BU7411 International Marketing Strategy

BU7411 International Marketing Strategy Assignment Sample

 

Introduction

The following report aims to provide an in-depth evaluation of the way a strategic marketing approach can help organizations to build a strong business network globally.

The present report will consider the UK-based Retail Company Sainsbury’s to illustrate its effectiveness to expand operations in the French market by implementing an effective market entry strategy.

The report will also illustrate the justification behind the selection of the host market, as well as the market entry mode along with the marketing mix that could be considered by the selected company while expanding in the French market in this report briefly.

Findings and Analysis

Contemporary issues

Implementing or adopting an effective international marketing strategy allows an organization to foster its business network along with its customer base by establishing a presence across the global market.

An organization that is willing to expand internationally is required to adopt a suitable marketing strategy to promote its services or products across the host market efficiently.

PESTLE to analyze the external market environment

Political ●      Political and economic reforms

●      Stringent consumer laws and policies

●      Scrutiny of a retail organization is done by the government

Economical ●      Improving the economic position

●      Increasing consumer purchasing power

●      Growth in GDP

Social ●      Changing consumer behavior and preferences towards cost-friendly products and a diverse range of products

●      Lack of retail stores that specifically sell food and personal items

●      Focus on the better value of products

Technological ●      Technological advancements in supply chain management

●      Use of AI and ml to manage the company’s operations

●      Use of technology to study the market and changing trends

Legal ●      Taxation laws labor laws and other regulations imposed by the government

●      Disregarding any legal regulation in the country can lead to bankruptcy and closure

Environmental ●      Sustainability of operations

●      Lowering carbon footprint

 

Considering the political aspects in the external environment of the retail industry, it can be seen that there are several political and economic reforms, have taken place, which can affect the entry of the organization into the French market (Peiffer-Smadja & Torre, 2018).http://BU7411 International Marketing Strategy Assignment Sample Changes in regulations like prices, investment decisions and forming a regulatory framework according to EU standards.

(Amf France, 2021).http://BU7411 International Marketing Strategy Assignment Sample It would be very essential for Sainsbury to consider the kind of changes that are occurring in the political sphere so that the organisation can effectively enter into the markets without having any issues with the local government.

Furthermore, the country also has changed consumer laws and policies, which protect the rights of the consumers at all behest. Therefore, it is necessary for the organization to define their terms and conditions of services in a proper manner so that they do not find themselves tangled in any kind of lawsuits filed by the consumer as wary of being cheated by the company.

Furthermore, the country’s government carefully scrutinizes the operation that is undertaken by any retail organisation within the country’s market and therefore this would require Sainsbury to maintain all kinds of quality procedures to get clearance from the government before they start their operations in the markets of France (Allain et al. 2017).http://BU7411 International Marketing Strategy Assignment Sample

In terms of economic factors, it can be stated that the economic position of France is improving and has improved in the past few years (Bolet, 2020). Due to the economic development in the country, the consumer purchasing power within the country’s market has drastically increased which reflects that the organization can make its pricing strategy quite flexible (Herbert, Robert & Saucède, 2018).http://BU7411 International Marketing Strategy Assignment Sample

Furthermore, the country has also experienced growth in terms of its GDP, which indicates that the markets of France can be a profitable proposition if Sainsbury wishes to enter it. Consumers in France spend an average of €385 on food and groceries every month (Expatica, 2021). http://BU7411 International Marketing Strategy Assignment Sample

Companies can achieve a sustainable amount of sales from the French market mostly due to the fact that the purchasing power of consumers is high (Torre & Smadja, 2017).http://BU7411 International Marketing Strategy Assignment Sample

While on the other hand when it comes to considering the social aspects, such as changing consumer preferences towards cost-friendly items and buying behavior have been changing.

There is a distinct gap present in the retail industry of France, where the number of retail stores that sell food and personal care items is far less compared to other forms of retail stores (Shi et al. 2018). http://BU7411 International Marketing Strategy Assignment SampleSince Sainsbury’s is an organization that deals in the sales of most groceries and personal care items, the organisation has the capability to fill the gap present in the retail industry of France.

In terms of technical aspects, it has been seen that the retail industry has been adopting a number of different technological inputs. This has improved the efficiency of organisations, operating in the markets of France helping to improve the existing marketing channels.

