Discuss about the International Marketing Strategies in Industrial.
As the technology updates, the world remains to feel smaller. In this scenario, it is potential for the companies to conduct business in almost every country around the world. International marketing is the application of marketing principles in more than one country. These are the marketing activities coordinated and incorporated across the market of multiple countries. Recently the Australian consumer brand Koala cookies have been purchased by the Singapore consumer goods company. Koala cookies is an Australia based cookie manufacturer. The company wishes to start it’s export business overseas. The Koala cookies come with the picture of Koala on the outside of cookies doing various activities. The filling comes in various flavors like vanilla, honey, banana and café latte. The most famous flavors are strawberry and chocolate. The handmade biscuits of Koala are regarded as the taste of country Australia. In this report, three different markets have been evaluated to establish a brand that is Koala cookies. This report provides an evaluation of markets in terms of size, demographics, legal framework, political risk, social and culture environment and competitive landscape.
The government of UK has taken measures such as monetary and fiscal initiatives to address the deteriorating economy. The government of UK is the most stable in terms of the application of rules, corruption control, government efficiency and monitoring quality.
As per the labor law, the extreme number of working hours is 48 in 7 days along with the minimum rest of 11 hours in each 24 hour period. The UK government is anticipated to made changes in the British labor laws since the labor party has come into power such as the introduction of minimum wage and strict measures to conflict discrimination (He, 2015).
The industrial activity has been focused in the northern parts of UK whereas the service sector has been promoted by the service sector (Jin, Ji & Gu, 2016). The industrial sector and the surging activity in the service sector have flourished caused north to develop at a lower rate.
The social and cultural environment of UK includes the factors like age distribution of population, level of education, income and more. The working-age population is covered in the age of 15-64 which accounts for 67% of the population and is active to consume bakery products.
The demographic environment is repainting the impact on food and beverage products. The new immigration is bringing new cuisines. The millennials are also seeking new dining adventures in the country. The 84% population of UK lives in England and Wales regions. The number of bakery companies is increasing.
The technology used in the UK industries can be understood by the factors like internet availability and infrastructure. The subscribers of internet connections have continued to rise intensely in UK (Schmid, Grosche & Mayrhofer, 2016). The country has one of the advanced telecommunication infrastructures.
The frequent change in weather can be experienced in a single day. The country has comparatively cool summers and not mainly cold winters. The baking is most influenced by the climate change (Papadopoulos, & Heslop, 2014). The processing is most sensitive to the change in temperature.
The infrastructure is a significant part of UK’s economic growth. It supports the business and regional development. The high level of infrastructure provision and liability indicates the performance of the company and supports the development of infrastructure.
The transportation and infrastructure development of India is helpful in the distribution network. The political environment of the country is greatly influenced by the government policies, political interest, and several political factors.
A number of regulatory reforms have taken place in the Indian economy. The present regulatory reforms can be concluded from the minimum wage increase and disability discrimination. The environmental pressure groups have been anticipated to establish in the Indian market in order to regulate and control waste (Grünig & Morschett, 2017).
The economic factors are significantly stable. The industrial reforms policies have made a reduction in the manufacturing licensing and liberalization of foreign capital. It has resulted in the continuous improvement of the economic environment.
The social factors state the changes which have an influence on the business environment. The country has more population between the ages of 15 and 65. The culture and lifestyle changes fast in the economy and the local market is also growing fast.
India is ranked seven as the largest country and is heavily populated. The country prefers global chain of food than the local chains. The loyalty is higher towards the global brands. It witnesses the entry of many fast food chains (Samiee, Chabowski & Hult, 2015).
India has the advanced technology. The technology considerably influences the product development and cost-cutting processes. The advanced infrastructure and the highly skilled IT workforce provide enormous opportunities to the foreign companies.
There is a complex relationship between the climate change and food. The season has an effect on quality and the quantity of food. There is more trend of packaged food due to change in climates. These products are easily available and can be consumed anywhere (Majlesi, 2016).
