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There are several organizations that are looking forward to expanding their business not only into the domestic market but also in the international market. The Butter London is the organization chosen for this report which wants to expand its business in the Indian market. The scope, as well as the key concepts of international marketing, will be discussed in this report. Further, the approaches of the international marketing will also be explained that can be chosen by the Butter London organization. The recommendations will also be made on the operations in the international market. This report will provide a completed understanding of how a business should enter into the international market and what approaches as well as strategies it should use to operate properly in such markets.
Analyse the scope and key concepts of international marketing.
International marketing can be defined as a company applying their marketing principles in another country. It is usually executed across borders. London butter began with nail lacquer products to every kind of cosmetics of face, lip, and eyes. The London butter products are non-toxic and of high quality popular in the London market(Czinkota, et, al.,2016). The company has emerged as the clean beauty brand which offers the most premium and luxurious products to all the skin type and tone. The company decided to enter into the flourishing market of Indian cosmetics to increase their customer base and reach. The international markets offer the brand many new opportunities and knowledge. The international market can offer the company a good number of interested customer(Tan, et, at., 2013)
It is important for the company to understand whether or not it should go international as there are many challenges that are to be considered prior to zeroing down on tapping in the international market. As it is already highlighted that company is aiming at increasing it customer base and reach. Hence, for that purpose, it need to consider going international as an option.
The company would be considering the cost-effective ways of entering in the Indian market. For that purpose, there are many options available before the organisation. However, the best way to enter in the international market is to join hands with the local leader in India and carry out business. Forming a joint venture is the most suitable option before the company.
The company needs to develop its reputation in the Indian market and joint venture will help the company to build the brand image. In addition to this, it helps in increasing the customer base and market share. Effective marketing approach can help in building the brand image.
The company needs to foster a healthy competition that is very helpful in managing the company’s brand and organisation needs to identify and consider 7P’s of marketing in order to improve and enhance marketing strategies. These would assist organisation in analysing marketing and environmental conditions of the organisation.
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The concept of international market is:
- The company have to search for the international customer needs and prospective buyers.
- The pricing policy is set according to the trends and pattern of the international market.
- The distribution channel and distributors are approached.
- The customer services and feedbacks are analysed.
The Butter London want to enter the international market of India because of the following reasons(De Mooij, 2018)
- To tap in worldwide market: International market causes the organization to extend its business all around and increment deals and incomes. These days MNC's are the organizations gaining on a high scale.
- For development and benefit: Growth of the organization and expanding the benefit rate is the primary motivation behind why organizations frequently will in general move in global markets. It expands their image esteem, builds the income of the organization, and so on.
- There are numerous reasons why universal market does not capacity and a portion of the real reasons are:
- Political condition: Political steadiness is vital for the working of a global market. Any variance in the political condition regularly prompts the disappointment of legitimate working.
- Economic change: Economic state of universal market influences the working of the market and this influences the deals and income of the organization.
- Social elements: Social and social factors likewise assume fundamental job in influencing the working of worldwide market.
- London is the base for many developing and already established brands for the cosmetic products and range so the intensified competition can be the reason to enter into international market.
- The developing countries like India can come up with a great number of potential buyers of the cosmetic products and other opportunities of the Butter London.
- The Butter London can experience growth in their profits and revenue by entering into the international market.
- The cost of production and distribution of the cosmetic products of Butter London can be reduced in India as the labor and material cost is low.
- The market of the London can be saturated and the company is not experiencing any kind of growth in the local market so to avoid stagnant position, the Butter London can enter into new international market.
The various routes to enter into the international market of India are(Dinu,2018 ):
- Licensing: The Butter London can give the license to some company in the Indian market to use their brand name or expertise for a charge or royalty.
- International agent or distributors: The butter London can also hire some Indian agents and distributors to sell their products in the Indian market in exchange of commission.
- Strategic alliances: Butter London can be agreeing on different type of agreements concerning on the different aspects like manufacturing, research and development, marketing or distribution. The company can access the international market without sharing their ownership and remain independent.
- Internet: The internet can also be another route for it to enter into the international market of the India. There are now many platforms on the internet to access the international market without actually visiting the country.
The opportunities available in the Indian market for the Butter London are:
- Low investments: Butter London need less investment to enter into the Indian market to establish as compared to other international market.
- Taxation:With the adaptation of GST, the Butter London don’t have to follow any strict regulations for the tax policy. It is easier to ship goods freely without any unnecessary tax issues.
- Large population: The population of India is high and can offer a great number of potential customers for the cosmetic products of Butter London.
The challenges in the Indian market for the Butter London
- Poverty: The poverty level in India is very high so the Butter London can experience fewer profits and revenue.
