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International marketing has risen in the market due to which new opportunities have arisen. Local businesses are the ones that are mostly affected by this as it seems that it helps to increase not only the customer base but also provide expansion options in international countries for such organisations. This specific report will highlight how international marketing will be beneficial for Hoxton Farms.
Hoxton Farms is an organisation that deals in making animal fat without using animals due to which it is more profitable and a healthier option is adopted. The use of such fat is being used in order to make sure that there is effective work that can be done along with showing that plant oils are not being used accordingly. By going into the international marketing it would be able to increase the innovative product it is offering.
Scope
The scope of international marketing is to make sure that one’s product and services are being done to a new country. It is through this that expansion of the business can be done hence increasing the brand image in the market (Sheth, 2020). Through this there can be a competitive edge attained over the other local businesses that are present in the market.
The use of the EPRG Schema helps to further enhance the understanding of the scope of international marketing.
Ethnocentric
Through this schema it shows that the marketing strategies that are being used in the home country is highly probably and when entry is done into the new market there will not be any further new strategies that would be made.
Polycentric
The marketing strategies that are being looked at are based on factor of looking at how the external environment is functioning and analysing the customer behaviour are two of the most important points that can be looked at here.
Regiocentric/Geocentric
Through this there is only one strategy that is developed which would fit all of the countries and none changes would be made.
Key Concepts
There are certain key concepts that are involved in international marketing due to which there can be better comprehension of how work is being done in the international market.
Expansion of Sales: new markets are going to be looked at in order to increase the number of sales that will occur. This is because new customers are going to be targeted because it seems that in the international market a new or already used product can be introduced accordingly. It is through this that an organisation can make sure that if there is a decline in sales in one country then it can be managed by attaining higher sales in another country.
Resource Acquisition: there are certain resources that are not available in a certain country hence international markets have to be taken into account. Oil is one of the resources that is mostly sought after in the international market, for example, the Niger Delta has many multinational organisations present because there is a large amount of oil that is present there (Patrutiu-Baltes, 2016).
Risk Minimization: the risk that is being targeted here is that if there is a decline of growth present in the home country then revenue can be made from the international market. Through this there can be better accommodation for further development to be done.
Innovation: the number of technologies and resources can be abundant in an international country hence through this there can be better accommodation of creativity to occur.
Economies of Scale: if there is more exporting that is being done by an organisation then it can lead to more capital to be invested into the economy (Leonidou et al., 2018). This helps for the growth for the organisation and establish a better level of goodwill in the market.
Competitive advantage: there can be products and services produced in the international market because there can be cheaper labour and other costs that will be looked at. By this there will be a lower price that will be added hence creating a competitive edge in the market.
Government Incentive: there are better grants and loans that make sure that organisations are greater work to be done. There are less and even exempted taxes and duties that are present in the market.
Rational
The animal fat market is growing steadily and it seems that most of its use is present for food applications. The issue with animal fat is that it sometimes causes a high inflammation to occur after consumption and the rate of heart disease is also present. Plant oils on the other hand have proved to be better than animal fat but it seems that they also cause heart risk diseases to arise.
Hoxton Farms has provided a product of animal fat that is being manufactured and produced without having any animals involved. It is by this that they can modify the fat so that there is fewer to minimum side effect that is present. This is an innovative product and by launching it into the international market there can be further awareness created for it. More food manufacturers would see how the use of this animal fat is better than the ones that they have been using.
Trade Routes
The trade route helps to identify how the organisation will be able to provide its services to the international market. This is necessary to be looked at as it is through this that there can be a better outline of seeing what can be the different areas for further development to be looked (Rana and Sharma, 2016).
Selling through distributors: this involves that there are various distributors that are added to the supply chain so that the final product can reach the customers.
Direct Selling: this involves that the organisation sets up its own plant or office in a country so that it can directly sell its products to the customers.
Licensing or Franchising: This involves that there is a second party that takes the operations of the organisation into their own hands and sells the product. However, the power stays within the hands of the parent organisation and certain rules and regulations have to be followed (Gaitán, 2021).
For Hoxton it seems that direct selling would be considered as the best route that can be opted. This is because the product that they are trying to sell is relatively new in the market hence making people aware about it or having them to clear out what can be the different areas for further clarification to be made (Hoxton Farms, 2022). It is through direct selling that a better impact will be made.
Opportunities
Brand expansion: there will be further expansion of the brand as it will be known not only in the local market but also increasing the level of the competitive edge in the market (Mykola et al., 2020).
Investment: a small firm such as Hoxton Farms must gain capital investment as it is through this that they can increase the level of their operations. Gaining investment in the host country would help it to develop networks effectively.
