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 which 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 which 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 when developing 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 is basically a process for analyzing the expediency of a new service or a product with the help of research accompanied directly by potential customers. This particular method generally helps organizations or a business to invent their target market, document and collect opinions, and finally make informed decisions. In Kickerco, which is a trading company market research is required as it involves recording, systematic gathering and analyzing data in order to provide crucial information useful to the decision-making process. The information is required to be communicated across domestic boundaries and these all research tools are often implemented in international markets. It is quite difficult for the management to keep well-informed of changes as well as to collect relevant and timely information in order to adapt strategy and market techniques in expanding local market. Thus, as a consequence market research for international marketing becomes important for an effective decision making process when organizations begin to internationalize in the direction of foreign markets.
In organizations such as Kickerco, market research is majorly concerned with customer goods and also with service or any resource under a value chain that can be utilized commercially. Research for the international market involves some basic steps which are mentioned here.
Defining research objective: It is the first and foremost step of market research. It help a researcher to analyze appropriate source of information and select particular methodologies for collecting information.
Determining required information: The information which is necessary in the light of research goals has to be listed for planning data collection.
Determining methodologies: In order to collect several kind of information from different sources, various methodologies are utilized in marketing research.
Actual collection of information: Actual data collection includes a particular planning of fieldwork in order to contact respondents or different sources of the survey.
Preparation & Report: It is important that the information that has been collected through research is presented in the form of a report. The report usually contains findings of the research including recommendations and comments of the researcher.
Thus, market research is required for international market to identify target customers along with market trends, rules and regulations of the international market in order to deliver quality products and to acquire a position in market area.
How business case for the international market can be justified?
There are a number of advantages and benefits for a business to be trade internationally. One such biggest advantage of international market expansion is new sales. Enhancement in sales is equal to more revenue that can often lead to more expansions of business. Having a number of advantages and benefits eventually justify Kickerco business case to an international market. Some of such benefits for the mentioned organization are mentioned here.
Entry to new markets: The foremost advantage for the respective company to trade internationally is access to new market areas. It will eventually lad the company to form a new customer base.
Access to local talent: It is very difficult to find specialized talent in a domestic country. Thus, expanding business to a foreign market will help Kickerco to access to a wide range of potential workers and employees with unique skills and techniques. It will help the respective company to stand out in the market area and to compete with its competitors.
Enhanced business growth: It is one of the important benefits of international expansion. Enter into oversees market allows organizations for faster growth in their business. By expanding, market in foreign countries help the company to give new experience of their products and services to the customers.
Stay ahead of the competition: It is important for the respective company to go to the market area before its competitors. Expanding business to a foreign country will allow the organization to access to new customers as well as give a visibility which others do not have. It is also beneficial to get out of the congested market and step ahead of all the competition.
Regional centres: It is very crucial to provide reliable and quality services to the foreign clients. Setting up in a new country will help the business to lower its operational costing. Thus, hiring local employees who already knew the local language and customs will help the organization to serve their clients within the same time zone and that too without any complications.
Risks that must be considered for international marketing
Business that are involved in international trade has to deal with number of risks locally and also many other business development risks such as transportation, ethics, credit, intellectual property, currency and many more. Such risks generally creates a hurdle in smooth running of business operations and thus it is very important to take necessary steps in order to limit the effect of such risk. Some of the major risk which can be considered for Kickerco to internationally trade their business are mentioned here.
Commercial Risks: It can be created due to incapacity to adapt to the environment, lack of knowledge, different sort of situations to deal with and bigger transit time involved. The exporter of Kickerco organization is supposed to know much about the international trade as he does about his own particular business. In case of a situation where good are not sold, the exporter must have to bring the goods back or must be prepared to sell them at the cheaper prices. This risk can be reduced by the implementation of skills and techniques.
Political risk: Such kinds of risks can be arise as a consequence of changes in party to power within the countries concerned civil wars, coups and rebellion between two counties. Some of such risks are covered by Export Credit Guarantee Cooperation.
