International Market entry strategy (Essay Sample)

Instacart: International Market Entry Strategy Author’s Name Institutional Affiliation Course Instructor’s Name Due Date Instacart: International Market Entry Strategy Grocery delivery company Instacart is based in the U.S. and Canada. It offers its services through a mobile app and a website. Customers can order groceries from various retailers and deliver them to their homes through its platform. The company's personal shoppers then carry out the shopping. The mission of Instacart is to create a world where everybody can enjoy the food they love. On the other hand, the company's vision is to go far together. Despite operating successfully in the Canadian international market, the company must expand its reach to other markets, particularly Argentina. Business and Revenue Models Personal shoppers meet the customers' orders at home or work and deliver them within one to five days. They use various payment methods, such as credit or debit cards, Apple Pay, and EBT cards (Instacart, 2022). The delivery fee is typically $3.99 for orders over $35. There is a 5% service fee for every order, with a minimum of $2 owed (Instacart, 2022). For members of the service, called Instacart+, there is a monthly fee of $9.99 and an annual fee of $99 (Instacart, 2022). The business and revenue models have proved successful in the American and Canadian markets. Figure 1: A sample of grocery products on Instacart for purchase by consumers Product Strategy The American company Instacart is entering a new market, Argentina. The benefits and challenges of this move are essential to consider in understanding the company's product strategy. Instacart is an on-demand grocery delivery service focusing on high-quality, fresh food. The company has succeeded in the U.S. and is looking to expand internationally. These factors help us understand how they will likely approach their new market and what they need to do to succeed. In particular, the experience of other companies operating in Argentina is relevant here. It may help us understand what problems for Instacart is entering this market and how they might solve them. For example, various services such as Amazon Pantry have launched their services in Argentina. However, they have yet to find enough customers to keep them running, failing to achieve profitability year after year. In contrast, Instacart has experienced success with its grocery delivery services in the U.S. and Canada. As such, we can expect them to have more success with their presence in Argentina than Pantry did. However, we can expect some challenges for Instacart as well. For instance, the country's economic crisis means that some consumers are less likely than others in the region to buy groceries online. According to an article by Reuters analyzing the current economic crisis in Argentina, rising domestic inflation is threatening to put the country's growth at risk. The central bank has raised its key interest rate to 52% to prevent investors from dumping their pesos (Bianchi, 2022). The volatility in the exchange rate has been caused by the increasing number of factors that have affected Argentina's balance of payments, such as the rise in global oil prices and the U.S. Federal Reserve's policy tightening (Bianchi, 2022). After restructuring its debt in 2020, Argentina's sovereign bonds have started to fall back into the distressed territory. Some of these are trading at around 30 cents on the dollar (Bianchi, 2022). Therefore, these economic factors could affect Instacart's entry into Argentina by limiting many potential consumers from accessing the online grocery store's products. Instacart needs to change its product strategy in the face of a new market. They have previously focused on delivering groceries quickly through door-to-door delivery and have achieved some success with this model in other markets. However, there are many challenges to overcome in Argentina. Consumers are accustomed to receiving deliveries from street vendors and other vendors who do not follow the same rules as grocery stores. The company might also face an ethical dilemma: many consumers only want to pay for grocery delivery services if they could get it for free or at a discount by buying the food themselves. Instacart must decide to adapt its business model for Argentina by opening grocery stores under its brand name and selling groceries at discounted prices. This would allow them to compete directly with local vendors without relying on price discrimination—that is, offering prices below cost to entice customers into purchasing products from them, which would be illegal in Argentina. The company also has to consider how it could ensure that customers felt like they were getting good value for their money when shopping at this new store format. Therefore, the company must have a model that attracts more customers than its local and international competitors. For instance, it could offer free delivery to Argentina customers who purchase $50 and more per month, worth groceries. Sales and Merchandising Efforts Sales and Merchandising is the process of planning, implementing, and monitoring the sales of a product or service. Sales and merchandising are essential parts of marketing. To succeed in sales and merchandise in Argentina, Instacart must first understand customer needs, wants, and desires in the new marketplace. This can then determine what products customers need to meet their needs. Once this is done, salespeople must sell these products to customers who want them by ensuring they are prepared for any situation during their sale. This includes being well-prepared for questions from customers and having enough copies of their product available for those who want additional samples or information about the product before making a purchase decision. In addition to preparing for potential questions from customers, it is also vital that salespeople understand how best to present themselves during each interaction with customers so they can present themselves in a way that will make them appear confident and trustworthy while also seeming professional and knowledgeable about their product, and how it will benefit the consumers in the new market. As a new market, Argentina might be a challenge for Instacart. The infrastructure is not as advanced as in the United States, and the cost of living is lower. This might make it harder for the company to meet its customers' expectations and provide them with affordable service. Instacart's Argentina sales strategy should focus on three main areas: online marketing, brick-and-mortar stores, and partnerships with local grocery stores. They will emphasize online marketing because it is more cost-effective than traditional advertising campaigns, which can cost millions of dollars in the U.S., but less per customer in Argentina. The company should also partner with grocery stores to reach potential customers who cannot afford Instacart's services or live far away from one of their offices. Also, the company should continue using traditional sales strategies, such as door-to-door salespeople and telephone calls, by using text messages and email marketing campaigns instead of traditional phone calls with automated scripts. Furthermore, Instacart should consider doing an excellent job at acquiring customers through word of mouth and social media marketing in its new market. The company should spend more money on advertising, which will help it to acquire new customers. The company should also invest in customer retention programs and customer satisfaction surveys, which will help keep its customers happy and satisfied with its services. An essential aspect of this strategy is the company avoiding trying to be everything to everyone. It should focus only on providing the best possible service for those customers who are most likely to buy from them, i.e., those willing to pay more than the average amount for grocery delivery. In doing so, it will keep its costs low while retaining loyal customers who will shop with them repeatedly as long as there is something worth buying from them. Placement Strategy In order to successfully enter into new markets, companies must develop a strategy that will allow them to take advantage of the existing knowledge of their customers in those markets. In particular, companies need to consider the cultural differences between their market and the new market in which they wish to operate. This will help them understand how their customers interact with each other and their products (Adamczyk, 2017). In addition, companies must al...