International Marketing Strategy Assignment Sample

Here’s the sample on International marketing assignment.

Introduction

International marketing is related to marketing mix decisions across national boundaries. It is the process of developing manufacturing facilities overseas and coordinating marketing strategies across the globe (Terpstra et al., 2015). On the other hand, marketing can be defined as activity or processes for creating, communicating, delivering, and exchanging offerings that create value for the society as a whole (Armstrong et al., 2015). Meanwhile, global marketing is the whole process that helps to plan, produce, place and promote a company’s products in a worldwide market (Lee and Carter, 2011).

1.     Benefits and limitations of the three international marketing issues 

This part will explain different international marketing issues that are raised due to external environment as follows:

1.1  Why and when do organizations internationalize and to what extent?

In this globalized business environment, every organization is intended to expand its business globally and achieve high growth in the international market. Sainsbury’s also expanded its business due to increasing competition in the domestic market. There are several companies in the UK retail market like Tesco, Morrison, Marks & Spencer, etc. that cause high competition for the firm and impact the market share significantly.  It shows that the domestic market matured because of increasing competition from local and foreign retail companies in the UK. Regarding this, Sainsbury’s focused on international expansion to grab other market opportunities to sustain its market share (Brush, 2013). Apart from this, Sainsbury’s also adopted internationalization due to global advantages in its respective environment. In relation to this, the Network approach of internationalization also holds that it is required for the firms to develop networks of business relationships in other countries for sustaining competitive position in the market through global advantages. The global advantages include large number of customers, untapped markets, enhancement in economies of scale, resource management like advanced technologies, workforce and fund that encourage the firms to adopt internationalization. Global expansion enabled Sainsbury’s to access large number of customers and increase its market share in the industry. Right now, the firm is the second largest chain of supermarkets in the UK with approx 16.9% share and has expanded its business across the world (Mura and Gašparíková, 2014). Company also deals in energy and banking services apart from retail products. The global expansion also enabled it to increase its revenues and profits and consequently market share. It also adopted internationalization to achieve greater economies of scales to exploit unique and differentiating advantage. Economies of scale enabled the firm to reduce the cost of operations as it is on track to reach its £500 million cost savings target by 2017/18. Internationalization benefitted Sainsbury’s to access strategic and physical assets that contributed to operational performance and cost reduction. Through this, the firm became capable to provide the best services to the customers and improve financial performance.

But at the same time, internationalization should be limited as it can be harmful for the business if the firm is not able to determine the market conditions in foreign countries (Vahlne and Johanson, 2017). At the same time, if there are no adequate resources, it can be adverse for the firm to manage the operations in international market. In order to grab an internationalization opportunity, it is significant to keep in mind that there is need of having investments with strong capital that can be significant to realise the international potential. So, it is mandatory for the firm to consider the investments with strong capital to internationalize the market. In addition, the firm also went for internationalization to diversify the risks while accessing other markets (Opp and Gosetti, 2014). The high competition in domestic market encouraged the firm to diversify the risks regarding dependence on single market.

1.2  What mode of entry strategy should be chosen and what exit strategy can be deployed

There are several modes of entry strategy exporting, licensing, franchising, direct foreign investment, etc. that can be adopted by Sainsbury’s to enter the new market. Licensing is a market entry method that allows the firm to have a license to enter the foreign market. This license is a contractual agreement that is provided to company (licensee) by another firm (licensor) to use the available assets through exchange of royalties, license fees, patent rights and trademark rights (Nielsen and Nielsen, 2011). This entry strategy is effective in terms of attractive returns and profitability, management of tariffs, export barriers and quotas. However, it has some limitations in terms of limited participation, lacking control, possibility of licensee becoming competitor. 

Franchise is also a popular entry strategy adopted by the firms like Sainsbury’s in wihc the firm as franchiser gives the franchisee to a franchise to use the assets. it is a legal relationship in which franchiser provides a set of standard system, management services and products and services I exchange of  a fee or royalties whereas  franchise gives personal involvement, market  knowledge and fund. The benefit of utilizing this mode for entering is that there is no compelling reason to make brand awareness and additionally less promotion is needed as customers are aware of products and services of the firm (Vahlne and Johanson, 2017). In the meantime, it is also advantageous because franchisee as of now has useful information and effective methodology which help organization to enter abroad market. As opposed to it, there is some inconvenience of utilizing a franchise that any disappointment or issues looked by franchisee make an unfriendly effect on parent organization.

Exporting is identified with cross-border trade of locally produced items to universal market through immediate or aberrant methodologies. While examining, it is discovered that exporting is one of the best appropriate approaches to enter the global market since this technique creates business in both home nation and foreign nation where an organization will sell its products and services. There is substantial number of nations, for example, China, United States, France, Japan, etc. and significantly more are considered under greatest exporters around the world. Notwithstanding it Martin (2013) likewise expressed that there are couple of nations which don’t offer a vast chance to nearby generation, for this situation, exporting enables an organization to export the products for other diverse abroad market.

