and Acquisition Market entry strategy
to enter the international Market.
Recommendations
From the above evaluation of criteria of choosing a preferable nation for
establishment of business for Terry’s Cafe, UK, it can be recommend that China will
be an appropriate nation for establishment of business, since there are least number
of issues with economy, labour wages, infrastructures, and government in China.
Merger and Acquisition entry strategy shall be adopted by the Terry’s Cafe, since the
particular strategy has least number of limitations then compared to the mentioned
strategies.
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Task 3
P5 Present an overview of the key arguments in the global versus local debate
Terry’s cafe, an UK based 5-star cafe located in London, which a local enterprise
catering to the taste buds of the local residents for years. However, the rising
competition in the domestic market necessitates the need for the company to reach
the global market (Gillespie and Riddle, 2015). Keeping the company, restricted to
the domestic of UK has several disadvantages, which must be addressed by the
company in order to improve its market position and to increase its profit margins.
The several disadvantages of domestic marketing might be illustrated using the
following factors:
 To maximize the revenues: Since the company caters only to the need of
the customers of UK, the number of consumers of the company is low when
compared to other cafes, which have a global presence. Therefore, in order to
sustain itself in the competitive market economy, the company must consider
spreading its branches globally.
 To increase market shares: Keeping itself restricted to the domestic
market, implies that the company holds a lowered market share. Spreading its
branches all across the globe help the company to increase the market share
it holds, thus enhancing its market position in both the domestic and global
market.
 To increase its brand value: In order to enhance the popularity and
reputation of the company, the company must consider a global expansion
that will enable it to reach to wide spectrum of global consumers, which would
finally result in maximization of revenues.
 To widen the customer spectrum: Targeting customers all over the globe
and catering to their varied needs, is one of the prime motives of the company
to adopt globalization strategies
Thus, considering the above-mentioned factors, the company must consider
adopting certain strategies that will enable it to reach the global market. However, in
order to target consumers all over the globe, the enterprise must consider the
following factors:
 Quality and taste of food products: Since the company was a reputed one
in the domestic market, to maintain such a reputation, the company must
ensure high quality of food products, and the company must offer items with
varied tastes, in order to cater to the needs of the customers all across the
globe.+
 Pricing : Since the company , is launching itself newly in the global market, it
has to use penetrative market strategies so that consumers all over the globe
can avail these newly launched products at affordable prices
 Advertising: Extensive advertising of the products using online platforms and
print media and audio-visual media would enable the organization to grab the
attention of customers all over the globe.
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 Online ordering and payment Platforms: In order to cater to the needs of
the global market, the company must develop platforms for ordering and
paying for the food products of their choice
 Proper packaging and Fast delivery: Since the company deals with food
products, it must ensure proper packaging of its products to avoid spillage and
a fast delivery system would reduce the chances of spoilage.
P6: Investigate how the product, price, pricing and promotional distribution
approach differs in a variety of international contexts.
The alteration in marketing strategies used by the company in order to globally
expand itself are namely product, price, pricing and promotional distribution has
been discussed in the following section.
Product: The products should be such that offers a variety of tastes in order to cater
to the varied taste buds of people all across the globe. Every nation has their own
staple food based on its climate, cultural backgrounds, history and geographical
location. This leads to varied preferences of food all across the world and the
company must consider all these tastes in order to make a position in the global
market (Kireeva and Drozd, 2015). In the context of the given company, which is a
café and mainly deals with bakery items such as cakes and pastries, the company
might consider promoting different types of customized designer cakes, and pastries
of different flavours and other kinds of desserts such brownies, cheesecakes and
premium quality breads.
Price: Not every nation is economically flourishing. Therefore, in order to cater to the
consumers of the developing nations, the prices of the products must be affordable
in order to target a wide spectrum of customers all across the world. The prices of
the cakes must vary according to their size and flavours to make it affordable for
most of the nation’s populations.
Pricing: There are mainly four kinds of pricing strategies usually used by the
organizations according to the kind of various political, social, economic and
legislative factors. These strategies are namely are penetration pricing, economy
pricing, price skimming and psychological pricing (Cristo et al., 2017). The Company
in this context must use penetrative pricing strategies in order to promote its
products. If the prices of the products are high, the customers would not be willing to
purchase them. Therefore, a penetrative pricing strategy, that would enable the
company to offer high quality products at the lowest possible prices, would attract a
wide spectrum of customers.
Promotional Strategies: The Company needs to use several promotional strategies
in order to target customers all across the globe. The organization can give offers
such as ‘Buy one get one free’ or give discounts on meal boxes and offers on
customized cakes or pastries or newly launched cookies. The company can also
consider providing loyalty cards to its regular customers, which would help them to
avail discounts on a regular basis.
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Task 4
P7 Explain and analyse the various international marketing approaches your
client organisation can adopt
International marketing approaches can be subdivided into two major types, namely
centralized and decentralized approaches .Each one of them is has its own
characteristics, which are illustrated as follows:
 Centralized marketing approach: As the name suggests, the centralized
marketing approach is when, the headquarters marketing team takes the
major decisions for the company and frames the important marketing
strategies (Liu et al., 2016). Some of the characteristics of this approach is
listed as follows
 This kind of approach is adopted when the marketing department at the
headquarters is highly potent and experienced in international
marketing.
