Strategic Management
Unit: International Marketing
15 Credits
Unit Code: Unit J/615/2696
Assignment
You have recently joined the marketing team at Kickerco, a company that has been trading nationally for many years. The company would like to start to trade internationally. The company has recruited you because you have worked for organisations that have traded internationally and they want to use your experience and expertise to assist in the development of this area of work.
Task 1 – Formal brief
The senior management team has asked you to brief them on the implications of international marketing for organisations in general. Write a formal briefing paper for the senior management team to read.
In the briefing paper you must:
∙ assess the market research requirements for international marketing ∙ analyse how the business case for international marketing can be justified ∙ assess the risks which must be considered for international marketing.
Extension activities:
To gain a merit grade you must also:
evaluate different methods of international marketing.
To gain a distinction grade you must also:
analyse the way in which financial and pricing issues may affect international operations.
LO1, ACs 1.1, 1.2, 1.3, 1M1, 1D1
Task 2 – Report
The senior management team would now like you to use your knowledge and experience of operating in international markets to help them to understand how to develop an international marketing strategy. Write a report for the senior management team. In the report you must:
∙ analyse the features of international markets
∙ evaluate the operational considerations that should be taken into account whendeveloping an international marketing strategy
∙ analyse the characteristics of an international marketing strategy.
Extension activities:
To gain a merit grade you must also:
evaluate the legal implications associated with developing and implementing an international marketing strategy.
To gain a distinction grade you must also:
choose an organisation you know well or one where you have access to detailed information. Evaluate the chosen organisation’s international marketing strategy.
LO2, ACs 2.1, 2.2, 2.3, 2M1, 2D1
Task 3 – Presentation
The senior management team would now like to understand the requirements of international marketing communications. Develop a presentation with an accompanying handout for the senior management team. You do not need to actually deliver the presentation. In the presentation you must:
∙ evaluate the way in which local customs, culture, language and ethical considerations may affect marketing communications ∙
assess the role of technology in international marketing communications ∙ assess the implications and requirements of different sales and marketing communications strategies.
Extension activities:
To gain a distinction grade you must also:
Analyse the concept of “globalization” and review its impact on communications. LO3, ACs 3.1, 3.2, 3.3, 3D1.
Answer
Task 1-Formal brief
Market research requirement for international marketing
Market research refers to a procedure of collecting data on goods and services in order to determine whether the service or product is going to fulfill the needs of customer. Market research is beneficial for finding out demographics, economic shifts, and market trends along with the crucial information on competition (Carson and et al., 2020). Kickerco, can utilize this particular information for defining target markets and for developing competitive advantage in market area. Market research helps business to sell their products and services in effective and efficient manner. It is very vital for organizations that are trading internationally.
Critical and useful information about target nations of international business are discovered through market research. It helps a company by providing all the information it requires to make correct decisions before entering in a new market. Similarly, International market research can regulate chances for a new business and deliver targeted data regarding particular geographical locations. Market research can also provide regulated information for advertisers and marketers compare products, markets along with other market variables and also supply new ideas for business expansion and business entry. International market research is crucial for almost all decision making departments of an organization. Kickero can easily decide about how extensive the international market research could be. The outcomes of an international market research basically form a base of information which is very crucial when it comes in making strategic market decisions (Crick, 2019). Market research assist a company in deciding which market to enter and to identify its target customers in order to acquire respectful position in market and to make a strong customer base.
How business case for international market can be justified?
It is very beneficial for business to trade internationally as it provides number of benefits. New sales is said to be one such biggest advantage of moving a business in foreign country. Increment in sales is equivalent to more revenue that can eventually lead to expansion of business (De and Fennis, 2019). Justification of business to trade in a foreign market comes from advantages and benefits it provides to an organization. Some of its advantages are mentioned here.
Entry in the new market area: One of the foremost benefit for Kickero to trade internationally is access to new market area. It help the respective organization to identify its target customers.
Access to local talent: It is quite difficult for an organization to identify a specialized talent in its own nation. Thus, moving business in a foreign country can help the respective organization to access a wide range of potential employees as well as workers who have unique skills and techniques. This helps the organization to stand out in market area and competing with its competitors.
Enhanced business growth: International marketing helps in enhancing growth of a business. Entering into oversees market helps organizations for faster growth in their overall business (Dey and et al., 2019). Expanding market internationally help the respective organization to provide a new experience of their products and services to the consumers.