The benefit of utilizing exporting as mode for entering a global market is that it gives organization to deliver more items and this outcome in more noteworthy economies of scale and edge. The burden of utilizing exporting as a section technique for global market i.e., there are chances that organization may lose its concentration from its current home market and in addition there are likewise odds of losing a control in abroad market (Schwens et al., 2011). Accordingly, the utilization of export is just gainful when an organization centers on the two markets appropriately with a specific end goal to support in the two markets for the more extended period.

Then again, Parker and Van Praag (2012) likewise tended to joint venture as one of appropriate global entry mode for an organization to focus on a solitary nation. In this technique, two partner firms share a responsibility for recently created business entity. For entering another market, firms need to center around keep up and assembling strength for each other so as to work a business effectively. This joint venture choice gives leverage to enter a global market effectively. Yet, there are few impediments of utilizing joint venture i.e., venture objectives are not clear and conveyed to each other. Joint venture needs to wait to achieve a higher outcome and for that they have to construct the correct business relationship (Peng, 2012). This strategy for going into new market is powerful as it permits greatest adaptability, potential benefits, opening and significantly more.

Foreign direct investment is likewise the most ideal approach to enter a global market since globalization has expanded open door for organizations to straightforwardly put resources into outside nations. Under this mode, investment can be made in an alternate way like a start-up, merger with different organizations, obtaining of existing organization, and so forth. In a comparable way, it is clarified that FDI gives a chance to organizations to effectively trade universally (Brouthers, 2013).

The disadvantage of FDI is that it raises trouble and rivalry for existing organizations that nations are not enabling much speculation to outside organizations. Likewise, this mode additionally makes job opportunity and economic development by making new jobs as speculators are constructing new organizations in remote nations. Meanwhile, this investment opportunity prompts increment in jobs and way of life as pay increment and client purchasing power increments and this outcome in economic growth (Laufs and Schwens, 2014). The utilization of FDI is additionally the ideal approach to enter outside nations showcase for extension and advancement of nations.

1.3  What international market segments exist, should brands be global, and should the marketing mix be standardized or adapted?

As per the research, Sainsbury has separated its market by using all the variables. For instance, Sainsbury offers products all over the UK by its retail stores. Its market has divided through the demographic variables. Demographic segmentation includes the factors that are related to demographics such as education, area, age, family life cycle, occupation, religion, nationality, income and so on (Christopher, 2016). Further, it can be said that Sainsbury is also capable to segment its market psychographic variable. Market segmentation is very valuable for Sainsbury due to the benefits that provide it the ability to serve every kind of customers by offering the products as per their need and comfort. Due to it, market segmentation, company is able to improve its customer services standards as well as increase the sales volume and its profitability. Moreover, the Sainsbury has also been capable to focus on its selected market segment and also been able to re-examine the development and expected changes in the selected market from the activities related to competition (Dibb and Simkin, 2016).

Global branding is important because in present time, to compete in the market, it inessential to serve it, customer, nationally as well as internationally. Global branding helps the Sainsbury to overcome various challenges. Global branding is also essential to build company’s brand name internationally (Steenkamp, 2014). Any company’s marketing mix should be standardized because it has various advantages like standardizing marketing mix supports the consumer’s positive perception in order to products. Standardise marketing mix has other advantages like reduction of cost that provide economies of scale. The cost can be reduced due to selling a large quantity of the products, buy the components in huge quantity and non-adopted products. In other words Standardise marketing mix can provide the object to the company to focus on marketing mix that is uniformed (Kraus et al., 2016). Specially, it focuses on those one single products that leave sufficient space for improving the quality.

2.     The effectiveness of organization’s approach to international marketing and its choice of international marketing strategy and its marketing mix

2.1  The effectiveness of organization’s approach to international marketing

After establishing as a company, Sainsbury needs to have an effective and successful approach in order to international marketing. That is why it uses marketing audit approach. A marketing audit is important with respect to crucially analyze the current marketing strategies in the organizations. Marketing audit can be defined as a logical and complete process which gives the permission to the organizations to increase the understanding of factors in order to get better its market positioning (Brewster et al., 2016). There are four areas that are analyzed under marketing audit. These four areas are following:

Segmentation: Segmentation is explained as one of the essential factors that are connected with the development of the market. According to the Sainsbury, it includes both the segmentations like geographical segmentation as well as behavioral segmentation. On the behalf of geographical segmentation, organizations focus more on UK region. Apart from this, in the context of behavioral segmentation, the organization’s primary factor to be focused to drive itself as a strong brand (Demangeot et al.,  2015). The main objective of this segmentation is to increase its market share that should synchronize by the best value for money.