Larger customer base: there will be more customers that can be attracted here hence promotional strategies would have to be kept in check all of the time.
Challenges
Not being able to create a solid network: this is necessary to be done as it will help to distribute the products into the host country and at the starting, the organisation will not have too many partners at hand.
The competition level is high: though Hoxton is offering a unique and different product than the ones present in the market it seems that people would have a hard time in understanding why this product is better and using it on a daily basis (Nuruzzaman et al., 2019).
Lack of experience: since the organisation is new in the market it seems that expanding to the international countries would provide a lack of experience for the managers. There would have to be outside consulting hired in order to manage this or the right market entry strategy needs to be chosen for such to get done.
There are 4 steps that can be taken in order to identify which is the international market that should be looked at.
The first step is to define the market that one wants to enter into. Here the needs of the market need to be understood and also customer behaviour has to be identified. It is through this that segmentation is in order to outline the needs of the customers and see if the project does match them.
The second step is to carry out a market analysis itself. This is looking at the external business environment so that there is a clear understanding of the opportunities and threats that are present in it. For example, the economy of a country could be going down hence an innovative product would not be appropriate to be launched (Hong et al., 2015).
The third step is to assess the internal capabilities of the organisation to see whether the operations can go into the international market or not. This is necessary as to whether the same processes can be created in a country have to be looked at or else more capital would have to be invested.
The final step is to look at what market entry strategy should be adopted. This is the step that will help the organisation to develop its presence in the market through which it can provide a clear outline on how to launch itself in the market (Schmid, 2018).
Criteria
The criteria that will be looked at before entering into the international market involves:
Level of Income
The level of income is being looked at on seeing how much of spending power is present with the customers. Such is necessary because the customers need to be able to buy the product or services that are being offered. For example, coffee is a product that is sold around the world yet it should be understood that there are some places where big brands like Starbucks do not exist, such as Malawi (Africa), due to the fact that the spending income is very low.
Cultural Differences
This is a major issue at hand because it is due to this that there can be further evaluation of a product that can be done. The role of diversification comes into play here because going into the international market means that a new culture would have to be looked at. The example of Mcdonalds can be taken here as when entering into India they made sure to get rid of all the beef related products because cows are sacred in the Indian culture.
Regulations
Different countries have different regulations that are present. This helps to show what the ease of doing business is present in the country hence allowing a better choice to be made.
Acquisitions
This requires that the organisation overtakes another organisation in the country that it wants to expand to. This helps to make sure that all of the resources are taken over due to which the main organisation can run its operations according to its own.
Joint Venture
This is when two organisations get together and share their brand name and knowledge together. This means that whatever the profit is being made will be shared between the organisations and this can also be loss or even investment accordingly. Both of the parties involved will share their expertise along with the resources that are present. It is according to this that there can be better understanding of the host country’s market (Lojacono et al., 2017).There is a transfer of technology that is present here hence the infrastructure is helpful here. However the drawback here is that there is less communication is present between the parties which can lead to different goals to be present.
Exporting
This involves that products are made in one county and sold to the host country. This may involve that there is direct exporting that is being done due to which products are directly sold to the customer. On the other hand, indirect exporting involves that there are third party distributors involved and they sell the products of the organisation in the international market.
It seems that there are many countries that Hoxton Farms can targeted however it seems that USA would be the perfect market that can be entered into. Looking into the market of USA it is one of the top 3 countries that is a high user of animal fat. India stands to be on the top of this list but entry into such a country will not be done as it seems that the level of technology and understanding of unique products is not easily done as the use of animal fat is being done even in remote areas across India. Another reason that USA is being chosen is the fact that people have focused on having healthy options, the animal fat that is being produced by Hoxton Farms has products that are far healthy for making products hence use of it will be highly liked in USA (Oroian and Petrescu-Mag, 2017).
It seems that the organisation is solving the issue that animal fat is causing hear diseases to rise in the market but the use of this chemically engineered animal fat that is being offered by the organisation does not have such effects and is considered to be healthy (Szotkowski et al.,2019). Hence, it seems that this international market would be highly effective for Hoxton Farms to enter into.
Now looking at the market entry strategy, it seems that a joint venture would be the best options that could be adopted here as it is through this that there can be better recognition received in the market. The joint venture would help to provide a market analysis and also better resources that can be used (Dinu, 2016). Through a joint venture there will also be better reach established within the market so that there is better outline of how to make sure that there is effective work to be done.
The use of the exporting market entry strategy is not being used because it seems that explaining and creating awareness cannot be done effectively through this. The chemically engineered fat that is being made by Hoxton Farms needs to be properly introduced and explained in order for there to be awanress created and it cannot be done by the exporting market strategy (Broocks and Van Biesebroeck, 2017).
