There are several organizations that are looking forward to expanding their business not only into the domestic market but also in the international market. The Butter London is the organization chosen for this report which wants to expand its business in the Indian market. The scope, as well as the key concepts of international marketing, will be discussed in this report. Further, the approaches of the international marketing will also be explained that can be chosen by the Butter London organization. The recommendations will also be made on the operations in the international market. This report will provide a completed understanding of how a business should enter into the international market and what approaches as well as strategies it should use to operate properly in such markets.
International marketing can be defined as a company applying their marketing principles in another country. It is usually executed across borders. London butter began with nail lacquer products to every kind of cosmetics of face, lip, and eyes. The London butter products are non-toxic and of high quality popular in the London market(Czinkota, et, al.,2016). The company has emerged as the clean beauty brand which offers the most premium and luxurious products to all the skin type and tone. The company decided to enter into the flourishing market of Indian cosmetics to increase their customer base and reach. The international markets offer the brand many new opportunities and knowledge. The international market can offer the company a good number of interested customer(Tan, et, at., 2013)
It is important for the company to understand whether or not it should go international as there are many challenges that are to be considered prior to zeroing down on tapping in the international market. As it is already highlighted that company is aiming at increasing it customer base and reach. Hence, for that purpose, it need to consider going international as an option.
The company would be considering the cost-effective ways of entering in the Indian market. For that purpose, there are many options available before the organisation. However, the best way to enter in the international market is to join hands with the local leader in India and carry out business. Forming a joint venture is the most suitable option before the company.
The company needs to develop its reputation in the Indian market and joint venture will help the company to build the brand image. In addition to this, it helps in increasing the customer base and market share. Effective marketing approach can help in building the brand image.
The company needs to foster a healthy competition that is very helpful in managing the company’s brand and organisation needs to identify and consider 7P’s of marketing in order to improve and enhance marketing strategies. These would assist organisation in analysing marketing and environmental conditions of the organisation.
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The concept of international market is:
The Butter London want to enter the international market of India because of the following reasons(De Mooij, 2018)
Reason to tap in the international market:-
To tap in worldwide market: International market causes the organization to extend its business all around and increment deals and incomes. These days MNC's are the organizations gaining on a high scale.
For development and benefit: Growth of the organization and expanding the benefit rate is the primary motivation behind why organizations frequently will in general move in global markets. It expands their image esteem, builds the income of the organization, and so on.
There are numerous reasons why universal market does not capacity and a portion of the real reasons are:
Political condition: Political steadiness is vital for the working of a global market. Any variance in the political condition regularly prompts the disappointment of legitimate working.
Economic change: Economic state of universal market influences the working of the market and this influences the deals and income of the organization.
Social elements: Social and social factors likewise assume fundamental job in influencing the working of worldwide market.
The various routes to enter into the international market of India are(Dinu,2018 ):
The opportunities available in the Indian market for the Butter London are:
The challenges in the Indian market for the Butter London
The process to enter into the international market are:
The following factors need to be considered while tapping an international market.
Size of Market: The extent of the market and accessibility of assets in that advertise must be discovered before entering in any of the universal market.
Contenders: Competitors accessibility and their incentive in the market must be discovered before entering the worldwide market. This will assist the Tesco with working according to the circumstance and according to the opposition of market.
Lawful necessity: Legal prerequisites and enactments ought to must be considered before entering in a universal market. These are the elements that influence the development of an association so Tesco should take care about these elements.
Costs: Costs of items and administrations ought to be considered before moving towards any global market. Cost is something that assume fundamental job in any of the market whether it is national or worldwide.
Foundation: Infrastructure of the nation and the financial estimation of the market ought to be investigated before entering in that showcase.
Clients' sorts: It is the duty of Tesco to recognize key clients and bring out strategies and systems to satisfy their requirements and requests
The different strategies that can be used by the Butter London to enter into the international market are(Terpstra, 2012):
Exporting: The Butter London can enter in the international market of India is through exporting. India has well established base for the foreign markets and great opportunities for success. The company can avoid the manufacturing cost of the cosmetic products in the India and just focus on the marketing investment in the India.
