Category: International marketing

The globalisation of the modern world and appearance of companies that have their offices in numerous countries all over the world contribute to the increased importance of tolerance and improved comprehending of at least basic peculiarities of various cultures (Five steps to avoiding cultural mistakes 2014). In other words, when running a business internationally, a company should exclude any probability of cultural mistakes that can offend feelings of bearers of a certain mentality and decrease the popularity of a brand (Five steps to avoiding cultural mistakes 2014). For this reason, it is vital to adhere to strategies that could help to minimise the risk of these mistakes appearance (Chahal n.d). First, one should mind the peculiarities of the local market and the target audience when introducing a new good or brand (Chahal n.d).

The investigation of local cultures should precondition the further spread of a company to a certain region (Sinha 2010). Moreover, it is also necessary to avoid generalising by using local insights. In other words, the population is not homogeneous in its structure (LaPlante 2005), and a brand team should appeal to the interests of a certain specific group that could be interested in services or products suggested by a new actor. Finally, it is also critical to understand what methods could be used to win a certain market (Chahal n.d). The nature of these actions should not be inappropriate for locals. To avoid cultural mistakes that have the pernicious impact on the image of a certain company or brand, it is crucial to investigate the peculiarities of the local environment and understand the main behavioural patterns exercised by bearers of a certain culture (Chahal n.d). Only under these conditions, the risk of certain cultural mistake will be decreased, and a company will obtain a unique opportunity to win a new market.

At the moment, we could observe the tendency towards the centralization of advertising campaigns run by numerous companies and the creation of a single approach that should be used when promoting a certain service or good. The great positive effect of this approach is obvious (Chahal n.d). Companies became able to introduce more influential and customer-oriented campaigns that improve their image and contribute to increased incomes. For this reason, one could predict the further rise in the popularity of this practice (Payne n.d). The fact is that the exploration of the given approach helps a company to respond to the new challenges that appear in the course of its functioning in the most efficient way.

Moreover, brand teams that work to create the unique proposal obviously consider the above-mentioned local peculiarities that might result in the increased or decreased level of interest to a new product. With this in mind, companies obtain a powerful tool that could help them to become more flexible and consider the interests of various population groups (LaPlante 2005). Additionally, the further evolution of means of transport and digital devices predetermines the increased paces of globalisation (Sinha 2010). Under these conditions, the adherence to the approach that rests on the well-thought-out advertising campaign which is provided by the head office seems the only perspective for the further evolution of business (Payne n.d) as it provides numerous opportunities for the further growth.

Altogether, globalisation and international markets condition the great importance of the creation of a unique approach that will be able to consider local cultural peculiarities and provide the companies with an opportunity to impact peoples choice by appealing to their interests and peculiarities of mentality.

Reference List

Chahal, M n.d., How to make global marketing locally relevant, Web.

Five steps to avoiding cultural mistakes 2014, Web.

LaPlante, A 2005, When Does Culture Matter in Marketing?

Payne, N n.d., The Costly (and Humorous) Impact of Cultural Blunders, Web.

Sinha, R 2010, How To Avoid Cultural Mistakes In India Business. Web.

A global strategy is based on the assumption that the consumption and production patterns of goods and services are homogenous worldwide and countries are interconnected. Multinational enterprises keep total control of their activities by centralizing decision-making global strategy to increase profits while reducing production costs. MNEs can execute global strategy and practice centralization by franchising, and creating whole subsidiaries, and transnational and standardization strategies.

The franchising strategy allows franchisees to legally sell goods and services according to the franchisers standards and rules. The franchiser sets the rules and manages, marketing, and selling the product (Hill & Hult, 2018). This strategy allows the franchiser to set the instructions to guide their franchisees on the businesss outlook and staff training (Hill & Hult, 2018). Creating whole subsidiaries occurs when a firm sets up a new operation in another country or acquires an already established firm and uses it for marketing its products. This global strategy allows the parent company to control the whole subsidiarys operations (Hill & Hult, 2018). The parent companies have the right to take management and the subsidiarys operations with immediate effect and control the strategies of the subsidiaries without facing disputes.

Adopting the transnational strategy enables the firm to run the business through a global perspective. The national borders do not affect the decisions of firms adopting this strategy (Hill & Hult, 2018). Therefore, the central firms managers use the world market as their management frame and make core decisions throughout its ventures (Hill & Hult, 2018). Additionally, standardization strategy enables the firm to produce goods and sell services to a broader market without customizing local conditions. The managers of the firms make significant decisions on the common activities of the firm. Examples of such activities are decisions to reduce global marketing costs and the design of the product.

Worldwide Product Structure

The organizational structure is the usual and system of value that an organization shares with its employees. The organizational structure of a firm is dependent on its business strategy. The appropriate global structure for an MNE with a worldwide strategy and has many alliance partners would probably be the worldwide area structure. This structure allows the division of the world market into different geographical areas, which are entirely independent and have their set of value creation activities (Hill & Hult, 2018). Additionally, the worldwide area structure allows decentralization of the authority of the firms operations and strategic decisions relating to the value creation activities (Hill & Hult, 2018). However, the headquarters maintain the control of finances and the authority for the firms strategic directions. The result enhanced responsiveness between partners, and they are allowed to make customizations of their product offerings, marketing, and business strategies to the local conditions.

Some of the adjustments that could be made are ensuring that the relationships between the partners are enhanced, and the organizational structure ensures the inclusivity of every partners ideas. Enhanced relationships build trust within the firms, thus allowing smooth operations and maximizing profits (Hill & Hult, 2018). Improving the relationships between the partners may present an opportunity for enhancing the local responsiveness and easing the transfer of core competencies. This would have a positive impact on the adoption of the worldwide area structure. Additionally, inclusivity ensures that every partners ideas are catered for and considered during decision-making processes (Hill & Hult, 2018). This allows the partners to feel a sense of belonging in the deal and reduces cases of conflict and dissolution that might arise due to differences in the strategies for the business.

Reference

Hill C. W.L. & Hult G. T. M. (2018). International business: Competing in the global marketplace, 13th edition. McGraw-Hill Education.

Introduction

It is argued that a company should employ comprehensive and efficient expansion strategies if it strives to maintain a sustainable growth in the future. In the case under consideration, Pret A Manger, a British fast food restaurant chain, is the subject of the discussion of an appropriate foreign market entry strategy. The company is UK-based, and the majority of the chains restaurants are in the UK (Junqian, 2014). Also, Pret A Manger operates successfully in the United States as well as in Hong Kong and Shanghai (Junqian, 2014). However, it is possible to notice that the overall presence of the company in the international market is insufficient given the fact that the chain is relatively successful and has a competitive advantage. The attempt to enter the Japanese market in 2002 in a joint venture with McDonalds has been a failure. Therefore, the purpose of this paper is to develop a profound strategic plan for international market entry for Pret A Manger.

The Selection of Possible New Market for the Expansion

The Concepts of Target Markets and Market Selection

First of all, it is essential to overview the concepts of target markets and market selection principles as they play the primary role in developing a market entry strategy. The work of de Kluyver (2012) will be used as a key reference for this section since the author provides a comprehensive observation of target markets and various modes of entry. As the author states, one of the most important aspects of selecting a suitable market entry strategy is the companys basic value proposition (BVP) because such decisions as selecting global target markets, entry modes, and customer communication patterns can influence the necessity to adapt the business BVP to some extent (de Kluyver, 2012). Accordingly, the ability of the company to tailor its offerings to the global market without changing the core of the brand is the key to success when entering foreign markets.

In order to measure the markets attractiveness and estimate the companys potential to succeed in this market, there are four key factors. They are the following: (1) the markets size and growth rate, (2) institutional contexts of a particular countrys market, (3) competitive environment of the region, and (4) markets cultural, administrative, geographic, and economic distance from other markets served by the particular company (de Kluyver, 2012). Based on these criteria, it is possible to suggest several markets in which Pret A Manger could succeed in expanding.

Recommendations for the Expansion Strategy

Dwelling upon the provisions from de Kluyver (2012) observed in the previous subsections, it is possible to state that Pret A Manger should consider its expansion to European markets. In particular, it is possible to mention such countries as Italy, Switzerland, Belgium, and other members of the European Union. Generally speaking, the primary rationale behind this decision is that these markets could be considered as being in the same economic and social context as the UK and having similar trends and customer behaviors in the fast food industry.

It is possible to mention that the most important aspect of the Pret a manger brand is that the company offers healthy fast food without chemical additions, and it is also concerned with questions of environmental sustainability (Food chain Pret A Manger targets more expansion as profits rise, 2017). This aspect allows targeting such customer groups as global citizens and global dreamers (de Kluyver, 2012). As it was previously mentioned, Pret A Manger has a considerable competitive advantage as the company offers services, which are not fulfilled by other companies in the selected market.

Regarding the regions institutional contexts (including political, social, and economic peculiarities of the targeted countries), it should be stated that European countries would be easier to enter since they are significantly similar in terms of product, labor, and capital markets (de Kluyver, 2012). It is also apparent enough that the aspect of cultural, administrative, geographic, and economic distance mentioned by de Kluyver (2012) is an advantage for Pret A Manger when expanding to European markets since these countries have relatively short distance with the UK.

