Assessment Sample on M26197 International Marketing
. Introduction
The report is based on “Amul” which is a food processing company based in Gujarat, India, and will critically evaluate the key concepts of Amul’s marketing strategy along with analyzing the present structure and condition of the foods processing sector it is trying to enter in the United Kingdom. Relevant business data and information will be identified and appraised in this report in order to evaluate the cultural choices faced by the selected company while entering the UK’s food processing market. Based on the information and various aspects of the selected company, a market entry mode will be selected and suggested along with a minimum of three effective changes to the marketing communications or the products. These changes will be suitable for Amul to establish its business in the United Kingdom (UK).
2. Industry analysis
It has been assessed that there are several challenges as well as opportunities for “Amul” when entering into the food processing market of the United Kingdom (UK).
Political factors
The UK government extends support for making the industry green and reducing the carbon footprint work as a motivating factor for the existing companies and new entrants. Amul on the other hand has always been concerned about the environment and has undertaken various projects in order to minimize the impact of its operations on the environment (amuldairy.com, 2022). The political stability in the United Kingdom is also very much constant and thereby is effective in suitable in providing significant business conditions for the new entrants (statista.com, 2022).
Figure 1: Political Stability in the UK
(Source: statista.com, 2022)
Amul’s knack for engaging in community services will also be benefitted as the UK government has actively been regulating legislation on food products framework, thereby focusing more on sustainable ingredients and sourcing. However, the government’s Brexit now makes it necessary for the company to formulate significant new “contractual agreements” with the UK government (Zhao & Dou, 2019).
Economic factors
It has been assessed that the foreign exchange rates will go high due to Brexit and it will initiate critical fluctuation in the rates within the food processing industry. Therefore, the sudden spike in the cost of the products might prompt the consumers to neglect the products. In addition to this, the price rise might as well increase the consumers’ expectations of the quality of the product. Thereby, making it crucial for the company to mitigate the latest challenges in an effective way (Bessière et al. 2019). The food market’s overall revenue forecast depicts that the food processing industry is growing exceptionally thereby making its potential first-choice for new entrants (statista.com, 2022).
Figure 2: UK’s food market overall revenue forecast
(Source: statista.com, 2022)
Social factors
The United Kingdom’s social structure is significantly diverse with varieties of cultural tastes. Amul will get access to the international market for real in the UK’s food processing industry. The rise in advancements and education regarding the food healthy and consuming habits of the consumers is driving changes in the products range of the food and beverages markets (Oraman et al. 2018). It has been assessed that the lifestyle of the UK citizens is aligning more towards an “easy go comfort living” indicating that the consumers are more aligned towards consuming easy products along with the assurance to get positive health returns from the consumables. It has been seen in the graph below that price is one of the most influential factors when it comes to the purchasing choices of consumers in the UK (Bussinesswire.com, 2022).
Figure 3: Factors affecting consumers’ food purchasing behavior
(Source: Bussinesswire.com, 2022)
Technological factors
The present trends in the food processing markets like any other market have been developing and undergoing significant changes. In this context, it is evaluated that the sustainability of the business is very critically dependent on the technological advancements made by the company (Garcia-Garcia, Stone & Rahimifard, 2019). The usage of big data within the industry makes it crucial for the new entrants to be well-equipped with the same in order to survive the highly competitive market.
Legal factors
It has been assessed that the legal environment is used to the best effect by the UK government for motivating the companies to adopt better sustainable practices. The legal environment in the UK is supportive overall has a good score in terms of ease of conducting business practices (Ladha-Sabur et al. 2019). The UK government is effective in giving directions to foreign organizations for adopting effective practices to render high outcomes. The government has imposed “sugar taxes” on processed food products for reducing sugar consumption and minimizing the implications of it. This poses a business challenge for the company’s operations.
