international strategy marketing essay

International Marketing Strategy Essay

Introduction, italian market overview, uk market analysis, market entry strategy, international marketing mix strategy, information to be availed, conclusion and recommendations.

Brimi is an Italian-based food company specializing in the supply of dairy products to its Italian market (Brimi 2010, p. 1). The company started its operations in the late 1960, when two companies merged to form a cooperative, aimed at supplying dairy products to its primary markets.

For a long time, Brimi only operated in two locations across Europe, but in the late 70s the company opened more branches, starting with its 1977 Vahrn plant (Brimi 2010, p. 1). This region was chosen because it was home to high quality cattle breeds which supported the company’s supply of fresh dairy produce. In fact, most of the company’s operations were directed from this region.

Brimi initially specialized in only a few brands, but in 1978, a board meeting resolution saw the company, expand into producing new products such as Mozzarella products (Brimi 2010, p. 1).

This change of strategy was supported by other strategies bordering on the production of their dairy products such as the substitution of dairy milk with buffalo milk. This change of production process acted as a boosting element to the company’s sales because the company’s products bore a new taste which enabled it cut a niche above its competitors.

The Mozzarella product is the company’s most popular product, with more traditional products and processes such as cheese production eventually discontinued. In the Northern part of Italy, Brimi had its Mozzarella product strategically positioned in consumers’ lifestyles, such that, there was very minimal competition from other companies (Brimi 2010, p. 1). In the South of Italy, the company’s Cheese products also had a strong consumer base, and in the same manner, there was very minimal competition from rival products.

However, after several years of enjoying a strong market share, Brimi’s competitors caught up with the company’s sales record by imitating the company’s production strategies (this move limited the company’s growth and expansion prospects) (Brimi 2010, p. 1). Since the company was primarily formed by two companies from different countries (Germany and Italy), there was an internal pressure to explore international markets (emanating from its hybrid composition).

During the early years of the 90s, Brimi started its global expansion plans which saw the company command a global presence in several nations across the globe (Brimi 2010, p. 1). This move was further complemented by the company’s international certification in the production of high quality mozzarella, which added to the company’s product acceptance in the international market.

In line with the global expansionary plans, this study undertakes a case study of the company (Brimi) launching its products to the United Kingdom (UK) market. With such plans in the offing, a thorough analysis of the UK and Italian markets ought to be done to establish the company’s expansion feasibility and product success in the UK market.

These analyses will be aimed at formulating an international marketing strategy for the company to ensure product success. To come up with the best outcome, this study incorporates a market overview of the UK dairy product market sector to evaluate the substitute and complementary products that affect the launch of Brimi’s products in the same market. Afterwards, a market entry strategy will be formulated and an international marketing mix developed to complement the initial marketing entry strategy.

As mentioned in earlier sections of this study, Brimi moved from specializing in exclusive dairy products to a diversified field of production. Among its most popular product is the Mozzarella cheese which is a favorite Italian Cheese. It is estimated that more than 60% of Italians consume this product on a regular basis (Associazione Italiana di Sociologia 2010, p. 67).

The Italian consumer market has a high regard for fresh produce. Products considered to have stayed on the shelf for long do not share the same value as those which are less than a day old (Mooij 2010, p. 32). In fact, it is said that, goods which are more than a day old are not usually considered fresh produce by Italian consumers (Hassan 1994).

This fact has a significant impact in the supply of perishable goods to Italy because there is an increased emphasis on fresh produce which creates an increased demand for efficiency in a company’s supply chain. Moreover, there is a higher standard set in the production of such perishable goods.

The Italian food market also operates within the confines of a family culture whereby, food is normally perceived to be a family issue whereby people sit together and eat (Heyer 2002, p. 109). Food is therefore usually served in events where family members seat, relax and talk about whatever is going on in their lives. During food serving, food is served in small amounts to preserve the taste of various food delicacies. Foods with a rich array of ingredients are preferred to those which have poor ingredient content (McCullough 2003).

PEST Analysis

The political environment in the UK allows for a free trade economy (Tribe 2005). In this type of market, there are very minimal trade barriers among states willing to trade with one another. There is also a very liberal trade policy which allows for the transaction of business with very minimal government interference. However, there are several regulations in place to ensure the standard of imported food is of high quality.

These standards are defined by the European law for food standards, which guarantee the quality of food to be imported or exported in any participating European country (Dvořák 2005, p. 5). Nonetheless, Brimi seems to have satisfied this requirement, because it has in the past been awarded two quality management standards and one hygiene certificate; meaning that, it is a leader in the production of quality foods, and almost by default, it meets the EU food quality standards.

The UK is considered by the World Bank as a high income country (Tribe 2005). The country has excellent infrastructure, a wide industrial base, established service sector and a huge consumer purchasing power (Great Britain: Department for Environment, Food and Rural Affairs 2011, p. 5).

The strong consumer purchasing power is beneficial in the sustainability of the demand for Brimi’s products. Moreover, the company can adopt a high-end marketing strategy in the UK market and it will succeed. This means that the company can still be able to make huge profits from little sales because it will still be able to sustain product demand due to high prices.

Brimi has a close association with the UK, because they are both part of the wider European Union economic block (Panke 2010, p. 1). This economic provision has a significant economic implication, because there is no trade barrier, or restriction for companies within the two countries to trade with one another.

This economic provision is also advantageous to Brimi because it can easily operate within UK. without much interference from the UK government. In the UK, taxation is favorable to international companies because taxation is normally done in the currency of the home country (where the international company hails from) (Panke 2010, p. 1).

This economic provision means that, Brimi will have to pay tax using the Euro (which is its home currency). However, UK uses the pound for local trading and if currency is converted, there is a fee of 5% to 10% charged in such transactions (McKernan 2005). This is a disadvantage to Brimi because it may have to incur such transaction costs if it operates in the UK.

Its profitability in this market is therefore likely to be significantly dented. To maintain a high profit level, the company may have to increase its product costs, but this may have a resultant effect on the demand of its products (like competitors gaining a competitive advantage, based on the price differentials). Alternatively, the company may decide to retain its profits in pounds to avoid incurring any currency conversion costs.

The UK exchange rates (when converting the Euro to pounds) have also shown some strong tendencies of being unstable, especially with the motions of the global economic crunch and the speculative debt burden in the European Union (McNair 2009). This unstable exchange rate poses as a disadvantage to Brimi because it is difficult to undertake proper financial planning due to the unstable exchange rates.

More so, this is one economic factor it has no control over. However, the unstable UK currency poses a small advantage to Brimi, because, with a decrease in the value of the Euro, exporting becomes very easy for the company and Brimi can lower its costs to make its products more attractive to UK consumers. However, if it still maintains its current prices, it can easily realize increased profit margins.

The nature of UK’s economy is highly characteristic of an import-dependent nation, considering much of its food is imported from other countries (Panke 2010, p. 1). This fact supports the acceptance of Brimi’s food products, considering it is a foreign company with foreign products.

The acceptability of UK’s consumers to Brimi’s products are therefore bound to be favorable to the company. However, due to the economic crisis prevailing in the country, and decreased consumer spending, there is an eminent threat on the demand of high quality foods (which Brimi’s products fall under) because there is a stronger focus on prices as opposed to quality. This factor poses a threat to the long-term sustainability of high premium purchases, hence decreasing the chances of Brimi realizing increased profits.

Though Italy and the UK are both European countries, there is a slight difference in culture and other social elements. For example, there is a language difference in both countries, because Italian language is spoken in Italy while English is spoken in the UK. This language difference has a profound impact on the launch of Brimi’s products in the UK because it will imply that, the company has to repackage its products in English, to be appealing to the UK consumers.

The product packaging styles between the two countries however show elements of similarities in consumer adaptation and acceptance. For instance, most of Brimi’s products are packaged in blocks, and UK consumers are known to accept such packaged goods (Blythe 2008).

It will be evidenced in subsequent sections of this study that the international marketing strategy to be adopted by Brimi can be supported by a product packing and distribution strategy (from one location) because UK consumers are not known to demand excessively fresh products (when comparatively analyzed with Italian consumers). Therefore, an export strategy may easily work (Moschandreas 2000).

Compared to Italy, the UK is not known to be health-conscience when it comes to the purchase of consumable goods (Moschandreas 2000). However, in the recent past, there have been increased campaigns to make more UK consumers aware of the benefits of a healthy diet, and this trend is likely to pick up soon.

As a result, there are more UK consumers buying food products which have lower calorie content, highly organic and highly functional (Moschandreas 2000). Nonetheless, these products are sold at a premium. Since Brimi’s products are healthy foods, it may be easy for the company to enjoy a higher sales margin because it can highlight the “low calorie” content of its food and the high organic nature of its products to command higher prices.

UK consumers have also adopted a trend whereby any consumable goods in the country (especially imports) ought to have a label indicating the origin of the product. This consumer demand has been necessitated by the increased awareness in global economic practices which were necessitated by the increase in child slavery practices and unfair labor policies (Moschandreas 2000). Consumers in the UK are therefore more aware of such economic practices and would not want to encourage the consumption of such goods.

This increased consumer demand is likely to boost the sales of Brimi’s products because they originate from Italy and the labor practices of the country is largely acceptable. Moreover, high quality raw materials, especially regarding dairy products, are known to originate from the same place. In fact, since Italy is known to produce high quality goods, it is easy for the company to demand a higher price for its goods because they are justified to do so.

The UK is known to have a strong use of technology in most of its operations (Havard 2002, p. 4). With regards to the production and distribution of Brimi’s products across its UK market, technology will have a strong impact on such a strategy because Brimi engages in the production and sale of perishable goods.

UK’s infrastructure and technological advancement is deemed among the highest in the world, and therefore, high-tech technology can be easily used in the sale and distribution of the company’s products across the UK (Kensett 1990). Since subsequent sections of this study explores the strategy of direct exporting as a viable alternative for Brimi in its venture into the UK market, it is important to note that, technology will greatly reduce the distance of distribution and sale of Brimi’s products from Italy to the UK.

Furthermore, since both countries are not very far from one other (geographically), high technological advancement (including airport and transport infrastructure and equipment) can make it possible to transport goods from Italy to the UK within a day, ready for sale.

Entry into foreign markets can be a tricky issue. This is true because many researchers have established that, various entry strategies vary with different circumstances (Agarwal 1992, p. 1). The choice of entry strategy greatly affects the success of a new product in a new market.

Though a company may achieve tremendous levels of success in a home market, the same level of success is not guaranteed in a new market because the company has to deal with new factors such as culture and similar socioeconomic factors. For instance, though Walt Disney had achieved exemplary success in its Florida, California and Tokyo establishments, it found it difficult trying to expand into the European market because it had to deal with new cultural and nationalistic elements (Hollensen 2010).

Brimi’s situation is not any different because it is venturing into a new market and though it has achieved tremendous levels of success in its primary markets, the same level of success is not guaranteed in the UK. Nonetheless, the country is faced with four market entry strategies: exporting, joint venture, licensing and foreign direct investments (Hollensen 2010).

According to the normative decision theory, the choice of a market entry strategy is normally influenced by the trade-off between the risks of undertaking the foreign venture and the expected returns (Rapoport 1989, p. 7). In other words, it is very important for a company to choose a market entry strategy which poses the lowest risk and yet poses the highest returns.

Also, a firm’s resources in undertaking a specific market entry strategy is also to be factored before choosing a specific market entry strategy (but another factor of an almost similar importance is a firm’s willingness to control its operations in the foreign market). These factors withstanding, it is important to acknowledge that, the correct choice of a market entry strategy is subject to the best compromise to be obtained if a firm’s resources and its desire for control are established (Evans 1999).

Analyzing the existing international market entry options for Brimi, we can establish that, the sole venture market entry strategy is characterized by high risk and high returns, but it also gives the company a high degree of control over the firm’s activities in the UK market. A joint venture strategy would depend on a firm’s investment in the venture because it can be a high risk, high return venture if Brimi’s investment in the UK is characterized by high equity.

The opposite can also be true, whereby, Brimi’s investment in the UK market is characterized by low equity investments and therefore, the company receives low returns. The licensing strategy is however a low risk, low return investment where the company lacks a strong control over its foreign market activities.