 The marketing team has a fair idea of the needs of the consumers at
the various geographical locations and therefore can decide, the
amount of product required by each zone (Kireeva and Drozd, 2015).
 It is mostly adapted in companies which does business involving
electronic gadgets or scientific equipments and products, where the
needs of the customers doesn’t vary from one geographical location to
another
 Moreover, if the company is extremely reputed or has a high brand
value, this kind of international marketing approach is adopted
 However, such marketing approaches would result in slow growth of
the company, but they ensure that no single growth barrier exists.
 The prime advantage of this approach is that the marketing team at the
headquarters has a complete control over the marketing and sales
cycle in all other branches of the company all across the globe.
Moreover, a lot of travelling costs is saved and hence time saving.
Figure 4: Centralized marketing approach.
(Source: Johanson and Mattsson, 2015 )
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 Decentralized marketing approach: In this kind of marketing approach, the
responsibilities for taking the major marketing decisions and framing
strategies for the same are distributed among all the marketing departments
of the organizations branches spread all across the globe (Neelankavil, 2015).
The major characteristics of this approach are enlisted below:
 The marketing team at the headquarters is not very competent or
experienced in international marketing
 The need for the product is variable across different regions of the
globe. For example, if the company deals with food products, since the
tastes and preferences of the consumers vary cutting across
geographical locations, the company must adopt a decentralized
approach (Sternquist and Goldsmith, 2018).
 This kind of approach is adopted when the company does not have a
high brand value.
 Moreover, if the organization is facing high level of competition from
other companies in the same sector, the company might adopt this kind
of strategies.
 The prime focus of this approach is to inspire and support the
marketing teams of all branches of the organization
 However, a lot of transportation costs are involved in adopting this kind
of approach and its implementation is also time consuming.
In the context of the chosen organization, the company must use
decentralized approach so as it to collaborate with regional local
companies and to be able to cater to the varied preferences of consumers
all across the globe.
Figure 5: Decentralized marketing approach
( Source: Johanson and Mattsson, 2015)
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P8 Compare home and international orientation and ways to assess
competitors, outlining the implications of each approach.
The company would use the decentralized approach in order to collaborate with local
cafeterias in China, which is an emerging market for fulfilling the purpose of its global
expansion.
The chosen organization is Terry’s cafe, is UK based where quality is the key to the
company’s success. However, the high population of China necessitates the need
for the company to focus on developing quantity rather than improving quality. In
addition, China is developing nation and therefore the prices of the products must be
such so that it is affordable by the common people (Carpenter et al., 2015). Hence
the company should emphasize on efficiency and productivity of its employees and
the manufacturing department in order to successfully make its mark in the China
market. In order to establish itself successfully the company must produce more and
more products, in the least possible time and should be able to sell them at
affordable prices.
The company would adopt Market Research and perceptual mapping in order to
identify its key competitors. Market Research is the study conducted by any
organization in order to get an idea about its challenging organizations and its target
consumers (Pradhan, 2017). Perceptual mapping on the other hand is a
diagrammatic representation used by the marketing department of an organization in
order to evaluate the company’s reputation among the consumers (Challagalla et al.,
2014). This tool enables the organization to correlate the quality of the product with
its price.
The decentralised approach of international marketing would be imp lemented using
the following way:
Activities Start Date End Date Duration
Deciding on the
approach to be
adopted
1st July 2018 4th July 2018 4days
Market Research 5th July 2018 12th July 2018 7days
Perceptual
mapping
13th July 2018 15th July 2018 3 days
Choosing suitable
partners
16th July 2018 18th July 2018 3 days
Collaborating with
the local
companies
19th July 2018 27th July 2108 9 days
Implementation of
the approach
28th July 2018 5th Aug 2018 7 days
Table 2: Action Plan for implementation of decentralized approach
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(Source: Created by learner)
Conclusion and Recommendations
The study has led to the understanding of the concept of International Marketing and
its major differences with local marketing with respect to the factors of export, import,
joint endeavour, contractual manufacturing and agreements and fully owned
manufacturing. The various reasons due to which the chosen organization Terry’s
cafe needs to spread its branches globally have also been studied extensively. The
opportunities and challenges to international marketing and the several factors
influencing international marketing of the company has been evaluated. Centralized
approach and decentralized approach of international marketing and the best-suited
approach for the chosen organization has been assessed and justified. An action
plan for successful implementation of the decentralized approach has also been
developed.
The following recommendations might be given to the organization
 The company must conduct extensive market strategy in order assess the
challenges the company might face from similar organizations in China. In
addition, this is also required so that the company can have a fair idea about
the taste preferences of the residents of China.
 The company must adopt an extensive advertising and marketing strategy in
order to promote itself in a global market. The company has to use print
media involving newspapers and magazines, audio visual media such
broadcasting in television and social media platforms in order to promote its
products in the China market , which would thus serve to grab the attention of
customers all across the globe.
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