Advantages of Exporting:
Disadvantages of the exporting:
Licensing: The Butter London can use the licensing method to allow the company of the Indian market to use their brand and expertise to sell the products under their brand name in the charge of royalty or fee.
The advantages of the licensing are:
The disadvantages of the licensing are:
Joint ventures: The Butter London can tie up with any other firm to enter into the international market over mutual conditions and terms. They will share the ownership and rights over the resources of the joint company. Mostly the companies share the profits and returns on equal basis and have equal right to take the decisions of the management and functions.
The advantages of the joint venture:
The disadvantages of the joint venture:
The marketing activities of the business like production, promotion, distribution is executed across border.
the marketing activities like production, promotion and distribution is executed within own country.
the market size of the international market is wide.
The market size of the domestic market is small.
the government influence and control is high as the global marketing deals with the rules and regulations of numerous countries.
The government control and rules are comparatively less because the domestic laws are much easier.
The technological advancement of the international country can benefit the company which is not available in the domestic country
The domestic country do not uses the technology of different countries.
The risk involved and challenges are very high due to changes in the social, cultural, economic environment.
The risk and challenges are low as the environment of the domestic country are comparatively consistent.
Global marketing requires huge finance and capital expenditure is very high.
The cost of acquiring the resources and capital is low.
The company may feel problems during the communication between the international people as their nature, taste, habits, and language is different.
The customer preferences, segments, and needs are similar.
Global marketing requires deep research and knowledge of the foreign market due to different backgrounds and culture.
The market information and knowledge of the domestic market can be easily executed.
The business operations are operated in different countries
The business operations are operated in same country.
The decisions for the pricing and marketing in the foreign market is risk-taking and complicated
The decisions for the pricing and marketing are not complicated as the customers are familiar and have same taste.
The Butter London has to create such a marketing mix for the international market that suits the customer needs and wants of the foreign customers:
The marketing mix for the global markets(Czinkota, 2013):
The international market can be evaluated on the following basis (Helm, 2014):
Marketing Mix is a tool of marketing which is very important and is used by organizations to pursue the main aims and objectives of the marketing. There are 4Ps included in the Marketing Mix which are required to be analysed to launch any product that is suitable for that particular country where the company wants to expand its business. For such purpose, there must be an investigation of the product, place, promotion as well as pricing.
Product: The basic marketing concepts explain that there will be sales of more products if there is the aim of meeting the requirements of the target market. On the other hand in international markets, there will be involvement of the several factors such as the background, culture as well as the buying habits of the customers. The argument for the standardization states that the process for adapting the products in local scale does a little more than the complete cost of producing on the global scale. For example, Butter London is required to know about the requirement of the customers that what kind of beauty products they require and such products should be manufactured (Armstrong, et. al., 2015).
Pricing: It also plays a very important role in marketing. There is a requirement of looking for the two issues that what is the perception of the customers and which are the objectives as well as the aims of the organization. There are several other factors that are required to be considered while setting the prices in the international market such as the exchange rates, transportation costs as well as the duties and tariffs. Butter London is also required to look into these factors.
Place: For the purpose of expansion of the business are different international markets there are certain factors that differ from market to market. To expand the business it is necessary that the business should be situated at such a place where the customers can easily purchase the product by reaching to the organization. Such as, Butter London is offering its products in ULTA, US and offers around twenty-one thousand beauty care products in all the stores. It ensures the delivery of the products at the right time.
Promotion: There is always a requirement of promoting and advertising the products in the international countries where the company wants to expand its business for the purpose of bringing awareness among the customers. These methods of promotion include personal selling, advertising sales promotion as well as the advertisement on TV, Newspapers or the use of flyers. For the different international context, different promotional methods can be used by the organization.
Butter London will standardise and adapt the ‘Product’ to tap in the Indian Market. It needs to work on developing products. Adding an element of uniqueness in its products can help the company to capture higher market share. The argument for the standardization states that the process for adapting the products in local scale does a little more than the complete cost of producing on the global scale.