The Selection of the Mode of Entry

Foreign Entry Mode Options

According to Carpenter and Dunung (2012), there are five principal modes of entry to foreign markets. These options include the following: exporting, licensing and franchising, partnering and strategic alliance, acquisition, and greenfield venture, which is a new wholly owned subsidiary (Carpenter & Dunung, 2012). de Kluyver (2012) proposes a similar classification of entry modes. Each of the mentioned modes has different characteristics, but it could be observe that they differ primarily by the level of the companys control over the business process in the foreign market, with exporting being the method with the lowest level of control and greenfield venture being the most controlled approach to expansion (Carpenter & Dunung, 2012). Additionally, costs and risks vary from method to method in a relatively similar manner as the level of control.

The Rationale for the Selection of the Entry Mode

It should be stated that the most suitable entry modes for Pret A Manger are acquisition and greenfield venture. Partnering with McDonalds in 2002 was not beneficial for the company. Also, such options as exporting and franchising offer a considerably low level of control over the operations, which is disadvantageous for Pret A Manger because the company is known for its excellent quality and service. Therefore, it is apparent that the company needs a full control over the whole complex of operations related to the restaurants functioning.

The primary disadvantage of this approach is the high cost of implementation. However, as it is mentioned by de Kluyver (2012), companies that employ acquisition or greenfield venture modes have the highest potential of succeeding and growing in the foreign market. Another issue which is common for the chosen option is the higher level of risk due to the integration into the unknown environment. However, this is not the case with the scenario in which Pret A Manger enters European markets because it would be significantly easier to adapt to the market conditions of these countries than, for example, in China or Japan. Therefore, the only substantial disadvantage is the cost of implementation, which should be eliminated by the companys projected profits from a wholly owned business in foreign markets.

Conclusion

In conclusion, it is essential to observe that Pret A Manger is the company with great potential for expansion in the international market. The company is successful due to the excellence of provided services, and it also has a competitive advantage. This paper exemplifies the reasons for expanding in European markets since they are the most appropriate and suitable for Pret A Manger to enter.

References

Carpenter, M., & Dunung, S. (2012). International expansion entry modes. Web.

de Kluyver, C. (2012). Target markets and modes of entry. Web.

Food chain Pret A Manger targets more expansion as profits rise. (2017). Web.

Junqian, X. (2014). Pret a Manger prepares for sandwich battle. Web.

Introduction

According to Anderson (2010, p. 28), internationalization is one of the most important and pervasive forces that reshape the competitiveness of business environments. It has largely shifted the basis of competitiveness in companies and makes it necessary to understand global regions as one vast market (Forsgren, 1999). Internalization has made it possible for companies to expand the scope of their activities and has also brought more competition to the home countries of the companies (Forsgren, 1999). According to Welch (2000, p 555), internationalization can be defined as the process of increasing involvement in international markets. The author continues to explain that this process cannot be considered as a separate feature of a companys strategy, but should always be considered as a part of its overall competitive strategy.

Competitive strategy and intelligence are very vital tools in this process. Competitive strategy can be defined as a set of actions put in place by a company to reach the companys objectives, which should be in-line with the companys vision and mission (Ball, 2004, p. 18). Competitive intelligence on the other hand refers to the action of defining, gathering, analyzing and distributing intelligence about customers, products, competitors and every other aspect needed to support managers, executives and the whole management team in making strategic decisions (Rouach, 2002, p. 555). The key thing to note in both these aspects is the fact that they are ethical and legal business practices. Their focus is on the external business environment and there is a process involved to gather information, convert it into knowledge and then utilize it in decision making. Competitive intelligence and a business marketing mix work together to identify opportunities and risks in foreign markets (Zanasi, 2001).

In the Uppsala model, which is what this paper will focus on, a basic assumption is that lack of knowledge about foreign markets is a major obstacle to international operations but then such knowledge can be easily acquired (Campbell and George, 2004, p. 99). Due to the nature of market knowledge, the main source of knowledge must be the firms own operations (Drolshammer and Michael, 2001). Acquisition of knowledge happens more easily and more effectively by participation in the market rather than mere collection and analysis of knowledge. By participating in the market, an organization is not only able to collect the information more easily but is also able to connect and relate well with the information.

Internationalization theories

The Uppsala model

In this model, a basic assumption is that lack of knowledge about foreign markets is a major obstacle to international operations but then such knowledge can be easily acquired (Ball, 2004, p. 18). Due to the nature of market knowledge, the main source of knowledge must be the firms own operations (Dunning, 2007). Acquisition of knowledge happens more easily and more effectively by participation in the market rather than mere collection and analysis of knowledge. By participating in the market, an organization is not only able to collect the information more easily but is also able to connect and relate well with the information.

The second assumption is that decisions and implementations that concern foreign investments can only be made incrementally if there is market uncertainty (Dicken, 1999, p. 196). Incrementalism in this context is looked at as a process by which management is learned by doing. The more an organization participates in the foreign market, the more they learn about it, the lower their risk will be and the bigger the foreign investments are available to them. A firm must learn to postpone each successive step in an international market until the perceived risk associated with that market is at a level lower than the organization can tolerate (Dicken, 1999, p. 196).

The third assumption is that knowledge is hard to transfer to other individuals and contexts since it is highly dependent on individuals (Margardt, 2007, p. 117). Experience cannot be transferred and therefore every organization needs to undergo its own experiences in the market. Only those working in a market will be able to identify its opportunities and problems, and cannot be able to transfer those experiences fully to others. For those people who have been on the front-line, it becomes easier for them to adapt and to them, and present challenges become solutions to future problems.

The Uppsala model influences an organizations marketing mix in different ways. They include market commitment, market knowledge, commitment decisions and current activities. At certain points in time, market knowledge and market commitment are assumed to affect the commitment decisions and also affect how certain activities are carried out in the subsequent periods, which in turn influence market knowledge and market commitment at later stages (Nigh, 2000). Assuming the theory of incrementalism, and taking these four concepts into consideration, this model predicts that the step of internationalization would have to start with initiation and continuation of investments in a few neighboring countries, rather than huge investments in various countries at the same time (Anderson, 2010, p. 28).

The main emphasis of this model is the experimental type of learning through ongoing activities in the organization (Anderson, 2010, p. 28). However, learning does not only involve doing but is also considerate of several other dimensions in the company that has consequences on the firms behaviors. These include business relations which can help an organization acquire information from other companies without necessarily going through the same process. The other type of learning is imitative learning where organizations learn by observation of other organizations, doing this so closely and following in their steps but doing so diligently to ensure they duplicate all the steps followed by those they are observing. Other forms of learning include hiring people with the type of information an organization is looking for and including them in the concept of organizational learning. Finally, an organization can learn through conducting specific and well focused research rather than having to go through the experience themselves.

Requirements for successful international marketing

For the process of international marketing to be successful and effective, it is important for the management to support the internationalization process and have a clear and shared vision for the process. When this support is not available, the process seizes to be viewed as important and priority is no longer placed on it. It is important for the management to be open and appreciate new tools of decision-making. It is also paramount that the business embraces international marketing as

necessary support for the business landscape. Every organization should always maintain a healthy level of pressure for change and growth to allow implementation of the process.

The management should then find or appoint the most suitable person to oversee and drive the process. Apart from having extensive and professional knowledge on the concept of international marketing and globalization, the person must be well conversant with the business and have healthy relations with the rest of the employees. The persons access and relationship with the senior management and especially the chief executive is equally important as his skills and character. The issue in choosing a driver for the process is the amount of support the top management is ready to accord to them.

Timing and readiness are important elements when doing international marketing in any industry. Since most organizations are normally overloaded with other core operations in process, timing is an important consideration in adding another operation to the already existing load. The plan and timing must make it easy to integrate the process with other initiatives in the company. It should also be easy to integrate it to the organizations culture and decision-making which automatically becomes bigger and more challenging.

The requirements needed to fulfill the entire process are more important than where the process is positioned. A companys international marketing mix should be positioned in a way that it is on the lookout for significant changes and opportunities that may impact the competitive future and market size of the organization (Nordstrom, 2003, p. 15). According to Peng (2009, p. 200) the process is more effective when positioned as high up in the organization as possible where it will have direct and unfiltered access to the Chief Executive. For such access to be achieved, it is therefore only reasonable that the process is hosted by the organizations strategy function.

Soon after the process is conceived, the second wave includes adding operational value. This is for the purpose of delivering products and proving that the process can add value in the shortest time possible (Shenkar and Yadon, 2008). The products and results will then sell it to the management and prove their value to anyone who doubted the process. The eventual success of the process is determined by the accuracy with which the key global needs are identified and analyzed (Marinov, 2000). This basically amounts up to laying the foundation of process. Key intelligent needs are supposed to focus on issues held critical to the success of the company. These needs will often change with the companys strategy and therefore should be updated regularly if they have to remain critical and actual.

Core elements of the international marketing cycle include planning, collecting, analyzing and disseminating information. In most organizations, the globalization cycle will guide the process. Internal and external networks then serve as suppliers for information to the company. Continuous training and sensitizing programs on employees are important to ensure that the process receives the much needed cultural support. It is only if the employees understand the concept that they will be willing to share contacts, skills and knowledge. Employees in different established regions are also needed to serve as the sensors of the organization and feed the process with new information when it is mature. A relationship between the two will then start having an impact on the organizations strategy. Based on identified globalized needs, a structured process should be in place to develop networks.