The utilisation of technology has allowed retail companies in the market to study consumer behaviour patterns and changing perceptions of consumers (Gately, 2017). http://BU7411 International Marketing Strategy Assignment SampleFurthermore, technology has also allowed companies to connect more closely with the target consumers, which has helped in increasing sales, and therefore, they can adopt similar technologically advanced techniques to connect with their target customers.

When it comes to legal aspects it has been seen that the organization needs to follow a number of different legal regulations present in the country to operate in a proper manner. The company needs to follow a large number of taxation laws, labour laws, consumer laws, and others to avoid any kind of legal dispute with the consumers all the involved stakeholders (Rehfeldt & Vincent, 2018).http://BU7411 International Marketing Strategy Assignment Sample

Similarly, in terms of environmental factors, organizations in the retail industry aim towards achieving sustainability and reducing their carbon footprint. This has influenced organizations to focus on the reduction of plastic products and packaging in their items (Mialon & Mialon, 2018). http://BU7411 International Marketing Strategy Assignment SampleThe company can adopt a similar approach and achieve sustainability once it enters the markets of France and starts operating.

Cultural aspects based on Hofstede’s cultural dimensions


BU7411 International Marketing Strategy

Figure 1: Cultural comparison of France and UK according to Hofstede’s cultural dimensions

(Source: Hofstede insights, 2021)

Power distance

The power distance quotient in France is much higher than that of the UK, which indicates a bureaucratic organisational environment. Therefore, the organisation needs to consider these aspects before entering the market as this can drastically determine the company’s modes of operation strategies towards addressing the needs and demands of consumers (Mialon & Mialon, 2018).http://BU7411 International Marketing Strategy Assignment Sample

Uncertainty avoidance

The uncertainty avoidance quotient in France is quite higher which indicates that the organizations, as well as the people living in the country, do not indulge themselves in risky endeavors.

Therefore, risky perspectives are avoided by both consumers as well as companies equally. Additionally, it can also be stated that the company should not try to experiment with any kind of new products or services. Considering the higher quotient of uncertainty avoidance in the markets of France, consumers might not end up buying new items or availing new modes of services.

Masculinity

The quotient of masculinity is lower in France compared to the UK which means that gender equality is much more prevalent in the country therefore the company would find both male and female customers in abundance. As a result, the organization needs to focus more upon products and services that are not gender-biased (Lascialfari, Magrini & Triboulet, 2019). http://BU7411 International Marketing Strategy Assignment SampleFurthermore, when it comes to operating the human resources of the company the organization needs to maintain a fair gender ratio in order to avoid internal conflicts and maintain the highest satisfaction rate among the employees.

Justification of the chosen market and market entry mode

While expanding into a new or international market, it is important for an organization to identify or analyze the target market. The key reason behind this statement is that strong market analysis has the potential to obtain effective insight into the shifts or fluctuations of competitors, economy, demographics, present or emerging market trends, consumer purchasing and buying behavior as well as others across the host market.

As mentioned by Nuryakin et al. (2021), market analysis is one of the crucial components that are required to be carried out by every business organization to collect all the required information that could directly impact business performance during or after business expansion.

While expanding a business knowing the existing market trends, customers’ preferences, and market size across the host market plays a significant role to develop strategic promotional or marketing strategies to grab customers’ attention.

In addition to this, the market analysis also serves as beneficial to uncover different potential opportunities across the host market that leads to the generation of a strong customer base and network (Xu, 2020).http://BU7411 International Marketing Strategy Assignment Sample

In the context of Sainsbury’s, the French retail market is considered as one of the attractive markets for their business expansion. The key reason behind this selection is that French is found to be the third-largest market after Germany and the UK which generates a turnover rate of 65 billion euros (CEIC, 2021). http://BU7411 International Marketing Strategy Assignment Sample

In addition to this, the growing popularity of online retailing practices is found to be another aspect that opens up opportunities for international retailers like Sainsbury’s to flourish their business in the French retail market (Herbert, Robert & Saucède, 2018).http://BU7411 International Marketing Strategy Assignment Sample Despite a sudden decline during the fiscal year 2020 by -11.72%, the retail market in

France has effectively coped up with the situation and enhanced its retail sales growth. In this context, retail sales in French market are found to have grown by 42.3 % during the month April 2021 as compared to the 25.4 % growth in March 2021 respectively (CEIC, 2021).http://BU7411 International Marketing Strategy Assignment Sample

 

BU7411 International Marketing Strategy

Figure 2: Growth of French retail market

(Source: CEIC, 2021)

In the context of the following figure, it can be clearly highlighted that fashion and clothing retailers are the leading sectors with a persistence of 135 chains followed by decorations and furniture 46, leather and footwear 50, and others.