- Corruption: The rate of corruption in India is high.
- Infrastructure: India has poor transportation and telecommunication infrastructure.
The process to enter into the international market are:
- Country identification: The first step to follow in the international market evaluation is the country evaluation and identification. The company have to execute the research for the potential buyers, culture, customer taste and other information before entering into the international market. The company have to evaluate the business environment of the countries before the selection.
- Preliminary screening: The second step requires more emphasis as this leads to the selection of the international market. The company need to evaluate the identified countries over the basis of some characteristics like the currency stability, level of domestic consumption and exchange rates. This plays an important role in the international marketing of the company.
- In-depth screening: The company need to take the other factors and conditions of the international market than the economic factors. The company need to evaluate the pricing pattern of the similar products in the new market, the channel of distribution available in the market and its cost, and the preferences and the taste of the customers.
- Final selection:The goals and strategies of the company are evaluated to match to the needs of the new market. The competitors and similar companies operating in the market. The company can also find the similarities in the existing markets of their products to evaluate the new market and apply the conditions to make a choice.
- Direct experience: The company should visit and experience the potential market of the country short-listed for the marketing purpose. The difference between the domestic and international market will give an idea of the operations and functions operated in the new market. The flexibility and the condition of the market can only be understood by visiting and exploring the new market.
The following factors need to be considered while tapping an international market.
- Size of Market: The extent of the market and accessibility of assets in that advertise must be discovered before entering in any of the universal market.
- Contenders: Competitors accessibility and their incentive in the market must be discovered before entering the worldwide market. This will assist the Tesco with working according to the circumstance and according to the opposition of market.
- Lawful necessity: Legal prerequisites and enactments ought to must be considered before entering in a universal market. These are the elements that influence the development of an association so Tesco should take care about these elements.
- Costs: Costs of items and administrations ought to be considered before moving towards any global market. Cost is something that assume fundamental job in any of the market whether it is national or worldwide.
- Foundation: Infrastructure of the nation and the financial estimation of the market ought to be investigated before entering in that showcase.
- Clients' sorts: It is the duty of Tesco to recognize key clients and bring out strategies and systems to satisfy their requirements and requests
Explain, using examples, the different market entry strategies, including the advantages and disadvantages of each.
The Butter London can enter in the international market of India is through exporting. India has well established base for the foreign markets and great opportunities for success. The company can avoid the manufacturing cost of the cosmetic products in the India and just focus on the marketing investment in the India.
Advantages of Exporting:
- The manufacturing is domestic, so it avoids the risk involved in the overseas market
- The exporting helps in learning and exploring into the new markets without investing much.
- The potential risks of operating internationally reduces.
Disadvantages of the exporting:
- The company have no control over the activities of the overseas country
- The third parties may not show up the interest in the products.
- The customers may not find the products according to their needs.
The disadvantages of the licensing are:
- The participation of the brand company is very limited.
- The potential revenues and returns may be lost
- It requires considerable finding and planning to license a company
- international-marketing-assignment-answerThe sharing of risk and resources helps in setting up a new plan
- The knowledge and technology of both the firms can be utilised fully.
- The financial burden is divided.
The disadvantages of the joint venture:
- The partners don’t have the full control over the company
- Partners different view may clash for the expected benefits.
Present an overview of the key arguments in the global versus local debate.
The marketing activities of the business like production, promotion, distribution is executed across border.
the marketing activities like production, promotion and distribution is executed within own country.
the market size of the international market is wide.
The market size of the domestic market is small.
the government influence and control is high as the global marketing deals with the rules and regulations of numerous countries.
The government control and rules are comparatively less because the domestic laws are much easier.
The technological advancement of the international country can benefit the company which is not available in the domestic country
The domestic country do not uses the technology of different countries.
The risk involved and challenges are very high due to changes in the social, cultural, economic environment.
The risk and challenges are low as the environment of the domestic country are comparatively consistent.
Global marketing requires huge finance and capital expenditure is very high.
The cost of acquiring the resources and capital is low.
The company may feel problems during the communication between the international people as their nature, taste, habits, and language is different.
The customer preferences, segments, and needs are similar.
Global marketing requires deep research and knowledge of the foreign market due to different backgrounds and culture.
The market information and knowledge of the domestic market can be easily executed.
The business operations are operated in different countries
The business operations are operated in same country.
The decisions for the pricing and marketing in the foreign market is risk-taking and complicated
The decisions for the pricing and marketing are not complicated as the customers are familiar and have same taste.
- Increase profitability and sales: The global approach can give the Butter London new markets for growth in sales and increase the revenue of the company. The local markets are limited and may have reached the saturated point(Özsomer,2012).
