Marketing Strategy Assignment On Internationalisation Of Kickerco
Marketing Strategy Assignment
You have recently joined the marketing team at Kickerco, a company which has been trading nationally for many years. The company would like to start to trade internationally. The company has recruited you because you have worked for organisations which have traded internationally and they want to use your experience and expertise to assist in the development of this area of work.
Task 1 – Formal brief
The senior management team have asked you to brief them on the implications of international marketing for organisations in general. Write a formal briefing paper for the senior management team to read.
In the briefing paper you must:
- assess the market research requirements for international marketing
- analyse how the business case for international marketing can be justified
- assess the risks which must be considered for international marketing.
To gain a merit grade you must also:
evaluate different methods of international marketing.
To gain a distinction grade you must also:
analyse the way in which financial and pricing issues may affect international operations.
Task 2 – Report
The senior management team would now like you to use your knowledge and experience of operating in international markets to help them to understand how to develop an international marketing strategy. Write a report for the senior management team. In the report you must:
- analyse the features of international markets
- evaluate the operational considerations that should be taken into account when developing an international marketing strategy
- analyse the characteristics of an international marketing strategy.
To gain a merit grade you must also:
evaluate the legal implications associated with developing and implementing an international marketing strategy.
To gain a distinction grade you must also:
choose an organisation you know well or one where you have access to detailed information. Evaluate the chosen organisation’s international marketing strategy.
Marketing Strategy AssignmentTask 1: Formal Brief
Market Research Requirements for International Marketing
In this era of world economic interdependence and globalization, there is a growing number of national business organizations like Kickerco which are trying to achieve their place in the arena of international marketing . The organizational structure that is used in domestic level of the company is not compatible for the task on an international scale. Therefore, Kickerco needs effective market research to trade internationally.
According to , an effective market research gathers the information related to cultural, sociological, political, economic, demographic, market conditions, competitive situation and technological environment of the various countries. On the basis of these information, Kickerco should analyse threats and opportunities of its target market and should determine product diversity, pricing range, target regions and promotional strategies for different countries. Market research about socio-cultural diversity is important as misunderstanding can destroy business opportunity. Data collected from market research on economic growth, market trend, inflation and profitability trend determine the target regions or countries. However, there are challenges in conducting market research across the border which demand attention from the leadership and the strategy makers.
Economic Dualism- As stated by , dual economy exists in the developing and the under-developed countries due to their economic discrimination. It would be an issue for the research team of Kickerco to analyse socio-economic status of industrialists and corporate employees within a same economic zone. Multicultural Research- Countries like Australia, Latin America have diversity in languages, social structure, cultural beliefs. Therefore, different research methods need to be applied to get same type of information from different regions. For instance, as Kickerco produces car and home audio, it should focus on its volume mechanism as Americans prefer loud music compared to British people.
Privacy Issues- According to , it is difficult to conduct primary research in Far Eastern and Middle Eastern countries as they are very much concerns about their privacy. Though there is a facility of virtual data collection, yet there exists a doubt of reliability.
According to , there are different methods of international marketing such as export, licensing, joint venture and contract manufacturing. Kickerco can directly export goods to foreign country which entails lowest risk. If Kickerco uses licensing agreement, which is done for long term, then the company has to pay monopoly rents regardless of its profit or loss.Whereas it is better for Kickerco to enter the global market through joint venture as it divides the risk between partner companies. It is management’s duty to determine the correct method after conducting market research on international marketing.
Justification of International Marketing
Boost Industrial Economy
International marketing creates demand of innovative products and services which can boost industrial economy and creates new jobs. According to , Kickerco not only produce car and home audio, rather it produces marine audio which has a current demand in the market.
Offers Higher Standard of Living
Kickerco ensure standard lifestyles of citizens by offering great quality of sound through their car, home and marine audio systems. Though, there are other brands producing audio system, yet Kickerco offers best products at a reasonable price along with it sells t-shirts, hats and jackets. Therefore, it needs to expand its business across the border and offers their products to the people of other countries.
Provides Competitive Advantage
As stated by , if an organization taps into international market, it can uphold its name and reliability to its existing and target customers. For instance, to compete with the leading rival brands such as JBL, Bose or Sony, Kickerco needs to globalize their market beyond USA.
Organizations involved in international marketing can protect the downfall of a domestic economy. Kickerco can boost economy of US by exporting their products in global market.
World Peace and International Cooperation
According to , international marketing encourages countries to keep the political differences aside for the betterment of their economy and their citizens and to work collectively. Through performing international trade, Kickerco can make friendship between US and other rival countries.
Availability of Foreign Exchange
Foreign exchange is required for importing essential goods such as modern technology and other raw material for heavy industries. International marketing injects enough foreign exchange into a county’s economy. Generally, everyone loves listening to music, therefore, it is an opportunity for Kickerco to export their products in different countries to bring more foreign exchange in the US.