Targeting: After segmentation, targeting is the main factor to be analyzed for the organization in order to attract their target customer so that organizations can sustain in the market for a long time. In the process of targeting, organizations have need to decide that where they want to target customer or in which segment they target trough searching the most attractive customers. In other words, targeting is a process by which the organizations highlight themselves in the target market. In order to Sainsbury, it uses the behavioral segment that can be helpful to take forward the organization’s targeting strategy.

Positioning: From the pricing point of view, it is crucial for the organizations to set its position in the market. It can be a main driving force for the organization. Sainsbury is one of the organizations which has the aim to target a more quality dominant market and thus the organization’s strategy of pricing ranges between low and high at the end of the market (Wilson, 2015).  This factor is valuable in order to show that how the Sainsbury develops its customer’s values.

Promotion: Promotion can be defined as a strategy which helps the organization to connect with its customers. In respect to Sainsbury, it uses traditional marketing approaches like televisions, radio, as well as billboards to promote its products in the market.

2.2 Choice of international marketing strategy and marketing mix

The marketing mix is a set of tools, tactics or strategy or can be said that the set of aspects which the company control in order to promote its product or brands within the market or influence its customers for purchasing its products. Thus, marketing mix helps the company to concentrate on its weaknesses in the global market as well as improve its market growth towards its products (Omar, 2018). There are different marketing strategies that are used to market the product and achieve the competitive advantages. The Sainsbury’s marketing mix is used to analyze the company’s factors like 4P’s and it also determines the marketing strategies of Sainsbury. Various factors are following:

Product: Sainsbury introduces its wide range of products for its target customers under its product strategy of the marketing mix. In order to concentrate on the quality management of its products and innovation, it also focuses on its developing new products as well as increasing the range of existing products. Rather than, Sainsbury also uses eco-friendly biodegradable packaging that makes with the help of potatoes.

Price: After deciding the offering products, pricing strategies should be established because the determination of price has impacts on company’s profitability, demand, supply and also on marketing strategies. In order to Sainsbury’s pricing strategies, it is based on the value of the money that is provided to its customers (Laffy and Walters, 2016). Furthermore, servicing and the management of quality of product ensure the retention of customers. That is why Sainsbury provides the very low price range of its products.

 Place: Place is also an important factor in marketing mix because location should be convenient from its customer’s perspective.  Sainsbury has its broad range of products which distributes the customers through its 598 supermarkets and its 714 convenience store. It also has around 45 stores that operate 24*7.

Promotion: After determining the product, price and the place of product offering, promotion is a crucial part of the marketing mix. Promotion can be explained as a process in which marketing companies provide the information about their product to the customers in order to attract them for purchasing the products (Fernie, 2014). In respect to Sainsbury, it uses the above the line and below the line promotional techniques in order to attract the customers as well as it builds its brand name.

International Marketing Strategy Assignment

3.  Conclusion and recommendations

On the basis of above analysis, it can be concluded that expansion is essential for all the companies whether the company is small or large.  In the context of Sainsbury it has been analyzed that the company has expanded its business worldwide for the international growth and attract more and more customers in the worldwide for the succession of the organization in the market. It has also expanded the business due to increase in the competition of the business in the market. It has been determined that Sainsbury focuses on international expansion to grab other market opportunities to sustain its market share. It analyzed that the global expansion enabled Sainsbury’s to access a large number of customers and increase its market share in the industry. There are various advantages that Sainsbury gained such as by expanding its business at the global level such as a large number of customers, untapped markets, enhancement in economies of scale, resource management like advanced technologies, workforce, and fund that encourage the firms to adopt internationalization. Sainsbury has adopted market audit approach in order to critically analyze the current marketing strategy. Marketing audit includes segmentation, targeting, and positioning as well as promotional marketing strategy.

Various recommendations can be recommended to Sainsbury to overcome challenges while expanding its business worldwide. It is necessary for the Sainsbury to adopt innovative category of business activity that would help in overcoming the challenges faced internationally by the company. It should target the market in order to maximize the sales and productivity. It should adopt several modes such as entry strategy exporting, licensing, franchising, direct foreign investment, etc. to enter the new market. It should also focus on the core business activity in the business. It should also adopt different marketing strategies like marketing mix, STP in order to do expansion worldwide. It should analyze deeply the 4 P’s so that it should compete in the market. It should also launch a product and enable discount to the customers so that more and more customers may be attracted. It should also apply joint ventures, mixed ventures with the government. By adopting various entry modes it would be able to grasp various opportunities in the international market. These things would enable the company to overcome the challenges.

References

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Brouthers, K.D., 2013. A retrospective on: Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies44(1), pp.14-22.

Brush, C., 2013. International entrepreneurship (RLE International Business): the effect of firm age on motives for internationalization. Routledge.

Christopher, M., 2016. Logistics & supply chain management. UK: Pearson.

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