Considering the dynamics of the UK market, this study proposes an export market strategy. Exporting is the production of goods from Italy and selling them to the UK market (DIANE Publishing Company 1994, p. 1). Though this market entry strategy is traditional, it is possibly the best way Brimi can venture into the UK market.

This market entry strategy is justified by the fact that, Brimi enjoys immense ownership advantages over it new market (UK) in the sense that, the company has important assets and skills in the production of its Mozerella brand, such that, the economic benefits of its UK venture is highly likely to surpass the economic cost of venturing into the new market.

Brimi’s market power is further reflected by its strength in overseas operations and its history of dealing with competitors in the Italian market. The company’s products have been sold in several locations across Europe and indeed the world. This multinational experience is bound to be invaluable in its UK expansion plans.

Moreover, the company has managed to create a strong strategic product differentiation strategy that has seen the company receive global acclamation in the production of its products (in reference to the ISO certifications). Considering the company has this strong asset power, research has affirmed that, it is not advisable for such a company to share this knowledge in a new market because it will lose its competitive advantage (Hird 1986, p. 151).

In other words, it may be easy for competitors to steal the company’s production formula and use it to run a parallel company to provide the same services as Brimi, thereby jeopardizing its long-term prospects of profitability.

In reference to this claim, Van de Ven and Poole (1989) affirm that, “This risk is especially relevant for international transactions because inter-organizational infrastructures are often poorly developed, likely to change frequently and likely to change across international boundaries” (p. 31). These scholars therefore affirm that, if a company has such high-caliber skills, it is important to safeguard them.

Other research studies done by Anderson and Coughlan (1987) also affirm that, if a company has achieved a higher level of product differentiation, it is highly recommended that they safeguard their secret. Since Brimi falls in the category of such companies, it is important for the company to safeguard its product differentiation secret, and there is no better way to do so than through a direct export strategy.

Moreover, exporting is the most economical way Brimi can venture into the UK market, considering it does not have to make any direct investments to the European nation (Craig and Douglas 2005). Considering Italy and the UK operate within the UE economic block, it becomes very easy for Brimi to export its goods from Italy to the UK because there are no customer barriers (which are normally deemed to be a barrier to direct exporting by increasing the cost of imports) (Agusti 2008, p. 10).

The direct export strategy is supported by the comparative advantage theory which acknowledges that, countries can derive a lot of benefits by trading with one another, without any trade restrictions (Maneschi 1998).

The theory further states that, it is possible for two countries to gain from one another through international trade, even though one country maybe less efficient than the other in the production of export goods (Madura 2008, p. 6). In the context of this study, there is an obvious difference in the production of Mozarella in Italy and the UK because Italy already has a well established infrastructure for the production of such a product. However, the UK does not have this advantage.

Nonetheless, the comparative advantage theory identifies that, both countries can easily benefit from one another through direct exports (Samli 2001). Since the comparative advantage theory proposes that, countries can effectively gain from one another through direct exports, it however also notes that, barriers to trade such as trade costs (like custom duties, heavy taxation and the likes) can easily erode the benefits derived from foreign direct investments (Daly 2010, p. 355).

However, factoring the nature of the trading infrastructure between Italy and the UK, there are no trade barriers, and therefore both countries can sufficiently enjoy the benefits of free trade.In this regard, only marketing costs will be realized with the direct export strategy.

However, the practicality of this strategy involves the input of four parties in the supply chain system: exporters, importers, transport agents and the government (Doole 2008).

There are two types of export strategies: direct and indirect exports. However, for Brimi company, the best strategy to use will be the direct exports strategy because the company’s expansion into the UK market is primarily motivated by its international expansion strategy, aimed at conquering new markets, considering the limited expansion opportunities characteristic of its local Italian market (as mentioned in earlier sections of this study, the Italian market is flooded by substitute products which have been developed by replicating Brimi’s strategy, therefore offering very minimal opportunities for growth).

With such slim expansion opportunities, it is prudent for the company to capitalize on its economies of scale, from Italy and then export the produce to its new markets. This strategy will give the company a strong sense of control over its distribution strategy and therefore the operations or supply of its products will be firmly within its control.

Through this strategy, the UK market will be regarded as an extension of existing Brimi markets. Since the UK and Italy are part of the European Union economic block, it becomes feasible to produce goods in large quantities because protectionist policies cannot be introduced because of the liberalization of the UK market and its free trade policies.

The export strategy is applicable to Brimi’s case because it poses a trade advantage (after factoring the benefits of currency valuation between the Euro and the pound). Considering there is a significant decline of the Euro (in value), Brimi is bound to increase its profitability because it will be paid in pounds, while its expenses will be quantified in Euros.

It would however be an unwise decision to adopt another foreign market entry strategy, like foreign direct investments, because this would mean the company has to set up new investments in the host nation (to be incurred in pounds), thereby significantly increasing the costs of investments or new operations.

The strategy of directly exporting goods to the host country will be a feasible idea because Brimi will have control over the entire operations of the expansion strategy (from the selection of company representatives to the selection of new foreign markets). In this manner, they can easily retract from the UK market if their products fail, simply by decreasing the production of the products from the original market (Italy).

In this regard, the company will not suffer heavy financial losses (when compared to a case where the company set up a new plant in UK for the manufacture of its products). The foreign direct investment strategy will also be useful in obtaining feedback from the new customers because the strategy will be primarily based on sales and marketing, which is a good contact point between the company and the consumers.

Moreover, since the company has endured periods where its food processing formula was stolen by rival companies in Italy, it may be easy for the company to protect its trademark and patents if it engages in direct exportation because it is easy for the company to have control over these intangible properties.

Also, since the direct export strategy will be primarily based on a marketing strategy, it will be easier for the company to make more profits because a lot of emphasis will be based on sales, which dictate the company’s revenues, hence increased profitability.

When launching a new product in a foreign market, it is often a common company dilemma, if to retain its home market international mix or alter the market mix strategy (Learn Marketing 2010).

Researchers have often proposed that, for a company to develop a successful marketing mix strategy, it ought to factor the cultural make up of the host population; the target consumer behavior; purchasing power and the likes (Ghauri and Cateora 2005). This fact is reinforced by previous assertions made by other scholars, proposing that a company is bound to sell more products if it factors the dynamics of the target market.

Often, global companies have adopted the “think global act local strategy” but for Brimi, this study proposes a “think global act global strategy” (Keegan and Green 2005).

This strategy is motivated by the fact that, Europe is quickly becoming one social block, emanating from the formation of the European Union block, and therefore there is bound to be no significant differences in consumer tastes and preferences between Italy and UK.

Though there may be some substantial differences in consumer spending habits and dietary patterns, tailoring Brimi’s products to suit the local UK market is not bound to add much value to the company’s products, but it definitely increases the costs of production, thereby reducing the company’s profit levels. Redesigning the product is therefore bound to weaken the global brand.

There are companies which have over the years adopted a global strategy over almost all their target markets and have successfully achieved their desired objectives (and still enjoy good sales). Such brands include Coca Cola, MTV, Nike (and the likes), and they share appalling similarities with Brimi’s Mozzarella brand because the company’s brand has received global commendation regarding its quality and value content (as evidenced by the ISO certifications).

Changing the product’s design or make-up for the UK market is therefore likely to weaken this product strength, and equally likely to affect the strength of the brand’s product differentiation strategy.

Moreover, the nature of today’s global market is that, consumers are increasingly adapting to a common culture inspired by the internet, globalization, television (and the likes) and therefore, the gap between consumers’ tastes and preferences among various nations (and more so, Italy and UK) are increasingly narrowing.

The launch of Brimi’s products in the UK market will therefore be aimed at targeting the same type of consumers as those evidenced in Italy. Since this target market selection is in effect, it would be fruitless trying to change the company’s product components to suit the local UK market.

From the above analyses, this study proposes that, Brimi should adopt a standardized international marketing mix strategy because the Mozarella brand already commands a strong brand following across Europe. Modifying the product would act against the company’s interest especially if it intends to conquer new markets.

However, the product differentiation strategy is most preferable because the launch of Brimi’s products will be undertaken through a direct export strategy. This fact implies that, products will be manufactured in one location and distributed to several others. The standardization strategy will therefore be complementary to this strategy because it is easy to standardize a product if it is produced in one location as opposed to if it is produced in several locations (Transtutors 2011, p. 1).

Though the international marketing mix to be adopted by Brimi will be a standardized marketing mix, the promotional strategy to be adopted will not be of a standardized nature. An adapted promotional strategy will be preferable for Brimi because of the differences in language between the UK and Italian markets.

Italians speaks Italian while UK consumers speak English. Promotional materials for UK consumers will therefore be designed using English language. The common mediums of product promotion will be television and online media. The two communication mediums have a strong penetration in the UK, with television and online communications having a penetration rate of more than 90% (Ghauri and Cateora 2005).

Determining a pricing strategy for a foreign market is not a simple thing. Several factors such as fixed costs, variable costs, competition, company objectives, positioning strategies and willingness of target group to pay for the desired price have to be factored in the pricing strategy. Brimi’s pricing strategy should however be similar to its pricing strategy in Italy, except for a substantial increment in product pricing, emanating from the transport and distribution costs associated with availing its products in the UK market.

Brimi’s place strategy will be designed to cater for the needs of the distribution and sales of the company’s products (Obringer 2011). Brimi’s place strategy will be a dual strategy where its products will be availed in every high-end restaurant or any market deemed viable for the company’s products.

The second strategy will be centered on creating a demand for the product because it was not available in the UK market. This strategy will however need to be implemented with the assistance of strategic partnerships with existing restaurants. The latter strategy will ensure the company increases its profit margins because it allows for a high price strategy. Since Brimi’s products are of high quality, they will be majorly availed in high-end restaurants to preserve its image.

With regards to the product strategies of the marketing mix, Brimi should maintain all aspects of its product’s strategy, such as, quality, design, features and branding; like that evidenced in its Italian market. In this manner, it will be able to remain authentic to its brand differentiation qualities, so that, it does not weaken its brand in any manner (Learn Marketing 2011).

These factors withstanding, the Brimi product brand will be aimed at high-end UK consumers, and the core benefit will be exemplary product quality. The brand will be positioned in the high-end market by offering quality products to the UK consumers and its main differentiating factor will be the high product quality and exemplary exotic taste (when compared to competitor products).

There is supposed to be more information to be availed in the formulation of a comprehensive marketing plan, based on Dunning’s (cited Letto-Gillies 2005) assertion that, the international entry strategy for a foreign firm ought to be based on its ownership advantages, location advantages and international advantages.

Though some of these elements have already been discussed in this study, it is however difficult to determine how these elements interact with one another for Brimi (in the formulation of an international market entry strategy). It is very important to determine the relationship between these elements because it is not only enough to analyze these elements in isolation because an interaction of these elements may possibly expose a different motivational factor of the company’s international marketing strategy.

For instance, research studies have established that, companies which have a low level of firm ownership, are bound to refrain from adopting any international expansionary plans or undertake low-risk market entry strategies, such as, direct exports (which has been identified as the preferable market strategy for Brim) (Czinkota 2007, p. 300). Nonetheless, these companies are known to be highly attracted to lucrative markets, but often they adopt the joint venture or licensing strategies (Rialp 2006).

From this analysis, we see that, it is very important to understand a firms’ ownership and location advantages because collectively, these factors are bound to affect a firm’s behavior and more so, its international market entry strategy. The relationship among the three elements described above should therefore be further studied to develop the best international market strategy for Brimi.

More information should also be sought in determining Brimi’s financial capabilities and its resource base to determine its capability of undertaking other market entry strategies like acquiring an existing food processing firm in the UK as a market entry strategy (Mühlbacher 2006).

The direct export strategy has been chosen because it poses the lowest risk in international market ventures, while providing the highest returns (but such a strategy has been chosen under the assumption that, Brimi lacks adequate resources to undertake a riskier strategy).

Another factor of an almost similar magnitude is Brimi’s desire to control its foreign market activities because the direct export strategy has been chosen under the assumption that, it would be more beneficial for the company to adopt an international market strategy that gives the company immense control over its foreign operations.

