International Marketing Strategy Assignment
Diverse factors of internal and external business environment are having an influence on the organisations. In this report the researcher would be explaining that that when the company is entering into the new market what different factors are required to be taken in concern(Cateoraet. al. 2019). Also the study will discuss the different issues related to market entry, marketing mix, strategies and culture would be discussing. For explaining these concepts the case of Sainsbury would be considered which is looking forward to expand to the Chinese market.The different characteristics of the Chinese market would affect marketing of the company in that nation which would be discussed in this report.
ISSSUES FACED BY SAINSBURY WHILE ENTERING INTO CHINA
Entering into the new market is not an easy task for the businesses. The companies need to focus on different factors of the targeted nation before developing the strategies and entering into new market. Business makes a lot of changes in their strategies and products and services when they expand into a different country because of values, beliefs and traditions that are being followed. It is important for organization to make sure that they are taking right actions to be able to gain right attention and working so that there would be better reputation.Success and failure of the company in any of the market is highly depended on the different factors of the target market. When the company is entering into the new market then it is essential for them to focus on marketing in an effective manner. All the different factors influencing the marketing and advertising strategies are required to be taken in concern so that the company can take better strategic directions and can work accordingly(Spivakovskyyet. al.2018).
While offering products and services to the international market and entering into the new Chinese market Sainsbury have to focus on having effective strategies. The international marketing strategies used by the company are having an major impact on the success of the firm in new market.The culture of the nation is having an major impact on the businesses operating in the nation. Culture is the most important factor for Sainsbury which would be analysed and understood in an effective manner. Culture is having an significant role to play in international marketing(Samahaet. al. 2014). It can be said that the Sainsbury needs to study the local culture of China before offering products and services to them. For influencing the customers in an effective manner Sainsbury needs to understand the culture of China. Sainsbury needs to focus on communicating the message related to the products and services in accordance to the receiver's culture.
The Chinese customers are highly influenced by their culture. Before entering into china the case company have to understand their culture.Sales, promotion and culture are high influenced by each other in the Chinese market.The Chinese customers highly influenced by Confucianism which is a Chinese belief system which focuses on the personal ethics and morality. From this it can be said that case company have to focus on their values and beliefs while offering products to them.
The Chinese customers are attracted towards the branded products they prefer to buy the premium products. The Chinese customers are price sensitive but they are brand conscious also at the same time. Although pricing affects the Chinese customer's buying decision but then prefer to buy branded and high quality products. Other than this the Chinese customers are very concerned for the environment and this is having a higher influence on their customer behaviour. The company needs to focus on taking care of the environment while offering products and services to the Chinese Market otherwise it would create issues for them.Due to great technological advancement the Chinese customers are highly influenced by the latest technology(Lyuet. al. 2019). The Chinese customers focus on making online purchase and using mobile payment methods as well. These characteristics are also significant for the case company and are required to be taken in concern by the case company.
There are different cultural models which can be used by the case company for understanding the cultural factors in an effective manner. Edward Hall had proposed a cultural model in which they have classified the culture on the basis of high context and low context(Sreenet. al. 2018). According to this model the Chinese culture is high content which means that the Chinese population gives more importance to the situations. For marketing in such culture it is important to attract the customers with the images and videos instead of using the words only. Along with this several things would be changed for the company in comparison to the UK market and Chinese market. The GDP and lifestyle of population would change but it is very important to make sure that there is good impact on them overall as well. Chinese follow traditional way of market itself therefore Sainsbury will make sure that they have easily accessible stores in country, so that there are good sales.
Competition would be one of the most important factors which would affect the case company in the new market. It can be said that competitive analysis is required to be performed by Sainsbury for understanding the impact of the competition which would be faced by them in Chinese market. Sainsbury would have a difficult time in expanding into China since Alibaba has made a large place for them in market that would be difficult for company to compete with.The marketing professionals of Sainsbury need to focus on comparing their business plan and marketing strategies with their competitors in the new market(Doole& Lowe, 2016). In the competitive analysis the company should include their competitors, compare the pricing, differentiators, culture and companies strengths and weaknesses in the new market. The case company can use porter five forces model for identifying the impact of the different competitive forces on the company in new market. The company would be facing great competition from Alibaba which is one of the most successful e-commerce retailers to operate in china and earn higher profit.
