Discuss about the Global Marketing for Realistic Market Options.
The project requires the evaluation of the realistic market options for the Donut King in the target country market. The project then, requires illustrating in the advantages and disadvantages of the target market options. It also deals in illustrating the reasons for adapting or rejecting each of the options within the context of the company and the market being selected. The second assessment of the project requires identifying the potential target market segments within the entry being selected for the company to expand its business. The project also deals in determining appropriate STP strategies suitable for the market entry of the company in the selected country and justifies the same in the process within B2B, B2C or combination of both the sectors. The paper aims at demonstrating the application of the knowledge as acquired for the development of the strategies in the global market. The main objective of the project is to assess and evaluate the impact of the variables associated with the marketplace on the marketing practice in the global market place. The project also deals in selecting the markets and justifying on the options for the market entry. It also deals in creating effective and justifiable marketing strategies.
Background
Donut King is the biggest fast food franchise in Australia which is planning to expand its business in Austria. Although, being a reputed brand selling donuts in Australia, the company does not have any international presence especially in the Austrian market. As the Fast food market is very competitive, it would be compulsory to evaluate the realistic market options for the Donut King in the target country market. Upon assessing the market opportunism for the company in the Austrian market, the project would be dealing in determining an appropriate strategy for the company to expand its business in the Austrian market and remain sustainable and competitive in the market. As noticed by the strong value in CAGR in 2015, the fast food market in Austria has a high prospect of growth in the near future. Thus, the fast food business seems to be a getting high end profits and benefits as the opportunities in the market are expected to be blooming. According to a recent survey, the fast food companies and restaurants in the country has been estimated to generate revenue of around $ 10 billion USD in the year 2016 (The Heritage foundation, 2016). Thus, the business plan of the company to expand its fast food service in the Austrian market seems to be a profitable one. The evaluation of the different types of internal and external market opportunities of the fast food industry in Austria would be helpful in developing effective and justifiable marketing strategies for the company in the process. The strategies for entering onto the new market would require the managers of the company to conduct an extensive market research on the trends including the buying behavior, political, social and economic factors as evident in the country. This evaluation of the market trends in the country would be helpful in providing suitable approach for the company for expanding its business in the new market (Bryman & Bell, 2015).
Screening of the market allows the marketers to identify the possible opportunbitues and develop strategies to be successful.
The five stages of overseas market selection process:
Country identification: This is the first stage in the market secrrning. In order to arrive at a particular market for overseas expansion, it is necessary to select a group of possible countries where the organization can expend its business. For this report, the identified country is Austria. Moreover, it is important to understand the significance of this stage. In the modern business environment business entities are free to operate in any market globally, however, it is important to select the country that presents unique growth opportunities for the company, has some similarity with the domestic market or share similar heritage (Navarro, 2015).
Preiminary screening: At this stage, the marketers try to evaluate the best available alternative for the selection of a particular country, narrowing down the choices to arrive at the final selection. The macroeconomic factors such as exchange rate, political stability, currency stability, level of domestic consumption and so on are evaluated to ascertain the probable entry cost to the country.
In depth screening: After the commaony has evaluated the macroeconomic factors of each possible alternative, more information about the selected country is required. The marketers collect detailed information about the target market so that the top management can make better decisions (Hollensen, 2015).
Final selection: At this stage, the marketers have clear understanndibng of the market where the business should enter. At this stage, managers analyze the industry dynamics such as level of competition in the market, competitors strategy, cost to enter the market as well as the strategic goals of the company and how the selected company fits in.
Direct experience: At this stage, the company tries to collect some real time data by offering their products to a limited group of customers and getting feedback from them. The marketers tries to understand the similarity or dissimilarty of the selected market with the domestic market and formulates future course of action for the business (Navarro, 2015).
Austria has been selected as the country of choice for venturing as the macro and microenvironmental analysis suggests that Austrian market for the business objectivers of donut king. The country ranks number one in the human life style index, the Austrian people like to eat fast food products and the overall market conditions are suitable for the company to operate in such environment (Barringer, 2012).
To become the fast food company of choice by providing customers with superior quality products and excellent customer service delivery.
To gain a market share of 10% in the next five years.
In order to operate in the Austrian market, Donut king can adopt any or a combination of these entry strategies discussed below:
Licencing: It is a very sophiscated arrangement where, the seller or the producer gives the right to another company for using their products. Donut king can adopt this strategy for entering into the Austrian market. The company can provide licence to some large lfirm in the fast food category for its marketing operations.
Franchising: It is one of the most effective and faster means of expanding business in different parts of the world. Donut King can implement this strategy for its Austrian venture. Franchising is the best market entry alternative for the business with repeatable processes such as Donut king. Moreover, franchising minimizes the risks involved in the business and helps the company to grow on the basis of brand name and the unique selling proposition of the company (Schlegelmilch, 2016).
Partnering: It is another strategic choice that can be considered to enter into the Austrian markets. It is useful where the selected country has completely different culture and the local firms posses more knowledge and expertise of the market. Donut King can form partnership business models for co-marketing arrangements and to enhance the brand awareness in the new market (De Mooij, 2013).
Once the company has identified the country and the means of venturing into the new market, it is important to further segment the market into different catagories based on some relevant criteria in order to provide better products and services to the customers.