Acquisition is also out of the context because Hoxton is already a small firm and it would need a lot of capital to acquire another firm in the USA. Also, there would be a number of rules and regulations that would have to be gone through hence making it not only a costly process but also a lengthy one as well (Lebedev e al., 2017).
The marketing strategies of Hoxton farms should be changed as the market of USA is being focused upon. Looking at the market of the USA it seems that the use of social media marketing would be one of the best was that this can be done. From the image that has been presented below it can be seen that the spending on social media market in the USA has increased year upon year hence it would be the best marketing strategy that can be adopted by the organisation.
There are also many platforms that are present on social media such as Facebook, Instagram and even YouTube and it seems that through this that customers can be further targeted.
Another market strategy is to take part in food events and showcase products of the animal fat in order to show the benefits that can be maintained. This will highlight what can be the different areas for seeing what the markets that can be used for further growth are.
It seems that global and local marketing is highly debatably as it is hard for organisation to see if they should venture into the international market or else stay in the local markets. This debate shows two sides of the market and organisation have to choose which the best is for them.
One of the key arguments that has made in the favour of global is that it helps to increase the profile of a business further on. This is necessary to be understood as it is through this that there can be further involvement of new areas in order to have further awareness to be increased about the product. It is through this that the brand can be recognised throughout the world and not only in a single country (Steenkamp, 2019).
It seems that through the global market there will be a higher network that can be developed. More popularity of a brand can increase when they are set out in the international market hence innovative resources can be used to further promote the product. There are a number of events that can be attended in international markets for further development to be made.
On the other hand localisation has shown that the brand was made for the specific country and launching it into different parts of the world will not provide an efficient market. It should be understood here that the marketing aspect is done easily as there would not have to be too many changes in the advertisements like language as there will probably be only one language that will be used here (Westjohn et al., 2016).
Another point that must be understood here is that in local marketing there is not too much of research that is to be done as it will be known when starting the organisation on what the customers want and what their attitude is towards the product can be easily understood. The market is already researched and there would not have to be further investment that needs to be made for further research to be done regarding marketing.
Product: the product should meet the needs of a customer or should be solving a specific issue that is being faced. This is necessary as it helps to show whether the product is effective for a country or not. The product of animal fat would be effective in the USA as it is most used there but in some countries in the EU it is considered a health hazard and is not used. Hence, there should be proper placement of the products according to the market.
Price: the price should be set according to the competition that is present. This is important to be looked at because there can be a different price that is offered in different countries. This is because a price in the US would be different as compared to the ones present in China. Hence, the price should make sure that the costs can be covered and it should create a competitive edge in the market (Thabit and Raewf, 2018).
Place: The place will show where the organisation will be situated. Such is important as if the organisation is present in the main city then its products should be created accordingly but if the organisation is situated in the suburbs then more homely products are to be presented.
Promotion: this is highly important as the marketing strategy has to be clearly outlined. This is because different places required various promotion types that can be done. It seems that through this there can be better outline of the various performance that can be properly assessed (Ahmed and Rahman, 2015).
It seems that Hoxton Farm is relatively new in the market and for there to be effective goodwill to be established in the market it needs to be able to create effective awareness. Being present in the London, UK it seems that there might not be too much of a high market that would be present. This is because there are not many products manufactured in the market do not use too much of animal fat accordingly. This is important to be looked at because if the product is launched in the market of US then it will gain further awareness as this country is highly approachable in the market.
There are however circumstances in which the local approach had to be used because there are many trade wars that occur around the world due to which local approach is more desirable. It seems that in such a circumstance the option to have a local approach is beneficial. There is also the concept of better trade routes that can be adopted in the local market, as the UK is present in Europe and this country has adopted the approach of a common trade market to be developed. Hence, through this the organisation can reach more customers within the trade agreement that it is in.
From the above it might seem that the local option seems to be highly desirable but it seems that there are a number of ineffective growth that will be attained. The international markets show that the need for animal fat is higher hence there should be better outline of how to manage the work that is being done (Liu et al., 2020). Hence, it is important that there can be better creation of the brand value to be looked at.
Product: the product that is being offered by the organisation is chemically manufactured animal fat. This product is better than the original animal fat that is being developed due to which health issues arise. The organisation’s product does not have any such issues to be looked at.
Price: the price will be set around $5/kg in the market. This is necessary to be looked at because it is through this that this animal fat does not harm the individuals hence making it better than the ones that are present in the market.
Place: States in the USA such as California and New York will be targeted as the level of population present there is high hence there can be better analysis that can be done here. California is the specific state that is being targeted because there needs to be awareness that has to be created in order to make sure that people understand why the organisation is important. Further looking into the place it seems that Hoxton should make sure that the healthy factor is highly focused upon because California State has a large number of restaurants and populations that focus on such a factor.