Expansion of Tertiary Sector
If Kickerco exports huge number of products, it facilitates financial institutions like bank and it increases the use of transport. Thus, international marketing improves the facilities related to infrastructure which indirectly boost a nation’s economy.
Benefits at Time of Emergency
Countries which are involved in trade relationships help and support each other whenever, a country suffers from natural disasters such as flood, famines and earthquake or faces manmade destruction such as terrorist attacks.
Risks Associated with International Marketing
Financial and Pricing Issues
According to , risks associated with credit, foreign exchange, shipping and intellectual property are considered as the financial risks. Often parties involved in international trade operations are unable to meet their financial obligations. Sometimes, organizations face losses during international financial transaction due to currency fluctuations. There are always risks like accident, seizure, vandalism, breakage and contamination while an organization is shipping their goods. Kickerco needs to export their products at a reduced price to compete in foreign market as it not that popular like JBL or Sony. However, they need to pay attention to price escalation in order to avoid future loss.
Racial Differences- Product needs to be diversify their range according to the need of the customers of different regions. For instance, though loud audio system is in demand in Western countries, the Middle-Eastern countries prohibit their citizens to use such devices.
Economic Differences- Buying power, economic progress and level of revenue are different in different countries. For instance, though America and UK are financially developed countries, but Kickerco needs to fix acceptable price range for its target customers of Latin America, Africa or Eastern countries.
Climate Differences- As stated by , another risk is climate difference as organizations need to produce same product with different mechanisms in order to offer them into different climate regions. For instance, water resistant audio system of Kickerco will be sold like hotcakes in countries like Colombia, Malaysia and Singapore due to their rainy weather.
Language Differences- Language can establish a marketing or can destroy it by creating misunderstanding. Same phrase has different meanings in different countries. Therefore, it is suggested to understand the language and its usage of the target country where the Kickerco wants to spread their business.
Historical Differences- Though in recent time historical differences are decreasing due to the globalization, yet some prefer to keep their values intact. For instance, music is part of the life of people in Latin America, America or Britain. However, some middle eastern countries restrict their citizens from listening to loud music. Therefore, it is not possible to sell Kickerco products in such conservative countries.
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Task 2: Report
The rise in global competition is encouraging increasing number of companies to expand into international markets for gaining sustainable competitive advantage and ensure long-term growth. Various factors like regulations, competitive forces, organizational factors and others fuel international expansion of firms (1). This expansion allows the business ventures in achieving growth and gaining positive returns through efficient utilization of their resources and capabilities. It also facilitates learning, thereby providing them with the opportunity of both creating and exploiting knowledge. Companies also go international for growing or expanding their operations. They gain various benefits including increasing revenues, competition for new sales, more customers, diversification, investment opportunities, decreased costs and hiring new talent (1). However, businesses require definite strategies for going international as different factors affect time. Thus, it is essential to understand the features of such markets, operational conditions put forward by the government and characteristics of an effective marketing strategy. The aim of this report is to evaluate international marketing strategy for the case study organization Kickerco. For this purpose, it has analysed the international market features, evaluated operational conditions and analysed the characteristics of international marketing strategy.
Features of International Markets
International markets refer to those geographical regions where a company can conduct its business operations outside the territorial boundaries of its home country. It enables the companies in selling its goods and services beyond the home country for gaining various benefits such as access to new market regions, increased brand recognition, cost-effective production of goods, customer service centres and using free trade zones (2). Firms require various suitable characteristics in terms of age or reputation, resources, skill sets, project experience and networks for operating in the international markets. They need to possess established commercial presence in domestic market, possess sufficient financial and human resources with multiple offices and commercial activities, wide skill set and diversified expertise, experience in numerous and large-scale projects and informal multinational networks. These are some of prerequisites for operating in international markets. In this regard, established firms find it easy to gain access to such markets directly which is not the case for young firms. In addition, international markets also make it essential for these companies to engage in entrepreneurial activities, knowledge development, knowledge diffusion, resource mobilization and counteracting to change resistance. Furthermore, another feature of international market is the necessity of marketing capabilities and recent performance of the firms for driving their strategic intentions (3). These marketing capabilities include skills, activities, knowledge and expertise comprising of both informal and formal processes that help in transforming available resources into value outputs. These capabilities also encompass customer relationship, information usage and product development for operating in the international markets. On the other hand, current market performance is also essential as it indicates past performance in strategic efforts for enhancing value in export venture of the companies (3). Both these factors help in increasing competitive intensity in international markets. Resources such as international knowledge, networking and management characteristics are most important for firms for their operations in the international markets. Apart from these resources and capabilities, digitalization has been identified as another important feature of these markets (4). This has encouraged the expanding firms to utilize different digital technologies such as artificial intelligence, additive manufacturing, internet of things, big data analytics, e-commerce and others for value creation. This shows that Kickerco should enhance its resources and capabilities alongside introduce various digital technologies in the organization before expanding into international markets.