Stay ahead of the competitors: International marketing help the respective organization to go to the market area before its competitors. It gives a visibility to the organization regarding its target customers and helps them to provide quality services and products in order to compete in market area and to attain a respectful position in the market.
Risks which must be considered for international marketing.
Business involved in foreign marketing has to tackle with several numbers of issues locally along with many other business development issues such as ethics, transportation, intellectual property, credit, currency and many others (Finnegan and et al., 2019). These risks and issues mostly create difficulties in smooth running of business operations. Hence, it is very crucial to take necessary steps for minimizing the effects of these risks otherwise it will result in huge loss in overall business. Some risks that can be occurring in respective organization are mentioned below
Commercial risks: Such kinds of risks can be developed because of incapacity to adapt to the surroundings, lack of information as well as different types of situations to tackle with and involvement of bigger transit time (Hollensen, 2019). Merchandiser of the respective organization is required to know about all the crucial and typical information of international trade in order to set up business effectively and efficiently. This particular risk can be removed by the application of strategies and techniques.
Political risks: The accountability which is developed by personal or financial losses due to wrong political decisions and conflicts are known as political risks. Businesses are highly inclined by political choices that are taken by governments of different nations. Political conflicts also arise terrorism; international wars, civil wars as well as political elections that can result in replacement of ruling political party with some other party can also have an impact on international marketing.
Legal risks: It can be refer to loss or any damage which is incurred in a business because of negligence in compliance with laws that are related to business. There is an enhanced focus on rules and regulations in certain countries. Failure of compliance with such legal rules can result in expensive damage and penalties to company’s brand name.
Different methods of International marketing.
International marketing can be defined as an exchange of services and goods through national borders in order to fulfill needs and wants of customers. It basically includes analyses of customers in the international market and to identify the target market area in for overall growth of an organization (Jabbari and et al., 2020). Organizations like Kickero, who are looking forward to trade their market internationally normally initiate with export and licensing. Other than these, there are other types of international marketing such as contract manufacturing, joint venture and foreign direct investment.
Export: In international marketing, export can be defined as products and services that are manufactured in one nation and sold to buyers in another nation. Export in combination with import refers as an international trade. Business owners tend to seek out for export first when they are planning to trade internationally.
Licensing: It is basically a business arrangement where one organization gives permission to another organization for manufacturing its product in decided payment. Under this agreement, the multinational organizations permit rights on its intangible property to a foreign business for a limited period of time.
Joint venture: It can be refer to a combined effect of two businesses from two different nations for their own mutual advantage. It is generally the participation of two or more firms jointly in a readiness in which both the firms acquire entity up to some level contributes assets and share risks.
Foreign Direct Investment: Under such type of international marketing, a firm basically places a set asset in an international organization with an aim of manufacturing a product in foreign. Unlike joint ventures, foreign company fully owns the subsidiary. As a result it begins to either regulate or influence the decision making procedure.
Analyze the way in which financial and pricing issues may affect international operations.
In international marketing, finance and pricing are one of the most important elements of marketing mix, engenders cash and determines the survival of a company (Kumar and Srivastava, 2020). Financial and pricing issues affect both the revenue and international operations of a business. Working capital is very important for any kind of business, thus without pricing and finance the entrepreneur would not be able to attain new customers and manufacture products. Pricing can also affect organizational brand name and position in market area by developing a perceived value about the product and prices in front of customers. Foreign exchange risks develop when an investment value fluctuates because of the variations in currency exchange rate risk. It can either result in profitability by increasing revenue or may be result in loss of business. Financial and pricing issues have direct impact on manufacturing of products and services that can cause development of low quality products (Michael, 2020). Company can lose its targeted customers along with eir trust to deliver quality products. There may be chances that company loses its position in market area and has to close business. Thus, financing and pricing are the most important factors for running international business operations in an effective manner.
Task 2-Report
Features of international market
International marketing can be defined as performance of business operations which directs the flow of products and services to customers or consumers in more than one country. It is the application of marketing principles for satisfying different requirements of consumers residing through the national borders (Pedada, 2019). International marketing also has some crucial features. Some of them are mentioned here.
Large scale operations: It basically consist of relative amount of labor and capital for fulfilling requirements such as handling, transportation and warehousing. International marketing is usually directed on a larger scale, so it is basically done on the basis of wholesale rather than retail base in order to get advantage of large scale operations.
