MKT744 Assignment Sample

GLOBAL MARKETING AND SALES DEVELOPMENT(MKT744)

MKT744 Assignment Sample

Introduction

International marketing can be defined as a process of exchanging goods and services among countries to fulfill the requirements of customers (Cateora et. al. 2020). International marketing, often called Global marketing, develops the marketing mix (place, prize, product, and promotion) worldwide customize it according to the requirement and preferences of the other countries people.

Present report focuses on the company Bambooth situated in the US and now looking for expansion in Lebanon. The company wants to launch their one of the best selling product in respective countries market as global expansion initially. In this row, this report analyzes the international marketing and the global strategy of the cited company. Further, it performs a PESTEL analysis of the host country and develops a successful international marketing strategy. Moreover, the report will also analyse the firm’s internal market and highlight the method of entry in the respective countries’ markets for the firm.

International marketing and global marketing environment

International marketing can be defined as a strategy of business expansion for the organization across the country’s boundaries. In this, by establishing the different subsidiaries, the company expands its business (Sheth, 2020). These subsidiaries develop the marketing strategy according to the local customers of the host country. With the help of an international marketing strategy, companies can enter a mass production stage and achieve stability in economies of scale.

Global marketing is a Conceptual framework of marketing through which an organization adopts the introduction, design, promotion, distribution, and maintenance of its product in the global market context.

The global marketing process has various dimensions like the product, product design, labelling, branding, packaging, warranty, and different advertisement strategies according to all countries where they want to sell their products and availability of after-sales services support.

This concept includes the customization and modification of advertisement strategies according to each country’s needs. This process is not just selling the products in the global market; it is the process of conceptualizing and subsequently conveying a final product or service globally (Pegan et. al. 2020). The company aims to reach the international marketing community.

The global marketing environment can be defined as a process through which All the factors and forces internal or external of an organization affect the marketing strategy to build and maintain successful relationships with targeted customers located in different countries.

PESTEL analysis of Lebanon

The PESTEL Analysis of Lebanon will help the company to make strategic decisions correctly, keeping in knowledge about the external trends and factors of the external environment.

Political factors Economic factor Social

Factors

Technological

Factors

Ecological factors Legal

Factors

These factors consist of government policies, political stability, and level of bureaucracy. This factor concerns economic growth, GDP growth rates, unemployment level, and inflation rate. The social factors consist of demographics, including Values, culture, norms, system, language, and many more. This includes the level of technology present in the country and its effects on production, distribution, and services. Environment factors comprise climate conditions, natural resources availability, and laws governing environmental protection. Legal factors include all the laws and regulations governing business and worker’s interests, such as labour laws, environment laws, judicial systems, and many more.

 

Political Factor

Government Stability: Lebanon is a country where government stability is very high, and institutions support growth and development. Trade relations with other countries are also very stable (Gillespie and Hennessey, 2015).

Tax policies: Lebanon’s government has favourable tax policies for MNC’s which allows them to expand in the country. There are many subsidies and favourable tax rates; the government also allows the competitive pricing strategy, which also helps increase economic value for the country.

Regulation of Competition: Competition regulation helps the government monitor, restrict and regulate the companies to help the local business and their expansion (Steenkamp, 2017). This tactic ensures that all the companies are using fair play for growth.

Trade Blocks: Lebanon has various trade blocks with different countries, which help the domestic companies to do business across the nation’s border and allow the international companies to expand their business. Trade blocks are very efficient as they make the products and services easily assessable through various distribution channels or agencies.

Economic Factors

Inflation Rate: In 2020, Lebanon has the fourth-highest inflation rate globally at 85.45%. The higher inflation rate leads to the lower disposable income of the people and lowers the overall expansion, which is not an ideal situation for any company (Ratten, 2017). It also decreases the confidence of the consumers.

Interest Rate: The current interest rate in Lebanon is 9.40%, moderate rate of interest helps the business grow in the country with financial support.

Customer’s spending trend: The consumer spending trends can be positively influenced by product quality and strategies. These trends are also influenced by the interest rate, unemployment rate, and inflation rate.

Unemployment Trends: The unemployment rate of Lebanon is 6.60%. Higher unemployment trends will lead to lower overall disposable income in the economy, which would directly affect the performance of companies.