Promotion: it has been mentioned that the use of social media marketing will be done so that there is better awareness created. Food events will also be targeted through which direct face to face discussion to be made (Hanssens et al., 2018). It is important for the food events to be attended to because through these there can be proper explanation of the products that Hoxton Farms is portraying. Food events not only in California but also in New York because this is the State where most of such events occur hence helping for better promotion to occur.
There will also be more social media presence increased because most of the population is present on such platforms. The use of Twitter will be done the most in order to make sure that there is effective outline of the work that needs to be established.
Through the marketing mix it can be seen that the price which is being offered by Hoxton Farms is higher than what is present in the market. This is a disadvantage but it seems that the price for healthy options in the market of USA is high hence this price can be justified accordingly.
The focus on promotion should be done because it seems that mostly all of the organisations present in the USA are using social media marketing to be present. This is necessary as it seems that there are clear instructions on what can be the different areas for further development to be made, the advertisements have to provide a different aspect in order to attract the customers.
Transaction Cost Approach
This approach focuses on making sure that there will be outline of what can be the strategy for which there will be a cost efficient approach that will be used. There will be a budget that can be created for which there is better analysis for better growth to be attained. This makes sure that greater control over the finances and capital present will be dealt with even in the joint venture which gives more power to the organisation (Soliño and Gago de Santos, 2016).
Standardization Approach
This means that there will not be any changes or modifications to the product made. This helps to show that the original product is being created throughout the market like it is supposed to be. It helps there to be showing that the organisation will not change its products. S]
Adaptation Approach
This approach shows that the product is modified in accordance to the needs of the customers. It is through this that there can be not only modification in the product but the marketing strategy that is being used (Otuedon, 2016). This is important to be looked at because it seems that there could be better attraction of customers made.
Home Orientation
Ethnocentric
This makes sure that regional organisations are not kept in check due to which there have to be better creation of what can be the areas in development to be made. It seems that through this there is a better focus on international products hence more marketing has to be done my local organisations in order to attract the customers (Feurer et al., 2016).
Geocentric
This makes sure that similarities and differences are compared to both international and host countries. It is through this that there can be better outline of how to make sure that the product can be effective as compared to the international products as well.
International Orientation
Polycentric
This orientation has made sure that each host country is different hence there has to be different marketing strategies that can be developed accordingly. It is through such an orientation that a plan and strategy needs to be developed for management of the work that is being done (Horner and Nadvi, 2018).
Ways to assess Competitors
The first step would be to outline of the main competitors that are present. In the case of Hoxton Farms it would be the organisations that are producing animal fat such as Archer Daniels Midland Company are to be kept in check.
There would be further analysis of the strengths and weaknesses that are possessed with the competitors. It is through this that there can be better outline of what can be further strategies that can be provided to the organisation on how to overtake the competitors.
The final step would be to assess the own competitive advantage to be looked at. This is because the competitive advantage that is being provided by the organisation needs to be promoted more so that there is adequate growth achieved in the market.
Porters 5 Force Analysis
Competition in the Industry
There is a high level of competition that is present in the country because it seems that the current organisation that are involved in producing real animal fat would not want an organisation that produces fat which is better. This can cause their business do go down. Hence, entering into such a market wold be highly competitive to be looked at.
Potential of new entrants into the industry
This power is low in the market because there are not many new players that are present in such a market. This is because the cost of getting into this market is relatively high hence causing there to be not too many entrants to be looked at into the market.
Power of suppliers
This power is high as attaining the resources that are needed in order to have such a product made would be difficult to achieve. This is why USA is targeted as there is an abundance of resources that can be targeted.
Power of customers
This is low as the customers would not have any other substitute because the other fat related organisations are offering products that are harmful for people.
Threat of substitute product
It seems that this threat is low as the formula to manufacturing fat that is not harmful is present with Hoxton Farms hence expecting an organisation to copy it would take a lot of time.
One of the recommendations is that not only one country is to be focused on but instead there should be more countries that should be looked at. This is important to be understood as it seems through this there can be more expansion done in different countries like China. This would help to bring in various development areas for further control in the market to be looked at. Here there can be better attainment of clear functionality to be presented and more reach to be established in the market.
Another recommendation is that the joint venture that is being developed needs to be focused on what can be for further development to be made. This means that an organisation has to show make sure that the host country organisation is thoroughly searched and there is effective identification of whom the host organisation can be further developed.
From this report it can be seen that having international operations is not an easy task at it seems that there have to be various crucial decisions taken. It is through decisions such as what will be the market entry strategy and what country that is to be entered has to be looked at.
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