Factors that encourage internationalization

Different scholars and theories offer different interpretations of why and how internationalization occurs. One thing that these explanations have in common is that they agree on their role as an engine for many multi-national organizations. Internationalization is a product of more rational global markets, culture, and regulations. As more countries open up to global trade, the world is today one vast market that allows suppliers, consumers, and manufacturers from every part of the world to interact.

Among the factors identified, technology has been the most influential. Technological innovations have provided an infrastructure that allows global communication, transportation, payment and data processing systems. Sending and receiving feedback about different markets is easier, faster, more affordable, and most importantly, reliable. Innovations such as jet engines, the internet and paperless payment methods allow an organization to trade in any part of the world today.

Another significant factor behind international marketing is regulation. Regulations play a major role in enabling different roles of an organization. According to Hill (2009, p. 189), Inter-territorial links would not be possible in the absence of various facilitating rules, procedures, norms, and institutions. Every enabling element of internationalization is heavily dependent on the liberalization of rules and regulations governing it. For example, trade has been largely promoted by removal or state-imposed restrictions such as tariffs. Trade and tax laws in many regions today offer an environment that encourages global trade interactions and investments.

Other impulses to internationalization include rationalized modes of knowledge. Faith in science, technology and other innovations has been instrumental in overcoming traditional barriers to solve cultural, socio-economic, and technical problems. Business thinking is today centered around issues that spur global developments.

As some scholars argue, capitalism has played a significant role in developing internationalization. Karl Marx, a famous philosopher, was once quoted as saying capitalism by its nature drives beyond every spatial barrier to conquer the whole earth for its market (Jones et al., 2009, p. 455). In capitalism, global markets are viewed as prospects of increased revenues through more diversified markets and sources of income. In addition, businesses benefit from economies of scale through larger production volumes.

Factors to consider before doing international marketing

Size

There have been different driving forces behind internationalization. Size is among the factors that can be used to explain the likelihood that an organization will diversify abroad. Size affects internationalization in various ways. A firms size determines income and expenditure changes that will follow internationalization. Size affects a business ability to benefit from economies of scale and market dominance after internationalization.

Leverage

A business accounting choices are largely dependent on its leverage. Leverage in many organizations is considered a risk factor. As a result, leverage is directly proportional to the level of risk and inversely proportional to a business likelihood to go international. Businesses with high leverage are, therefore, not likely to pursue internationalization.

Penetration

As competition levels grow in a market, a business may be forced to seek overseas growth opportunities. Many developed nations are currently experiencing saturation in a majority of their industries. This has forced much business to diversify in less saturated markets abroad. As it becomes harder to penetrate domestic markets, so do more organizations go international. According to Larimo and Tiia (2009, p. 117), penetration is measured by a firms annual domestic sales over annual industry domestic sales, reasonably describing the extent to which a firm has penetrated the domestic market.

Annual domestic earnings growth

According to Margaret (2007, p. 117) In the arena of strategic management, growth and profitability of international firms has been extensively documented. Looking at organizations that have sought internationalization as an option, there is a clear relationship between their diversification and growth in their production efficiency. By diversifying their markets, businesses are able to stabilize their profits. Annual domestic earnings are a significant consideration when a business is contemplating internationalization. When a business is not experiencing any growth in their domestic market, it is more likely to seek alternative markets overseas. The opposite is also true, especially because internationalization increases risks.

Case study: Anheuser-Busch InBeV

The Anheuser-Busch has its origin from as far back as 1852 as a Bavarian brewery. The founder acquired the Bavarian brewery in 1860 and renamed it E.Anheuser & Co. The company later became Anheuser-Busch. The company had a bold and keen vision right from its inception and this has kept it going to date. It has a legacy of marketing savvy and a passionate commitment to quality which remains one if its firm legacy to date (Anheuser-Busch InBev, 2010, p.2). Today, the company has two of the bestselling beers in the world, the Budweiser and the Bud Light.

The companys internationalization process started more than two decades away, as early as 1981 when the company started expanding to other markets and purchasing companies from other industries like the BARI and Busch Industrial Products. In 1989, the company purchased SeaWorld and in 1993, the company invested in Corona beer in Group Modelo in Mexico. In 1995, the company purchased the majority interest in the Chinese brewer, the Budweiser Wuhan International Brewing Company.

Interbrew on the other hand, was founded as early as the 14th century in Belgium. In 1717, it was renamed as Brasseries Artois and in 1987, in a bid to consolidate its presence in the market, the company merged with Belgium largest brewers then, the Brasseries Piedboeuf (Anheuser-Busch InBev, 2010, p.3). This is how Interbrew was created. By 2004, the companys operations were dispersed across five regions including America, Western Europe, Eastern and Central Europe and the Asian Pacific. AmBev on the other hand was founded as early as 1885 and its presence started taking shape in 1999 when two leading Brazilian brewers, the Comphania Antarctica and the Companhia Cervejaria Brahma merged to create AmBev (ICMR Center for Management Research, 2004). By 2004, the company had more than 65% share in the Brazilian beer market and more markets like Uruguay, Peru and different other regions.

In 2004, two of the worlds largest world breweries the Interbrew and AmBev announced a merge, creating the worlds largest brewing company in terms of volume and resulting in command for 14% market share in the global beer market (Anheuser-Busch InBev, 2010). The resulting company came to be known as InBev. Interbrew was then the third largest brewery company in the world and the Brazilian based AmBev was at the time the fifth largest brewery company in the world. Interbrew at the time had a presence in more than140 countries, with most dominance in Europe and North America, while AmBeV had a two-third share in the Brazilian market and had a dominating presence in the Latin American region (Anheuser-Busch InBev, 2010, p.3). This meant that the merger would give the newly formed company a presence in Latin America, Europe, North America giving it one of the largest beer markets in the world. In 2008, Anheuser-Busch and InBeV combined to form Anheuser-Busch InBeV. This case study illustrates how mergers can be used as an effective strategy when a business wants to market itself internationally.

Conclusion

Internationalization has largely shifted the basis of competitiveness in companies and has made it necessary to understand global regions as one vast market (Forsgren, 1999, p. 188). It has made it possible for companies to expand the scope of their activities and has also brought more competition to the home countries of the companies (Forsgren, 1999). According to Welch (2000, p 555), internationalization can be defined as the process of increasing involvement in international markets. The author continues to explain that this process cannot be considered as a separate feature of a companys strategy, but should always be considered as a part of its overall competitive strategy.

To understand its influence on a companys marketing mix, it is important to look at factors that encourage and support the process. This paper identified globalization, technology, regulation and liberalization of trade as some of the factors. Technology is considered the most influential because of its role in developing infrastructure that allows global communication, transportation, payment and data processing systems.

Another significant factor identified by the paper is regulation. Regulations play a major role in enabling different roles of an organization. Trade and tax laws in many regions today offer an environment that encourages global trade interactions and investments. Other drivers include rationalized modes of knowledge and capitalism. Factors that a business needs to consider before venturing into international marketing include size, leverage, domestic income and penetration. This paper has used Anheuser-Busch InBev to illustrate how businesses can move from operating in a small domestic market to dominating global markets through international marketing. The businesses use mergers and acquisitions of small players in different markets as an international marketing strategy.

References

Anderson, U. (2010) Managing the Contemporary Multinational: The Role of Headquarters. Edward Elgar, Cheltenham. UK [i.p. 28]

Anheuser-Busch InBev, 2010. Financial report 2009. Web.

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Campbell, D and George, S. (2004). Business Strategy: An Introduction. Butterworth-Heinemann, Oxford. UK [i.p. 99]

Dicken, P. (1999). The Internationalization Process: European Firms in Global Competition. Chapman, London. USA [i.p. 196]

Drolshammer, J. and Michael, P. (2001). The Internationalization of the Business Practice Law. Kluwer Law International, The Hague. Netherlands [i.p. 200]

Dunning, J. (2007). Multinational Enterprises and Emerging Challenges of the 21st Century. Cheltenham: E. Elgar Cop., Cheltenham. UK [i.p. 317]

Forsgren, M. (1999). Managing The Internationalization Process: The Swedish Case. Routledge, New York. USA [i.p. 188]

Hill, C. (2009). International Business: Competing in the Global Marketplace. McGraw-Hill, Boston. USA [i.p. 189]

ICMR Center for Management Research. (2004). The Interbrew-AMBEV Merger Story. ICRM. UK [i.p. 44-50]

Jones M.,et al. (2009). Internationalization, Entrepreneurship and the Smaller Firm: Evidence from Around the World. Edward Elgar, Cheltenham. UK [i.p. 455-476]

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Margardt, D. (2007). A Critical Comparison of Internationalization Theories: Eclectic Paradigm of Dunning. Business Expert Press, New York. USA [i.p 117]

Marinov, M. (2000). Investor Strategy Development and Adaptation: The Case of Interbrew. European Management Journal. Vol. 16, No. 4, pp. 400-410 [i.p. 400]

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Nordstrom, K. (2003). The Internationalization Process of the Firm: Searching for New Patterns and Explanations. Institute of International Business, Stockholm. UK [i.p. 15]

Peng, M. (2009). Global Business. South Western Cengage Learning, Mason, OH. USA [i.p. 200]

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Marketing and trade are complicated and interconnected processes, and their complexity increases in proportion to their scale. Most companies start their activities in the domestic market and expand to other countries, achieving success. For this reason, marketers need to understand the difference between domestic, international, and global marketing, as well as the various concepts and procedures accompanying them to launch their product around the world successfully. Therefore, this paper will examine the need for adaptation and standardization strategies, as well as the appropriateness of the one size fits all approach for global marketing to understand its fundamental principles.