This study recommends a direct export strategy to be adopted by Brimi because the company enjoys a strong brand following of its core brands in most of its primary markets. Moreover, the company has a strong brand differentiation strategy which should be safeguarded at all levels of the production process.

The best way to protect the company’s brand secret is to adopt a direct export strategy because the risk of company secrets in producing the best Mozarella will be safeguarded in this manner. This strategy is complemented by the minimal distance in geographical distance between Italy and UK, which can be further decreased by technological input. In this regard, it is possible to avail fresh produce to the UK market, thereby preserving the product’s taste.

This study also acknowledges that, the direct export strategy will be of high benefit to Brimi because Italy and the UK are part of the European Union economic block and therefore, there is no possibility of the company incurring import or export tariffs which will further erode their profit margins.

This economic union greatly complements the direct export strategy. With regards to the company’s international mix strategy, the product, place, and pricing strategies will significantly resemble the original marketing mix strategy used in Italy, but the promotional strategy will be different, considering the language differences between Italy and the UK. These international marketing strategies pose the best prospects for Brimi to succeed in the UK market.

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• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2024, January 15). International Marketing Strategy. https://ivypanda.com/essays/international-marketing-strategy/

"International Marketing Strategy." IvyPanda , 15 Jan. 2024, ivypanda.com/essays/international-marketing-strategy/.

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IvyPanda . 2024. "International Marketing Strategy." January 15, 2024. https://ivypanda.com/essays/international-marketing-strategy/.

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• Brand and Product Management: Ireland and Italy
• Training US Expatriates to Work in Italy
• Physical, Human, and Economic Geography of Italians
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International Marketing Strategy: A Roadmap to Global Success

• February 29, 2024

Navigating the challenges of international marketing can seem like a huge challenge.

Every country has its own set of cultural, language, and regulatory hurdles that can complicate your efforts to expand globally.

However, having a strong international marketing strategy is the secret to overcoming these challenges.

A good strategy allows businesses to connect with their international audience effectively, ensuring their brand is globally appealing and locally respectful.

This article is here to guide you through creating a successful international marketing strategy, providing you with practical tips and insights to help your business grow worldwide.

What is International Marketing

International marketing extends beyond borders. It’s how businesses promote and sell products or services across the globe. Unlike domestic marketing, it requires a keen understanding of multiple cultures, legal systems, and market dynamics.

At its core, international marketing aims to connect with a global audience, ensuring that marketing efforts resonate with people from around the world.

What are the Benefits of International Marketing

Expanding Customer Base and Diversifying Revenue

Delving into international markets opens up a plethora of opportunities for businesses. It not only broadens the target audience but also diversifies revenue streams.

Tapping into foreign markets means accessing new customer segments eager for your offerings, providing a significant boost to your business’s reach and financial health.

Achieving Economies of Scale

Venturing into new markets can lead to economies of scale. As businesses expand and production volumes increase, the cost per unit often decreases. This reduction in overall costs is a strategic move to enhance competitiveness and profitability on a global scale.

Fostering Innovation and Learning

International exposure is a catalyst for learning and innovation. By entering diverse markets, companies encounter unique challenges and customer preferences, driving them to innovate. This constant evolution helps businesses stay ahead of domestic and international competitors, ensuring they remain relevant in a fast-paced global industry.

Boosting Global Brand Recognition

One of the paramount benefits of international marketing is the significant boost it gives to brand recognition across different countries. Establishing a presence in foreign markets elevates a local brand to international status, enhancing its visibility and appeal to global customers and target audiences.

This global recognition is essential for any business aiming to become a household name worldwide.

Building on this view, it’s interesting to note that around 64% of marketers globally expect to spend more on advertising this year. Even more notable, about 13% of them plan to increase their budgets by more than 50%. This kind of spending shows just how much value is placed on using international marketing to make a brand more recognizable around the world. It highlights the strategic investments companies are making to improve how visible and attractive their brand is to people everywhere.

The Importance of International Marketing Strategies

Tailoring marketing to cultural nuances.

The essence of crafting international marketing strategies lies in their ability to resonate with the local market while maintaining the brand’s core values. Successful global marketing strategies go beyond mere translation; they require a deep understanding of cultural differences, language nuances, and local tastes.

This tailored approach ensures that marketing campaigns are not just seen but also felt, fostering a connection with international consumers.

Ensuring Consistency While Adapting to Local Preferences

A well-thought-out international marketing strategy balances consistent branding with adaptations that reflect local preferences. This balance is crucial for businesses to communicate their brand’s values effectively across various markets.

By doing so, companies can build trust and loyalty among international customers, ensuring that their brand is recognized and revered globally.

Driving Global Growth

Ultimately, the importance of international marketing strategies cannot be overstated. They are the backbone of a business’s global expansion efforts, providing a roadmap for successfully entering new markets and securing a competitive advantage.

Through strategic planning and execution, businesses can enhance their market share, appeal to target customers in different cultures, and achieve sustainable growth on a global scale.

Steps to Creating an International Marketing Strategy

1. Conduct Thorough Market Research

Kicking off with thorough market research is non-negotiable. This foundational step is your key to unlocking international marketing success. It’s all about diving deep into different markets, understanding what makes local consumers tick, and eyeing the competition closely. Market research isn’t just a box to check; it’s your treasure map.

It guides you in customizing your products and marketing campaigns to resonate with local markets. Remember, every insight gained is a step closer to making your brand a household name on a global scale.

2. Understand Cultural Differences

Never underestimate cultural differences; they’re the heartbeat of successful global marketing strategies. Gaining a deep understanding of local cultures, languages, and etiquettes isn’t optional—it’s essential.

This knowledge shapes your communication strategies, ensuring your marketing messages aren’t just heard but felt. It’s about striking the right chord with international audiences, making every word count, and showing respect through understanding.

After all, the goal is to make your brand globally relatable, one cultural insight at a time.

Surprisingly, fewer than 40% of marketers utilize consumer research to inform their decision-making processes. This statistic underscores the untapped potential of leveraging deep cultural insights to refine marketing strategies. By integrating consumer research, marketers can significantly enhance their understanding of local preferences and nuances, thereby elevating their global marketing efforts.

3. Develop a Global Marketing Mix

Crafting a global marketing mix that’s as flexible as it is strategic is your next big move. It’s about finding that sweet spot between adapting to local tastes and keeping your brand’s values shining bright.

Whether it’s tweaking your product, adjusting prices, choosing the right distribution channels, or nailing your promotional tactics, every decision counts. This balanced approach not only appeals to target markets across multiple countries but also cements your brand’s identity worldwide.

Reinforcing this strategy, campaigns that leverage three or more channels can see a purchase rate that is 287% higher compared to those that use only one channel . This statistic highlights the effectiveness of a multi-channel approach in engaging customers and driving sales globally. By diversifying your marketing mix across various channels, you can significantly enhance your brand’s reach and impact, catering to the preferences of a global audience.

4. Optimize for Local Search Engines and Social Media

In today’s digital age, an online presence is your golden ticket to international brand recognition. Optimizing your content for local search engines and making waves on social media can catapult your brand into global markets.

It’s more than just posting; it’s about engaging. Collaborate with local influencers , spark conversations, and create content that speaks directly to local consumers. This digital dance is what turns viewers into loyal followers, and followers into customers, on a global scale.

Reinforcing this, a striking 89% of consumers indicate they are likely to buy from brands they follow on social media, and 84% say they would choose these brands over their competitors . This highlights the critical role of social media in not only building a global brand presence but also in driving consumer preference and loyalty.

5. Establish Local Partnerships

Navigating a foreign market is no solo journey. Forming partnerships with established companies or diving into joint ventures can give you an unparalleled competitive edge. These alliances aren’t just about sharing resources; they’re about sharing wisdom.

Tapping into local networks, understanding market nuances, and easing your way into new markets become significantly smoother with the right partners by your side. Think of it as a bridge-building exercise, where collaboration paves the way for mutual success.

88% of marketers consider partner marketing essential , recognizing it provides significant value—with 51% seeing it as highly valuable and 37% acknowledging it offers some value. This perspective underscores the strategic importance of partnerships in expanding your brand’s global footprint, highlighting how collaboration with local partners is key to unlocking market potential and navigating the complexities of new landscapes effectively.

6. Monitor, Adapt, and Innovate

The global market waits for no one. It’s ever-changing, always evolving. This is why keeping your finger on the pulse—monitoring trends, gathering customer feedback, and eyeing what the competition is up to—is crucial.

This vigilance enables your brand to stay agile, adapt strategies, and innovate product offerings. Whether you’re expanding into new markets or strengthening your hold in existing ones, staying ahead of the curve is what keeps your brand relevant and resilient in the global marketplace.

By weaving these steps into your international marketing efforts, you’re not just launching a campaign; you’re embarking on a journey. A journey that requires patience, insight, and a willingness to adapt, but one that promises unparalleled growth and the chance to turn your brand into a beloved name, far and wide. Remember, the world is your market; navigate it wisely.

International Marketing Strategy Examples

Exploring unique and compelling examples of international marketing strategies offers valuable insights into the diverse approaches companies take to navigate global markets successfully.

Here are some innovative examples from brands that have masterfully executed their global marketing strategies, incorporating essential terms and concepts:

Spotify: Mastering Global Standardization and Localization

Spotify’s global marketing strategy showcases a perfect blend of global standardization and localization, crucial for engaging an international audience. By offering a vast library of international music alongside playlists curated to cater to the local tastes of each target market, Spotify has become a brand worldwide.

Their approach emphasizes the importance of understanding language differences and cultural nuances, providing valuable insights into user preferences. This strategy not only respects intellectual property laws across different countries, including the Middle East, but also encourages users to explore new genres, making Spotify a leading figure in the international business of music streaming.

Airbnb: Navigating International Business and Local Cultures

Airbnb’s successful global marketing strategy hinges on its ability to provide authentic travel experiences while respecting domestic markets’ regulations and customs. Their marketing campaign transcends mere accommodation sharing, encouraging hosts to offer unique local experiences, thus appealing to a broad international audience seeking immersion in new cultures.

Airbnb’s efforts to collaborate with local authorities and communities demonstrate a sophisticated understanding of business abroad, ensuring their platform offers both universal appeal and local sensibility.

Red Bull: Global Branding through Content Marketing

Red Bull exemplifies a successful global marketing strategy by leveraging content marketing to build a brand worldwide. Their international marketing campaign, focused on extreme sports and adventure, resonates across foreign markets, transcending language differences through universally appealing visuals and narratives.

By generating valuable insights into their target market’s preferences, Red Bull has established itself as a global company synonymous with energy and excitement, fostering a strong connection with their international audience.

Uniqlo: Strategic Adaptation in Global Expansion

Uniqlo’s approach to international business showcases how global companies can achieve brand recognition and expand into new markets by adapting to local preferences. Their global marketing strategy balances universal brand values with local tastes, adjusting product lines to meet each domestic market’s climate and fashion sensibilities.

This strategic adaptation and collaboration with local designers demonstrate Uniqlo’s commitment to respecting cultural and language differences while protecting intellectual property and encouraging users to embrace their innovative yet accessible fashion.

These examples underscore the complexity and importance of crafting a successful global marketing strategy that respects cultural nuances, navigates legal and regulatory landscapes, and engages with international consumers on a meaningful level.

By prioritizing customer-centric approaches and local relevance, companies can enter new markets and build lasting relationships with their international audience, driving global growth and establishing a lasting brand worldwide.

International marketing is more than just selling abroad; it’s about creating meaningful connections with international audiences. A well-crafted international marketing strategy considers cultural nuances, employs thorough research, and adapts to local tastes while maintaining a cohesive brand message.

By embracing these practices, businesses can achieve international marketing success, expanding their global reach and establishing themselves as successful global brands. The journey to international markets is challenging but immensely rewarding, promising growth opportunities on a global scale.

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18 Global Marketing Strategies And Examples

Jennifer February 22, 2022 Article

So, let’s see what a great international marketing strategy looks like for these wildly successful global companies that operate numerous sub-brands, products, and services. In some cases, they are juggling tens or maybe hundreds of brand strategies and international marketing strategies. It’s no wonder then that these multinational brands need a corporate brand strategy to tie all these brand strategies and international marketing strategies together!