The case company have to focus on being more competitive by offering different product. Product differentiation would be one of the best marketing strategies for Sainsbury which can help them in creating a positive brand image in the Chinese market. Also the company needs to invest more in online marketing as the Chinese customers are highly influenced by the technology and quality. For this the company should focus on high quality products and create a brand image that would help them in establishing themselves more effectively in the new market and gaining competitive advantage over others.
SWOT analysis should also be applied which can help them in identifying their strength and weaknesses. Also the company needs to PESTLE analysis which would help them in selecting the best market entry mode on the basis of the different factors related to the external business environment of China.
The political factors of China would support Sainsbury as they promote the businesses and subsidizes companies. Also the government supports the businesses by having better trade relations with most of the powerful nations which makes the availability of the raw material easy and convenient for the businesses. If we look into the economic factors then the high GDP and low cost of labour are the factors which would support Sainsbury in the Chinese market. The social-cultural factors reflect that the Chinese population is having shifting choices and are more attracted towards online shopping. The great technological advancement of the nation would support Sainsbury also in managing their business operations with the use of latest technologies. The concern for the environment is higher among the Chinese population due to which Sainsbury needs to pay attention on sustainability and CSR more effectively. Moreover the Chinese government is having some strict rules related to the e-commerce businesses and the taxations are also higher which would create issues for Sainsbury to operate effectively in the Chinese market.
Sainsbury is having an effective market image which is the strength which would help them in establishing themselves effectively in the Chinese market. Along with this the innovative promotion strategies of the company are also considered as the strength which would help them in attracting the customers in an effective manner(Fengyi, 2021). The company is having a great opportunity to generate better profit from online retailing in the Chinese market. But the competition which would be faced by the company in the Chinese market is the greatest threat for the company.
Sainsbury should use both online and offline modes for offering their products and services to the customers in China as the Chinese customer prefer online shopping(Sanaei& Sobhani, 2018). Also the case company should invest better capital in their promotion and advertisement. Sainsbury should use animations, images, television advertisements and influencer marketing for promoting their products in the new market. Moreover it can be said that the case company should focus on using effective strategies for international marketing then only they would be able to get success in the new market.
SELECTING THE BEST MARKET ENTRY MODE FOR SAINSBURY
While entering into the new market it is significant for the company to focus on selecting the best mode of entry. There are different factors which are required to be considered while selecting the mode of entry for international expansion(Holtbrügge & Baron, 2013).To be able to enter a new market there are a lot of methods that can be used by organization to be able to get right working. It is because of new location there must be good analyzes and understanding of new market. This way company will be able to make right decisions accordingly so that there would be higher functioning and profit margins.
The direct exporting method makes sure that producer is selling products directly to customers and works according to their interest. Advantage of direct exporting is that there is good profit margins and control. On the other hand Licensing is a method when another person is included and is given copyrights of selling products and services of another firm. In Franchising the company operates at different locations and expand successfully in market, this method is used so that there would be higher productivity and trademarks are also invented so that this process would take place effectively. In joint venture the company forms partnership with the local company which makes it easier for them to enter into the market and do trading in an effective manner.
From the analysis we have understood that there are different challenges and opportunities for Sainsbury which would be faced by them while operating in China. On the basis of the above analysis it can be said that joint venture would be one of the most appropriate market entry strategy for Sainsbury. This strategy would help Sainsbury in operating and managing the business operations overseas in an effective manner.When the companies are using the joint venture then they share the risks and costs with their partners and this is one of the most important benefits(Nippaand Reuer, 2019). This helps the companies in reducing the changes of risk and then entering into new markets effectively. Along with this both the companies are having access to the important resources. But when the company is working as an joint venture then they needs to focus on organisational culture, structure and ethics in an appropriate manner. Along with this effective management style and leadership is required for managing such firms and leading them towards success.