Social Factors

Demographic: Significant population of Lebanon is lying between the higher middle class, and it attracts the companies toward the country (Lee and Griffith, 2019). This group of consumers are highly interested in new products and easily converts into loyal customers.

Education: Lebanon is a highly educated country that can provide skilled talents to companies while expanding. The consumer with higher education has a high awareness about their preference, product quality, and benefits. The educated youth of Lebanon is highly aware of their consumption and purchase patterns.

Size of Families: This affects the frequency and nature of purchases they made. Lebanon is mainly faced with families of nuclear style, with 4 or 5 members in a family (Samiee and Chirapanda, 2019).

Health consciousness: In the country, an increasing population is taking note of health and wellness trends. This also influences their consumption decisions.

Technological Factors

Technological Infrastructure: Lebanon is blessed with a strong infrastructure in regards to technology. There is a high rate of advancement in technology in terms of business. Technological up-gradation increases the efficiency and effectiveness of any business (Strzelczyk and Chłąd, 2017).

Internet Penetration: High internet penetration is used in the country for personal, social lives and the professional responsibilities of the consumers. This shows that most of the population is educated, knowledgeable and progressive. This also helps the companies to get in touch with consumers directly.

Use of social media:  Higher portion of the population is a youth or middle-aged person active on social media platforms. In Lebanon, officials also make announcements through official social media channels.

Ecological Factor

Recycling: Country is highly focused on environmental sustainability and recycling. Consumers are becoming more aware of products and demands for products that can be easily recycled (Pan et. al.  2019). Lebanon market is highly demanding for eco-friendly recycling products.

Waste Management: In the cited country, rules and regulations are very high regarding waste management (Kinnvall and Mitzen, 2017). Companies are instructed to register themselves with waste management authority and institutions and follow the maintenance checks and regulations to avoid further Hassles.

Green Consumptions: With the increased awareness of the environment also provides the citizens with a green lifestyle. Consumers in the country are preferring products and services that are environmentally friendly and sustainable.

Legal factors

Health and safety law: the country has strict laws regarding the workers working in the organization (Earnest, 2015). Their safety and health law not only includes physical wellness but mental and emotional wellbeing also.

Employment law: In consideration of safety in job contracts between employee and employer, the country is highly demanding.

Anti-Discrimination Law: Market consists of a diverse population, and businesses are located on multiple shores of the country. To avail the safety of consumers, this law abides the business to follow the rules regarding anti-discrimination in their business.

Analysis of potential market opportunities in Lebanon

While small in scope, Lebanon country offers unique market opportunities for US Based firms. Products and services of US origin enjoy relatively high receptivity in the market. Although the Lebanon market is price-sensitive when talking about the quality, Lebanese consumers like to avail themselves of name brands, exceptional quality products, and specific after-sales services (Çitilci and Akbalık, 2020). For these reasons, this market attracts US corporations to invest in Lebanon. It is the highest population density country among its neighbour countries, which provides a low traffic rate on imports and exports and a high excesses market.

In the present scenario, due to covid-19, the market of Lebanon is in chaos, but government assures that they will overcome this situation very soon with the help of FDI and many more strategies. This overall situation developed the consumer’s consumption of oral hygiene products, and in the upcoming year, Lebanon will be a great opportunity market for the products related to oral hygiene (Rapoport, 2020).

According to a report, the World Health Organization (WHO) has recommended the yearly use of 6 tubes of toothpaste of 170g each and four toothbrushes per individual. However, in Lebanon, The annual supply for toothbrushes per individual fluctuated between 3.1 toothbrushes in 2000 and 3.24 in 2016. The trend of supply reveals a plateau phase followed by steep increases and decreases between 2012 and 2016. Guidelines governing the quality of tubes of toothpaste are regulated by LIBNOR and follow European Standards (The trends in consumption patterns of toothbrushes and toothpaste in Lebanon, 2021). This immense gap shows the market opportunities for the suppliers of oral hygiene products.

Consumer market of the respective country is consists of youth and middle-aged people who are aware of the importance of hygiene after this situation pandemic. This leads to a new pathway for the companies dealing in the industry.

Overview of the Company

Bambooth is a toothbrush brand started by two enthusiasts named; Joe and Niamh. They focus on delivering high quality services to their customers. With their products and services, they highly contribute towards environmental protection (De Villa et. al. 2015). Thus, it is a sustainable-centric brand in the UK, aiming to establish its business in Lebanon due to increasing customer demand.