Kickerco would also come across various other features of international markets that might be challenging for the company. The political and institutional factors present in those markets have implications on the company’s operations, decisions and modes of entry. For example, higher regulatory quality in international markets require higher commitment from the firms, higher infrastructural endowment encourage firms to depend on wholly owned subsidiaries and openness of international investment options also help in establishing subsidiaries in the international market (5). Market factors such as country size of international market, market potential, market concentration and number of available partners would also determine the modes of entry for Kickerco. Besides, cross-cultural and managerial factors of the international markets might also play an essential role in influencing the firm’s operations and decisions. These cross-cultural factors include cultural proximity and language affinity with the international market, which would determine the challenges that Kickerco would face in that market (6). The firm would face several problems with the presence of cultural distance with the international markets because of their distinct values, norms, beliefs and customs that influence their business ways and etiquettes. It might lead to misunderstandings and conflicts in the international market, thereby making it difficult to conduct business. Moreover, managerial role and limitations make it even more complex to handle these situations with the added cultural distance present in the international markets. This shows that the cultural differences of these markets have significant influence on the expansion firms. Additionally, Kickerco would have to face obstacles in the international markets because of their economic factors and national culture (7). Economic factors like exports and imports, energy consumption, gross domestic product (GDP), per capital income, vehicle ownership and others present in the international markets are essential as they can become the basis of segmentation for Kickerco. National culture is one of the features that can also hamper or help the business operations of the company and thus, focusing on the cultural differences is essential.
Operational Conditions for International Marketing Strategy
There exist various operational conditions that Kickerco needs to evaluate before developing an international marketing strategy. From the above section, it has been observed that different factors and features of international markets generate an influence on the firms willing to expand. These include economic factors, social and cultural factors, political and legal factors, market attractiveness, stability and intangibles such as environmental, regional partnerships and product adaptation (8). Thus, it is of utmost importance to take into consideration those factors while formulating any international marketing strategy.
Economic factors determine whether the individuals in the international markets are capable of buying the products that the firm has to offer. This can be recognized with the help of variables such as per capita income, relevant class structure, supply and demand, financial transactions and banking infrastructure (8). Kickerco would refrain from expanding into markets incapable of affording its products or services and readily expand into ones accepting slightly different versions of its products. Furthermore, social and cultural factors also determine the presence of cultural distance and social differences between the international market and foreign company. They include language, consumer taste, regional values, consumer habits and demographics. These factors need to be considered while developing marketing strategy for better reaching the target customers (11). These differences are both real and significant that cannot be ignored by Kickerco marketers as they can hinder or facilitate their marketing efforts.
Political and legal factors should also be taken under consideration by Kickerco. Political stability and efficient regulatory system can make it easier for the firm to formulate its international strategy while instability or disharmony would be an obstacle. These include laws of conducting business, licensing and permits, taxes, fees and currency risks that the firm should abide by for marketing (9). However, it might face difficulties because of investment restrictions, discriminations against foreign firms, operational restrictions and quotas for home companies. Besides, Kickerco should also evaluate market attractiveness and stability in the foreign country before developing an international marketing strategy. Market attractiveness would help in analysing the market potential of generating revenues and profits alongside potential competition and dynamics present in the market (9). On the other hand, stability of the foreign country must also be evaluated for recognizing any ongoing political unrest or wars that might hamper the firm’s operations.
Various intangibles such an environmental, regional partnerships and product adaptation are also important before developing international marketing strategy. This is because environmental factors might generate both positive or negative effects on the strategy (10). Regional partnerships are required for gaining knowledge about customers, markets and competitors in the foreign markets. Moreover, product adaptation is important for understanding the possible acceptance of the company’s products and services in the international market.
Apart from these factors, some others are there that often drive complexity in the international markets. Kickerco should further evaluate these factors before developing international marketing strategy in the foreign market (9). These include reporting requirements, legislative changes, labour laws, penalties for non-compliance, accounting and tax requirements.