• Netflix – Video Streaming, The USA
• Apple – IT, The USA
• Toyota – Automotive, Japan
• Sony – Consumer Electronics, Japan
• Nintendo – Consumer Electronics, Japan
• Huawei – Telco & IT, China
• Alibaba – E-commerce & IT, China
• Booking.com – Travel & Accommodation, The Netherlands
• Philips – Medical & Consumer Electronics, The Netherlands
• Heineken – Beverage, The Netherlands
• Unilever – Consumer Goods, England
• GlaxoSmithKline – Pharmaceutical, England
• HSBC – Banking, England
• Adidas – Sporting Goods, Germany
• Deutsche Telekom – Telecommunications, Germany
• Kindred Group – iGaming, Malta
• Kerry Group – Consumer Goods, Ireland
• Carrefour – Consumer Goods, France

Example 1: Netflix – Video Streaming, The USA

Streaming video is the new internet. It’s no surprise that Netflix is so successful since just about everyone wants a subscription. The company has developed an agile and integrated approach to its brand strategy and international marketing strategy.

First of all, Netflix adopts a customer-centric approach to marketing. The company collects, analyses and applies data insights across all stages of the customer journey and blends them into one user-friendly and personalised streaming experience. It pulls out all the stops to meet its audience wherever they are—for example, by using advanced algorithms, machine learning, and viewer data to rearrange programs over time, based on factors like your viewing history and preferred genres. This leads to the creation of tailor-made content advice that perfectly matches the taste and preference of individual viewers.

Netflix’s international marketing strategy is also multi-channel, innovative, and integrated. You often come across Netflix advertising on mobile phones, although most people watch Netflix on larger devices, such as TVs or tablets.

Traditional marketing strategies that concentrate on getting sales through a few channels are being replaced by modern marketing methods that evolve with the market. Your brand, like Netflix, may interact with customers across a variety of media, devices, and touchpoints if you utilise constant analysis and optimisation.

Sources for further reading:

https://www.voices.com/blog/global-content-strategy/

How Netflix Marketing Wins Audience Every Time

Example 2: Apple – IT, The USA

In terms of revenue, as well as its brand ranking, Apple is the most important technology company in the world. Time and time again, Apple has introduced groundbreaking products that have revolutionised the IT market.

Apple focuses on a distinct target audience. As the most high-end IT brand on the market, it generally employs lifestyle segmentation. The urban demographic with sufficient purchasing power to acquire Apple items is the typical segment the company targets.

Apple’s marketing strategy is primarily founded on four ultra-strong pillars:

The superior technology behind its products. Items like the Macbook and Apple Watch are clearly leaders in their particular market segments because of the OS and technology used. Apple shines when it comes to brand equity and has had a cult following of “brand fans” for quite a while. Apple’s high margins provide revenue over time. Apple invests a lot of time and expertise in R&D. The brand doesn’t only live in the present but also has a continuous focus on the future.

Apart from this, Apple has a very smart retail set-up that is focused on helping its customers rather than constantly stuffing new products down their throats. Besides operating its own retail stores, Apple is also present in many other modern and premium retail stores. Apple is one of the most elegant advertisers in the business. Printed ads and television commercials have a clear message and are visually appealing.

In the last decade, Apple started to bring more of its production line in-house, including its chip design. This has given the company a huge advantage over competitors that are stuck with slower silicon by Intel, AMD, or Qualcomm. Apple’s biggest strength in the Tim Cook era is the operations side of the business.

https://www.marketing91.com/marketing-strategy-apple/

Example 3: Toyota – Automotive, Japan

Toyota is a popular brand worldwide. Its cars and pickup trucks are known for being comfortable, reliable, well-manufactured, and fuel-efficient—a feat that has helped the company gain momentum during and after the oil crisis of the 1970s. And all this at a competitive price!

Toyota started conquering the global markets in the 1960s, 1970s, and 1980s using a variety of strategies based on the company’s unique selling points. Take, for example, the global communication structure that Toyota has created throughout the years. It allows the Japanese car manufacturer to communicate with different offices across the globe through an impressive plethora of online and offline channels (email, telephone, app, chat, video conference, satellite phones). Modern communication technology also allows Toyota to control and monitor its worldwide business activities in an easier and more efficient fashion.

Toyota has also effectively harnessed traditional strong points like outstanding vehicle performance and low fuel consumption to cater to the growing legion of environmentally aware car users. High commission fees and an emphasis on the important role of local dealers fuel the proactive promotion of Toyota vehicles on the local markets.

By around 2000, Toyota had produced more than 100 million vehicles for export. To cater to the luxury segment and compete with the likes of Audi, BMW, and Mercedes, Toyota created Lexus as a separate brand, which was also the first car company to produce a hybrid consumer car in the 2000s.

https://graduateway.com/international-marketing-assignment/

Example 4: Sony – Consumer Electronics, Japan

Sony is a well-known Japanese global conglomerate. A leading designer and producer of consumer and professional electronics, as well as the world’s largest video game console company and video game publisher, it is one of the world’s top technology firms.

Additionally, Sony is one of the world’s most important music companies (largest music publisher and second largest record label), as well as the third largest film studio, making it a very comprehensive media corporation. It is Japan’s leading technology and media conglomerate.

Like many other Japanese brands, Sony is known for its quality products, whether those are cameras, image sensors, or screens. Sony has effectively embraced the concept of market mix and segmentation as an integral part of the marketing strategy. Sony offers a variety of products to serve specific needs in the market. Television and projectors, home audio, home video and gaming (PlayStation), in-car entertainment, home theatre systems, digital photography, handycam video cameras, and storage and recording media. Each category of these items is broken down into subcategories to serve niche interests in the market, creating a wide and highly diversified product lineup.

Additionally, Sony also embraces globalisation. The Sony brand is present in over 200 countries and is highly recognisable. The company has managed to market its products all over the world as if it’s acting as a national or regional company.

https://samples.primeessays.com/business/marketing-strategy-in-sony-company.html

Example 5: Nintendo – Consumer Electronics, Japan

Nintendo is a famous consumer electronics company that produces both hardware and software. Its games are very distinct in style and have given rise to popular sub-brands, like the Mario games, over the years.

Nowadays, Nintendo is concentrating on its Switch gaming console and making games for this device. It has also recently ventured into other gaming devices, like smartphones, with its games by launching distinct versions for iOS. The Switch is a handheld device that was launched to combat the increasing shift to mobile gaming. It has proven to be a top seller and a product that put Nintendo on the map again as a force to be reckoned with.

Nintendo provides a good example of an international market strategy and brand strategy where consistency is key. Catering to the company’s loyal followers is very important to keep sales going strong. Nintendo purposely focuses on a clear demographic and social target group: people from the age 15-35 who like video games but are not professional gamers.

When it comes to devising a promotion strategy, Nintendo focuses on the charisma and recognisability of familiar characters (Mario, Luigi, Donkey Kong, Joshi) and a clever, multi-channel promotion through kid’s channels, prime channels, magazines, bulletins, and social media. The company presents itself as an affordable and fun alternative to Sony and Microsoft (PlayStation and Xbox).

https://studymoose.com/analysis-of-marketing-plan-of-nintendo-switch-essay

Example 6: Huawei – Telco & IT, China

Huawei was rapidly becoming one of the largest smartphone and telco/networking companies worldwide, leading the charge with the global transition to 5G. The ongoing trade war between the US and China has, however, thrown a spanner in the works, with the US outlawing sales of most of Huawei’s products in the US itself and pressuring allies to do the same.

The brand continues to sell well in China, and many countries around the world still use its networking technology and other products to roll out its 5G networks. Consistent and heavy investment in advertising and communications has been the mainstay of Huawei’s brand strategy. A significant part of Huawei’s leap from regional player to global leader is also the result of the company’s astute international marketing strategy of building brand partnerships (3Com, Symantec) throughout its development. Huawei also invests quite a lot of energy and money into influencer marketing.

https://www.bsm.upf.edu/en/news/mobile-huawei-branding-kol-program-mobile-world-congress-upf-bsm

Huawei – Transforming A Chinese Technology Business To A Global Brand

Example 7: Alibaba – E-commerce & IT, China

Alibaba is known for its B2B, C2C, and B2C e-commerce marketplaces. It was one of a number of fast-growing Chinese tech companies that ventured across the tightly controlled Chinese borders in the 2000s. Via sub-brands like the AliExpress marketplace, it gained international popularity among those wanting to easily buy cheap Chinese goods online. Many dropshippers also use the company’s B2B platform to do business.

Alibaba’s international strategy was based on a realisation by founder Jack Ma that in order to gain international appeal, the company needed an international name that was easy to pronounce. It actively did this by pioneering the “new retail” philosophy. A household name in China, Alibaba’s approaching adolescence on the global stage helps brands unlock the potential of Chinese consumers. The company makes it easier for companies to do business everywhere in the following ways:

Seamlessly integrating online and offline by utilising data synergies to create operational efficiency. Creating a global infrastructure of commerce through technology. Building a comprehensive, globally present commercial operating system that facilitates “Retail as a Service”. Creating the ultimate shopper-centric platform by combining huge data assets to launch a powerful suite of marketing services. Alibaba managed to make good use of the fact that China is more or less the factory of the world, and that the sellers on its platforms quickly catered to both domestic and international demand. Nowadays, Alibaba is involved in numerous other ventures, such as artificial intelligence, payments, and cloud computing.

https://consulting.kantar.com/growth-hub/why-alibaba-is-more-than-a-gateway-to-china/

Example 8: Booking.com – Travel & Accommodation, The Netherlands

Booking.com has made booking accommodation online easy. While it started out as a Dutch company way back in the Web 1.0 era of 1996, it mostly started gaining widespread popularity during the Web 2.0 era in the 2000s.

Both its mobile app and website make it very easy to instantly book and pay for any accommodation in just about any country in the world. That’s a huge differentiator compared to going to a local travel agency and booking something there.

Other successful aspects of Booking.com’s marketing and brand strategy are:

The option to book special and exclusive accommodations through its Preferred Plus programme. The active promotion of actions aimed at building customer loyalty. Credit for future bookings, promo codes with discounts, free taxis, and savings on commissions are some prime examples of marketing geared towards creating customer loyalty.

https://www.mirai.com/blog/what-booking-com-was-doing-to-gain-market-share-while-we-were-all-in-lockdown/

Example 9: Philips – Medical & Consumer Electronics, The Netherlands

Philips made a big name for itself in consumer electronics. The Dutch international was founded way back in 1891, when it started producing light bulbs. Over the years, the company has made products like radios, TVs, electric shavers, and video cassette recorders. It even invented the CD (and later the Blu-ray) and brought it to the market with Sony. However, medical devices are where the company’s current focus lies.

More importantly, Philips recognised opportunities and used its engineering prowess to bring revolutionary products to the market, such as the CD or Blu-ray. It also saw that collaborations with the likes of Sony were necessary to produce these items at a mass scale. Branding-wise, Philips is known for providing usable, quality products at a reasonable price. The company follows a set international marketing strategy of “keeping it simple” and plans to launch “experience zones” that allow potential customers to explore a product before purchasing it. Do-it-yourself and experiential videos are aimed at strengthening the connection between Philips and its customer base.

https://brandequity.economictimes.indiatimes.com/news/marketing/with-keeping-it-simple-strategy-philips-to-take-social-media-route-to-market-its-latest-product/70449766

Global marketing strategy example 10: Heineken – Beverage, The Netherlands

Heineken is a Dutch beer brand that was founded in 1873. Over the years, the company managed to create a unique flavour and gained recognition by winning prestigious international awards.

By tweaking its branding to perfection, like implementing a smiling letter “e” and switching to green bottles instead of the brown ones used by most other brands of the time, Heineken really did stand out. Heineken also brands itself as a company that holds corporate social responsibility in high regard. It actively communicates that it wants to protect the environment. That’s why its products are green and recyclable. Moreover, Heineken promotes responsible alcohol consumption.