In this context, it is identified that there are about 27 food and 30 personal care retail chains in French that can serve as an opportunity for Sainsbury’s to obtain success after expansion in the French market (Statista, 2021). http://BU7411 International Marketing Strategy Assignment SampleThe key reason behind this statement is that Sainsbury’s is a renowned and well-established supermarket retail chain in the UK.

Thus, Sainsbury’s could utilize different marketing approaches to minimize its market competition during expansion due to the persistence of minimal retail chains in this food and personal care product category (Dewitte, Billows & Lecocq, 2018).http://BU7411 International Marketing Strategy Assignment Sample

 

BU7411 International Marketing Strategy

Figure 3: Number of retail chain in France

(Source: Statista, 2021)

Considering the above statistical evidence, it can be mentioned that consideration of the French retail market for the expansion of Sainsbury’s operations is justified and appropriate to flourish their growth and prosperity.

Market entry strategy or mode is considered an effective tool for obtaining clarity about the way an organisation can enter into a new market accurately and efficiently.

The selection of strategic marketing entry mode helps to analyse how business can be established into a new host market. According to Shen, Puig & Paul (2017), there are different market entry modes such as exporting, licensing, franchising, joint venture, Foreign Direct Investment and others.

Depending on the organisational existing state, a suitable market entry mode is being selected during the business expansion process (Schellenberg, Harker, & Jafari, 2018).http://BU7411 International Marketing Strategy Assignment Sample

While expanding business like Sainsbury’s across the host market France, exporting mode of entry offers a wide range of opportunities to obtain business success after expansion.

For example, the exporting approach can serve as beneficial for Sainsbury’s in terms of gaining a wide range of business and customer networks. Exporting can also serve as effective in terms of diversifying the existing portfolio of Sainsbury’s and enhancing opportunities towards obtaining market competitiveness (Lin & Ho, 2019).http://BU7411 International Marketing Strategy Assignment Sample

It is identified that an organization that emphasizes exporting is able to expand its market and vision effectively regionally or internationally. Exporting products can serve as beneficial in terms of accomplishing business expansion goals as well as maximising profitability (Amf France, 2021).http://BU7411 International Marketing Strategy Assignment Sample

Franchising can be considered as another entry mode for Sainsbury’s while expanding business in the region of France. The franchising approach allows an organization like Sainsbury’s that is willing to expand in the French market by minimizing business expansion risks.

In addition to this, with minimal employees, business expansion can be accomplished easily across the host market with franchising approaches (Bretas & Alon, 2021).http://BU7411 International Marketing Strategy Assignment Sample In addition to this, this approach can further help Sainsbury’s in terms of strengthening its brand equity along with promotional activities accurately during the expansion activities.

Thus, it can be mentioned that these two modes of entry can be integrated by Sainsbury to obtain success after expanding its business operation in the French market. In this regard, direct exporting and franchising would be more profitable entry methods.

Marketing mix

International Product Strategy

The term “international product strategy” is found to be associated with all the decisions regarding organizational services and products offered across the international or host market.

For instance, decisions regarding customization or standardization of communication strategy generally rely upon a specific product is locally accepted or standardized (Liu & Shi, 2017).http://BU7411 International Marketing Strategy Assignment Sample Product strategy is associated with the identification of specific products that should be offered across the host country to add value to the business after expansion.


BU7411 International Marketing Strategy

Figure 4: EPRG framework

(Source: Martin, 2021)

In the context of Sainsbury’s, it can be mentioned that a regiocentric approach from the “EPRG (Ethnocentric, Polycentric, Regiocentric and Geocentric)” framework can be adopted while expanding its operations across the host country France.

The key reason behind this statement is that a regiocentric approach could serve as beneficial in terms of expanding business in the ranch market easily.