Characteristics of International Marketing Strategy
International marketing strategy refers to methods undertaken for marketing effectively to large number of markets covering both domestic and foreign countries. Kickerco can either adapt or standardize its marketing strategies in the international market (12). The intention of maximizing firm returns associates with the arguments for or against standardization. By applying this strategy, the firm can realize cost savings by economies of scale. However, adaptation also help in earning greater returns as the firm adapts to the local market and customers’ needs (12). Kickerco needs to analyse some of the fundamental characteristics related to international marketing strategy. These include modifications in its products or services for the new customers, changing the pricing strategy using criteria or metrics, identifying the beneficial target markets and assembling or manufacturing in marketing. Such characteristics are considered as most essential for developing an effective marketing strategy in the international market (13). Furthermore, the firm would have to undertake effective marketing and packaging for reaching customers, set price points at par with competitors, form its brand identity, identify international shipping options, recognize effective advertising options and select appropriate distribution strategies, which are also parts of an international marketing. Some of the basic characteristics of international marketing strategy include availability of broader markets, requirement for broader competence, involvement of various uncontrollable variables, intense competition, high risk and challenges, large scale operations, international restrictions, domination of other multinationals and locals and importance of advanced technology (13). Kickerco would have to efficiently analyse each of these characteristics before developing the marketing strategy. The firm also needs to have specialized institutions, long-term planning, acknowledge its nature of lengthy and time consuming. These characteristics can generate both positive and negative effects on the marketing outcomes of the firms, thus, they must be considered before developing any strategy in the international market. Kickerco can face intense competition from existing MNCs and local brands in the international market, which makes it essential to undertake effective strategy. International restrictions can also come in the form of advertising and promotions to the target customers (14). The suppliers of the company can face competition from three angles, while marketing research is another essential characteristic that Kickerco has to consider for understanding customer tastes, competitors’ offerings and market trends. Besides, sensitivity and flexibility are other characteristics because of external factors affecting the international marketing strategy. The firm can also evaluate the use of advanced technologies by existing firms in their international marketing strategies for devising its own. The lengthy and time-consuming nature makes it essential to undertake long-term planning for formulating this marketing strategy. Despite different characteristics providing challenges and benefits, international marketing strategy offers wide scope to the firm. Apart from these, activation, accessibility, affordability, awareness and acceptance are other characteristics of international marketing strategy. Access indicates availability and convenience of the products being offered while affordability is the ability and willingness to pay for such products or services (15). The acceptance of customers also matters from both functional and psychological perspective, which Kickerco would have to consider while developing the strategy. In addition, awareness refers to the product and brand awareness while activation indicates offers and engagements that the firm would offer to the customers in the international market.
There are various entry modes available for Kickerco to expand internationally. These include licensing, franchising, acquisition, greenfield investment, strategic alliance or partnership, joint venture, exporting, and others. In this regard, strategic alliance would be suitable for the firm to enter into the international market. It refers to an arrangement between the two companies for undertaking a mutually beneficial project while retaining their independence. In this regard, both the firms would pool resources for creating the separate business entity. Here, the responsibilities for both the parties would be defined clearly for avoiding any confusion. This market entry mode would enable Kickerco in gaining new customer base and competitive skills from the foreign firm and enter new business territories. Furthermore, it would also be able to create various sources of additional income and handle industry challenges more efficiently. Besides, it would use the skills, knowledge and expertise of the partner for understanding the market trends, customers’ preferences and competitors’ offerings. Both the companies would also build valuable intellectual capital, leapfrog competition, reduce risks and acquire new resources. However, Kickerco must also focus on not providing the entire control to the other firm or take the entire liability to itself.
Alongside the suggested market entry mode, Kickerco can undertake some recommended international marketing strategies for growing its business in the new market. This covers the four P’s of marketing including product, price, promotion and place. The existing trading products and services can be offered by Kickerco in the international market. These products can be slightly modified based on the customers’ needs and preferences, however, new products need not be added to the existing range. It can undertake a competitive pricing strategy for setting prices of the services and products based on the prices offered by competitors. These prices can either be at par or higher than the competitors. Besides, Kickerco should undertake digital marketing strategies through social media platforms, email marketing and other advertising tools for reaching the customers in the international market. In addition, the firm can provide both online and offline services through its physical location and mobile app in the international market.
The report aimed at evaluating various aspects of international marketing strategy for the case study organization Kickerco. In this regard, the first section provided an analysis of various features of international markets. Here, the report identified different features that can either act as restrictions or benefits for the firm in the international market. Some of the significant features included firm specific factors like resources, marketing capabilities, recent performance, digitalization and others. Furthermore, the host country specific factors like political and institutional, national culture and economic factors were also recognized as significant features present in the international market. The second section focused on evaluating the operational conditions required for developing international marketing strategies. These included economic factors, social and cultural factors, political and legal, market attractiveness, stability, environmental, product adaptation and regional partnerships. Such factors were evaluated to understand their implications on international marketing strategy development. The third section analysed characteristics of international marketing strategy. Here, the identified characteristics were products, pricing strategy, promotions, advertising, competition, challenges and restrictions, large scale operations, flexibility, accessibility, advanced technologies and others. Lastly, some recommendations were provided about the market entry mode and international market strategies for the firm. Thus, these helped in understanding the importance of marketing strategy in the international market.
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