International restrictions: There are no such restrictions in domestic marketing. However due to policies and legal issues there are umber of restrictions in international marketing. Trade barriers are practically adopted by all the nations.
The dominance of MNCs and developed countries: MNCs are dominating international marketing on a larger scale (Peng and Lin, 2021). They all apply an effective and efficient strategy to all the business operations. It helps them to attain a respectful position in the market and they also have a global approach to find them on grounds of international marketing.
Sensitive character: International marketing is said to be sensitive and flexible. The mandate for specific product or service in the market area is largely affected by political and economic factors (Perumal and et al., 2021). Such kinds of factors play a role in developing or decreasing demand of a product.
Importance of advanced technology: International marketing is greatly affected by developed and advanced countries such as Germany, USA and Japan because they use advanced technology and strategies in advertising marketing, production as well as in developing a brand name (Rindfleisch and Malter, 2019). They deliver admirable quality of products at affordable prices. Recently, Japanese products have stable existence in market area. Japanese are able to attain all of this because of effective utilization of automation and advanced technology.
Requirement of specialized institutions: International marketing is highly prone to risks actors and are very complex and tangled. Specialized institution is generally a lengthy procedure and time taking. Skilled expertise is needed for tackling various sections of international marketing.
Need for long term planning: It is very crucial aspect of global marketing. Operations as well as practices of marketing are different from country to country and is influenced by social, economic and political factors.
Lengthy and time consuming: International operations are generally complex and take a lot of time. Main reasons for such kind of difficulties are local laws and policies that are implemented on different nations, difficulties in processing payments as different nations use different currencies, variations between participation of nations and time. Operational considerations that must be taken into account when developing an international marketing strategy.
Global marketing is totally different from domestic marketing. Kickero has to tackle with lot of issues for trading its market internationally. Few of the operational considerations that must be taken into account for mentioned organization are stated below:
Flexibility: Adaptability and flexibility has a vital role in all business operations. Each entrepreneur needs to be open for any kind of adaptation and variability when it comes to business plans, products and market strategy.
Product Standardization: Quality of products and services is the core and most important thing to run a business (Sadchenko and et al., 2020). For global marketing strategy it is very necessary to deliver quality products and services to international clients and customers. Along with the good quality organizations are also required to maintain the consistency of their products and services.
Capital and investment: Time and money plays a vital role in running international operations smoothly. It helps the organization to takes the business at net level across geographical borders. Thus, for an international marketing strategy the organization must have enough capital for investing successfully in another country’s market.
Language and cultural difference: It is very crucial for a business to learn a new language or else to find out a representative who can easily give assistance for promoting business. Enough information about the area where the business is going to expand is also necessary as cultural differences can also be a major reason for slower growth rate.
Characteristics of an international marketing strategy.
Crafting and executing international marketing strategy is the most crucial part of any business under an organization. The key for creating a strong strategy basically resides in satisfying requirements of organization and about the marketing services along with the products or services to the customers. Characteristics of an international marketing strategy are mentioned here.
Analyzing target audience: It is very important for Kickero organization to know about the customers or individuals they are marketing their services. Respective organization is required to make sure that there is actual requirement of the product or services they are offering and manufacturing in order to make a strong customer base. Hence, it is important to first realize if there is even a market available for the desirable products before even entering into the market.
Think out of the box: Business organizations such as Kickero must ensure that their employees and workers should come up with unique sand creative ideas in order to make products different from the market area and to enhance their overall productivity. It generally helps them to give a competitive benefit and also increase overall quality of the products. For any business organization it is very necessary to make a strong customer base for making profit and for growing overall business. Implementation of this particular strategy helps organizations to gain the profit and trust of their customers.
Performance friendly and measurable: An effective, as well as efficient marketing strategy, require to have responses that can be tracked or measured in order to visualize the overall growth rate of the organization (Shemyatikhina and et al., 2020). Utilizing effective tools and techniques for generating real-time numbers can be an effective strategy. It helps business organizations to analyze the performance of their employees and loopholes in the business so that they can work upon them.
Competition and credibility: It is very important for any business organization to have proper knowledge of their completion in overall market area. It can be easily done by analyzing the strengths and weaknesses of their competition and also help them to know the current and exact position in the market. An effective global strategy needs to be credible which means that target and desirable goals of an organization could be achieved sustainably in a given amount of time period.
Legal implications associated with implementing and developing an international marketing strategy.