With its marketing and branding prowess, Heineken is going places by sponsoring strategic sporting events like the Olympics, where there’s usually a Holland Heineken House, big soccer events, and Formula 1. And, of course, Daniel Craig’s incarnation of James Bond also regularly drinks a bottle of Heineken in the more recent 007 movies…

https://medium.com/marketing-marques-innovation-bordeaux/heineken-how-did-it-become-the-most-popular-brand-in-the-beer-market-f461e2503dff

Example 11: Unilever – Consumer Goods, England

This Dutch/British company was founded in 1930 and currently sells a vast assortment of consumer products around the world. Unilever is known for its thorough customer and market research. Not a bad international marketing strategy!

For example, the Dove brand is well-known for using forward-thinking marketing campaigns, like the “Real Beauty” campaign, that redefine stereotypes of its target audience—in this case, predominantly women. In general, Unilever has become and managed to remain top of mind thanks to a clever combination of traditional and large-scale advertising (billboards, video advertisements), sales promotions (for example, giving customers free ice cream or a beverage when they buy products like Dove, Lux, or Surf), smart, clearly defined and globally uniform distribution processes, and a product strategy that focuses on the relationship between a specific product and the culture of a specific area.

The Axe/Lynx brand is usually a little more ironic in its tone, and the Axe Apollo Space Academy (AASA) campaign was quite ambitious. However, it fits the target audience.

https://academic-master.com/unilever-marketing-strategy/

Example 12: GlaxoSmithKline – Pharmaceutical, England

GlaxoSmithKline, also known as GSK, is the sixth largest pharma company in the world with around 45 billion USD in revenue.

Its overall marketing efforts are focused on the brands and products that provide it with the greatest growth and highest profits. The company has seven so-called global power brands, such as Sensodyne, Voltaren, Panadol, and Theraflu, as well as 12 regional core brands like Tums and Excedrin. The goal of its international marketing strategy: bring together two highly complementary portfolios of trusted consumer health brands, which cements and further strengthens the image of reliability that the company seeks to present.

Additionally, GSK has also developed a strong focus on digital transformation. The aim is to deliver more meaningful interactions with consumers, fuel brand growth and achieve efficiency savings. This was done by hiring new digital talent, partnering up with a new media agency and developing new partners. The company has also allocated more financial resources towards digital innovation and transformation. And last but not least: GSK’s overall marketing strategy is highly targeted on the brands that deliver the strongest growth numbers and biggest return margins.

https://www.orientation.agency/insights/benchmark-series-gsk-pharmaceuticals

Example 13: HSBC – Banking, England

HSBC is a financial behemoth that needs no introduction. A campaign that the British company released in the Asian metropole of Hong Kong seeks, in HSBC’s own words, to project optimism and confidence in Hong Kong’s future, as well as highlight HSBC’s commitment to playing its full part in supporting individuals, businesses, and the community of its home market.

A positive “can-do” attitude is at the core of HSBC’s marketing strategy, even in dire economic or pandemic-troubled times. The message that the company sends out by adopting this public attitude? Great brands are not just out there to make a lot of money but also to provide hope in both good times and bad.

https://www.campaignasia.com/article/great-brands-always-provide-hope-hsbc-on-the-imperative-behind-its-new-hk-bran/462548

Example 14: Adidas – Sporting Goods, Germany

Adidas is all about wanting to be the best sporting goods company in the world. This broad but clear mission makes it easier for it to fit marketing activities into its international marketing strategy. That’s because sporting goods are fairly easy to attach to strong, positive emotions like winning.

The company supports its business strategy (a limited supply of key items) with an international marketing strategy that uses endorsements from big names in the sporting world and a focus on social media to capture the attention of its target audiences. The marketing and branding strategy of Adidas focuses on:

Collaboration through powerful endorsement contracts with well-known athletes and non-athletes (Pharrell Williams, Kanye West). Innovation. Using recycled plastics in its shoes and clothing is a good example. Limiting supply. Limiting the availability of a number of popular shoes helps Adidas to increase its merchandise margins. Social media. Adidas has active Facebook and YouTube channels where it has uploaded thousands of promotional videos for its products.

https://heartofcodes.com/marketing-strategy-of-adidas-adidas-target-market/

Example 15: Deutsche Telekom – Telecommunications, Germany

T-Mobile is a DT brand with international recognition because of its magenta logo and clear branding. It won a prestigious Red Dot Award for creating a simple, minimalistic brand that keeps on being reinvented and updated. It was the number four European telecommunication company in 2008 and currently leads the charts.

The company managed to do this by focusing on brand experience, experimenting a lot with messaging, and expanding rapidly into different countries. Telekom’s marketing strategy is all about inclusiveness. “Life is for sharing” highlights Telekom’s path away from a pure technology provider to a wider mission that still defines the company’s claim today: to foster the exchange of knowledge and experience.

The recognisable pink colour and logo is another trademark that accentuates and consolidates Telekom’s brand identity and increases the recognisability of the company. Atmospheric images, hip music, promotions, and powerful testimonials reinforce the overall message that everyone should be able to enjoy the benefits of modern technology and fast internet.

Marketing in Magenta: 4 Winning Strategies by Brand of the Year Deutsche Telekom

Example 16: Kindred Group – iGaming, Malta

The Kindred Group is a publicly-traded iGaming company with offices on four continents that provides a variety of entertainment offerings, including online poker, sports betting, and online casinos.

Kindred’s international marketing strategy is predominantly aimed at collecting and analysing valuable data. It translates information into actionable, easy-to-understand insights about its most effective channels, customers, and marketing efforts. In doing so, the company can drive customer retention and engagement, but also optimise ad spend.

https://www.keboola.com/blog/kindred-transforming-raw-data-into-powerful-insights

Example 17: Kerry Group – Consumer Goods, Ireland

Kerry Group is an Irish consumer goods company that’s big in Europe. The company’s marketing strategies are focused on innovation, different pricing approaches, such as premium brands mixed with more economical ones and pricing to match, as well as promotion planning and more.

https://www.mbaskool.com/marketing-mix/products/17690-kerry-group.html

Example 18: Carrefour Consumer Goods, France

After spending five decades as France’s largest retail company, Carrefour has successfully expanded across Europe and the world, becoming one of Europe’s major retailers.

The secret behind Carrefour’s success is its constant pursuit of localisation. The majority of its market entries have been done through greenfield or collaborative strategies, subject to local legislation. This helps it to meet the demands and preferences of its local consumers.

The biggest differentiator for Carrefour’s success has been its more ingrained adjustment to the local environment and the appreciation of local consumer behaviours and cultures. The company is also committed to sponsoring local economic development wherever it is operating globally, an approach that creates a lot of goodwill and customer loyalty.

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ESSAY #3 – Pricing Strategies for International Marketing

Pricing is a major decision for international businesses since it affects a firm's positioning, profitability, and shareholder value. Irrespective of the context, companies need to set their pricing strategy to recoup capital investment, make a profit margin above fixed and variable costs, limit the negative effects of elasticity of demand, match the right stage in the product lifecycle, fulfill company objectives, and differentiate themselves from competitors. In international markets, firms will also have to consider local market conditions, avoid being charged with dumping, mitigate currency risks, engage in transfer pricing between subsidiaries, transact with other governments through countertrade, and minimize the effects of price escalation.

Related Papers

Assoc. Prof. Dr. Rashad Yazdanifard

Abstract-Basically among the four Ps marketing assortment, product, promotion and price, and place or distribution channels, lone price creates income and the other three generate costs. Price, besides creating income globally, plays a major role as a strategic factor in developing competitive advantage in the market. The amount of income and promotion of a company regarding the positioning and finding a suitable position in the mind of customers are related to suitable pricing Decision making for pricing is not an easy task and many factors are affecting in this decision. This paper will review some of the challenges companies face in global pricing in their respective markets. Key words: global pricing, pricing strategy

Olawale Horlahwahley

This research work examined the determinants of pricing policy in Nigeria manufacturing firms, most firms fails to incorporate some factors such as level of competition, close substitute, financial indices, among others in their pricing decision and this may lead to several crisis in the organization such as loss of profit and this may cause winding up in the long run. To this end, the study analyzes the factors that determine the pricing decision of manufacturing industries in Nigeria and the effects of the factors on revenue and profitability. Secondary data were employed, the secondary data were gathered from the annual reports of the selected firms in the sampled periods, the study is centered on cement companies in Nigeria and purposively selects Dangote cement having about 85% of the market capitalization and 75% of the Net Asset of all the quoted cement companies in Nigeria. OLS and correlation was used in establishing the relationship among the variables used in this study. The results show that, ROE, CNA and DC have individual and combine impacts of pricing policies in Nigeria. Also, COS and INF also have individual and combined impacts on pricing policies in Nigeria while COS has the major determinants of pricing policies has individual impacts on pricing policies also ROE and INV have individual and combined impacts of pricing policy. Some of the recommendations made is this study are, Managers should pay more attention on reducing cost of productions without having any negative impact on quality, this is in relation to optimality concepts; using the minimum resources to the achieve the maximum output. Manufacturing industry should also apply, operational research to tackle their logistics problems as well as supply chain in other to reduce the distribution cost, this can be achieve by appropriate transportation algorithms and other professional scientific methods.

CENTRAL EUROPEAN BUSINESS REVIEW (ISSN 1805-4862)

Michael Neubert

This paper aims to understand how born global firms develop their international pricing strategies, practices, and models. It aims to expand the study of international entrepreneurship and born global firms by including a broader and deeper range of pricing aspects than is normally found in the international entrepreneurship and pricing literature. The paper opted for a multiple case-study research design using different sources of evidence, including four in-depth interviews with CEOs of born global firms. The case-study firms were selected using a purposive selection method. The theoretical framework of Ingenbleek, Frambach & Verhallen is used. The results suggest that successful leaders act as 'integrating forces' on two levels: by applying a structured and disciplined price-setting process with regular reviews and by mediating between corporate financial goals and the local market reality. The results support the claim that policy makers should offer insights, training and financial support to give promising born global firms the possibility to select the most efficient international pricing models and strategies. The results are relevant for entrepreneurs to understand the importance of efficient price-modelling processes and the influence of the different price strategies and price models on financial results and sales revenues.

Euro Asia International Journals

Since 1930, the year of first Exportations, Rwanda's Balance of Trade continues to be chronically Deficit due to higher Imports over Exports. The National Bank of Rwanda (BNR) reported that from 2000 to 2015, the deficit value (expressed in million US dollars) passed from-238.63 in 2000 to-1616.50 in 2015. Trade deficits are not necessarily seen as a cause for concern, nor are they seen as good predictors of a country's future economic growth; however, they also may reflect a low level of savings and make countries more vulnerable to external economic shocks, such as dramatic reversals of capital inflows. For the case of Rwanda where imports have been always dominated by consumer goods rather than capital goods, its chronic trade deficit traduces the lower the Country's strength and the lower its economic growth. Facing the gap requires increasing production, fighting subsistence production and encouraging market oriented to national and international markets through exportation. Promoting local manufacturing and Made in Rwanda in general generates internal jobs and reduces jobs transferred to foreign countries by Importations. The solution to the crisis could be found on Private Sector side but it is unfortunate that the private sector in Rwanda is still embryonic. Only Governance innovations addressing the issue by promoting Made in Rwanda can face a number of challenges in industrial and micro small medium enterprises and leads to lower deficit trade. The present research has double aims: analysing Rwanda's deficit trade and its impact on business and consumers and economic growth; and providing appropriate governance initiatives to face the gap by promoting made in Rwanda. The research used Descriptive Quantitative methods with Documentary techniques. The Data were provided by the National Bank of Rwanda. The software for data analysis was Eviews Version 8.

TJPRC Publication

World Trade Organization was created at the Uruguay round of talks in 1994. GATT (General Agreement on Tariffs and Trade) transformed into a permanent institution. The Uruguay Round negotiations started in Uruguay in 1986. The aim of this round was to promote free trade. The WTO is responsible for trade negotiations, trade disputes and handling national trade policies. WTO agreements are endowed with technical assistance to developing countries and also cooperate with other international bodies on trade related issues. The presumption is that, all members have an equal voice in the decision making process. With the increase of free trade it is crucial that World Trade Organization servers to speed up world economic activity. This cannot be done without referring to the social, cultural, economic consequences, particularly with regard to vulnerable groups. Dumping is a practice of selling goods in another country at a considerably lower price. Anti-Dumping measures are deliberate and prevent a company from selling goods lesser than the cost to force the contender out of business. Anti-dumping rules cause economic mischief by shrinking markets and excluding efficient producers, there by hoist prices for consumers.