- Enlarge the customer base:The global markets are wide and diverse to offer new potential buyers and customers for the products and services of the company Butter London. The customer base of the local market might have been achieved and no new customers are available.
- Benefits from economies of scale:The global countries can provide the benefits of the economies of scale by lowering the manufacturing cost of the products in different country. The local market cannot be offer lowering the manufacturing or producing cost.
- Products:The international market may have similar products and services that can used by the majority of the customers so to grab the most potential customer the company should focus on innovation in their products. The culture and preferences of the foreign country should be focused.
- Pricing:The pricing in the foreign market is very crucial as it defines the customer approach and revenue of the company. The customers are always in the need of good quality products in affordable range but the cost of manufacturing can be the factor affecting the price.
- Promotion:The company has to focus on the promotional and marketing activities of the company while entering into the new market as the people are new their products and services.
The international market can be evaluated on the following basis (Helm, 2014):
- Size of the market:The company should evaluate the size of the market in which it is deciding to perform their marketing functions. The size of the market is important to know about the product range.
- Working with the local parties:The third parties involved in the marketing process like the suppliers, distributors, and agents have an important role in providing the products to the final customer.
- Prevailing prices:The prices prevailing in the overseas market by the competitors with the similar products and services should be evaluated to identify the pricing policies of the international market.
Investigate how the product, price, pricing, and promotional distribution approach differs in a variety of international context.
Marketing Mix is a tool of marketing which is very important and is used by organizations to pursue the main aims and objectives of the marketing. There are 4Ps included in the Marketing Mix which are required to be analysed to launch any product that is suitable for that particular country where the company wants to expand its business. For such purpose, there must be an investigation of the product, place, promotion as well as pricing.
- Product: The basic marketing concepts explain that there will be sales of more products if there is the aim of meeting the requirements of the target market. On the other hand in international markets, there will be involvement of the several factors such as the background, culture as well as the buying habits of the customers. The argument for the standardization states that the process for adapting the products in local scale does a little more than the complete cost of producing on the global scale. For example, Butter London is required to know about the requirement of the customers that what kind of beauty products they require and such products should be manufactured (Armstrong, et. al., 2015).
- Pricing: It also plays a very important role in marketing. There is a requirement of looking for the two issues that what is the perception of the customers and which are the objectives as well as the aims of the organization. There are several other factors that are required to be considered while setting the prices in the international market such as the exchange rates, transportation costs as well as the duties and tariffs. Butter London is also required to look into these factors.
- Place: For the purpose of expansion of the business are different international markets there are certain factors that differ from market to market. To expand the business it is necessary that the business should be situated at such a place where the customers can easily purchase the product by reaching to the organization. Such as, Butter London is offering its products in ULTA, US and offers around twenty-one thousand beauty care products in all the stores. It ensures the delivery of the products at the right time.
- Promotion: There is always a requirement of promoting and advertising the products in the international countries where the company wants to expand its business for the purpose of bringing awareness among the customers. These methods of promotion include personal selling, advertising sales promotion as well as the advertisement on TV, Newspapers or the use of flyers. For the different international context, different promotional methods can be used by the organization.
Butter London will standardise and adapt the ‘Product’ to tap in the Indian Market. It needs to work on developing products. Adding an element of uniqueness in its products can help the company to capture higher market share. The argument for the standardization states that the process for adapting the products in local scale does a little more than the complete cost of producing on the global scale.
In the international marketing, Butter London utilization of the marketing mix to provide the best products available in the best place on correct prices using promotional activities. There are 4 Ps included in the marketing mix of the international market such as price, place, product as well as promotion. The Butter London organization is looking forward to expanding its business in the international market of India and for such purpose, it is important for it to review the determination of the prices which can be based on the several factors such as the Exchange rate, transportation costs, as well as the other duties, levied on the products. The place also plays a very important role in the marketing of the products and the place should be at such location which can be easily accessible by the customers to purchase the products easily. To expand the business, it is also necessary to promote the products offered by the organization in the international market and at the end, the products should be of such quality and types that fulfil the demand of the customers (Baker, & Sinkula, 2015).
Explain and analyse the various international marketing approaches your client organization to adopt.
There are mainly two approaches that can be used for the smarter international marketing by any business. These international marketing approaches are Transaction marketing approach and Standardization marketing approach. These marketing approaches are used by the organizations to help them in moving towards the international market to expand their business in the best possible manner. Following is the description given of these two approaches:
- Transaction approach: In this approach of international marketing the main objective of the organization Butter London will be to keep its concentration on the cost constraints as well as analysing the methods to penetrate the market in the same manner. It can be analysed that the creation or the formulation of the single structure is the main concept of the organization and several marketing tools can be used such as searching the sellers, buyers as well as the study of the market. This is one of the best approaches suited for the companies having the small business structure (Someh & Shanks, 2016).