There are a number of legal challenges that can be proved as a hurdle for Kickero to trade internationally. Developing new units, implications of tax, hiring employees are some of the legal issues that can come in between for moving a business at the global level. Legal implications that are associated with the application and development of an international marketing strategy are discussed here.
Subsidiary or not: Many business organizations generally assume that by establishing an entity across borders, they would not be bounded by legal rules and regulations of the market area where they are operating (Tanasychuk and et al., 2020). However, it is a wrong assumption as people are usually protected by the laws of their individual nation such as customer laws, data protection laws or employee regulations. Thus, failing to put place the correct structure can eventually lead to fill obligations that are related to country financial information which private organizations usually favor to possess confidential.
Employees: Most of countries have similar laws regarding distinguishing between employees and contractors. Generally, if an employee of the organization in under direction and management of the business then they are supposed to be categorized as an employee. Payroll obligations and filing, employees are usually protected by rules of their nations. Hence, organizations are required to provide them with local employment contract. Failing to do so can result in developing difficulties in hiring employees that can result in low productivity and profitability.
Intellectual Property: Patents, trademarks and design rights are required to be registered in global market area where the organization is operating as they are not protected by local filings. It is a crucial step to follow otherwise it can directly put a negative impact on overall business operations and other companies are free to utilize trademarks or brand names.
Tax: It can vary from nation to nation, but one common approach is that authority of tax prefers to increase the contribution it gains from the businesses operating under the borders. Imposition of tax on organization usually causes market price to increase and quantity of demanded products to drop.
Data protection: Almost all countries have strict laws for protecting data that require organizations that generally process and receive personal data to consider strict rules regarding retention, receipt and use (Thomas and et al., 2020). A particular consent or disclosure is required to be made to the owners of the data. Failing to comply with this rule can result in loss of trust as well as diminished reputation as well as loss of customer trust.
International marketing strategy of McDonald’s
McDonald’s is known as one of the world’s largest chains of fast-food restaurants. They basically operate around thirty-two thousand restaurants that serve over sixty million consumers on a routine basis. The most important key to the successful and rapid international trade of McDonald’s is the Franchise model established by the respective organization. McDonald’s already realized early in their life that international marketing is required to have an extremely high degree of domestic responsiveness and that they are supposed to manage the business to spread across various regions efficiently and effectively that can only be acquired through Transnational strategy. Value chain of the respective organization was created taking into consideration of legal-political, local customs and culture as well as economic environments in mind (Ukessays, 2021).
Organizational international strategy
The strategy of MacDonald’s to serves across different parts of the world is discussed here.
Think globally and act locally: MacDonald’s utilize a transnational strategy in terms of global integration and local responsiveness. They analyzed that international marketing required a high degree of local responses and since they have their branches in other parts of the world they need to manage effectively and efficiently which would not be acquired through any other strategy.
Local management: Respective organizations focus on local management for enhanced responses to the external environment. Hiring local employees would bring more acceptance of the organization in local markets by consumers and it can be easily accessed to bureaucracy linked with local government. This eventually leads to accountability, innovation and a strong customer base.
Pricing strategy: Organizations entering into various countries for business are required to gauge their pricing of services and products based on the income distribution of population, domestic rise and other factors such as the rate of currency exchange. MacDonald’s generally open their restaurants in cities targeting upper and middle-class citizens as they are able to afford prices.
McDonald’s Franchise Model
Respective organization generally operates through franchises in various parts of the world. Franchisees usually provide organizations such as McDonald’s an inexpensive way of trading internationally and also give control over the utilization of their operations and brand. Advantages of franchising are given here. MacDonald’s basically gains revenue from franchisees in two modes:
Service fees: Monthly payment depending on the sales of the restaurant. The current service fee is 4.0% of the monthly sales.
Rent: Macdonald’s owns a large number of properties in which their franchisee operates it basically collects a percentage of monthly auctions as rent. With the help of this method, the respective organization is known to be the largest owner of properties in the overall world.
Task 3- Presentation
References
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Thomas, S.,and et al., 2020. Cause-related marketing research (1988–2016): An academic review and classification. Journal of Nonprofit & Public Sector Marketing, 32(5), pp.488-516.
Online:
Ukessays (2021) The International Market Strategy of McDonald's. [Online]. Available at: https://www.ukessays.com/essays/marketing/the-international-market-strategy-of-mcdonalds-marketing-essay.php. (Assecced: 24 Aug, 2021)