The main differences between domestic, international, and global marketing are the area of activities, diversity of the audience, government interference, and presence of risk factors. The first and second aspects are related to the fact that domestic marketing operates in the territory of one country, while the global one covers many countries with different cultures (Morales, 2018). This fact means that for creating a marketing strategy, specialists must be culturally sensitive to take into account the interests of all audiences. These interests can include cultural values and beliefs for use in advertising, as well as tastes, features of clothing, lifestyle, and national cuisine. A variety of countries also means different laws, according to which a company needs to adapt its strategy (Morales, 2018). For example, sexual images cannot be used for advertising in Muslim countries. In addition, products or symbols can also be prohibited in some countries. For these reasons, the presence of risk factors in global marketing is also higher than in the domestic market.

These features of the global market also make it necessary for companies to use adaption or standardization strategies. Some companies believe that the one size fits all approach is useful for global marketing, but this idea is false. This approach means that one product is suitable for everyone, but Morales (2018) notes that understanding cultural diversity is a crucial factor and gives examples of McDonalds with adjusted menus in different countries. Martin (2016) also notes this aspect but focuses on places of the sale in various countries, such as supermarkets or local markets, and Holley (2019) says that involving famous personalities in advertising also requires cultural sensitivity. These cultural factors, as well as the states economic situation, laws, and geography influence the companys strategies (Akgün, Keskin, & Ayar, 2014). Moreover, the use of these strategies can be mandatory to comply with the laws of the country and discretionary to improve the product sales; however, in both cases, they lead to an increase in corporations profits (Westjohn & Magnusson, 2017; Lee & Griffith, 2019). Consequently, the adaptation of marketing strategies is a key factor for selling the product globally and brand building.

In conclusion, global marketing is a complex process that must take into account various cultural, legal, and socio-economic aspects to work successfully. The One size fits all approach is ineffective for most products, so specialists must adopt marketing strategies that work well in the domestic market to achieve the same success in other countries. Sometimes such adaptations are necessary to enter the foreign market, but more often, they are a logical move to attract customers. Therefore, the main feature of global marketing is the need to consider the diversity of the audience and their living conditions in different countries to create the value of the product.

References

Akgün, A. E., Keskin, H., & Ayar, H. (2014). Standardization and adaptation of international marketing mix activities: A case study. Procedia  Social and Behavioral Sciences, 150, 609618. Web.

Holley, J. (2019). Why theres no such thing as a one-size-fits-all brand partnership. Forbes. Web.

Lee, H. S., & Griffith, D. A. (2019). The balancing of country-based interaction orientation and marketing strategy implementation adaptation/standardization for profit growth in multinational corporations. Journal of International Marketing, 27(2), 2237.

Martin, A. (2016). No one size fits all: developing a global brand marketing strategy. The Guardian. Web.

Morales, G. (2018). Global marketing management. London, UK: ED-Tech Press.

Westjohn, S. A., & Magnusson, P. (2017). Export performance: A focus on discretionary adaptation. Journal of International Marketing, 25(4), 7088.

Introduction

This paper focuses on Spotify as a music streaming company. The aim of the report is to recommend South Korea as an ideal international market for Spotify. The analysis below is based on macroeconomic factors. In addition, the strengths and weaknesses of the music streaming industry in South Korea are necessary so that Spotify can make the right decisions when venturing into the new market. Modes of entry have been outlined so that Spotify adopts an effective strategy when entering South Korea.

Rationale for selection: South Korea

Hamilton & Kim (2007) write that politically South Korea is stable after instituting democratic governance. A significant political challenge arises because of possible attacks by North Korea. The government ensures that South Koreas economy is opened to all investors thereby leading to the development of the largest technology market in the world. South Korea has over 50 million citizens. Seoul, as the largest city, has over 10 million people.

Furthermore, South Korea is regarded as the fourth-largest economy in Asia. South Korea is also part of the developed nations that enjoy high standards of living. Democracy as a system of governance motivates investors to continue investing in the countrys economy. As a result, South Korea rarely experiences political conflicts. Spotify is likely to benefit from political stability as well as from democratic principles of government. Lack of political unrest and violence means that distribution channels assisting the Spotify e-commerce model would not be interrupted therefore South Koreans receive goods at the required time.

According to Park (2011), significant growth to $1.70 trillion is expected by the year 2018. Sectors that are critical to the economy include the service sector, real estate, transport, communication, and financial services. The country also has the most well-defined monetary policies that encourage investors. In 1999, the GDP of South Korea grew by 9.3% because of the economic and financial reforms introduced by the government.

Investors have great opportunities in sectors such as the financial sector, logistics, chemical manufacturing, distribution, shipbuilding, and telecommunications. High levels of economic growth can be attributed to the governments commitment to restructure the economy. In particular, all banks are controlled by the national government. Furthermore, the government ensures that capital and foreign exchange markets are controlled so that interest rates are affordable to investors. In the process of controlling the economy, South Korea has witnessed stability in economic growth, as well as the introduction of economic reforms that attract investments.

The government also ensures that South Korea does not overly rely on exports. It encourages domestic businesses to make use of domestic markets through increased investments in the countys infrastructure such as roads, rail, seaport, and airports. Restriction of imports by the government is part of measures introduced to motivate investments within the country.

High levels of economic growth would enable Spotify to roll out e-commerce businesses. Citizens who have a high level of income are likely to purchase products. Furthermore, it is highly possible that Spotify would make substantial profits since the society is willing to consume products. Low-interest rates, as well as exchange rates, are lucrative to Spotify and investment would not become costly. Return on Investment (ROI) in South Koreas economy is considered to be probable for investors.

Chang (2012) asserts that South Koreans have a high standard of living. Wage rates are higher than those of neighboring countries. In addition, education levels ensure that investors can recruit the best-skilled employees. High wages imply that South Korea continues to attract employees from the international labor market who are ready to work in any sector. However, an aging population incurs that population growth is likely to be affected.

High literacy levels mean that the education system supplies highly qualified employees to manage businesses and set up companies in South Korea. Further, the highest wages in the region entail that South Korea can attract highly skilled and talented employees from all parts of the world. High standards of living also motivate consumers to engage in the consumption of products produced by various industries. The high level of disposable income makes it unlikely for businesses to miss out on high sales volumes. As a result, continuous production guarantees the survival of companies.

Technologically, South Korea is regarded as the 12th largest economy. Electrical and electronic products are considered to be crucial in the technological capability of South Korea. Also, South Korea engages in the largest production of computer chips and mobile phones. In terms of Internet connectivity, South Korea has the highest rates of Internet subscriptions. Mobile devices uptake amounts to 68% and is one of the highest in the world (Hamilton & Kim, 2007).

The government also continues to develop research and design centers in charge of the development of new technologies and inventions. The South Korea Telecom has innovated the highest Internet speeds of up to 300mbps and 450 Mbps for commercial usage (Sang-Bae, 2011). Satellite digital broadcast services are also part of technological advancements making South Korea an attractive destination for investments. Spotify as a champion in e-commerce should benefit from high Internet speeds as well as from high mobile phone penetration. Music streaming services are likely to thrive in a country that has the best telecommunication services in terms of Internet connectivity.

Key strategic issues of South Koreas music streaming Industry

Strengths

The music streaming industry in South Korea is worth over $172.4 million considering December 2015. Revenues are also expected to grow at an annual rate of 11%. By the end of 2020, music streaming in South Korea is expected to reach over $262.8 million. Further, South Korea has over 10.5 million music streaming customers. The number of customers using music streaming services is expected to increase significantly by 2020 (Statistica, 2016).

The average revenue per user as a key strategic issue in South Korea is also attractive for Spotify. In particular, the average revenue per user is about $22.85 reflecting a huge potential of achieving a high level of sales in South Korea. High Internet penetration rates in South Korea are necessary for the music streaming industry. Over 80% of the population has access to high Internet download rates (Iqbal, 2012).

South Koreas music streaming industry is also based on increased value for recorded music. In late 2011, the recorded music industry brought total profits of $195.8 million (Statistica 2016). However, challenges in relation to the collapse of social networking platforms such as Cyworld has affected the value of recorded music. Digital music revenues are likely to increase thereby making Spotify competitive and profitable on the market. Furthermore, South Korea is one of the countries with the highest sales of recorded music. At the end of 2012, South Korea was the 11th largest market in terms of recorded music. High demand for recorded music and music streaming services is likely to increase the level of consumption among South Korean citizens.

Another key strategic advantage relates to an improved legal environment that encourages local artists to produce more music. Since South Korean enjoy local artists, it is necessary to consider South Korean music as part of products on the Spotify platform. Furthermore, South Koreas attractiveness in terms of music streaming is aided by improved copyright laws. South Korean government ensures that copyright laws are established and complied with therefore online music streaming services do not stream any illegal content without consent of local artists. Music streaming service providers are required to register with the government to adhere to filtering measures (Marshall, 2015).