Different international firms use the joint venture as an entry mode for market expansion.For example Tesco one of the top retailers of UK has formed joint venture with Tata group of India for expanding their business into the Indian market. This market entry had helped Tesco in doing business effectively in India(Karet. al. 2021). When the companies use this entry mode then it became easier for them to understand the customer preferences, buying behaviour and the culture of the new market. This helps them in developing effective strategies and expanding themselves in a more appropriate manner. Similarly if Sainsbury would use the joint venture as an entry mode then it would become easier for them to understand the Chinese culture and offer the product range as per the buying behaviour and preferences of the customers.
MARKETING MIX DECISIONS OF SAINSBURY IN CHINA
Marketing is having a key role to play in the success of the company. While entering into the new market the company needs to understand the market trends and should focus on using effective strategies for attracting the customers in an effective manner. Multiple strategies are required to be used by the company for attracting the customers and motivating them to make a purchase(Sapouna et. al. 2018). Management would be able to make sure that they understand market and aims and goals would be set accordingly so that company gains higher placing in new market. Branding must be done effectively and tactics also must be implemented differently from place to place(Lee& Falahat, 2019).Sainsbury is entering into the new market so they have to do marketing in such a way that they should reflect their long term goals and focus on attracting the customers and developing brand loyalty as well.For attracting the customers in an effective manner the company needs to focus on deciding the target group and then should attract them.STP is an effective model which can be used for segmentation, targeting and positioning.
Market Segmentation, Targeting and Positioning
STP is an effective model which can be used for segmentation, targeting and positioning.Sainsbury needs to focus on all the three factors in an effective market then only they would be able to attract the customers in an appropriate manner(Talayet. al. 2015).
The population of China is shifting to online shopping due to this reason the case company would be focusing on online customers. Along with this the company would focus on offering high quality products to the customers especially the grocery.
The targeted customers for Sainsbury in the Chinese market would be household working class and individuals. Groceries and other basic requirements like daily products that customers demand for are being provided by the organization at a very affordable price.
The company is providing their products and services at a very affordable price that would make sure that there is effective working and functioning. Clients want good quality at low price that is a great factor for company to have for a long run in market. The Chinese customers focus on purchasing high quality products and due to this reason the company would be positioning themselves as an high quality products serving grocery retailer.
Marketing mix is an effective method which is being used by the businesses for developing the effective marketing strategies and attracting the customers in an appropriate manner(Tienet. al. 2019). As per the above analysis and the market trends of Chinese market different recommendations are being made for the marketing mix of Sainsbury in the Chinese market. The recommended marketing mix is explained below such as:
Sainsbury has a good knowledge of pricing factor which is influencing customer’s majorly in China but it is very important to make sure that they are being able to adapt to them effectively.On the basis of the above analysis it can be recommended that the case company should use value pricing or the competitive pricing strategy. These strategies would help them in attracting the customers because the Chinese customers are ready to pay for high quality products(Aliand Anwar, 2021).
The company should focus on using multiple promotional strategies. Both online and offline marketing strategies would be used by the company for attracting the customers in an effective manner(Katsikeaset. al. 2019).
Sainsbury needs to have effective workforce that can deliver high quality service and better customer experience with their shopping at both the stores or from the online side. The case company needs to use effective method for hiring the staff. Also they should focus on hiring high skilled and talented employees those can deliver high quality work to the company.
It can be recommended that the company should focus on bringing innovation in their products as per the customer preferences in the Chinese market. But the company should not compromise at the quality of the products as the Chinese customers are highly concerned for the quality of the products offered to them.
On the basis of the analysis it can be recommended that Sainsbury should focus on offering products to their customers through offline mode which is through the stores and online mode as well. This would help them in targeting all the customers and offering convenient services as well.
Offering would have uniformity as well so that services are delivered effectively that would make satisfaction of customers be higher as well(Steenkamp, 2017). Services of consumption would be same as it is in UK that is a great factor for company to have for a long run. The company should offer high quality instore services and also the home delivery for the online orders for delivering the products to the customers in China.
