Marketing in international businesses is different and quite sophisticated compared to those that operate in a given country alone. It is common knowledge that no business can exist in a vacuum. There are factors that affect its operations which range from political, environmental to social ones. This paper will explore the global and international markets and the environmental factors that affect their success. The success of a business is determined mainly by how quickly the factors that affect its operations are perceived and the timely approach to manage them or to develop working strategies that will help to solve the problems. This paper will also develop the strategies that are used in instances when the environmental factors pose as a threat to the success of the organization or business.
The marketing environment is made up of a number of individuals or groups of individuals who form important aspects of the whole marketing process. These include the suppliers, distributors, and the business competitors. All these form important forces to the business and they should be addressed independently to understand the effect they have on the business. For instance, when we look at a business which is working internationally, the supply will look at as aspects such as bulkiness of the goods and the supply channel that will be used. The location of the satellite branches also matters a lot as they will determine the effort that will be put to deliver the goods and/or the services to the locations.
Distributors also help in various decision making processes as they will have a deep understanding of the environment that they are operating on. The competitors or the nature of the competition keeps on changing. This will facilitate the need to come up with better or improved strategies that address the needs that keep on arising as far as the competition in the business is involved. Therefore, the business has to come up with competitive strategies that will ensure that it’s in a position or better placed to make any needed developments. Maintaining a good awareness of the marketing environment means that the business is doing various examinations on the groups mentioned above and being well placed to address the issues that may pull it behind (Clarity Marketing, 2005).
One of the main issue that arises with international marketing is cultural differences. When the company decides to go international, the challenges that it will face are new and varying from what it may have handled in the past. Culture is one of the major environmental factors that affect various businesses even leading to their closure. Culture determines the products that will be popular in one region and the ones that may not sell well in that region. Therefore, a comprehensive analysis of the market as far as the customer base is concerned is very important. Communication also forms a key part of the business success (Deari, Kimmel & Lopez, 2008). If there are problems communicating, then it means that it will be very hard for the business to thrive in a new location. This essay will focus on Coca Cola which is a giant beverage company in based in the United States.
Coca Cola Company Marketing Strategy
Coca Cola is the world’s largest beverage company. It is known for its great marketing strategies with more than 500 brands that are being circulated across the world. They include Fanta, Coca Cola, Sprite, Stoney, Krest, Minute Maid, and Dasani. Proper marketing involves delivering the right product at the right place. This should be done at the right time and having employed the best promotional strategies. Coca Cola is viewed as one of the international companies which have employed the best marketing strategies that can be attributed to their success over time. There are three principles which are key to success and which Coca Cola has banked on to become such a successful brand in the market. The first one is acceptability. This has been done by making sure that people view Coca Cola products as an important and an integral part of their lives. Beverage products are key to anyone’s lives. Due to the competition that is evident in the market, the best company has to make sure that it creates brand acceptability.
Coca Cola has therefore ensured that its brands are the preferred ones anywhere. Ubiquity is another important aspect that Coca Cola has maintained over time to beat its competitors. Ubiquity is the situation where the product is always available when it is needed by the customers. To make a product have ubiquity, the distribution strategies have been enhanced to reach the very small individual across the globe. The belief that Coca Cola can make to quench the thirst of all the individuals in the world has played a significant role in this. The company also made a wise decision by deciding liaise with bottling companies worldwide and therefore manage the sole responsibility of delivering the syrups and concentrates while the bottling companies manage the rest of the work which include bottling and distributing the beverages to the end users.
Therefore, considering the issue of distribution which is a key environmental factor in marketing, it uses the local bottling companies which have a great understanding of the local processes or the contemporary societies in which they are located. Great marketing comes with various risks. For instance by establishing various sub brands, that meant that they had to introduce a working strategy that would be risky to the bottlers. However, the promotion that is made prior to establishing a given product to the market has worked well with the company with the consumers always receiving the new products positively. Coca cola aims at different audiences when developing its products. The Coke Zero brand that was developed recently and which has zero per cent sugar was one of the latest moves to capture the consumers who have medical issues with sugar consumption (Moye, 2015). By introducing the product into the market, this served to capture the consumers and still make the brand more popular.
Preparing an International Marketing Plan
Marketing strategies which work always start with the question ‘why’ (Clark, 2014). A & B Company will be a beverage company that aims to have its beverages distributed and sold across the world. To make the business a success, one of the first steps will be to evaluate the environmental factors that are involved in the marketing process. Conducting a Porter’s 5 forces analysis will also be important to establish the ease of introducing a new product into the market. Therefore, to understand the market, the first step would be to do the Porter’s Five Forces analysis of the beverage industry.
The industry structure in most times dictate the competitive dynamics that will emerge and the ease of entry and sustainability of the product in the market. According to Michael Porter, any industry will be affected by five forces. First, the threat of new entrants into the industry is determined by the barriers such as the capital needed to break it into the market and the government policies in the specific locality. In the beverage industry, it is important to come up with enough finances to support the entry of the new beverage into the market since that needs a lot of money for international recognition. Barriers to entry also include economies of scale, the business access to distribution and the distributor, and the access to inputs. Since this is already provided i.e. there is enough capital to finance the entry of the new product, the next process will involve analyzing the government policies in the countries that the business will operate in.