- Standardization approach: In this approach of international marketing, the main focus is to enter the market keeping in the mind the expectations as well as the requirements of the customers. This approach targets the market where the customers have similar tastes as well as preferences for which the marketing mix tools, as well as the promotional tools, are being used by the organization. In this approach, the main objective of the organization is to establish its brand in the global market by adopting the standardized practices in the new location.
As it can be analysed that the organizational structure of the chose organization Butter London is small hence the transaction approach of international marketing is the best approach that can be used by its business (Yan & Luo, 2016).
- Centralised Approach:In centralised strategy, the power and the authority are safeguarded by taking help of strategic and decision-making process as directed by the senior managers and executives. It is characterised as reliable and systematic stipulation of power.
- Decentralised Approach:It is a bit faster strategy and is characterised as the distribution of powers and authority between different designations within the organisational structure.
- Launch All Countries At The Same Time Or Step By Step: This approach is used in free market, wherein the power is transferred to a particular country at a particular course of time or to all the countries altogether.
Compare home and international orientation and ways to assess competitors, outlining the implication of each approach.
In the market orientation, the major objective of the marketing director of the organization is to analyse efficiently the expectations as well as the demands of the consumers. In the context of the home marketing orientation, it is generally unspecified that customers have the same expectations as well as the demands. In the international orientation, it is generally assumed that the needs, demands as well as the preferences may be different on the different levels.
On the other hand, there is also a behavioural approach in which the main constraint is on the home orientation. In the home orientation, it is assumed that the market in which the company is going to enter have the same first choices, tastes as well as tastes. Butter London will be entering the international market should keep in its mind the preferences of the consumers which are different from the home market. Following are the approaches of home orientations:
- Ethnocentric: This orientation in the home country dominance is used in the domestic market. The expansion of the familial strategy is generally seen at the global level.
- Polycentric: In this approach of the orientation, the concentration is on the local culture to adopt such strategy which can fulfil the demand of the customers.
- Regio centric: The markets are chosen on the basis of the common regional qualities and the marketing strategy adopted is the trade-off between the standardization and localization.
- Geocentric: According to it, the whole world is treated as a single market and the marketing strategy used is global standardization.
In order to make an analysis on the competition in the Indian market, there are numerous approaches that can be used by the business Butter London so that it may be able to give a cut-throat competition to the other rivals. The first approach that can be utilised is the production approach which focuses on the high quality and quantity production by the organization. It will help in the reduction in the prices of goods. The other approach that can be used is sales as well as the production of the great quality goods which will attract more and more customers to the business. Apart from these, the single commodity approach can also be utilized by the organization to internationalize the operations of the company. For the purpose of the analysis of competition, Porter’s five forces model can be used. There are other parameter too:-
- Competitor Analysis: It is one of the significant part for the environmental analysis of any organisation. It helps the organisations to study their competition’s strategies and that help them in improving the current strategies. It also help in performance measurement and benchmarking.
- Product Range: These are usually a range of the specific product that are produced in order to appeal to a wide range of customer and to cater their varying needs. The product range helps the company to cater the strong product line developed by the organisation.
- Customer Type: These are usually a group of people who can be classified into different customer categories based on their preferences or potential. These include Student, Senior Citizen, Adult, Female, etc.
- Market Coverage: These include number of wholesale outlets, active retail, saturation level, etc. It is usually achieved by various approaches, such as differentiated marketing, concentrated marketing, and undifferentiated marketing approaches.
- Pricing: There are several other factors that are required to be considered while setting the prices in the international market such as the exchange rates, transportation costs as well as the duties and tariffs. Butter London is also required to look into these factors.
- Supply Chain:organisation sees logistics and supply chain as the cost controlling factors and can help it in gaining competitive advantages. These can be therefore, considered important from organisation’s point of view.
For the purpose of internationalization of the functions of the corporation, it has been analysed that such arrangement should be used which can offer the best approaches to the company. The structure of the organization should be very flexible so that the corporation may be able to effectively deal with the fluctuations made in the global market. For the purpose of expanding the trade in the Indian market, the organizational structure should be divisional in nature (Hartsfield, et. al., 2017).
It has been concluded in the above-presented report that international marketing is a very important concept for the purpose of the businesses which want to expand their businesses in the international market. The scope of the international market has been explained in this report along with the import, management contract as well as export. The organization chosen for the report is Butter London which has analyzed several routes to enter into the international market and to promote its products on the large scale. This report has provided a comprehensive understanding of the international marketing concept.
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