Legal risks: Laws and regulations can be different within two countries. However, it will be quite expensive for the respective organization to conduct legal proceedings in an international market.
Different methods of International marketing
International marketing is also called global marketing that involves marketing products and services to customers across the world. International businesses who are looking for selling their products and services In a foreign market generally initiate with licensing and export. Rather than these options, other types of international marketing include joint venture, contract manufacturing and foreign direct investment (FID).
Export: It can refer to a exercise of shipping goods and services to international markets. Manufactures and business persons who are looking forward to expand their business in international market teds to seek out exporting first. It has the least effect on organizational human resource management.
Licensing: It is basically an agreement in which an organization, known to be a licensor permits a international firm the right to utilize its intellectual property. It is just for some specific period of time. Through this agreement, the international firm receives competitive advantage whereby the licensor acquires inexpensive access to new market area.
Joint venture: It basically depicts the combined effect of two businesses from two different countries for their own mutual benefit. It is basically a participation of two or more organizations jointly in an readiness where both organizations owns the entity up to some extent, shares risks and contribute assets.
Foreign Direct Investment: In this type of international marketing an organization basically places a fixed asset in a foreign country in order to manufacture a product in abroad. Just like joint ventures, foreign country fully owns the subsidiary. As a consequence, it starts either regulation or generous influence on the decision making process.
Analyze the way in which financial and pricing issues may affect international operations.
It is not an easy task to set pricing for the international market. Decisions with respect to products, distribution and price for the foreign market are unique to each and every country and are totally different from the domestic markets. In terms of pricing in the international market, it is important to take language, geography, climate, local culture religion and value into consideration. For developing a sound pricing approach, Kickerco should be aware of international customer’s preferences purchasing behaviours, perceptions, in context with various price levels. Getting payments in cash quickly by means of a suitable currency from a less settled country can effect business operations. In case of pricing, respective organizations can also face problems with organizational factors such as customs fees, operating cost, distribution channels, taxes and many other that can directly impact on business operations.
In the case of financing issues such as foreign exchange risks which is related to fluctuations in the value of currency. Organizations who trade their business internationally have international workers, international suppliers and international sales. However, it has both negative and positive impact on business operations. Sometimes, it can result in huge profit to the company, other times it can result in loss for the company. Such fluctuations show risk to the profits.
Task 2-Report
Features of international market
International marketing can be defined as several activities intended in the planning procedure. It is the implementation of marketing principles in order to satisfy different wants and needs of various people living through the national borders. International marketing has some important features. These features are mentioned here.
Large scale operations: It generally involves relative amount of capital and labor in order to fulfill needs such as warehousing, handling and transportation. As international marketing is always directed on a larger scale, thus it is basically done on a wholesale basis rather than a retail basis for getting advantage of large scale operations.
The dominance of MNCs and developed countries: International marketing is dominated by MNCs on a larger scale. Such organizations implement effective as well as efficient business strategies to all operations of the business. They hold a stable position in overall market area and have global approach to find them into international marketing ground.
International Restrictions: There are no restrictions in domestic marketing. However, in international marketing there are number of restrictions (non-tariff and tariff) because of the policies followed by various countries. Trade barriers are accepted practically by all the countries.
Sensitive character: International marketing is very flexible and sensitive. The mandate for a particular product in a market is greatly influenced by economic and political factors. Such factors can develop and even can decrease product demand.
Importance of advanced technology: International marketing is generally dominated by advanced and developed countries like Japan, USA and Germany as they utilizes advance technologies and strategies in marketing, production, establishing a brand name and advertising. They supply admirable quality of their products at a reasonable price. Currently, Japanese products do have a stable existence in market area. Japanese could acquire this only due to effective use of advanced technology and automation.
Need for specialized institutions: Global level marketing is highly prone to risk factors and is very knotty and complex. It is usually time taking and lengthy procedures as well as formalities. Skilled expertise is basically required for handling several sections of international marketing.