Environmental factors
The UK government has started and implemented various projects to reduce carbon footprint as well as carbon emission from its industries across all sectors. This propels the companies to undertake effective innovative measures to decrease their dependency on fossil fuels (Ladha-Sabur et al. 2019). Usage of biogas is now being adopted by many companies to reduce the burnout of fossil fuels or other natural gas. These parameters are driven by the strict measures and directions from the UK government thereby exposing “financial viability” to focus on the development of the environment.
3. Market entry mode
After reviewing the conditions, legislations, and the overall macro environment analysis of the food processing sector in the United Kingdom (UK) the perfect and most suitable market entry mode selected for Amul is “Exporting”. Like any other mode of market entry “Exporting” also has its disadvantages as well as advantages (Blackburne & Buckley, 2019). The primary reason behind selecting this particular market entry mode is that it has been deemed to be the best market entry mode for entering the international market. As per the view of Gschwandtner & Hirsch (2018), the main reason behind the selection of exporting market entry mode by most of the businesses for international expansion is because of its easy ways.
Exporting in general terms is defined as the process of selling the manufactured products that are manufactured in the home nation into foreign markets. The striking aspect of this mode of market entry is that the company can avoid the costs of accomplishing operations in a foreign country. However, the company needs to decide on the ways of distribution and marketing of the products in the selected foreign markets. As per the view of Schmutz et al. (2018), the placement and marketing of the products in any foreign or new markets is done through entering into contractual agreements with local distributors or companies.
Figure 4: GDP growth of the UK
(Source: statista.com, 2022)
Talking about the disadvantage that might be faced while implementing, this mode of market entry is the expense of transportation of the goods to the selected country. The high tariffs on exports/imports along with the little control due to contractual agreements are causes of concern (Wan et al. 2019). It is noteworthy that the overall revenue of the food market and the growing GDP of the United Kingdom are major prompters of selecting the exporting mode of market entry in this nation.
4. Justification for the chosen country
One of the primary reasons for selecting the United Kingdom (UK) as the potential international state for expanding the business is the strong growth rate of the food and beverages sector in this country. It has been assessed that the food and beverage company is going to register an exponential growth rate in the fourth quarter and first quarter of the financial year 2021 and 2022 respectively (bussinesswire.com, 2022). As per the view of Hasnan & Yusoff (2018), the food processing market of the United Kingdom (UK) is explicitly attractive for the food processing companies along with offering critical growth opportunities in the future.
Figure 5: Foodservice activities revenue of the UK
(Source: mordonintelligence.com, 2022)
The political stability within the country backed by crucial and effective legislation on the environmental production process within the industries has made it a first choice for the business looking for exponential growth in their respective sector (Bayazovna, 2020). The regulations on reducing the carbon footprint, fossil fuels burnout, and carbon emissions have attracted a variety of thinkers and administrators from worldwide who are looking for an environment to implement sustainable climate-friendly operation processes within their company. In addition to this, the social factors and the availability of some of the latest and innovative technologies in the vicinity of the business possess a significant option for the company, “Amul” that is looking to expand to the international market (Hullova et al. 2019). With a large consumer base, string import and export sector, as well as increasing affordability, is the key multiple companies choosing this nation for expanding and marketing their business in the international market.
5. Recommendation and justification of three changes
It is crucial to develop a better understanding of the market along with cultural differences between nations before developing communication as well as marketing strategies. As per the view of Hullova et al. (2019), in order to become successful in any country or market, the company must progress and have an attractive value proposition. In addition to this, Amul would have to become a cultural icon among the target consumers base like it is in India. Thereby, it becomes for the company to have a better understanding of the cultures of the United Kingdom. This can be done by making some critical changes to the marketing approach as well as the range of the products.
Recommendation 1: Amul can make effective changes to its marketing strategies while looking to expand into the British market. This can be done by making a few critical changes to the advertising strategies as well as the marketing strategies (Kuzior et al. 2019). The marketing managers at the company must look to research the target market and the consumers’ base. The culture and trends vary from nation to nation and therefore, it becomes more crucial to design the advertisements according to the target consumers.