In the international marketing, Butter London utilization of the marketing mix to provide the best products available in the best place on correct prices using promotional activities. There are 4 Ps included in the marketing mix of the international market such as price, place, product as well as promotion. The Butter London organization is looking forward to expanding its business in the international market of India and for such purpose, it is important for it to review the determination of the prices which can be based on the several factors such as the Exchange rate, transportation costs, as well as the other duties, levied on the products. The place also plays a very important role in the marketing of the products and the place should be at such location which can be easily accessible by the customers to purchase the products easily. To expand the business, it is also necessary to promote the products offered by the organization in the international market and at the end, the products should be of such quality and types that fulfil the demand of the customers (Baker, & Sinkula, 2015).
There are mainly two approaches that can be used for the smarter international marketing by any business. These international marketing approaches are Transaction marketing approach and Standardization marketing approach. These marketing approaches are used by the organizations to help them in moving towards the international market to expand their business in the best possible manner. Following is the description given of these two approaches:
Transaction approach: In this approach of international marketing the main objective of the organization Butter London will be to keep its concentration on the cost constraints as well as analysing the methods to penetrate the market in the same manner. It can be analysed that the creation or the formulation of the single structure is the main concept of the organization and several marketing tools can be used such as searching the sellers, buyers as well as the study of the market. This is one of the best approaches suited for the companies having the small business structure (Someh & Shanks, 2016).
Standardization approach: In this approach of international marketing, the main focus is to enter the market keeping in the mind the expectations as well as the requirements of the customers. This approach targets the market where the customers have similar tastes as well as preferences for which the marketing mix tools, as well as the promotional tools, are being used by the organization. In this approach, the main objective of the organization is to establish its brand in the global market by adopting the standardized practices in the new location.
As it can be analysed that the organizational structure of the chose organization Butter London is small hence the transaction approach of international marketing is the best approach that can be used by its business (Yan & Luo, 2016).
In the market orientation, the major objective of the marketing director of the organization is to analyse efficiently the expectations as well as the demands of the consumers. In the context of the home marketing orientation, it is generally unspecified that customers have the same expectations as well as the demands. In the international orientation, it is generally assumed that the needs, demands as well as the preferences may be different on the different levels.
On the other hand, there is also a behavioural approach in which the main constraint is on the home orientation. In the home orientation, it is assumed that the market in which the company is going to enter have the same first choices, tastes as well as tastes. Butter London will be entering the international market should keep in its mind the preferences of the consumers which are different from the home market. Following are the approaches of home orientations:
Ethnocentric: This orientation in the home country dominance is used in the domestic market. The expansion of the familial strategy is generally seen at the global level.
Polycentric: In this approach of the orientation, the concentration is on the local culture to adopt such strategy which can fulfil the demand of the customers.
Regio centric: The markets are chosen on the basis of the common regional qualities and the marketing strategy adopted is the trade-off between the standardization and localization.
Geocentric: According to it, the whole world is treated as a single market and the marketing strategy used is global standardization.
In order to make an analysis on the competition in the Indian market, there are numerous approaches that can be used by the business Butter London so that it may be able to give a cut-throat competition to the other rivals. The first approach that can be utilised is the production approach which focuses on the high quality and quantity production by the organization. It will help in the reduction in the prices of goods. The other approach that can be used is sales as well as the production of the great quality goods which will attract more and more customers to the business. Apart from these, the single commodity approach can also be utilized by the organization to internationalize the operations of the company. For the purpose of the analysis of competition, Porter’s five forces model can be used. There are other parameter too:-
For the purpose of internationalization of the functions of the corporation, it has been analysed that such arrangement should be used which can offer the best approaches to the company. The structure of the organization should be very flexible so that the corporation may be able to effectively deal with the fluctuations made in the global market. For the purpose of expanding the trade in the Indian market, the organizational structure should be divisional in nature (Hartsfield, et. al., 2017).
It has been concluded in the above-presented report that international marketing is a very important concept for the purpose of the businesses which want to expand their businesses in the international market. The scope of the international market has been explained in this report along with the import, management contract as well as export. The organization chosen for the report is Butter London which has analyzed several routes to enter into the international market and to promote its products on the large scale. This report has provided a comprehensive understanding of the international marketing concept.
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