For physical evidence the company should invest better capital in the infrastructure and designing of the stores and using latest technologies which can help them in providing best shopping experience to their customers. Also the company should use their trade mark and logo as an physical evidence.
In the above mentioned report the researcher had explained the detailed knowledge related to international marketing. From report is can be concluded that there has to be good working and planning which is required by company to be able to have right working. Different factors which are having an impact on the international marketing are required to be taken in concern then only the company would be able to expand themselves effectively in the new market. The companies need to analyse the business environment of the new market and they should develop the different strategies then only they can operate properly in the new market and generate higher profit.
Ali, B.J. and Anwar, G., 2021. Marketing Strategy: Pricing strategies and its influence on consumer purchasing decision. Ali, BJ, & Anwar, G.(2021). Marketing Strategy: Pricing strategies and its influence on consumer purchasing decision. International journal of Rural Development, Environment and Health Research, 5(2), pp.26-39.
Cateora, P. R., Graham, J. L., Gilly, M. C., & Money, R. B. (2019). International marketing: Philip R. cateora, R. bruce money, mary C. gilly, john L. graham (18th ed.). New York;London;: McGraw-Hill Higher Education.
Doole, I., & Lowe, R. (2016). International marketing strategy: Analysis, development and implementation (7th ed.). Andover: Cengage Learning.
Fengyi, Z., 2021. The Analysis of Asda-Sainsbury’s Merger/Acquisition. Journal of Finance Research, 5(1), pp.1-6.
Holtbrügge, D., & Baron, A. (2013). Market entry strategies in emerging markets: An institutional study in the BRIC countries. Thunderbird International Business Review, 55(3), 237-252.
Kar, S.K., Bansal, R. and Mishra, S., 2021. Tesco: Entry and Expansion Strategy in India. Emerging Economies Cases Journal, p.25166042211038465.
Katsikeas, C., Leonidou, L., & Zeriti, A. (2019). Revisiting international marketing strategy in a digital era: Opportunities, challenges, and research directions. International Marketing Review.
Lee, Y. Y., & Falahat, M. (2019). The impact of digitalization and resources on gaining competitive advantage in international markets: Mediating role of marketing, innovation and learning capabilities. Technology Innovation Management Review. 9(11).
Lyu, J., Li, M. and Law, R., 2019. Experiencing P2P accommodations: Anecdotes from Chinese customers. International Journal of Hospitality Management, 77, pp.323-332.
Nippa, M. and Reuer, J.J., 2019. On the future of international joint venture research. Journal of International Business Studies, 50(4), pp.555-597.
Samaha, S. A., Beck, J. T., & Palmatier, R. W. (2014). The role of culture in international relationship marketing. Journal of Marketing, 78(5), 78-98.
Sanaei, M. R., & Sobhani, F. M. (2018). Information technology and e-business marketing strategy. Information Technology and Management. 19(3). 185-196.
Sapouna, P and et.al. (2018). Market withdrawal, international orientation and international marketing: Effects on SME performance in foreign markets. In Advances in Global Marketing (pp. 281-303). Springer, Cham.
Spivakovskyy, S., Spivakovska, T., Kanishchenko, O., & Elalfy, S. (2018). Marketing strategies of companies in internationalization process. Journal of Advanced Research in Law and Economics. 9(6 (36)). 2155-2162.
Sreen, N., Purbey, S. and Sadarangani, P., 2018. Impact of culture, behavior and gender on green purchase intention. Journal of Retailing and Consumer Services, 41, pp.177-189.
Steenkamp, J.B., 2017. Global marketing mix decisions: global integration, not standardization. In Global Brand Strategy (pp. 75-109). Palgrave Macmillan, London.
Talay, M. B., Townsend, J. D., & Yeniyurt, S. (2015). Global brand architecture position and market-based performance: the moderating role of culture. Journal of International Marketing, 23(2), 55-72.
Tien, N. H., Phu, P. P., & Chi, D. T. P. (2019). The Role of International Marketing in International Business Strategy.“. International Journal of Research in Marketing Management and Sales. 1(2). 134-138.