The internal environment of Bambooth

The factors that affect an organization’s atmosphere are the internal environment (Teoli and An, 2019). The activities which are performed inside the company are highlighted using the internal environment analysis. Thus, this tool is used to scrutinize the internal environment of an organisation is the SWOT analysis. Bambooth company internal environment is described as:

Strength

The product is made of bamboo and is biodegradable, which makes it different from its challenger.

Weakness

It has a minimal variety with almost similar designs.

Opportunities

It can open its outlets worldwide as people are very much careful about the environment.

Threat

It has a competition with the brands like Oral-B, which are very popular.

 

Objectives

The objectives of Bambooth Company are as follows:

  • Teamwork– The company’s founders believe in working together rather than performing tasks individually to earn profits.
  • Innovation– The Company focuses on making its product unique and creative with minimum use of resources.
  • Customer service– The primary target of the company is to provide better customer service. The focus is on creating experiences that will further be used in increasing business.

Mode of entry in the International market

Market entry strategies or methods are the ways through which a company can target its entry into the host nation successfully and efficiently. It is noteworthy that many market entry methods can be adopted while expanding business globally, including partnership, joint ventures, contracts and agreements, franchising, strategic alliance acquisition, investment, and exporting. Many companies either export their products or enter into a partnership or joint venture to expand their business.

These strategies are selected, noting the high benefit achievement for the organisation (GURL, 2017). Thus, noting the market structure and market opportunities, it can be stated that the cited company that is Bambooth can enter into the relevant market of Lebanon by entering into a Joint venture.

The method of the joint venture is adopted for developing a new venture in the host market. A joint venture is determined as a business system in which more than two parties achieve a particular goal. It is observed that the market structure of Lebanon is improving from previous years, and it does not limit foreign investment; thereby, it is an accessible market.

Thus, market entry strategy that Bambooth Company can use in Lebanon is a Joint venture that will help them share their resources. Still, the same is to be adopted, noting the competitive analysis. With the use of this entry method, while expanding business in Lebanon, the cited company will have the opportunity to direct and control the industry by following the rules and regulations of the home country (Lindsay et. al. 2017). Moreover, it will be beneficial for the cited company by hiring local people from the host country. It will be convenient for the company to function in the relevant market and remove the language barriers and cultural challenges.

Overview of the competitive landscape

From the PESTEL analysis, it is clear that Lebanon is going through immense changes in terms of the standard of living, disposable income capacity. In addition, citizens are getting more and more aware about the products of hygiene and especially those hygienic products, which are environmentally friendly and organic.

As per the identification of potential marketing opportunities in the host market, it has been revealed that the companies related to toothbrushes are high, and this market is pretty competitive. Still, very few companies offer organic and charcoal bristles bambooth toothbrushes to the market (Matovic, 2020).

That can easily attract the customer to purchase the product as it provides value and satisfies their requirement of quality, eco-friendliness, recyclable, and above all, an organic product. Hence, the Bambooth company can establish its charcoal bristles bambooth toothbrushes in the market, a highly consumed product in the US. This product and offerings will attract customers and help gain a competitive edge in the oral hygiene industry of Lebanon.

 International marketing strategy

International market strategies consist of all those strategies that can be used in and marketed the product in the host country.

Product:

Bambooth company is launching its charcoal bristles bambooth toothbrushes in the Lebanon market, made of 100% biodegradable bamboo and the only company in its sector that offers a plastic-free product. It also offers charcoal bristles which are far better in dental care than normal bristles (Yusop, 2018). The product will positively respond in the market as the consumers are very attracted to environmentally friendly products and aware of oral hygiene’s importance.

Pricing decisions:

Although oral hygiene is relatively competitive in terms of toothbrushes specifically because of its unique features and customers’ need to be satisfied peculiarity, it will be one kind in the market. Still, the Lebanon market is a little cost sensitive so, the organization must keep its prices affordable for the target market in the starting (Wiklund et. al. 2019). A competitive market pricing strategy can also be taken into consideration. A competitive pricing strategy is a technique in which product’s final price is decided and fixed after evaluating and analysing competitors’ product’s prices. Apart from this, a penetration pricing strategy can also be taken into account to attract consumers early.

Promotional efforts:

For sustaining in the market and develop a competitive profile in market. Bambooth Company must have to watch its competitor’s strategies and activity in the market. Further, they have to attract potential customers and encourage them to buy product company is offering.