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Nike Global Strategy & Marketing Approaches

Company description, nike international strategy: overview, nike global strategy: marketing approaches, nike international marketing strategy: logistics approach, nike global strategy: human resource management approach, nike international strategy: analysis.

Nike Inc. is a multinational corporation that deals with the design, development, and production of different varieties of sports products. The company focuses mainly on the sports industry. Its head offices are at Beaverton, Oregon. Murphy and Mathew (2012) allege that Nike Inc. is a global manufacturer and dealer of sports apparel and shoes. It also sells an assortment of performance equipment, which includes socks, bags, timepieces, eyewear, protective equipment, and sports balls among others. The company’s revenue is over $32.4 billion according to the 2016 financial report. Moreover, Nike has over 70,000 workers globally (Kell, 2016). In the United States, the majority of the workers are from minority groups (see Appendix A).

The company was established in 1964 under the name Blue Ribbon Sports and later changed its name to Nike Inc. in 1971. Currently, Nike uses its brand to sell merchandise. It also sells its products under numerous subsidiaries such as Hurley International and Converse. Apart from producing sportswear and equipment, Nike runs multiple retail stores. The company sponsors various teams and sports events across the globe. Today, Nike runs over 700 production factories and operates in at least 42 countries (Murphy & Mathew, 2012). The company does not disclose sufficient information about its operation bases. Nike’s success hinges on its operations strategy. The company contracts out most production processes to foreign subsidiaries. The application of lean manufacturing and material consolidation techniques has contributed to the current success. Nike continues to dominate the sports apparel industry. Currently, there are allegations that the company’s sports shoes give runners an unfair advantage over competitors.

Nike Inc. has invested in three geographic regions, which are North America, China, and Western Europe. The company targets these areas due to the high demand for sports apparel. North America and Western Europe are known to be homes for many athletes. Additionally, the regions host numerous international sports events, thus serving as a good market for Nike Inc. For instance, North America is renowned for baseball and football. The company produces a lot of football and baseball merchandise that are sold not only to players but also fans of these major sports. Nike also has establishments in Asia and Latin America. The company has plans to invest in emerging markets in Central and Eastern Europe. Nike applies global strategy in its international market.

The company’s headquarters have significant control over all the subsidiaries in overseas. It helps to guarantee consistency in product development and minimize redundancy. Nike makes sure that it manufactures standard products across the subsidiaries. Moreover, it endeavors to standardize operations and marketing strategies. Since the headquarters make all the decisions, the company has a centralized research and development facility. The corporation has a state-of-the-art research and development (R&D) facility in Portland, Oregon. The American facility is responsible for designing sports products and works in liaison with manufacturers located in China, Vietnam, Malaysia, Pakistan, and other countries. The company has chosen to centralize its R&D facility to guarantee the production of standardized merchandise in all the overseas manufacturing plants.

Nike Inc. competes with other global companies like Adidas, Li Ning, Reebok, Toys R Us, and Under Armor. One of the primary strengths of Nike Inc. is the production of standard products across the globe. The centralization of the research and development facility enables the company to make sure that all subsidiaries use standard procedures to manufacture various products. It underlines the reason the company’s products are similar across the world. Indeed, customers can identify Nike products with ease in any market. The global strategy helps to improve organizational efficiency and reduce redundancy. Nike ensures that products reach the market on time. Moreover, elimination of redundancy helps the company to cut down on operations costs. Low production and operations costs help Nike Inc. to boost its bottom line. The strategy is invaluable concerning the product life cycle.

It enables the company to organize for the introduction of new merchandise into the market. One of Nike’s major weaknesses is that it does not value the needs of local markets. Instead, it pays attention to the global market. The centralization of research and development facilities prevents individual subsidiaries from operating autonomously. The subsidiaries cannot manufacture sportswear based on the needs of the local market. The global strategy denies Nike the opportunity to exploit local markets fully. Another weakness of the strategy is that it subjects Nike to operational risks. Changes incorporation or labor laws in the overseas countries may have dire consequences on the company. Additionally, political instability or natural disasters in the countries would interfere with the smooth operations of the company. The company’s investment in research and development coupled with outsourcing will help it to achieve both short-term and long-term goals. The corporation has control over operations costs, which are a major impediment to organizational growth. Nike will continue to expand its international market due to its efficient global marketing strategy.

Nike sells most products in North America, Western Europe, Greater China, Japan, and Central and Eastern Europe. The company’s primary market is North America, which accounts for 44% of Nike’s total revenues (see Appendix B). According to Ko et al. (2012), Nike’s marketing strategies and investments targeted countries that show steady economic growth, changes in lifestyle, and increased disposable income amid households. The corporation targets North America, Greater China, and the European market due to sustained economic growth and changes in lifestyle. Many people in these countries engage in physical activities as a way to stay healthy. Thus, the demand for sports apparel is high in nations. The increase in the level of disposable income means that a lot of people can afford Nike’s products (Hill & McKaig, 2015).

Nike uses customized marketing strategies to attract customers in these segments. For instance, the company uses technology to develop sports shoes (Nike Mag), which guarantee the safety of athletes and make them feel comfortable (Mahdi, Abbas, Mazar, & George, 2015). Nike has also developed a sports bra and tights meant for women. Indeed, the company is in the process of transforming women’s fitness into a multi-billion dollar business domain.

Soni (2014) alleges that Nike sells its products through three primary channels. The company distributes merchandise through wholesalers across the globe. Nike has numerous retail outlets globally that enables it to sell directly to customers. Moreover, the company uses its website to market sportswear and other products. Nike’s mode of communication entails liaising with retailers and sweatshops to ensure that it reaches a broad range of consumers in emerging and target markets. The company has a multichannel platform dubbed “Nike Digital Sport”, which enables it to interact with customers in the American and European markets. Customers get an opportunity to share their experience with Nike products and give recommendations on the possible improvements.

Nike Company does not run apparel and footwear manufacturing industries. Instead, it outsources the production of sportswear to manufacturing companies overseas. Taylor (2012) claims that Nike’s footwear is produced in China, Vietnam, and Indonesia. The primary reason for selecting these countries is the availability of raw materials and cheap labor. The technological aspect of the production of footwear is done in the United States. The procedures that do not require high technology are outsourced to these countries. Nike’s apparel products are manufactured in China, Thailand, Pakistan, Indonesia, Vietnam, and Malaysia (Wang, Wang, & Wang, 2016). The company chose these countries due to the availability of semi-skilled labor and raw materials. Additionally, the states are renowned for the production of textile products.

Nike Inc. does not own manufacturing plants but relies on outsourcing. The company understands the importance of human resources to the success of its foreign subsidiaries. Arora and Aggarwal (2012) claim that Nike works in partnership with contract factories to ensure that employees have adequate skills to facilitate lean production. The company helps to build the managerial capacity of individual plants and encourages them to promote employee empowerment. Kell (2016) argues that Nike relies on the local workforce because it is cheaper than exporting workers to overseas factories. However, the management of the subsidiaries comprises foreign experts. The company helps contract facilities to recruit and retain a skilled workforce. Nike’s objective is to cut down on operations costs, minimize employee turnover, and create employment opportunities for the locals.

According to Arora and Aggarwal (2012), Nike does not depend on agents or wholesalers in most of its businesses. Instead, the company recruits production workers on a regional basis to supervise and manage production. Currently, Nike has over 1000 production managers across the globe. In Vietnam, the company has a corporate responsibility team comprising 100 employees. Nike Inc. requires all suppliers to sign a code of conduct that obliges them to abide by established local labor laws. The vendors are supposed to offer good remunerations to workers and improve working conditions (Lund-Thomsen & Coe, 2015). In spite of Nike having a code of conduct, the company is accused of not being strict with its suppliers and distribution partners. For instance, most sweatshops that sell Nike’s brands do not abide by the corporation’s code of conduct. Nike has done little to make sure that the sweatshops comply with its code of conduct.

In the past, Nike faced numerous lawsuits due to child labor and poor working conditions in most subsidiaries. Additionally, the rate of employee turnover was untenable. Today, the company has engaged in corporate social responsibility (CSR) programs aimed at enhancing working conditions and discouraging child labor. It discloses the names of all its contract factories and the salaries scale of their employees. Moreover, Nike has formulated stringent laws that prohibit subsidiaries from exploiting employees. The company cuts ties with contract factories that contravene the laws.

Nike Inc. can serve as a primary source of employment for locals in the developing nations. The fact that the company outsources semi-skilled and unskilled functions means that it does not require exporting workers from developed countries. Allowing Nike to invest in a developing nation would not only help to create job opportunities to the locals but also boost their living standards. The company believes in building the capacity of local employees. It would go a long way towards equipping the workers with technical and leadership skills that might be essential for national development.

A developing nation will significantly help from Nike’s operations because of job creation. The company will create jobs for semi-skilled and unskilled employees who will contribute to the county’s economy through tax (Samuels, 2014). It will go a long way towards helping the local government to reduce the unemployment rate in the country. The company is notorious for establishing lasting relations with contract factories. Thus, employees are guaranteed of getting permanent jobs. Nike encourages employee training to facilitate lean production. Consequently, the local human resources will have an opportunity to advance their skills giving them a chance to get jobs in other industries. Allowing the company to outsource its functions to a developing nation would benefit both the country and the citizens.

Costs/Risks

Nike is a multinational corporation and has adequate financial resources to produce apparel and footwear at cheap prices. As a result, the company is likely to pose a significant threat to local textile industries (Samuels, 2014). It would lead to some people losing their source of livelihood. Additionally, Nike is blamed for not enforcing labor laws. Allowing Nike to establish operations in a foreign country may lead to the exploitation of the local workers. The company’s sweatshops or contract factories may take advantage of its reluctance to exploit employees.

Appendix A: Composition of employees in the United States (Kell, 2016)

Appendix B: Nike’s revenue by segment (Soni 2014)

Arora, J., & Aggarwal, G. (2012). Operations management at Nike: From breakdown to achievement. International Journal of Management Research and Reviews, 2 (7), 1293-1300.

Hill, C., & McKaig, T. (2015). Global business today (4th ed.). Ontario, Canada: McGraw-Hill Ryerson Limited.

Kell, J. (2016). Majority of Nike’s U.S. employees are minorities for the first time . Web.

Ko, E., Taylor, C., Sung, H., Lee, J., Wagner, U., Navarro, D., & Wang, F. (2012). Global marketing segmentation usefulness in the sportswear industry. Journal of Business Research, 65 (11), 1565-1575.

Lund-Thomsen, P., & Coe, N. (2015). Corporate social responsibility and labor agency: The case of Nike in Pakistan. Journal of Economic Geography, 15 (2), 275-296.

Mahdi, H., Abbas, M., Mazar, T., & George, S. (2015). A comparative analysis of strategies and business models of Nike, Inc. and Adidas Group with special reference to competitive advantage in the context of a dynamic competitive environment. International Journal of Economic Research, 6 (3), 167-177.

Merk, J. (2013). Global outsourcing and socialization of labor: The case of Nike . New York, NY: Routledge.

Murphy, D., & Mathew, D. (2012). Nike and global labor practices: A case study for the new academy of business innovation network for socially responsible business . Web.

Samuels, B. (2014). Managing risks in developing countries: National demands and multinational response . Princeton, NJ: Princeton University Press.

Soni, P. (2014). Nike’s global markets: Top revenue earners . Web.

Taylor, D. (2012). Global cases in logistics and supply chain management . New York, NY: Cengage Learning.

Wang, Z., Wang, Y., & Wang, J. (2016). Optimal distribution channel strategy for new and remanufactured products. Electronic Commerce Research, 16 (2), 269-295.

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International Marketing Management

Introduction.

The world is at this instant becoming a global village. So, the market’s chunks are now combined with different areas and thus the concept of the global market arises. To demonstrate in a global market, first a firm has to decide how they can enter a new region. Among the different types of market entry modes, franchising is the most familiar type of entry mode currently. It is getting higher attention because of its unique features, entrepreneur friendly and hazard free stepping. It has established the concept of the different circumstances that demand diverse entry modes. There is no single appropriate strategy to enter a new market. This essay will discuss the concept and show the different aspects of the Franchising entry mode.