This is because the companies that utilize the mentioned approach during their expansion are trying to focus on the market that shares similar market characteristics (Martin, 2021).http://BU7411 International Marketing Strategy Assignment Sample

UK and France almost share the same market characteristics, thus; utilization of the regiocentric approach would help Sainsbury’s to obtain business success after expansion (Fontaine et al. 2020).http://BU7411 International Marketing Strategy Assignment Sample

In addition to this, it is identified that retail chains for food and personal care products are found to be minimal in the French retail market as compared to other product categories.

Thus, Sainsbury’s could focus on establishing its business in the identified retail chain products during the initial phase of its expansion in France.

Additionally, Sainsbury’s will be required to identify the specific product categories market such as food, personal care, groceries, and others within which they could flourish their business appropriately during the market expansion process.

International pricing strategy

Pricing strategy can be considered as one of the crucial components for any business organisation in order to maximise the chance to obtain business success in the host market.

As mentioned by Kienzler & Kowalkowski (2017), having or implementing an effective pricing strategy can serve as beneficial for any business organization like Sainsbury’s to distinguish itself from the other market competitors.

In addition to this, pricing strategy also highlights or assumes the acceptability of products or services that an organization is going to offer in the new market. Overall profitability, market share, and financial growth can also be determined by having a suitable pricing strategy.

During expansion, Sainsbury’s could implement the concept of the “Cost Leadership Pricing” strategy in the French market. The key reason behind this statement is that utilizing the mentioned pricing strategy during market expansion can serve as beneficial in terms of maintaining market size within the host market.

Market size of a particular product can also be generated through utilisation of the mentioned pricing strategy during expansion. Sainsbury’s could strengthen its business sustainability along with profit margin by adopting the mentioned pricing strategy effectively in the future (Wada, 2018).

http://BU7411 International Marketing Strategy Assignment SampleMarket competition can also be minimised to enhance the chance of generating more capital in the context of maintaining overall business growth across the French market.

International Promotion Strategy

Promotional activities require to be effective and attractive based upon which overall growth and profitability rate depends. According to Untari (2020), promotional strategy requires to be developed by any business organisation that is willing to expand in order to promote their services or products that they are going to offer across the host market.

Promotional mix in this context can be considered for Sainsbury’s for gaining attention from their target customers in French market by promoting their products or services accurately and efficiently. Personal Selling and Sales Promotion can be considered by the mentioned company in order to gain attention from the target customers and to increase sales.

Adding to this, with the proliferation of technology, every business organisation has been adopting digital media platforms to promote and interact with the target customers effectively before expanding business across the host market (Bala &Verma, 2018).http://BU7411 International Marketing Strategy Assignment Sample

In this context, Sainsbury’s could consider the social media platforms such as Facebook, Twitter, Instagram, along with email marketing strategy in order to grab the customer base across the French retail market effectively.

In addition to this, being a renowned company, Sainsbury’s already has a presence in different identified social media platforms that serve as beneficial for them to establish their preference across French market in the future (Jacobson, Gruzd & Hernández-García, 2020).http://BU7411 International Marketing Strategy Assignment Sample

International Place Strategy

While expanding in the international market, market strategy plays a significant role in terms of providing detailed insight into the market within which an organization is willing to expand.

Through cultural and macro-environmental analysis, it is identified that Sainsbury’s has the potential to expand its market and obtain business property across the French retail market effectively. Even, it is important for an organization like Sainsbury’s to analyze the specific place where they could achieve success after expansion.

International strategy for perceiving a suitable place to expand a business is also found to be associated with consumer preferences, demands, and expectations along with market stability within which an organization is willing to expand (Ahi et al. 2017). http://BU7411 International Marketing Strategy Assignment SampleIn addition to this, the retail market across the mentioned market is found to be growing rapidly over the past few years raising opportunities for international reapers to expand its market (Tien, Phu & Chi, 2019).http://BU7411 International Marketing Strategy Assignment Sample

Conclusion

In relation to the above discussion, it could be highlighted that development if suitable and sustainable market strategy has the potential to promote services, brands or products effectively in front of treat audiences.

In addition to this, it is seen that the retail market in France has been growing rapidly and generating a wide range of opportunities for international retailers like Sainsbury’s for their expansion.

It is identified that with the help of identified market entry mode that is exporting and franchising along with mentioned marketing mix strategies could serve as beneficial for the aforementioned company for their future expansion in the French market.

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