The infrastructure of India has an important role in it’s economic growth. The infrastructure development indicates the physical environment of the country. There is efficient transportation system in the country which makes the easy distribution of goods and services.
The USA has an effective rule of laws and strong democratic setup. The country has political and economic impact over national and global policymaking.
The US is highly regulated. The companies those want to conduct business activities in the US are required to be conscious of many regulations and strategies which may impact on the sale of products. Each state in the country has it’s own government structure.
US is the largest economy with a GDP of over $16.70 trillion. The unemployment level has fallen in 2015 and is continuously improving. The labor is not cheap in the country so it encourages outsourcing business activities around the world.
The US is a diverse country. People are generally health conscious and prefer to eat healthy food only. There is socioeconomic mobility which denotes to the upward or downward movement of people from one class to another (Choez, Cortázar, Cruz & Carvache, 2015).
The trend of purchasing online has increased nowadays. The online penetration is high. The company adopts e-commerce for groceries.
The natural environment impacts quantity, quality, and location of food. The climate change has brought biological and physical changes. The climate change reduces the amount of food grown.
The US is the global leader in technology. It is at the forefront to adapt and apply technology in various fields. The change in technology and technological innovation is extremely rapid in the USA. The technology innovation in the private sector has been increasing and accounts for 70% (Li, 2018).
The US have even political environment along with progressive infrastructure and technology. The country is a great target for Foreign Direct Investment (FDI) and has been the initial choice for the many MNCs for FDI.
The food industry is a core constituent of UK economy. It signifies more than fifteen percent of manufacturing business and employment. The food sector accounts more than 4% of R & D. This sector provides more than average pay and moderately long tenure in employment. The product lifecycle includes the phases such as introduction, development, maturity, and decline. The competition in the market is influenced by the superstore saturation (Demangeot, Broderick & Craig, 2015). The emergence of new retailers and the potential new entrants are the competitors in the UK market.
The food industry is one of the main industries of India. The industry ranks 5 in terms of production, consumption, and exports. The food industry of the country valued at US$ 39.71 billion. It accounts for 32% of country’s total food market. The introductory stage of Koala cookies in the product lifecycle will have less competition, limited distribution, high production costs and a higher rate of failure. The second stage that is growth includes increased rate of sales, healthy profits, and fall in prices. The development costs are normally covered in this stage. In the maturity stage, the company is going to face a decline in the growth of sales and extends the product line (Felzensztein, Stringer, Benson-Rea & Freeman, 2014). The government of the country is making every possible effort to boost investments in the business. India has permitted proposals for the joint ventures, foreign collaborations, 100% export oriented units and more. The country has also received US$ 6.82 billion FDI in 2016.
The market of US food industry reached 75 million metric tons in 2017. The US food market has increased product quality. The food sales in the US amounted to 5.32 trillion US $ in 2015. The Koala cookie is going to face 4 stages at the time of entering in the US market. The initial stage is also known as the inductor stage. The product is designed in this stage and required to be tested before entering the market. It requires advertising campaigns in order to create awareness of the new product. The second stage is known as growth. The sales got an increase in this stage. As a result, the production also gets an increase which results in more profits (Peng & Liang, 2016). In this stage, more focus is given in the advertisement. The third stage is maturity, the sales reach peak rate and start to slow down. The main aim during this stage to ensure for the company is to maintain the level of sales. The final stage is known as decline. The sales of the product start falling in this stage. Koala cookies can make an investment in two ways. One is to produce at home country and export or produce at the host country and FDI. The FDI can be made through ownership, location, and internationalization (Solberg, 2017).
The overall value of the cookie in the retail market of UK has reached to £2.1bn and the value of cookies has increased by 11.7%. The demand has expanded for the healthy snacks and increase in per capita food consumption in the UK. The competitors in the same industry of UK are Britannia Industries limited, ITC limited, NV Mondelez international limited, Nestle, The Kellogg company, Hershey company and United biscuits company.
