Marketing Principles (Essay Sample)

Marketing principles utilized by organizations before engaging in international Marketing
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Contents
TOC \o "1-3" \h \z \u 1.Introduction PAGEREF _Toc387918425 \h 32.Findings PAGEREF _Toc387918426 \h 32.1.Market Entry Strategies PAGEREF _Toc387918427 \h 32.2.PESTLE and SWOT Analysis PAGEREF _Toc387918428 \h 52.3.Key Marketing Principles PAGEREF _Toc387918429 \h 72.3.1.Pricing PAGEREF _Toc387918430 \h 72.3.2.Market mix PAGEREF _Toc387918431 \h 72.3.3.Product planning and development PAGEREF _Toc387918432 \h 82.3.4.Market segmentation PAGEREF _Toc387918433 \h 92.4.UK clothing sector PAGEREF _Toc387918434 \h 102.5.Decision making PAGEREF _Toc387918435 \h 113.Conclusion PAGEREF _Toc387918436 \h 124.Recommendations PAGEREF _Toc387918437 \h 125.References PAGEREF _Toc387918438 \h 14
1 Introduction
Marketers focus on desires and wants of individuals, groups and societies. They focus on individual demand, market demand and the trend in society. Nowadays companies are establishing their businesses in the oversea markets. Mathur (2012) points out that international marketing involves a firm-level marketing practices across the border and aims at identifying market targets, entry mode strategies, marketing mix, and making the right decisions to compete well in global markets. Globalisation has progressed considerably in the past decade, due to recent communication advancement, improved transportation, few legal restrictions and political stability in many parts of the globe which have opened markets to international trade and finance. Various companies have been successful in global marketing such as Bosideng, which is a Chinese company which creates men's clothing and down wear. This report focuses on various market entry strategies, marketing principles and strategic decisions made by most companies which have been successful in international marketing like Bosideng.
2 Findings
1 Market Entry Strategies
One of the market entry strategies employed by companies which want to engage in international marketing is exporting. Exporting to a foreign market is a strategy various organizations employ for some of their markets (Agarwal and Ramaswami, 1992). Since many countries produce enough goods to satisfy their local population, exporting enables a company to manufacture its products for several markets in various countries and to obtain economies of large scale production. Apart from direct exporting, a company can contact foreign markets via a domestically located intermediary and this is called indirect exporting. Licensing is another market entry strategy. Licensing may offer the foreign firm access to brands, trade secrets or patents linked with products manufactured (Young et al., 1989). Under licensing, a company gives the right to a patent to another organization for a fee or a royalty. When a company uses licensing as a market entry strategy, it can gain market presence without any equity investment. As a result the foreign company gains the right to exploit the patent in either a restricted or an unrestricted way (Buckley and Casson, 1998).
On the other hand, franchising is another foreign market entry strategy. It is a special form of licensing in that the franchiser makes the whole marketing program available to the company given the patent including the brand name, products, logo and method of operations (Jain, 1989). Generally a franchise agreement is more inclusive than a normal licensing agreement in as much as the whole operation of the franchisee is given. It differs from licensing mainly in the depth and range of quality controls used on all phases of the franchisee`s operations. Other foreign market entry strategies include ownership methods such either ownership in a joint venture or in a strategic alliance. In a joint venture, an investing firm owns a given percentage of the foreign organization, allowing the investing organization to have a say in the management decisions of the foreign firm (Agarwal and Ramaswami, 1992). Participation of the shareholders in the venture may differ and some companies may allow either a minority or majority position of partners. Usually, international companies prefer wholly owned subsidiaries to avoid control by shareholders. Once a joint venture partner becomes part of the operation, the international organization can no longer function on its own, and this sometimes may lead to ineffectiveness and wrangles over responsibility for the joint venture.
In a strategic alliance, two entire firms pool their resources together in a cooperation that goes beyond the restrictions of a joint venture. Characteristically, alliances involve a distribution access, production technology or technology transfers with each partner bringing in a different element to the business enterprise. Alliances can either be technology-based alliances, distribution-based alliances or production based alliances (Agarwal and Ramaswami, 1992). Lastly companies can enter foreign market through be through mergers and acquisitions. Even though international companies have always made acquisitions of foreign markets, the need to gain access to foreign markets quickly has made firms to enter into some type of association and this has made the market acquisition route fast and attractive. This market entry strategy has been aided through opening of many financial markets which has made the acquisition of openly traded companies much easier (Buckley and Casson, 1998). A major advantage of mergers and acquisitions is that they position a firm in a new venture within a short period of time.
2 PESTLE and SWOT Analysis
PESTLE is stands for Political, Economic, Sociological, Technological, Legal and Environmental factors which should be considered by any company when planning to engage in international marketing. PESTLE analysis more or less implies an audit of an organisation's environmental influences with the aim of using such information to in sound decision-making. Organizations assume that, if they are able to audit their current environment and measure potential changes, they will be better placed than their competitor companies when it comes to responding to changes (Havas, 2012). PESTLE analysis helps in understanding the environment in which a company is operating. PESTLE analysis helps in understanding the risks related with market growth or decline and the position, direction and potential for growth of a given business or company. A PESTLE analysis is often used in finding out changes happening outside the company which may have effects on what’s happening within the organisation. One of the key research factors in PESTEL analysis is looking at the political aspect of the given potential market. This shows what is happening politically in the environment in which a company is planning to operate, and include areas like tax policy, environmental regulations, employment laws, trade restrictions and political stability.
Economic aspect in PESTEL involves looking into the state and nature of the economy in the foreign market such looking at economic growth and decline trends, interest rates, inflation rate, foreign exchange rate, minimum wage, level of unemployment and standards of living in the foreign environment. On the other hand, sociological aspect of PESTEL involves looking at cultural norms and people expectations, career attitudes, health care consciousness, population growth rate and emphasis on safety in the foreign market environment. What’s happening technology-wise can affect company’s performance in any market through affecting sell of products or services, new technologies are every now and then being developed and most of them help in marketing and generating more profits (Havas, 2012). In addition to PESTEL analysis a company can as well decide to do SWOT analysis before engaging in the foreign market. SWOT analysis helps in shedding some light into the marketing environment since there are barriers to entry into given markets and changes to financial decisions like outsourcing and in sourcing. This can be done by means of a SWOT analysis which stands for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis helps in identification of the company’s strengths and weaknesses in the foreign market, as well as identifying the opportunities and threats that exist in the market and macro-environment. Strengths may include things like specialized management skills, a well-trained workforce, adequate capital and weaknesses may include an obsolete product range and lack of capital (Onkvisit and Shaw, 2004; Jackson et al., 2003).
3 Key Marketing Principles
1 Pricing
Pricing in the overseas market is determined by the type of products, some products have small circulation opportunity while other comprise long delivery chains and the later leads to raise in value due to distribution price. Manufacturers find ways to maintain down the price and choose circulation through middlemen who comprise their own recognized sales strength as it is involves fewer monetary obligation (Craig and Douglus, 2005). Cost is also determined by the character and scope of the sell. If the quantity of clients is less as is in the case of large and costly machines, the producer may approach the client straight through his personal sales strength; so also if the clients are concentrated in a restricted geographical region. Nevertheless, for industrialized commodities where such products are large, producers may accept direct selling or promotion. Competition is an additional aspect which determines pricing of commodities and services. It is an intelligent strategy to learn the accessible channels of distribution, mainly those used in marketing competition. Channels plan is subjective to the competitors’ channels. Companies may desire to try to win similar outlets constituting th...