South Korea also has over 2.8 million music streaming customers between ages 25 and 34. The popularity of music streaming services among youth would enable Spotify to attract customers willing to purchase music. In addition, middle-income earners contribute to over US$3.9 million of revenues (Statistica, 2016). High levels of living standards mean that the society can afford music streaming services. High-income earners also contribute to over $2.5 million in profits in the industry of music streaming. It should be noted that such services are not preserved for the middle and high-class members of the society. Even people with a low income contribute above US$1.2 million of profits.

Also, the environment offers a good strategic option for Spotify. The company will need to focus on customers evolving needs in the music industry. Partnering with local companies will ensure customer service issues are addressed promptly. Further, local partnerships will foster Spotifys ability to cater to the needs of future customers.

Weaknesses

South Korean culture could prove to be a challenge for Spotify. Music streaming that focuses on musicians from western cultures is likely to be rejected by customers. South Koreans have a high preference for local artists (Chang, 2012). As a result, any music streaming service provider should consider the South Korean culture when planning the content of future streaming services. Unless local artists are preferred, an international music streaming company is likely to face certain difficulties. Language also makes a huge difference. The music streaming content should be presented in the Korean language in order to maintain a high level of understanding among consumers.

High levels of competition are another weakness in South Korea. Other competitors offering music streaming services include Apple Music and Deezer. Spotify would have to overcome a high level of rivalry in this market trying to attract customers towards its services. Apple Music and Deezer compete for unlimited access to music content libraries without a need for advertising. South Korea has a high level of music piracy, and music streaming is negatively affected by it. So far, any attempts by the government to eliminate or reduce this law violation remain unsuccessful. As a result, music streaming service providers are likely to experience an infringement of copyrights which would inevitably lead to reducing sales (Marshall 2015).

Spotifys Internal Environment

The ability of Spotify to provide protected digital rights for music content is a key internal strength. In particular, protected content ensures that Spotify develops relationships with music performers without the slightest trace of a conflict (Marshall, 2015). As a result, Spotify is capable to serve a large market without compromising of ethical issues of digital piracy. Secondly, music streaming capability of Spotify is a key strength. Spotify enables consumers to listen to streamed music freely at 160kbit/s while premium subscribers could enjoy a considerable 320kbit/s. Premium subscribers receive high-quality streaming without advertisements. High-quality audio and video enable consumers to listen to music offline.

The research and development sector is also a key strength for Spotify. The company ensures that innovative features that enable consumers to enjoy its services are developed on a regular basis (Marshall, 2015). The ability to use highly skilled and creative employees is likely to make Spotify a competitor in the music streaming industry in the long-term perspective. The capacity to innovate is of essence in this industry, given that the future survival of the company is not affected.

Spotify services the US, Europe, and Oceania. The ability to serve several markets makes Spotify a perfect company that can roll out compelling music streaming services in South Korea. Current infrastructure and capabilities support Spotify to initiate new investments (Marshall, 2015). Furthermore, the ability to target smartphone users makes Spotify an ideal investor. Music streaming based on mobile applications is likely to be successful based on the high number of South Koreans with Android-powered cell phones. Spotify also has high levels of revenues and profits due to the formidable audience of millions of users. As a result, investments cannot be affected because there is a lack of funds.

Modes of Entry

The first mode of entry is to consider working with local artists in South Korea. Local artists as a reflection of the wider society make Spotify being viewed positively in South Korean society (Hagen, 2015). The need to ensure that stream music lovers in South Korea can identify themselves with local artists entails the necessity of supporting the aforementioned artists. Culture as a key component of music should be given a top priority.

An entry into a new market cannot bring desired outcomes when local culture, language, and music are not considered. Partnerships and agreements with local artists are necessary so that Spotify would support the South Korean music industry in order to promote talented performers. Without support for local talents and music, South Korean music streaming cannot achieve the desired outcome (Coe & Lee, 2009).

Mergers and acquisitions can also assist Spotify to enter the South Korean market (Marshall 2015). In particular, Spotify should consider merger or acquisition of a local music streaming company in South Korea. The need for mergers is based on the assumption that Spotify can benefit from already established local music streaming companies in South Korea. Merger with such companies reduces the costs of operations. In addition, mergers, in this case, ensure that the probability of success is high. Furthermore, mergers assist in acquiring knowledge and network assets of a specific market or industry. Spotify is likely to overcome legal and governmental constraints when mergers and acquisition of stakes in an existing music streaming company is considered.

Localization of Spotify: Spotify can also enter the South Korean market by developing another application that is not identified with the international market. A music streaming application for smartphone users should be designed specifically for South Koreans to make them feel appreciated. The new application should be based on the Korean language to make sure English is not a fundamental challenge in understanding service delivery. In addition, when developing a mobile application that focuses on the South Korean market, the company must ensure that the society has a mobile application that reflects their identity and ideals. Spotify as an international mobile application may not be met positively in South Korea because of cultural differences with western countries.

Spotify should also take into account a partnership with music television stations in South Korea. Music televisions provide an effective platform for Spotify to target consumers of music in South Korea and market its services and products. Furthermore, music television companies in South Korea would enable Spotify to spot and nurture local talented artists capable of sustaining the business in the long-term (Morris & Powers, 2015).

Recommendations

The most suitable market entry method involves mergers and acquisitions of a local music streaming company in South Korea. A locally established music streaming company in South Korea should be purchased. This merger with local music streaming companies will reduce the costs of operations. In addition, mergers increase chances to succeed on the market. Furthermore, they are of great help when getting accustomed to local culture and consumer preferences. Spotify would successfully endure any difficulties with government and business law if an appropriate company for merger is targeted.

Spotify should conduct in-depth market research of subscribers of music streaming services in South Korea. It ensures that Spotify provides services that meet the need of the customers. Spotify has to provide a guarantee that it will promote local artists as well as local content. In terms of promotion, Spotify should market music streaming services as the only company in South Korea that offers the possibility of downloading local songs.

Spotify should also engage in the constant development of music streaming services and its features. Constant innovation and creativity would create a competitive advantage in a market full of rivals. Competition cannot be achieved when new services are not innovated and consumers needs and desires are disregarded.

Conclusion

South Korea music streaming industry is worth over US$172 million. Investing in the music streaming industry of South Korea would enable Spotify to benefit from high levels of music streaming consumption. In terms of economic factors, a high level of economic growth that entails a high standard living enables South Koreans to engage in the purchase of music without any financial challenges. A mean High Internet speed is high and it is extremely necessary for music streaming applications are not affected by slow Internet connection. Spotify needs to invest in more resources and constantly innovate to stay ahead of the game. Innovation will assist the company to defend its market share and deliver quality services to its customers.

Reference List

Chang, K.S., 2012. Economic development, democracy and citizenship politics in South Korea: the predicament of developmental citizenship. Citizenship Studies,16(1), pp.2947. Web.

Coe, N.M. & Lee, Y.-S., 2009. The Strategic Localization of Transnational Retailers: The Case of Samsung-Tesco in South Korea. Economic Geography, 82(1), pp.6188. Hagen, A.N., 2015. The Playlist Experience: Personal Playlists in Music Streaming Services. Popular Music and Society, 38(5), pp.625645. Web.

Hamilton, N. & Kim, E.M., 2007. Economic and political liberalisation in South Korea and Mexico. Third World Quarterly, 14(1), pp.109136. Web.

Iqbal, B.A., 2012. E-Commerce in South Asia. Transnational Corporations Review, 4(4), pp.104118. Web.

Marshall, L., 2015. Lets keep music special. FSpotify: on-demand streaming and the controversy over artist royalties. Creative Industries Journal, 8(2), pp.177 189. Web.

Morris, J.W. & Powers, D., 2015. Control, curation and musical experience in streaming music services. Creative Industries Journal, 8(2), pp.106122. Web.

Park, J.-H., 2011. The Economy and Elections in Korea: an Analysis of the Political Business Cycle. International Review of Public Administration, 16(2), pp.117 142. Web.

Sang-Bae, K., 2001. Koreas E-commerce: Present and Future. Asia-Pacific Review, 8( 1), pp.7585. Web.

Statistica 2016, Music Streaming in South Korea.

Appendix: Macroeconomic factors of South Africa, Russia, and South Korea

South Africa

South Africas macroeconomic environment is characterized by a stable government headed by the African National Congress. As a result, the stable political environment had led to the implementation of policies that encouraged social integration and employment generation. Despite political stability, South Africa still experiences high levels of political unrest. Trade unions have held demonstrations due to the governments inability to pay appropriate wages to employees. Violent protests and demonstrations have also been witnessed in gold mines. Pressure from trade unions as well as political unrest are key concerns for investors. Furthermore, consumer confidence has also been on the decline in terms of the ability of the government to guarantee a stable political environment.

Economically, South Africa has introduced a 30% corporate tax on profits generated by organizations. In terms of interest rates, the Reserve Bank ensures that interest rates are controlled so that the private sector is not disadvantaged. Exchange rates and trading are based on trade liberalization policies. As a result, total exports exceed $95 billion. Since 2009, GDP level has been on the rise in South Africa. The service sector dominates the economy thereby contributing over 60% of GDP. Increased economic growth is an ideal environment for other investors to set up a company.

Social and cultural factors in South Africa relate to high levels of unemployment. As a result, a low amount of skilled workers may negatively affect investors looking for qualified employees. Furthermore, South Africa is affected by high rates of crime. Crime is a safety threat to people as well as capital punishment. In terms of technologies, South Africa has well developed infrastructures such as rail, airports, and roads, all modern and properly functioning. Upgrade of infrastructure was necessitated by the construction of stadiums to host the 2010 World Cup. Electricity, which is crucial to economic growth, is still of a poor quality and distribution in South Africa. The government has made plans to produce electricity from nuclear power.