Market segmentation: It is dividing the market into different group of customers with varied needs, characteruistics and behaviour.
The market segmentation can be undertaken on the following bases –
Geographic segmentation: the customers can be segmented on the basis of their physical location such as zones, cities and territories. In the cas of Donut King, the geographic segmentation can be done by identifying the buyer power of customers located in different localities (Mullins et al., 2012).
Demographic segmentation: Demographic segmentation involve dividing customers based on age, gender, income, occupation, etc. It can be used by Donut King to identify customers with different needs and preferences. Moreover, among the demographic segmentation, the most profitable segment would be young customers age betrwwn 14 to 30.
Psychographic segmentation: it involves segmenting customers according to the social class, lifestyle choices and personal characteristics.
Behavioural segmentation: It is segmenting customers based on the customers’ knowledge, attitude and experience with the product (Ghemawat, 2013).
Market targeting: It involves evaluation of each market segmant’s attractiveness and selecting one or more market segments to enter. For the initial expansion styrategy of the business, the most attractive customer segmnent is young middle and upper class customers in the age group of 15 to 30. Apart from that the comoany can also focus on other segment groups once the company establishes itself in the Austrian market.
Further, it is important to understand that selected target segment represents the mass of the Australian population, the selected target customer base is quite big and company can enjoy from the huge market opportunities that it presents. Moreover, the selected target is huge is capable of making choices and economically independent to make the purchase (Dixit, & Skeath, 2015).
The next step after the selection of target market is deciding how the company would serve the customers, for this Donut King can adot one of the three market coverage strategies discussed as –
Undiffrentiated marketing
Differentiated marketing
Concentrated marketing
For the above identified target customers, Donut King can implement undifferentialted marketing as the needs and preferences of the customers are similar in nature. Therefore, undifferentiated marketing strategy would help the company to save on marketing cost while attracting the potential customers with common motives and communication mix. Moreover, by implementing undifferentiated marketing helps the new company to achieve a synergistic effect through integrated marketing communication. In addition, the undifferentiated marketing helps the company to establishe untested business by chasing all the customer groups through mass advertising of a “superior product” and then foraying into more customized marketing strategy (Schlegelmilch, 2016).
Market positioning: after the most attractive market segments are determined, company engages in the positioning of the product to occupy distinct and desirable place in the targeted market segments. It involves creating a competitive positioning of the product and formulation of detailed marketing mix. The purpose of positioning is to place the product and services high in the minds of the customers with respect to the competitor’s products. This can be achieved by communicating the customers about how the company’s product is different from the competitor’s products and what value customers can derive out of it. In this regard, Donut King can utilize the markrting mix elements to achieve the desird market positioning which is discussed as –
Product: the product of Donut King comprises food and beverages. However, to achieve differentiation it can offer local flavor products in addition ot its regular product offerings. Another approach can be introduction of healthy food products to cater to the needs of health conscious customers.
Price: Pricing is one of the most important decisions that a company has to take while entering new markets or when launching a new product. In this case, Donut Kind can implement competitive pricing to attract the customers of competitors. Moreover, as the company operates in fast food segment, it can implement customary pricing where the price is determined on the basis of prices of customers and bundle pricing i.e. selling products two or more products as a value pack to increase sales and help customer to save costs (Keegan & Green, 2015).
Place: The distribution is limited to the supplies of consumables required for making the food and beverages. Moreover, the finished products are consumed at the outlet itself or can be taken away by the customers.
Promotion: The promotional strategy should be in line with the company’s overall business strategy and objectivers. The promotional campaigns should be formulated considering the target audience. Therefore, Donut can utilize social media and online channels for its promotion and advertising campaigns (Singh, 2012).
References
Barringer, B., (2012). Entrepreneurship: Successfully Launching New Ventures, (2012).
Bryman, A., & Bell, E. (2015). Business research methods. Oxford University Press, USA.
De Mooij, M. (2013). Global marketing and advertising: Understanding cultural paradoxes. Sage Publications.
Dixit, A. K., & Skeath, S. (2015). Games of Strategy: Fourth International Student Edition. WW Norton & Company.
Ghemawat, P. (2013). Redefining global strategy: Crossing borders in a world where differences still matter. Harvard Business Press.
Hollensen, S., (2015). Marketing management: A relationship approach. Pearson Education.
Keegan, W. J., & Green, M. C. (2015). Global Marketing. Boston: Pearson.
Mullins, J., Walker, O. C., & Boyd Jr, H. W. (2012). Marketing management: A strategic decision-making approach. McGraw-Hill Higher Education.
Navarro, F., 2015. Business plan: A preliminary approach to an unknown genre. Ibérica, 30, pp.129-154.
Schlegelmilch, B. B. (2016). Creating Global Product and Service Offerings. In Global Marketing Strategy (pp. 83-103). Springer International Publishing.
Schlegelmilch, B. B. (2016). Entering Global Markets. In Global Marketing Strategy (pp. 43-61). Springer International Publishing.
Singh, M. (2012). Marketing Mix of 4P’S for Competitive Advantage. IOSR Journal of Business and Management (IOSRJBM), 3(6), 40-45.
The Heritage Foundation. (2016). Population, GDP, Inflation, Business, Trade, FDI, Corruption. (n.d.).
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