The government policies change from country to country. Cooperating with the bottling companies on the ground to make the distribution process easier will involve knowing the government policies that will be involved as that will form part of the pricing strategy. Government policies determine aspects such as licensing, taxing and the ease of new investors to make their way into the specific market. Some of the countries will make different moves to safe guard their local industries from the international threats. This can greatly affect the working and the success of the company there. The second force that will determine the entry of the product is supplier power. In the beverage industry, the supplier would come in terms of the raw materials that are used to prepare the syrups and concentrates. It is not wise to export the already prepared beverages. On the contrary, what should be done is preparing the syrups and the concentrates in the preferred percentages and then liaising with the bottling companies to do the production and packaging in their own locations. This saves both time and the capital that would have been invested in the process. When the suppliers have a significant power in a given industry, they will most likely dictate the prices of the commodities they are delivering therefore making their prices to be high.
The threat of substitutes should also be considered when planning to make a good marketing strategy. Substitutes in the beverage company range from juices to other soft drinks by other companies. However, to elucidate the effect of substitutes in the market, it is good to employ a strategy where the drinks are accessible and affordable to everyone. One of the strategies that has made Coca cola such a success is making their products so affordable and accessible to the normal people who forms the greatest part of their customer base. Switching costs when changing or switching to a new or substitute commodity are analyzed when looking at the threat of substitutes in the market. However, the buyers/customers have the ultimate power when it comes to the threat of substitutes. The branding that has been made on a given product determines how loyal people will be to the specific commodity.
Fourth, the power of the buyers’ plays and important role when it comes to the marketing dynamics and the rivalry that will be present in the industry. Brand identity and the price of the commodity will be some of the most significant factors that will be considered when the buyer power is analyzed. As a marketing strategist, I have the role of understanding the buyer information and the exact commodities that will be needed by the customers. These needs vary and change from one location to the other. This will be determined by the social dynamics and other issues such as the health of the population and the beliefs that they have as far as the given commodity is concerned. It is common to find a buyer volume that is small but has a great power when it comes to issues such as decision making and pricing of commodities. Sometimes, the government is the institution that is mandated with the role of pricing the commodities. Lastly, the competition or rivalry in the market needs to be analyzed to keep the company at a better position to edge out the others from the industry.
The company’s need for internationalization is driven by the call to capture more customers and be in charge of a larger customer base. Having a large customer base often translates to higher returns. However, this is not an easy process since it involves installing promotional mechanisms that will make most of the customers get the urge to try out the new commodity. It is not important to promote the commodity then fail to make it accessible and affordable to the customers. In this case, the customer number will be so significant since it will determine the returns. The targeted customer is the normal man whose income is quite low. Therefore, the price must align to the needs he has. The packaging must also be made in a manner that gives him the exact commodity he needs in the right package. This can be done in the similar packages that are used by the competitors i.e. three hundred milliliters, five hundred milliliters and one liter. The packaging makes it easy for the buyers to buy the package that solves the needs they are having. The pricing is quite tricky though it should be made in a manner that is considerate of the exact person who is being targeted by the sales.
The 4P Marketing Mix
The 4 P’s stand for product or service, place, price, and promotion. Balancing between the four determines the success of the whole marketing plan and whether the product or service will be a success in the market or not (Kotler, Armstrong, Cunningham, 2005). The product must be fulfilling a given need that the customer wants in a unique way. One of the basic things that one should understand is that there are already enough commodities in the market to satisfy all the needs that individuals have. However, what makes a new product to be a success is making the people realize that they needed the product without their knowledge. This is done by making the product uniquely efficient in addressing a given problem. The product should be slightly different from the one that is already being offered in the market by the competitors. It is in only this way that one will be assured that it will have a striking effect when it is introduced into the given market. The branding of the product is also an important aspect that makes the customers to be loyal and buy it. The name plays a great role in this. Some of the brands such as Coca cola have over the years became household names which play a significant part in their marketing. This has been risky especially with the introduction of the sub brands that needs new packaging (Wegrzyn, 2015).
The type of customers who are being targeted by a product will determine the place that it shall be placed. In the beverage industry, the customers’ base which form the biggest population is the common person who does not make a lot in terms of finance. Therefore, since that product will aim at all customers it should be present in the big stores and the local outlets as well. This will make sure that it is sold to people of all social classes in the society. The price should be fair enough with the projections being made being enough to make a slight profit as well as make the product affordable to all the customers who are targeted. In promotion, the main issue that arises is the social class that is being targeted maybe by the advertisements. What messages are they supposed to deliver. To make them catchy, the message should be simple and be modified in a manner that will make the product popular. Lastly, taking our host country to be the Kingdom of Saudi Arabia, there are factors that should dominate the marketing strategy. First, one will realize that the population is dominated by the Islam culture and so the product marketing plan needs to align with what they hold in their beliefs. Social beliefs and attitude will dictate how one relates with the society (Tamminga, n.d; Brown, 2015). Second, the climate of the region is generally hot so it will be easy to introduce the product. However, since there are other brands in the market, it will important to make the consumers get a need to use the new products. The factors that one will be considering will therefore involve laws and the government, supply lines, consumer trends and the economy (Morello, n.d.).
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