There is no single appropriate strategy to enter in a market:

Kotler & Keller, (2006) argued that a global firm is an organisation, which spreads out its completion in different countries and thus gets advantages in its all departments including R & D, production, logistics, marketing and finance. When a firm decides to enter a global market from a domestic one, it has to face different types of steps. Firstly, it has to decide which market to enter; it can be the new product in a new or existing market or an existing product in a new market. Secondly, deciding on the market entry strategy. Thirdly, it has to decide the planning for the marketing program. Finally it has to decide on the market organisation.

Among these steps, decisions regarding how to enter the new market are the most important step. When a company chooses a new country to expand its business, it has to select the best entry mode. There are many types of entry modes. The most important modes are:

• Franchising,
• Joint Ventures,

Direct investment

The basic concepts, which actually make the differences among these entries, are the commitments of the firm, risks, control and profit potential. Here is a graphical representation of the changes of these concepts in different types of entry modes:

The major types of market strategies

Kotler & Keller, (2006) said that exporting means the promotion and direct sells of a domestically produced product in a foreign market. Most of the costs incurred here are considered as marketing expenses. Exporter, Importer, transport provider and government are the four players here. Coordination among them is very important.

Kotler & Keller, (2006) argued that an organisation can follow two types of Exporting strategies. These are:

• Indirect Exporting: Export the domestic produced products to a new country through intermediaries.
• Direct exporting: Directly export the products into the new market without any intermediaries.

Advantages:

• Lower risk and investments is required,
• This is the fastest entry mode among all.
• Maximization of scale is possible, as existing facilities are being used.

Disadvantages:

• The cost may be higher because of trade barriers and tariffs,
• Transport cost may be higher.
• There may limit access to local market information,
• Dhar, (2006) argued that the company will be treated as an outsider in the new country.

Kotler & Keller, (2006) mentioned that licensing is a strategy of permitting a company in a target market to use the property of the licensor. These properties are usually of intangible nature, such as; trademarks, patents and production techniques.

• Less risk involved here because the investment is low.
• It can ensure the speedy entrance in the market.
• Earning of higher ROI is possible.
• Licensing is the most appropriate way to avoid the trade barriers.
• Less control over the licensee can hamper the ultimate goal of the licensor,
• Decrease in potential profit, which is enjoyed by the licensee.
• There may be a threat of unwanted competition from the licensee. That is the licensee may become a competitor of the licensor.
• Knowledge spillover is possible here.

Franchising

Franchising is a more inclusive version of licensing. Here, the franchiser gives the right to use the brand and gives training to local firms of the operation systems. Kotler & Keller, (2006) argued that the franchisee bears the whole investment and gives a certain amount of fee to the franchisor.

Joint ventures

Joint venture means joint production and marketing of product with a local firm. A joint venture can be considered as a partnership of a foreign firm with a local firm. Kotler & Keller, (2006) argued that there are five common objectives in a joint venture: The market entry, sharing of risk and reward, joint product development and conforming to government regulations.

• Overcome of the ownership restrictions and cultural distance is possible,
• Higher resources because two companies are combined.
• It will lessen the required investment.
• It is a difficult to manage various features,
• Loss of the power control as because the firm has to share the controlling power.
• Here the risk is much higher than exporting and licensing.
• Dhar, (2006) argued that the local firm can become a competitor because the market is familiar to it.

Foreign Direct Investment (FDI) is the last strategy where a company has direct ownership of properties and facilities in the target country. Here the company has to transfer its resources including capital, technology and personnel or starting completely newly using the resources of the selected country or through acquisition of an existing entity in the new country.

• The firm can enlighten its image as it creates new job offerings,
• Specialized skills and direct full control over the operation is possible,
• It will lessen knowledge spill over.
• Getting the whole profit for and do not need to share it with others.
• Higher risk is involved than any other strategy,
• It requires more resources and investments, and
• There is a huge chance to arise problems to manage the local resources.

Different strategies for different types of organisations

The market entry mode differs based on the type of the firm. There are mainly four types of firms. These are:

• Large organisations
• SME (Small and medium sized enterprise)
• Manufacturing organisation
• Service providers

In the case of large organisations, the investment capacity is huge. Its size also helps to handle high amounts of risks. For these reasons, a large organisation can take FDI or joint venture as an effective entry mode.

Blair & Lafontaine, (2005) argued that SME should take exporting or licensing as because they have lack of investments and they are not capable of handling high risks.

Manufacturing organisations can take franchising or joint venture as a market entry strategy because of the low amount of capital and attention to the continuous development of the operation system. Because service is being consumed simultaneously after the service is served, there associated a lower amount of risks. For this reason, Zeithaml & Bitner (2006) argued that a service provider can use exporting, licensing or franchising as a market entry mode.

Different levels of risks

A major reason, for which the single market entry strategy is not appropriate, is the risks associated with business. There are different types of business risks and these are shown in the following figure.

Cultural and demographic factors

Culture is the summation of learned beliefs, values and actions, which form the behavioural pattern of the consumer. The major cultural factors are language, religion, ethnicity, gender and membership of different cultural institutions, which play a significant role for market segmentation. These factors shape the mindset and behaviour of the consumer and thus create a problem for the firms to establish within the market.

Schiffman & Kanuk, (2007) argued that geographic and regional aspects may also effect the market entry decisions. All the places of the world have differences in its geographic and regional dimensions. The environment, as well as the climates, is not similar. For this, the resource availability and process of operation restrict the strategies to gain a good market share.

Franchising: A special attracted strategy

According to Zeithmal & Bitner (2006), franchising is a relationship or partnership where the producer or the franchiser produces or develops the products and production system and gives the license to deliver or sell the product to a particular region by the franchisee. There are different types of benefits and drawbacks of franchising for both the franchiser and the franchisee. The table is showing this bellow:

Table: Benefits and drawbacks of franchising

Business format franchising

There are two types of franchising, such as:

• Traditional
• The business format

Blair & Lafontaine, (2005) argued that in the traditional franchising, franchised dealers emphasized on the product line of only one company and the extent of their business relies only with that company. Here, the franchisers impose little restrictions regarding the operation and practices little control power.

Accourding to Blair & Lafontaine, (2005), the business format franchising refers to sell of the production and operation system and procedures to its franchisee. Here the franchiser teaches the techniques and ways of production and give the license to use the procedures for a fee.

Use of franchisees own capital

In the case of franchising, the franchisee will have to invest and to hold all relevant risks solely. Blair & Lafontaine, (2005) argued that franchisers need not to invest any thing financial; rather they invest their reputation and knowledge. That is the franchiser can get the advantage of using the capital of the franchisee. Franchisers can get financial advantages in two ways. Firstly, it can get a huge amount from the franchisee as royalty or license fee. Secondly, it can increase its brand values and reputation without using any money. The risks regarding doing business is also held by the franchisee. So, franchising acts as an additional income source for franchiser. Again, the franchisee spends solely in advertising campaigns. Thus, the franchiser gets free marketing advertisements.

Franchisee versus employee

There is a crucial difference between the franchisees and the employees. The main dimensions are:

• Share of business operation system : Murray, (2006) argued that franchisers share their production and operation techniques with the franchisees but they do not share these with its employees.
• Share of external and internal information: Employees are informed about only required information but franchisee is informed about almost all information.
• Give the power of control: Murray, (2006) also said that franchiser should give some exclusive power to control over the business operation to the franchisee. For this, some important decision making power is held by the franchisee. But the firm gives no or a little decision making and controlling power to employees.
• Earning of money: Blair & Lafontaine, (2005) argued that franchisor get money from franchisee because franchisors have to pay royalty or license fees. But, the franchiser as a firm gives money to the employees as salary, fringe benefits and bonus.

For the above reasons, franchisees are more motivated than the employees. Franchisee can enjoy freedom in many cases, which can not be enjoyed by employees.

Knowledge regarding the local conditions of franchising

The most advantageous aspect of the franchising is the franchiser can use the knowledge regarding the region of the franchisee. When the franchiser wants to enter a new market, it is impossible to gather all relevant and accurate information regarding the regional and geographical dimensions. Murray, (2006) argued that the franchisee is a local firm which has the exclusive knowledge about all the possible situations and also have the experience to work with the environment. Another aspect is that, a local firm can identify and understand the values, beliefs and expectations of customers more easily than an external one (Franchiser). For this reasons, a franchiser uses the knowledge of the franchisee to exact the knowledge about the local market.

Technology and business transfer

Every organisation has some unique features regarding its technology used in the operation. When a firm becomes a franchiser and gives the franchisee the license of franchising, it has the obligation to train the franchisee to use the relevant production related technologies. Besides, it has the obligation to transfer its business strategies. There are different types of strategies in a business process for example market segmentation strategies, Competition analysis strategies, distribution channels production and technological strategies, packaging strategies, pricing strategies and advertising strategies.

Strength of a franchisee

Murray, (2006) argued that franchisee has the business set-up and the apposite support from the franchiser. So, it gains some strength. These are:

• An established and tested business concept : A franchisee gets the business format from the franchiser, which is complete, tested, implemented and established by the franchiser. So, there is no need to test the feasibility of the business concept by the franchisee.
• Reduction of risk : the franchisee is using the tested and established business format, as a result, the risks of the business operation is low.
• Share of the strength of the franchiser : The franchiser have some strength in the market, which is transferred to the franchisee by the franchising agreements.
• Easiness in financing: it can easily find the sources and ways to getting financial helps because the franchisee gets the investment strategy from the franchiser.
• Enjoyment of possible independence : the franchiser gives ultimate independence in all types of decision making. So, a franchisee can take a decision and implement it independently and without any pressure from others.

In a global market, if a firm takes only one market entry strategy, it will lose its all strengths. The basic reason behind this is, business has no certainty. Every sphere of business is full of uncertainty and problems. These problems are most of the time unique and never seen before. So, treating only one strategy to enter a market is not appropriate.

Bibliography

Blair, R. D. & Lafontaine, F., 2005, The economics of franchising , Cambridge University Press, Web.

Dhar, S., 2006. Market entry strategies , The institute of chartered financial analysts of India. Web.

Kotler, P. & Keller, K., 2006, Marketing Management , 12th edition, New Jersey: Pearson prentice hall, ISBN: 0131457578

Murray, I., 2006. The franchising hand book , Kogan Page Limited, Web.

Schiffman, L. G. & Kanuk, L. L., 2007, Consumer behaviour , 9th edition, New Jersey: Pearson prentice hall, ISBN: 0-13-186960-4

Zeithaml, V. A. & Bitner, M. J., 2006, Services marketing , 4th edition, New York: McGraw Hill, ISBN: 0-13-205676-3

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Growth Depends On Marketing To Multicultural Audiences

Plus: Preparation For What Next With TikTok; X’s Community Notes Get A Big Win; Where Broadcast Is Still King; Moguls Unite For AI, Music And Cultural Messaging

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While the federal government may be primed to force its sale or ban it outright, TikTok isn’t dead yet . It’s still an app on which roughly 170 million Americans click daily to be entertained, enraged and informed (or misinformed, depending on who made the post). TikTok is still setting trends with quirky songs and silly dances. Trending videos are shaping the conversation . And more than 500,000 merchants are using the short video app to sell products.

Offline, things look a little different for the app . On behalf of parent company ByteDance, top First Amendment law firms are reportedly recruiting creators to sue the U.S. government over the law President Joe Biden signed last week, Forbes senior writer Alexandra Levine wrote. Meanwhile, ByteDance has denied reports that it’s exploring options to sell the app—even without its sophisticated and proprietary recommendation algorithm. And Forbes has learned that more than 30 Chinese TikTok employees have faced additional questioning at the U.S. border, reports senior writer Emily Baker-White.

For creators and marketers, many continue to work hard on TikTok, hoping to capitalize on the platform, its audience and its money-making opportunities while it’s still active , writes Forbes contributor Katie Salcius . There’s a lot of money to be made on TikTok between now and the day in roughly nine months it may eventually go offline, creator Koosha Nouri told Salcius. According to statistics on TikTok’s page promoting sales, three in four TikTok users are likely to buy something when using the app, and 83% say it plays a role in their purchasing decisions.