India is the third largest producer of cookies after US and China. The cookies market accounts for more than 70% of value share in the overall Indian cookie market. The major competitors in India are Parle G, Krackjack, Festo, Hide, seek choco chips and more. These brands have maintained a distinct position in the Indian market. The demand for cookies is driven by the supermarkets and bakery retailers (Levine, Bernard & Nagel, 2017).
The market share of cookies in the US is estimated at USD 14.64 billion. The cookies are most preferred and consumed and it drives the US market. The cookies are consumed by all age group of people in the country. Cola cookies can face competition in the US by Royalty cookies, Rozella mae’s cookies, Aunt Beth’s cookies, Bombolo Biscotti and more.
The UK market has strong demand for the new products. The supermarkets add more than 800 products every year. The consumers spend 230bn GBP. The 743 million consumers are in the easy reach of UK due to the location, efficient supply chain and the logistics system. The UK is not self-sufficient in food and has increased reliance on imports for some items. The food service sector of UK is continuously growing (Reinhardt, Domingo, García & Christodoulou, 2017).
India is one of the leading in terms of production, consumption, export, import and growth prospects. It is anticipate growing at the rate of 104% by 2020. There is great scope for the Koala cookies as the food sector has appeared as a high growth sector due to the huge agriculture sector and ample livestock. The demand for the instant and packed food has increased significantly. It indicates equally scope to the FDI companies. The ministry of food is also taking measures to encourage investments in such business (De Mooij, 2015). The forecast of the growth of biscuits and cookies market have been shown in the appendices 1.
The U.S. food industry is anticipated to raise at a steady rate of 2.9%by 2022. The country is already in other sections and innovations which other countries are beginning to enter U.S. food industry. The demand of consumers drives the industry such as health-conscious products and diet food. The major leading players are given importance in the industry.
Conclusion and recommendations
By evaluating the market opportunities of UK, India, and U.S. it can be evaluated that UK and U.S are already developed the country and has established cookie companies. India is a developing country and has more scope for such products and the new companies. The packaged food market is also not much established in the country. The government of the country also encourages such investments in the country. So, Koala cookies have to face less complexity in such a scenario. The demand for the packaged food products is growing in India day by days. The merchants are also focusing on the packaged foods which are ready to eat.
Koala cookies can enter the Indian market but before that, it has to identify the target market and the local partners who know the market well. The company can establish it’s own franchisee in India or set up a joint venture with the local companies. The joint venture gives more growth opportunities as the local partner of the country have better knowledge of the taste of local citizens.
References
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De Mooij, M. (2015). Cross-cultural research in international marketing: clearing up some of the confusion. International Marketing Review, 32(6), 646-662.
Demangeot, C., Broderick, A. J., & Craig, C. S. (2015). Multicultural marketplaces: New territory for international marketing and consumer research. International Marketing Review, 32(2), 118-140.
Felzensztein, C., Stringer, C., Benson-Rea, M., & Freeman, S. (2014). International marketing strategies in industrial clusters: Insights from the Southern Hemisphere. Journal of Business Research, 67(5), 837-846.
Grünig, R., & Morschett, D. (2017). Determining the Target Markets. In Developing International Strategies (pp. 85-104). Springer, Berlin, Heidelberg.
He, Z. (2015, August). External Environment Analysis of Commercial-use drones. In 2015-1st International Symposium on Social Science. Atlantis Press.
Jin, J., Ji, P., & Gu, R. (2016). Identifying comparative customer requirements from product online reviews for competitor analysis. Engineering Applications of Artificial Intelligence, 49, 61-73.
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Li, W. S. (2018). Competitor Analysis and Accounting Model: Accounting Model. In Strategic Management Accounting (pp. 125-141). Springer, Singapore.
Majlesi, K. (2016). Labor market opportunities and women’s decision making power within households. Journal of Development Economics, 119, 34-47.
Papadopoulos, N., & Heslop, L. A. (2014). Product-country images: Impact and role in international marketing. Routledge.
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