Russia

Governmental control of businesses characterizes the political environment in Russia. Lack of democracy and unstable political environment affects investors. In addition, corporations do not always follow regulations set by the government. Furthermore, political parties have control over the legislature. Russia also has the highest levels of corruption as well as challenges in freedom of speech. Economically, Russia is affected by economic sanctions imposed on the country by the international community. All industries have demonstrated a downward trend in economic activity. In 2012, Russias economic growth was at 2% of GDP. Inflation is also on the rise as well as high-interest rates.

Socially, Russias education supplies skilled labor to investors. Pressure from Western countries continues to pose a threat to the countrys traditional cultures. Furthermore, Russians perceive foreign brands to be inferior to home-made brands. Technologically, poor intellectual property legislation continues to affect Russia. The country also experiences a low level of technological advancement. Industries such as weaponry and telecommunications, as well as manufacturing of appliances, are highly developed.

South Korea

Politics

1. Stable democratic government.
2. The economy is opened to all investors thereby leading to the development of the largest technology market in the world.
3. Over 50 million citizens.
4. Fourth largest economy in Asia.
5. A developed nation.

Economy

1. Significant growth to $1.70 trillion is expected by the year 2018.
2. In 1999, the GDP of South Korea grew by 9.3% because of economic and financial reforms introduced by the government.

Social factors

1. South Koreans live a high standard living.
2. High literacy levels mean that the education system supplies highly qualified employees to manage businesses.
3. High wages.

Technological factors

1. Production of Electrical and Electronic products.
2. Production of computer chips and mobile phones.
3. Mobile penetration is at 68% rate and one of the best in the world.
4. Highest Internet speeds of up to 300mbps and 450 Mbps for commercial usage.

Hydraloop H600 water recycler is a water recycling system created by Hydraloop Systems and produced by Technologies Added factory.

Hydraloop originated from Leeuwarden, the Netherlands. The price of the recycler starts from ¬3300 ($4026), excluding the shipping, preparatory work, installation, and value-added tax (Hydraloop, n.d.). The product addresses the problem of water scarcity and sewage emission. The world is facing a water crisis due to climate change and unequal distribution of resources. Only 3% of the total amount of water on Earth is not saline and can be purified for human usage (Hydraloop, n.d.). The planet is at tremendous risk of drying out, and innovative products should improve the current situation with water availability.

Hydraloop Water Recycler is one of the solutions for solving the worldwide water crisis. It saves up to 85% of the water used in the home by filtering and purifying it from washing machines, baths, and showers. The product also saves energy and decreases carbon footprint (Hydraloop, n.d.). Since 2017, it has been installed in various countries of Europe and Africa; however, in 2020, it was brought to the international market (Hydraloop, n.d.).

The business needs to satisfy specific requirements before introducing itself to the worldwide market. It is not an easy task, so it comes with a lot of preparation and a clear, result-oriented strategy. Lin and Chang (2017) argue that firm expansion into international markets typically depends on a successful international strategy (p. 79). For example, one of the metrics used to evaluate the potential of integrating into an international market is the level of interest. This can include relationships made with clients overseas, new opportunities (such as new investors), etc. On the Hydraloop website, it is said that the water recyclers are not only for personal use but also are available for utilization in corporate buildings such as hotels. Hotel companies almost always operate internationally because they are an essential part of the tourism industry; therefore, there are plenty of opportunities for Hydraloop Systems to deliver their products to different branches of the same hospitality company.

While going into the new market, the company should also thoroughly evaluate their data and analyze whether the company is bringing profit. It should have great analytics and accounting teams for determining whether the company has the potential to move forward. Before entering the worldwide market in 2020, Hydraloop introduced its products across several countries in Europe and Africa in 2017 (Hydraloop, n.d.). The company obtained some leverage, such as reputation and evidence of high net income, which was attractive for the new investors. The companys production partner is located in the Netherlands, so the management needs to think about shipping costs.

Hydraloop products are not easily transportable due to their considerable size (31.5 wide, 74 high); moreover, the products require additional installation, and the process can vary in different regions (Hydraloop, n.d.). Therefore, the company should address these concerns about whether their product will be suitable for all water systems across the globe. That is why the website requires the client to fill out the specific form describing the plant of installment (the construction site, the condition of the pipes, role of the client in the project) before ordering the product. This detailed approach to the client helps the company to analyze where their product can be popular. Moreover, the management will understand how to update their water recycler to expand its availability.

Another essential metric for evaluating the international market potential is to know the competitors. There are plenty of companies producing water recyclers who have already made their name on the worldwide arena, so it is in the interests of Hydraloop to calculate the percentage of their deals made against the competitors. However, Hydraloop has the advantage over other water recycling system companies. Consumer Technology Association is one of the most significant tech events globally, where hundreds of brands and investors meet together. In 2020, Hydraloop came to CES and had won several awards, including Best of Innovations, Best Start-Up, Best Sustainable Product, and even Best of the Best award, outrunning more than 4000 tech companies (Hydraloop, n.d.). Such recognition has opened new prospects for them to establish connections with investors who can move their business internationally.

On a scale from one to five, where one is the lowest rank and five is the highest, the efficiency of the product and its potential in the worldwide market receives a rating of 4.5. Hydraloop is one of the most innovative and revolutionary eco products on the market today, having both individual, municipal and industrial clients across the globe. The products limitations lie in its scarcity because it is produced only in one factory in Europe. Therefore, countries that are located further are less accessible for marketing. However, overall, Hydraloop company does not only beats other competitors in their innovative approach or top quality; they have an ethical mission, which aims to solve the global water crisis. More consumers become concerned about climate change and its effects, which guarantees the rise in Hydraloop stocks.

References

Hydraloop. (n.d.). About Hydraloop. Web.

Lin, H. F., & Chang, K. L. (2017). Key success factors of international market development. Maritime Business Review, 2(2), 79-98. Web.

Abstract

This is a marketing plan for Mercedes Benz. The main objective is to increase the market share of Mercedes Benz in the UAE. Mercedes Benz is a pioneer in the automotive industry with a wide variety of automotives like trucks, vans, passenger cars, etc. Mercedes Benzs industrial operations in UAE are identified and recognized. The customer value of Mercedes Benz in the UAE is analyzed and it proves that the company has an increasing sales trend in the UAE markets. Mercedes Benz BCG matrix shows that the companys luxury cars are in high demand in comparison to the demand for its economical cars. The target customers are analyzed and it proves that the company can expand its niche platform which is already present in the market. Recommendations such as to launch economic pollution-free vehicles and to reduce wasteful activities are of great significance and can help in increasing the sales and in expanding the market presence in UAE.

Industry of operation and product portfolio analysis

Key product lines in terms of market share/profits

Mercedes Benz is a leader in the automotive industry and has a strong industry presence, especially in the UAE markets. The Market share of a product plays a vital part in a product portfolio scheduling model. Mercedes Benz is the first European car manufacturer to introduce cars in the UAE market and the response generated through sales has been of high significance. Mercedes Benz has a fair product portfolio. It has passenger cars, vans, and trucks. Passenger cars have the key market share in the UAE Automotive market. The new White Gold Car launched by Mercedes provides a chic look with all the luxurious comforts. During the year as a whole, Mercedes-Benz delivered 1,012,300 vehicles to customers worldwide (2008: 1,121,700  minus 9.7%) and, in many cases, performed better than the total market in many countries including the U.S., China, Canada, Russia, the UK, South Korea, and Brazil (Reese 2010).

The product life cycle of Mercedes

A life cycle of a product is divided into 4 stages; the introductory, the expansion, the maturity, and the decline stages. The life cycle of Mercedes Benz is amazing because it started in 1886 and has been in great progress to date with the introduction of more innovative products on a timely basis. Mercedes Benz has hybrid sedans, luxury cars, sports vehicles, etc. The luxury cars are in the category of S class, SLK class, E class, C class, CLK class, etc. the E class model fits into the budget of an executive car buyer. The latest launch in UAE has been the new E class model Cabriolet which has an advanced light system and other comforts like detection of drowsiness and the W212 model E-Class cars. So the model E-class is still in the introduction stage. In the growth, the stage is the C-class, S-class, and 600 series. Mercedes has been launching both introductory products as well as are bringing out various variants of the cars according to the products demand. There is no specific life span that Mercedes offers for its products. When a product is in the growth or declining stage then Mercedes prefers to withdraw it from the market.

Mercedes-Benz General Distributors in Abu Dhabi and Al Ain and the flagship company of Al Fahim Group recorded a 40% increase in Mercedes-Benz SLR sales from 2008 to 2009 (EMC records 40% increases in Mercedes-Benz SLR sales in 2009 2010).

Mercedes BCG model

The BCG matrix is a guideline to manage a product portfolio and balances the stages of the product life cycle. In the BCG matrix model, products are usually placed in 4 categories which are stars, question marks, cash cows, and dogs.