Although the production company is offering meets all requirements of the consumers, without the proper promotion tactics, the customer base can’t be increased in the foreign country (Omran and Khorshid, 2015). To establish their brand, the company can give offers like those they are providing in the US “buy three get one free,” “family pack,” discounts, and many more. Lebanon is a nuclear family-oriented country. These kinds of offers will grab the attention of those households effectively. In addition, their youth is very active on social media; companies use that platform also to advertise their product.

Distribution choices:

The Bambooth Company can distribute its products by the physical medium as well as online channels. The companies can launch a new website for the consumers of the cited company, which is available in their language and easy to access (Kfouri and Skyrius, 2016). It will become easy for consumers to buy products and track them there. Fast and easy delivery is the best way to deliver accurate and reliable services to the customers. During this pandemic period, this is the safest and fastest mode of shopping for customers worldwide.

Impact of decision on stakeholders competitors and public

The main stakeholders of the bambooth company are their employees, management, customers, the public, and competitors. Most impact came on the customers and employees of the bambooth company.

The employees must be aware of the company’s activities very closely and help them sell their products in the new market more efficiently. In addition, the customer must be aware of the company’s unique product and its one-of-a-kind features (Kara, 2018). Considering the competitor’s company must take note of their market activities and strategies in advance to gain the advantage in modification or other product development sectors. Further, the company must follow all the rules and regulations of the industry and country and function in an ethical manner and with transparency so that their stakeholders and the public can trust them.

Critical challenges to global expansion in the host market

Meeting the challenges of international expansion is very crucial for an organization. Without the proper preparations, hopes of growth in an unfamiliar market are next to impossible. Companies need to define their objectives and visions, determine the target customers, research the regulations involved and create a strategy to follow.

Biggest challenge that Bambooth faces are unfamiliar culture. Due to cultural differences, it becomes difficult for the cited company to access the target customers’ choices and needs that they need to modify before entering the Lebanon market.

Foreign country, unfamiliar culture, customers with different backgrounds, beliefs, and ideology: diverse needs and choices. All these factors together become the critical challenge for the bambooth (Samusenko et. al. 2020).  Difference in language is also a barrier for the companies while expanding their business internationally. During business operations, communication is the key to every operation. The company must hire local managers to operate in the host country, but communicating with those managers is a challenge.

The managerial policies and chain of command are also a dimension that varies from country to country, which brings complications in the processes. Language barriers develop misunderstandings and ineffective communication, making customer relationship management problematic and hamper the brand image globally.

In Lebanon, the government is very active in local or domestic companies’ interests and always pays attention to them, which is also a challenge for the bambooth company. The domestic competitors always have threats upon the foreign countries company. However, bambooth is selling a unique product in the market that also belongs to same family of oral care. That’s why the other domestic players play an effective role in their progress journey.

Justification of the decision by aligning PESTLE and international marketing strategy

After analyzing the overall factors of international marketing and market strategies, it can be stated that Bambooth can establish its subsidiary in the Lebanon market (Elmustapha and Hoppe, 2020). After conducting the PESTEL analysis, it has been evaluated that

  • The government of cited company is in favour of FDI and having good terms politically with the US. They also provide special subsidiaries for companies from the US.
  • Consumers’ disposable income might be low compared to other countries, but they are ready to spend for quality products.
  • The maximum population lies in youth age to middle age and using social media at a vast level. Social media can become a very effective source of promotion for the company.
  • The technological infrastructure of the country is well developed that also helps positively to the Bambooth.
  • Citizens of Lebanon country are highly aware of the environment and want those products which are organic and environmentally friendly. This will be key success point for the company in the Lebanon market.

Conclusion

After the report’s analysis, it can be concluded that in today’s world, for surviving in the market, expansion is needed for every company, and going global is their vision (Skafi et. al. 2020). The business now does not abide by the borders of countries they expand according to their vision globally.

The present report analyzes the various factors that a company must consider before going for expansion. The report analyzes the business environment’s external and internal factors in the home and host country, respectively. After this, all analysis and environment audits, a detailed marketing plan for expansion can be drafted to ensure host economy’s smooth functioning. After completing a proper business environment audit, a specific and detailed international marketing plan can be drafted to ensure the smooth functioning of the business at global level.

 

 

 

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