It’s a safe bet that TikTok will remain a vibrant online hub until its (possible) end. And it makes sense for marketers to stay focused on the leads and sales that the app can bring for now. But a contingency plan for the next big promotion engine needs to be fleshed out and utilized. TikTok could even be used to lead customers to the next online social platform that captures user attention and engagement. While it seems that TikTok has a central and irreplaceable spot in today’s social discourse, the same thing was once true of social networks including MySpace and Twitter . Geopolitics, technical challenges, regime changes or rampant disinformation drove users—and marketers—to migrate to other platforms.

Regardless of platform, brands should be doing targeted outreach to multicultural audiences . These audiences have $5.6 trillion of spending power, and are the largest growth area in the U.S., said Sheila Marmon, founder and CEO of Mirror Digital. Marmon’s business focuses on connecting brands with these audiences in an authentic way. and I recently spoke to her about her strategy. A portion of our interview can be found later in this newsletter.

SOCIAL MEDIA

Matt Cardy/Getty Images

After Elon Musk took over Twitter in 2022 and quickly laid off the bulk of its content moderation team, many worried about the platform’s magnified potential to be a megaphone for disinformation. Musk’s answer was a feature called Community Notes, which allows volunteer contributors to annotate posts, adding context or correcting misinformation. And while Community Notes may not be as robust as a full-time moderation team, a new research letter in JAMA found Community Notes accurately corrected Covid-19 vaccine misinformation 97% of the time in 2023. Between December 2022 and December 2023, 45,783 notes mentioned terms related to vaccines or Covid, and 657 were specific to Covid vaccines, with many about side effects, effectiveness and conspiracy theories. The study said that accurate corrections to such posts were viewed between 500 million and 1 billion times.

Across the Atlantic Ocean, the EU will investigate disinformation on Meta’s Facebook and Instagram platforms . The European Commission said it believes Meta has violated the Digital Services Act by failing to implement safeguards that would address deceptive advertisements, disinformation campaigns and “coordinated inauthentic behavior.” The probe will focus on the pro-Russia “Doppelganger” network, which has spread content favoring Russian President Vladimir Putin, people familiar with the investigation told Bloomberg. The EC is especially concerned about the disinformation’s impact on elections: European Parliament President Roberta Metsola told Reuters she expects heavy social media disinformation when EU member states vote for a new parliament next month.

NOW TRENDING

Americans are not touching that dial . A new Nielsen study on listening habits shows that adults listen to the radio more than podcasts, music streaming or satellite radio . Two-thirds of all listening of ad-supported content is traditionally broadcast radio, with those over 35 dedicating 74% of their listening time to the radio. While people in the 18 to 34 age range listen to less radio—just 45% of their total listening time—it still takes up the largest chunk of their listening. Not surprisingly, most radio consumption happens when people are driving. About 80% of all car listening is the radio, the study found.

BRANDS + MESSAGING

Uproxx Group partners from left Rich Antoniello, Jarret Myer and will.i.am.

A new star-studded conglomerate linking AI, music, marketing, personalized messaging and media launched last week . Uproxx Studios, created by media veterans Jarret Myer and Rich Antoniello, and recording artist will.i.am, is a new company that focuses on brand messaging, content creation and publishing for music superfan communities, writes Forbes contributor Ime Ekpo . The conglomerate emerged from the strategic acquisition of Uproxx, HipHopDX, Dime Magazine and other media assets from Warner Music Group. It includes the license for media sales on WMG’s YouTube inventory, and integrates will.i.am’s FYI AI technology and FYI radio. The new conglomerate also features the new AI StoryLabs, a unit using advanced conversational AI for brand communication. Even without such heavy hitters leading the venture—Myer founded Uproxx and Antoniello founded Complex Networks—the content it commands is huge. Through all of its channels, Uproxx Studios reaches more than 170 million U.S. visitors each month, and receives more than 12 billion monthly video views.

Mirror Digital’s Sheila Marmon On Authentically Speaking To A Multicultural Audience

Mirror Digital founder and CEO Sheila Marmon.

In the last decade, the racial social justice movement has shifted cultural norms, perceptions of race and culture and messaging. Mirror Digital founder and CEO Sheila Marmon likens multicultural Americans to the third-largest global economy—behind the United States as a whole and China. Multicultural people control $5.6 trillion of buying power and are the demographic showing the most growth, she said, and marketers need better crafted messages to speak to them. I spoke to Marmon about effective strategies to speak to the multicultural consumer. This interview has been edited for length, clarity and continuity.

How can a CMO check their messaging strategy to ensure they are providing relevant messages to a multicultural audience?

Marmon: I would remind CMOs that multicultural media partners and multicultural marketing was around before [George Floyd’s murder by police officers brought diversity more into the spotlight in] 2020. There were a bunch of people that jumped in chasing the opportunity, but there are people who have dedicated their life to this practice, including me. People who care deeply about these communities, who have expertise that is deep and that is specific, related to the various communities that we work with. I think that’s thing number one. I heard anecdotally that a brand was looking to reach out to [historically Black colleges and universities], and they hired a firm not run by a person of color, and had no one on the staff that had attended an HBCU. But they just felt like HBCUs are hot, so everybody’s doing HBCUs. That makes no sense. A lot of the decision makers don’t look like me, don’t look like multicultural audiences. They have to be mindful of bringing the right expertise to the table. And it just can’t be the same people that they’ve been working with who now are saying, ‘Oh, I can do multicultural, too’ because they see a market opportunity.

What are some other common pitfalls you’ve seen from brands and marketers who are trying to do better with this community, but are making mistakes?

You have to choose partners with a demonstrated track record, and people who don’t just have learned experience, but also lived experience. That combination is really the win-win, because multicultural culture moves fast. Being able to tap into the community and have a conversation that is real and relevant, that’s going to resonate with your audience. You kind of need a sherpa to help you get there.

These growth audiences, these multicultural audiences, are grossly under-invested in. It’s 40% of the U.S. population, and a little over 2% of the advertising spend. So 40% of the population, 25% of every dollar spent, and 2% of the advertising spend.

The challenge is it’s hard. You have organizations that haven’t built up this muscle, and they don’t have people on their teams and they don’t know who to call. And so you continue to do what you’ve always done, but you’re missing out on this massive opportunity to move your business.

Where do you see marketing for the multicultural community going in the next five years?

I think that we are going to have to be very deliberate about being inclusive. That often starts at the top, with large brands. When you have leadership that is really talking the talk and walking the walk, that is when you start to see systemic change in their organizations, and they then have the proof points to help other brands be brave enough to start to do this work. It is hard because you’re changing process, and it is always hard.

And then a lot of people don’t want to get it wrong. As a community, it always makes a better headline to call someone out: ‘Oh, they totally missed it. They look so crazy.’ But we have to change that mindset: To call people in, and really take it as a learning opportunity and help people help brands do better the next time.

FACTS + COMMENTS

Chinese online retailer Temu has extended the kind of censorship mandated in its home country to the United States. The platform returns no search results for election-related terms including “Trump,” “Biden,” “MAGA” and “president,” despite its sale of hundreds of relevant products, Forbes’ Cyrus Farivrar writes .

More than 1,000: Number of items Walmart’s website pulls up in a search for “Trump” or “Biden”

20 million: Average monthly U.S. Temu users in Q1, according to Sensor Tower

‘Temu seems to be trying to preemptively avoid embarrassment or bad PR’: Marketplace Pulse CEO Juozas Kaziukėnas said

STRATEGIES + ADVICE

Productivity is a vital part of workplace success . Here are some ways you can use technology to boost how much you can get done .

It’s always a good idea to reevaluate your processes and make changes when necessary, but change can be hard on your organization . Here are some common myths about change, and ways to implement new ideas and policies successfully .

Saturday will be the 150th running of the Kentucky Derby , and 150,000 spectators are expected to watch the race live at Churchill Downs. How much mint is the venue’s culinary team expecting to use to make the race’s signature cocktail, the mint julep?

A. 150 pounds

B. 700 pounds

C. 1,000 pounds

D. 1,500 pounds

See if you got the answer right here .

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Airbnb launches new global marketing strategy

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Friday, 03 May 2024

Related News

Russia's Yandex reports Q1 revenue rise as market awaits spin-off news

Feytech holdings aims to raise rm114mil from ipo, duopharma’s new rm578mil contracts a positive.

The company’s newest category called “Icons” features 11 global experiences – including concerts and celebrity meet and greets – for free or under US$100 to try to attract a larger audience. — Reuters

NEW YORK: Airbnb has announced its newest marketing strategy geared towards bringing in new customers by offering unique experiences as it expands beyond its core business of vacation rentals, the company says.

The San Francisco-based company’s newest category called “Icons” features 11 global experiences – including concerts and celebrity meet and greets – for free or under US$100 to try to attract a larger audience.

“Icons is a compelling new way to do marketing and help shift the brand to be more than just a place to stay and create space to offer new products and services,” chief executive officer Brian Chesky told Reuters, adding that it has reallocated a portion of its marketing budget towards the campaign.

Shares of the company fell 1.5% to close at US$156.

The company’s television ads were over 200% more effective in driving consumer engagement before the pandemic in 2019, according to the television data and analytics company EDO. — Reuters

Tags / Keywords: Airbnb , MarketingStrategy , Icons , BeyondVacationRentals , CustomerAcquisition , BrandShift

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Airbnb's New Marketing Strategy

• Airbnb redirects marketing budget towards new campaign
• Airbnb introduces 'Icons' category with 11 global experiences

Airbnb has launched a new global marketing strategy with the aim of attracting a larger audience. The strategy involves offering unique experiences beyond its core business of vacation rentals. The company's CEO, Brian Chesky, announced the introduction of a new category called 'Icons', which includes 11 global experiences. These experiences range from concerts to celebrity meet and greets, and are available either for free or under $100.

The company has redirected a portion of its marketing budget towards this campaign. The plan is to continue introducing new experiences every few weeks. The primary goal of this initiative is to provide compelling experiences that will drive consumer engagement. The strategy also involves the use of television ads to further promote these offerings.

In addition to this, Chesky expressed the company's intention to make the Airbnb guest experience more reliable. The aim is to encourage habitual hotel guests to book accommodations on the platform. This move is part of Airbnb's broader aim to shift the brand to offer new products and services beyond just a place to stay.

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Okinawa's rice spirit industry seeks rebrand amid falling shipments

Shipments of Ryukyu awamori , a traditional rice-based spirit from Okinawa Prefecture, have plummeted by more than half in the past 20 years, leading to a sense of crisis in the industry.

Producers are seeking to devise new marketing strategies to make awamori appealing to both young consumers and international markets by changing the existing notion that the beverage is only for older people to drink.

"The popularity of liqueurs (often used in cocktails) is causing local brewers to cease production of awamori," said Manabu Sakumoto, head of an association of awamori producers in Okinawa, at a news conference in Naha, Okinawa Prefecture, in April.

In 2023, awamori shipments from Okinawa totaled 12.9 million liters, a 53% decrease from a peak in 2004. The industry is looking to broaden its consumer base to address this decline.

An event in Naha in late April aimed at introducing awamori to a broader audience attracted about 1,000 visitors.

"First of all, we will target people in their 30s who are familiar with shōchū (Japanese hard liquor),” said Yuki Koja, who managed the event.

A new brand of awamori called Shimmer showcased at the event, which featured a richer flavor and updated packaging, enjoyed good reception. A delighted attendee in her 30s who tried it said, "It’s smooth and goes down easier than regular awamori, and the package is stylish, so I would buy it.”

As awamori is strong, Koja said, "I hope to propose the use of awamori in cocktails (like liqueurs) for overseas consumers.”

To this end, the association and awamori producers have been hosting exhibitions in Europe, the United States and Asia since 2007, promoting the beverage's versatility in cocktails to bartenders and sommeliers. These efforts have been well received and contributed to a 40% year-on-year increase in exports to South Korea in 2023.

Despite these international successes, the overall shipment volume continues to decline.

"Our challenge is to secure more awamori consumers, and we hope to attract new customers through events and other means," a prefectural official said.

Translated by The Japan Times

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