Mercedes Benz is a differentiator in the automotive market. It is the normal routine of the market that todays stars become tomorrows cash cows. Question marks of a firm should be converted into stars so that eventually they can turn out to be cash cows. The E models of cars are the biggest cash cows of Mercedes which implies that they are the biggest cash generators for Mercedes. Question marks of Mercedes are the low-priced A class series. The sports model SLK cars are the stars in the UAE markets. Dogs have a low market share as well as a low growth rate and are not profitable for the business.

Mercedes Benz has a low share of the total car market, but a high share of the luxury car market, and that is the reason why Mercedes Benz is broadening its market appeal through the production of the smaller, lower-priced A series and the launch of a competitively priced sports model, the SLK (Needle 2004, p.314).

Overall market analysis

The 8 Ps used in the marketing strategy of a product are:

Customer Value of Mercedes Benz

Customer value simply means the value that the customer gets for his payment of service. Mercedes-Benz is an excellent leader in business with respect to its consumer satisfaction. Mercedes Benz has an excellent customer profile in UAE which is evident through its skyrocketing sales in the previous years and its establishment in the UAE markets. Technology as well as the customary elegance helps to retain the loyal customer. Receiving customer queries and responding to their growing requirements and needs is a great method to increase their loyalty. Customer value helps to make proper decision-making power of the Mercedes Benz. One of the most important objectives of the marketing section is to obtain, maintain, and build up the most precious consumers. A consumer value development strategy helps to maintain this. Mercedes Benz recognizes that its clients are not merely purchasing a car to travel from one place to another and they effectively capture this idea through the course of their advertisement and promotion activities. Marketing strategy in UAE for the Mercedes Benz was formerly centered on protection, lavishness, and precision, etc&because of the emerging rivalry among the luxury car business consumers approach to the branding of Mercedes Benz was altered. Mercedes Benz has turned into a primary prestige vehicle producer to provide a permanent cost substitute parts and appropriate services enveloping its majority of well-known models. Mercedes-Benz is number 1 in J.D. Powers customer retention survey (J.D. powers customer retention survey 2010). Mercedes Benz holds an accepted utilized occasion with the large diversity for the selection of forms from A-Class Mercedes-Benz to S-Class for its consumers.

Customer Analysis

Mercedes Benz has produced passenger cars, vans, and trucks. But in the UAE market Mercedes passenger cars are in high demand. The trucks of Mercedes Benz have still not been able to establish themselves in the UAE market like the passenger cars. The company has targeted passenger cars because it is a product used by all office commuters as well as those who travel daily. UAE needs trucks for all delivery purposes so Mercedes Benz can target the truck users so that it can also establish the truck portfolio. Mercedes Benz can do little restructuring to increase their sales of trucks as well as vans. The buying behavior of customers changes from time to time. The product life cycle shows that Mercedes Benz products still represent both growth as well as maturity stage in the recession phase of the economy. New Mercedes Benz passenger cars models like Saloons, Roadsters offer complete luxury to people and are of high performance and so are in high demand among customers too. Its main target customers are those who want to have luxury cars because the demand for luxury cars is immense in UAE. Since customers want to have all luxuries, Mercedes Benzs passenger cars are really in demand for people who have a taste for luxurious life. The development of markets for trucks as well as vans will improve the market share of Mercedes Benz. So the future target of customers is the truck and van users because Mercedes has already established itself in the passenger car market.

Macro-environmental analysis  PESTEL tool

Mercedes Benz is a member of the DaimlerChrysler group. And it is one of the biggest automobile manufacturers. It is a world class product and has three great brands, its employees are highly qualified. Mercedes Benz is a modern and ground-breaking automobile, and it is famous for its quality, security, and comfort. The peculiarity of the Mercedes Benz is that excellent reputation, safety technology, and the standard automotive features today we can see in a Mercedes Benz car. They make an available wide collection of cars from the best quality small-sized cars to the Mercedes AMG. The majority of the cars are produced from the country of Germany itself and some production facilities are there across the United States, South Africa, France, Brazil, India, Indonesia, and Vietnam. Since 2005 China also have the facility for production. And its headquartered in Stuttgart, Germany. Daimler Chrysler gives more focus towards being environment friendly, produce groundbreaking technology, and excellence. And also they set to achieve high growth as well as profitability.

SWOT Analysis

SWOT has a long history as a tool of strategic and marketing analysis. No one knows who first invented SWOT analysis. It has featured in strategy textbooks since at least 1972 and can now be found in textbooks on marketing and any other business disciplines (SOWT analysis n.d.).

Here is the SWOT analysis of Mercedes Benz:

Marketing strategy

Overall objectives of organization

The Mercedes Benz is a superior product in the automobile industry and they are much centered on the differentiation strategy of the products. The marketing strategy consists of the inbuilt logic of marketing which acts as a catalyst for the success of business in the organization.

Marketing objectives

The marketing objective of Benz includes; to be focused on the differentiation strategy in the market and being in the superior position in terms of price and quality. The marketing objective of the company includes the conducting of integrated marketing campaigns for new models. The integrated communications aim in convincing the customers about the new product concepts and the advantages of using the product.

Our objective for this campaign is to motivate customers to experience for themselves the superior driving culture offered by the new C-Class, says Dr. Olaf Göttgens, Vice President Brand Communications Mercedes-Benz Passenger Cars (Mercedes-Benz launches integrated marketing campaign for the new c-class 2007). The company has certain marketing objectives; they make the owners of the Benz toggle in the vehicle insurance and to create awareness in choosing the vehicle insurance and its advantages.

The financial objectives

The financial objectives play a very important role in the organizations developments, financial services provider of Mercedes-Benz providing flexible, innovative and tailor-made finance and insurance solutions across the associated passenger car and commercial vehicle brands, offers customers a seamless experience; from vehicle purchase, finance, and insurance, to refinancing (Mercedes-Benz financial service n.d.).

Product strategy

The product strategy of Benz is based on the result of the product conception, the product design followed by the product manufacture and the development and finishing products, and the logistics. It includes; producing the best in terms of quality and services to the customers. The false strategic assumptions are to be discarded from the manufacturing of the product as they concentrate much on the quality aspects. The product strategy has the main intention on the customer and the company should be keener on the entire product portfolio and specifications in terms of quality, brands, and designs. The product has to be mainly specified on the customer tastes and preferences and more concentration should be done on the market where the Mercedes belongs to the premium segment in the market they find the market in the urban areas, the analysis should be made in terms of the brand image, the societal acceptance of such a posh car and the appeal that is created among the customers.

Price strategy

The pricing in the industry is depended on economic conditions and the financial market fluctuation in the automobile environment. The Mercedes Benz targets more on the competition price in the market, the Mercedes are the leaders in the automoblile market and they follow the skimming price stratergy, which means the superior pricing leader in the industry. The pricing is done in such a manner that more concentration is aimed on the urban areas and the posh cities where the economic and the living conditions are found to be very high. The higher you price certain products like Mercedes Benz, the more desirable they become. Most customers associate high quality with high prices. Image plays an important role in setting prices (Smith 2006).

Place stratergy

For Mercedes Benz, the place forms an important part in the logistical scenario of the automobile industry and as it marks the availability of the products and the need for customers to choose the product via internet, in order to make the selection of design and see the showrooms that have been set up which forms the main source of physical distribution of the product.

Promotion strategy

The promotion mix is a vital part in the marketing which creates an idea and the perception of the product concept which persuades them to purchase the product. The company uses the internet and the html advertisement strategy to oblige the product, in the web the advertisement of the car makes use of the sides of the browser window to show its features and to create a need for the product in the mind of people. The company also conducts integrated marketing campaigns, intensive promotions and Mercedes fashion week that are also much people driven, which help them to promote the product extensively. The company despite of the new campaigns also uses the traditional banners and menu cards and the advertisement in the print media.

People/productivity

The company has a very good people focus, they highly concentrate on the customer relationship management and they maintain a good bonding between the customers. The company provides very good opportunities for the people through different strategies incorporated by them. Keeping the customer in mind the firm introduced the online ordering system and an option for viewing their desired car and fixing the date of delivery of the vehicle. The people include the upper middle class individuals, business magnets and entrepreneurs who focus on better performance and sustainability than the competitors.

Process strategy

The Mercedes Benz as a business organization is driven by the process concept where the process is much concentrated on superior design and ingenious products that sees improvement in a shot span of time. The company incorporates the e-commerce system in its process which gives an option for the dealers to show the product and explain the features of the same to the customers and the customers are at a liberty in choosing the product and fixing the date of delivery. They provide an efficient service to the customers and enhances the strong bond of customer relationship.

Physical evidence strategy

The Physical Evidence in a broader sense is used to procure, carry off and follow-up as an up-selling tool among the company, customer and the end user. The physical evidence strategy of the Mercedes Benz includes the merchandise which is the assortment of products and categories that consist of a stock up or supply layout, it consists of various brands that compete within the same automobile industry. Planning and executing the promotion of goods and services in an attempt to obtain the greatest value for the seller. Merchandising in a grocery store might include holding promotional events, installing point-of-purchase displays, and issuing cents-off coupons (Merchandising definition-business 1996).

The different handouts are provided by the company which specifies the different features and the specifications of the product.

Recommendations

Continuous service providers for improvement

The service should be provided at each time in the UAE market where they may need the service of insurance company, the repair shops, the maintenance division etc which are very important.

Reducing wasteful activity

The wasteful activities should be considered and monitored properly where the distance between the supplies, floors, stores, and the distance have to be reduced.

