Unit 40 Assignment guideline

Your report should include the following specific tasks and should be answered in the context of your organisation as much as possible: -

❖ Introduce the chosen organisation and then analyse the scope and key concepts of international marketing.

Chose an organisation and explain its profile briefly. Define International marketing

Scope of international marketing

- Imports and exports: Bringing or sending goods and services across the border from and to other countries respectively.

- Joint Ventures: Agreement between two entities to work together and increase their bottom lines (profits). A new entity may be formed.

-  Strategic Alliances: Two companies undertaking a project but maintaining own independence. Companies working together to achieve a specific objective(s).

- Foreign Direct Investments: Investing in another country, i.e by starting a business in own name in another country.

- Franchising: Two organisations, franchisor and franchisee working together. The franchisee uses franchisors name, logo, processes to run its business for a fee to the franchisor. • The franchisor does the marketing tasks.

- Licensing: Legal agreement for use of trademark or technology. Limited in scoped compared with a franchising agreement.

❖ Discuss the rationale for an organisation to want to market internationally and describe the various routes to market it can adopt.

- Market saturation at home: Many companies at home and therefore market is shrinking.

- Changes to taste and fashion abroad: The market needs something new, and an opportunity is seen Profit: A company may move if there are prospects of higher profits than in the local market.

- Growth: Company sees an opportunity to grow and serve newer clientele

- Technological advancement Technological improvements i.e the power of the internet:

Websites like Amazon and Ebay, or company’s website. Introduce the chosen organisation and then analyse the scope and key concepts of international marketing.

- Competition: Intense competition at ‘home’ may force a company to seek markets elsewhere.

- Regulatory framework: Government may support companies to move to other market.

Chinese government has supported Chinese companies to sell outside China.

- Improving brand and image – Spinoff effect: If by being seen to sell in other markets, the image and reputation of the company may improve.

- Power of Monopoly: A monopoly is a market structure where one company controls the market.

- Competitive Advantage: A company may move to other markets to be the first hence control the market as the first entrant.

- Diversification: A company may venture into a new market using a new operation i.e moving into a totally new business line. For instance, a company in the transport sector may open a hotel in another country.

- Follow customers : In situations where one or some of the customers have moved to other countries, there may be a reason to follow those customers in order to retain them.

❖ Evaluate the opportunities and challenges that marketing internationally presents to an organisation.

Opportunities

• Expansion prospects
• Profit increment
• Image of the company is enhanced
• Diversification
• Customer loyalty
• Cushion from problems in local market

Challenges

• Different in employment laws: laws governing wages and employment may significantly differ. For instance, Health and Safety laws may be stringent in ‘Host’ country than they are in ‘Home’ country.

• Corruption and Impunity: Some countries have high levels of impunity and corruption, these may delay entry and setting up duration.
• Bureaucracy and Bottlenecks: In some countries, barriers may exist at official level, thus disrupting the plans for entry / or lead to abandonment of the plan altogether
• Human rights issues: Human rights situation in the ‘Host’ country might be a major ethical dilemma.

• Environmental concerns: In some countries, laws on pollution are disregarded for employment’s and job creation`s sake

❖ Evaluate the key criteria and selection process to use when considering which international market to enter.

When seeking to venture into a foreign market, the following steps can be considered (Cateora et al, 2020);

• Step 1: Country identification
• This involves conducting a general overview of your potential new market
• General aspects may include cultural similarity, for instance UK and USA share the same language, while Cuba and China have the same ideology – Communism
• Step 2: Preliminary Screening
• Screening of the identified countries should be performed.
• Ranking may be done on the basis of certain variables
• For example currency stability or demands for entry (in some countries, a foreign company must part be owned by locals)
• Step 3: Conducting In-depth screening
• The countries that have made it to this stage are considered feasible for market entry.
• It is crucial to look at local conditions which includes marketing mix variables
• Step 4: Final selection
• A final list of potential countries is made.
• There should be a critical look at the competitors (local or foreign) in the country.
• The company can consider the situation in the potential country in comparison with the country(ies) it operates in (if it already operates in other countries).
• It is important to draw lessons from other countries (where applicable).
• Lastly, conduct a final score and where possible, plan a visit can be made to the country(ies)
• Step 5: Experience
• Visitation should be made to the country to have a feel of the culture and business environment.

❖ Explain, using examples, the different market entry strategies, including the advantages and disadvantages of each.