Recommendation 2: The Company must look to partner and collaborate with the local firms in the United Kingdom (UK) in order to get better access to the raw materials as well as reduced transportation costs. As per the view of Kuzior et al. (2019), collaborating with the locals is crucial in gaining the trust of the target consumers and the suppliers as well. Amul can gain raw materials at a very low cost if it collaborates with the locals as the logistics charges may go up if the partners are at distant locations. In addition to this, the suppliers too will be assured of the reliability of the company which is employing the locals in its workforce, thereby giving a hint that it is there to stay and benefit the people of the place it will be conducting business at.
Recommendation 3: Amul can make vital changes to the range of products it offers as the tastes and preferences of the customers’ change with changing location, demographics, region, and beliefs as well. It can look to offer the products that are much in demand by the UK citizens rather than those products which are preferred by the Indian citizens.
6. Conclusion
The report was based on “Amul” a popular food processing company in India and has critically evaluated the key marketing strategy and concepts of Amul. In addition to this, it has analyzed the present market and macro environment of the foods processing sector in the United Kingdom. It has been summarized that relevant business details and information has been appraised in this report to evaluate the potential challenges faced by Amul in course of entering the food processing market of the UK. The report has concluded information and several aspects of Amul and the target market to provide suggestions and justification of a market entry mode to establish a business in the UK. In addition to this, three effective and essential changes have been made for the marketing communications as well as the range of the products. These suggested changes might be effective for Amul in establishing a competitive advantage to its business in the United Kingdom (UK).
Reference list
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Bessière, D., Charnley, F., Tiwari, A., & Moreno, M. A. (2019). A vision of re-distributed manufacturing for the UK’s consumer goods industry. Production Planning & Control, 30(7), 555-567. Retrieved from: https://eprints.whiterose.ac.uk/148547/3/PPC_SpecialIssueRdM_Final_Review_Finalwithcorrections.pdf
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Garcia-Garcia, G., Stone, J., & Rahimifard, S. (2019). Opportunities for waste valorisation in the food industry–A case study with four UK food manufacturers. Journal of Cleaner Production, 211, 1339-1356. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0959652618336722
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Hasnan, N. Z. N., & Yusoff, Y. M. (2018, November). Short review: Application areas of industry 4.0 technologies in food processing sector. In 2018 IEEE Student Conference on Research and Development (SCOReD) (pp. 1-6). IEEE. Retrieved from: https://www.researchgate.net/profile/Yuzainee-Yusoff/publication/333062733_Short_review_Application_Areas_of_Industry_40_Technologies_in_Food_Processing_Sector/links/5d73c97d4585151ee4a5c59d/Short-review-Application-Areas-of-Industry-40-Technologies-in-Food-Processing-Sector.pdf
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Website
Amul.com, 2022, Amul, Retrieved on 22nd January 2022, from: http://www.amuldairy.com/
Bussinesswire.com, 2022, U.K. Food and Beverages Market Outlook 2021 – Market Size, Share and Companies to 2028 – ResearchAndMarkets.com, Retrieved on 22nd January 2022, from: https://www.businesswire.com/news/home/20211119005377/en/U.K.-Food-and-Beverages-Market-Outlook-2021—Market-Size-Share-and-Companies-to-2028—ResearchAndMarkets.com#:~:text=The%20UK%20food%20and%20beverages,significant%20potential%20for%20future%20growth.
Mordonintelligence.com, 2022, UNITED KINGDOM FOODSERVICE MARKET – GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2022 – 2027), Retrieved on 22nd January 2022, from: https://www.mordorintelligence.com/industry-reports/united-kingdom-foodservice-market
Statista.com, 2022, Revenue of the food market United Kingdom (UK) 2012-2026, by segment, Retrieved on 22nd January 2022, from: https://www.statista.com/forecasts/713302/revenue-forecast-food-united-kingdom-uk
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