Reducing the Inconsistencies

The different mortgages are hired before the purchase of the product after ordering them, this may create time gap between actual quality of work, time and impatience to the customer

Providing economic vehicles

As the Mercedes Benz are the premium segment in the UAE, they are only concentrated in cost segmentation, i.e. the affluent class of the society. They can have a product penetration by making their product available to the middle class and be market flourished.

Reference

EMC records 40% increases in Mercedes-Benz SLR sales in 2009, 2010. Web.

J.D. powers customer retention survey, 2010. [Online] 4Wheelesnews.Com. Web.

Mercedes-Benz financial service, n.d. [Online] Mercedes-Benz Australia/Pacific Pty Ltd. 2010.

Mecedes-Benz launches integrated marketing campaign for the new c-class, 2007. Web.

Mercedes in Dubai: Luxury at its best, 2009. [Online] Emirates Update. Web.

Merchandising definition-business, 1996. [Online] Your Dictionary.Com. Web.

Needle, D., 2004. Business in context: An introductionto business and its environment, 4^th Ed. [Online] Cengage Learning EMEA. Web.

Reese, P., 2010. Mercedes- Benz increases GCC market share. [Online] Drive Arabia.Com. Web.

Smith, A., 2006. 8 pricing tips for advertised products art or science or both? from a South African perspective. Web.

SOWT analysis, n.d. [Online]. 2010. Web.

Executive Summary

The suggested paper is a marketing plan designed for SPAR International, Oman. There is the current situational analysis of the company and the conditions under which it functions. This section includes SWOT and PESTEL analysis to improve the understanding of all factors that might impact SPAR and its further development. Segmentation of the market and customers behaviors are also analyzed. The paper outlines relevant goals for the development of the brand along with the marketing mix strategic recommendations. Finally, evaluation and control tools are offered.

Introduction

SPAR International was created about 80 years ago and is now the worlds biggest food retailer that promotes its concept of fresh food. It has about 12,000 stores in 40 states across the globe (SPAR n.d). There are multiple international partners that engage in cooperation with the brand. SPAR also entered the agreement with Khimji Ramdas which means that new stores will appear in Oman  a minimum of 21 stores will be opened by the end of 2018 in the country (SPAR n.d).

The company boasts its strategy focused on the provision of fresh and high-quality products to customers regardless of the region where they live. It helps to remain attractive and generates a competitive advantage that is used to win the rivalry which is high in the sector (SPAR n.d). This strategy can be successful and contribute to the growing interest of the company.

The paper has several objectives regarding SPAR international. First, to assess the functioning of the company, the markets peculiarities, and perform the situational analysis of the existing environment. Second, to outline goals that should be achieved by the company to guarantee its further growth. Third, to provide recommendations for the realization of all planned actions. Fourth, to suggest effective evaluation techniques that will help to determine the character of all recommendations and alterations.

Situational Analysis

PESTEL Analysis

5 Forces Analysis

SWOT Analysis

Consumer Trends

At the moment, consumer behavior in Oman is characterized by the increased attention to the basic aspects of a healthy lifestyle (SPAR 2015). There is a trend of buying health products that can promote the improvement of health. Additionally, there is a focus on fresh and high-quality nutrients that are popular (Perreault, Cannon & McCarthy 2014). Buyers are characterized by high bargaining power which means that there are multiple opportunities for buying the types of products mentioned above to satisfy individuals demands.

Segmentation

It occupies the niche of health and high-quality products that have not been previously considered by other companies. SPAR functions in the products segment which implies a high level of rivalry (Gamble, Thompson Jr & Williams 2016). The majority of new stores are located in Muscat, Oman. The business is focused on the creation of neighborhood convenience stores (SPAR 2015). These peculiarities of the geographic location precondition the increased convenience for customers.

SPAR also introduces new segments that help it to compete and attract new consumers. It offers such appealing categories of foods as diabetic, vegan, gluten-free, and specific Lacto products (SPAR 2015). The introduction of these groups helps to minimize the threat of new entry and satisfy customers diversified needs. At the same time, SPAR offers nutrients for various diet plans to meet new individuals demands and guarantee their devotion to the brand.

Plan Objectives

The rise in sales should be achieved in two ways  new stores and revenue growth. New locations will guarantee the development of infrastructure and more potent positions of the company (Armstrong & Kotler 2016). A SMART goal can be set to increase the retails sales in the year 2019 by 20% with the help of new stores and growth of revenue. The specific level for retail sales and its measurability, as well as the set date, will help to set short-term goals. It is without a doubt that growth is a realistic and desired prospect for SPAR.

The second objective is the attainment of a higher level of consumers satisfaction. It can be achieved through the support of the quality and nutritional balance of the products to ensure that the customers are satisfied with the services. The SMART goal, grow a returning customer base and increase the level of satisfaction in the next fiscal year, can be measured through surveys and stores records. Stakeholders agree that consumer satisfaction is a vital part of the business. Happy clients return, making additional or recurring purchases, and promote the stores, thus contributing to the growth of the customer base (DuBrin 2016). The increase in quality over a year should be enough to determine future goals.

Finally, customers loyalty should also be increased as it will help to preserve leading positions in the sphere. One can formulate the goal to create a program that includes personal offers, discounts, and other advantages in order to reach a stable customer base by 2021. This objectives time frame is wider than that of others because customer acquisition requires significant effort. Similar to the previous goal, surveys and records can be used to document the existence of returning clients. Customer loyalty, as discussed above, can benefit the company; thus, it requires attention.

KPIs

In order to further analyze the opportunities of SPAR Oman, one should consider the business Key Performance Indicators (KPIs). KPIs are values that show the effectiveness of a firms activities to reach set goals (Parmenter 2015). By choosing and measuring them, a business can examine its productivity as well as find problems that require solving. These indicators should be derived from realistic goals and have a specific purpose. For example, the discussed plan objectives indicate that profit, expenses, and revenue are among the major KPIs. Others may include customer satisfaction, client retention, and customer acquisition cost (Parmenter 2015). To increase the number of loyal customers, the business can monitor the number and demographics of Very Satisfied clients or the number of repeat site visits.

Marketing Mix Recommendations

Evaluation and Budget

Implementation of the given plan and monitoring of main stages and results can be performed via cost centers. As for the budget, the cost of every of the suggested marketing mix strategies can be considered comparatively low (Mukherjee & Shivani 2016). Product and price domains will not demand additional spending as these are part of the current companys functioning. Therefore, there is no need to alter the next years budget to adjust for these goals.

The recommendation for marketing, on the other hand, shows that additional resources are necessary. Companies can allocate about 10% of their overall budget to advertising (Barton & Behe 2017). From this 10%, more than 30% are now being used to promote businesses on the internet (Barton & Behe 2017). Therefore, if the company decides to put $1 million towards promotion, $300 thousand will be used for digital advertising. The recommendation for entering other areas also implies that the business will spend money on new stores, equipment, employees, and products. One can expect to add another $300 thousand to $1 million to the budget (Das Nair & Dube 2015). These costs, while approximate, show how SPAR can plan its budget to achieve new objectives.

Conclusion

Altogether, SPAR International has good options for the development and growth in Oman. Being one of the leaders in the provision of fresh products, it occupies a specific market segment that guarantees high income to it. SWOT, PESTEL, and 5 Forces analyses prove the existence of a positive environment for the companys rise. KPIs include cost-related indicators such as profit, revenue, and expenses as well as customer-based measures of satisfaction and retention. The plan offers specific marketing mix strategies that can help to achieve the goal of expanding and continue the firms growth.

Reference List

Armstrong, G & Kotler, P 2016, Marketing: an introduction, 13th edn, Pearson, New York, NY.

Barton, SS & Behe, BK 2017, Retail promotion and advertising in the green industry: an overview and exploration of the use of digital advertising, HortTechnology, vol. 27, no. 1, pp. 99-107.

Cummings, T & Worley, C 2014, Organization development and change,10th edn, Cengage Learning, Thousand Oaks, CA.

Das Nair, R & Dube, S 2015, The expansion of regional supermarket chains: changing models of retailing and the implications for local supplier capabilities in South Africa, Botswana, Zambia, and Zimbabwe, WIDER, no 114, pp. 1-37.

Dens, N, De Pelsmaker, P, Goos, P & Aleksandrovs, L 2016, How to mix brand placements in television programmes to maximise effectiveness, International Journal of Market Research, vol. 58, no. 5, pp. 649-670. Web.

DuBrin, A 2016, Essentials of management, 10th edn, Wessex Press, London.

Gamble, J, Thompson Jr, A & Williams, M 2016, Essentials of strategic management: the quest for competitive advantage, 5th edn, McGraw-Hill Education, London.

Kotler, P & Keller, K 2015, Marketing management, 15th edn, Pearson, New York, NY.

Mukherjee, S & Shivani, S 2016, Marketing mix influence on service brand equity and its dimensions, Vision, vol. 20, no. 1, pp. 923. Web.

Parmenter, D 2015, Key performance indicators: developing, implementing, and using winning KPIs, 3rd edn, John Wiley & Sons, New York, NY.

Perreault, W, Cannon, J & McCarthy, J 2014, Essentials of marketing: a marketing strategy planning approach, 14th edn, McGraw-Hill Education, London.

SPAR 2015, Better together. SPAR annual report. Web.

SPAR n.d., 2017 review. Web.