International marketing is a process that takes place outside the national boundaries for creating a market that helps in satisfying the objectives of the business and of the individuals, the international marketing said to focus the resources on the global market. Globalisation has open the doors to enter any market of your choice and businessmen can run their business outside their domestic boundaries( Berthon Plangger and Shapiro 2012). Globalisation has re moved the barriers of boundaries. Here in this report Peppersmith’s expansion in international market has been explored. The peppersmith make candies named TINGZ and these are approved by the dentists and these are used by most of the schools to fed the children as it is sugar free and does not causes cavities. This report presents the application of the process and the entry of the foreign market and their mode of selection. Assessment of the process and practice of market development planning will be applied in the present report.
The Peppersmith wanted to enter into the international market and launch their product Tingz , which contains Xylitol (it is a sugar substitute and has no negative impact). For selecting the market there are screening criteria to see before entering the international market(Cheng Kotler and Lee 2011). The countries should be judged on these criteria and then ranking must be done and afterward business should enter that market.
|Country||Market demand||Country performance||Trade barriers||Political risk||Technological advancement||Cultural knowledge|
|Holland||18th largest economy in the world||$48,860 GDP termed as the richest nations in the world||No trade barriers. Its an open economy||safe||Highly educated people and technological advancement||Specific and concise|
|Germany||4th largest economy in the world||Strict safety regulations||Safe and stable||Very advanced in technology,Industrial sector is strong||Educated population with high living standards|
|Japan||3rd highest economy||GDP at $37,519||Strict||Stable but having conflicts with neighbouring countries||They are known for their technology||People are known for their professionlism|
|Czech Republic||GBP 22900||European standards||No political risk||Good standard of technology||People are easy going and talkative|
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The IMF ranked Holland as the 18th largest economy in the world. Its GDP is $48860 and is the richest nations. It has an open economy and its economy depends on foreign trade so there are no such trade barriers, it has low inflation and low unemployment. The current account surplus of Netherlands is more than Germany(Chung Wang and Huang 2012). The political conditions of Netherlands have democratic government.
The economy of Netherlands is very open and relies in international trades mostly. Their policies on recreational drugs, same-sex marriage, abortion, etc. are among the most liberal in the world.
The crime rate in Netherlands is declining at such a rate that they have to close 19 Dutch jails. Trade wise(Coviello McDougall and Oviatt2011), their depth of experience in trade, positions them as the genuine “neutral” traders of Europe.
Economically the Netherlands has an advanced, prosperous, outward-looking economy. The industrial relations are very stable, not much affected by the inflation and the distribution of the income is even. Netherlands is well known for its highly educated and flexible workforce. Also, the Dutch people are one of the most multilingual in the world.
Although being in size, the Netherlands is one of the world's ten leading exporting nations. The manufacturing sector is not the main USP of Netherlands but it is very well diversified. It includes the manufacturing of process food, tobacco, beverages and metal products. Netherlands is very popular with the foreign companies because of the openness in their economy. The introduction of the FDI has helped a lot to the multinational companies. Some of the examples are Shell oil(Czinkota and Ronkainen 2013), Unilever, Philips, Heineken, etc.
Technology wise, they are expertise in electronically controlled machinery. Due to this they have become the world’s leader in the food processing equipment. The Dutch are global in their outlook and generally welcome opportunities for foreign cooperation.
Dutch society revolves around hard facts and statistics, so presentations and speeches which contain sweeping generalisations and over-simplifications will not help sell your idea or product to a Dutch audience(Czinkota Ronkainen and Zvobgo 2011). Being specific and concise will.
Germany is well known for its export capabilities. The country is a leading exporter of machinery, vehicles, chemical and households. Persistent but reducing backwardness of eastern Länder. Germany is the fourth largest economy in the world and the biggest in the Europe. It is mainly built on research and innovation. It is well known for its export capability. One out of four jobs are dependent on the export in Germany. The industrial base in Germany is very solid and it covers around one-fourth of the GDP( Felzensztein Stringer and Freeman 2014). The main reason of pioneering in industrial sector is there exist a well-developed system of apprenticeships.
As far as the trade barriers are concerned, the company will face difficulties as Germany’s regulations and bureaucratic procedures are a difficult hurdle to cross. The safety standards are pretty complex which makes it difficult for the entry of the product. The companies interested in investing in Germany are generally advised to do their homework thoroughly and also make sure they know which standard to apply in their products so that they can do hassle-free business.
Population wise largest European country i.e. 82 million residents. Local architecture, music, literature, art and sports are fields which gives the proper reflection of socio-cultural scene of Germany(Gilligan and Hird 2012). Even though it is a very modern country but the family is still the most valuable to them. The people are educated and their standard of living is very high.
Germany is well known for its interest in science and technology. It is a very advanced country. And spends a lot of money on research and development(Griffith 2010). Not only it provides funding for their own people but they also provide that for broad European research and development. Their greatest strength is automobile industry. Their research in optical communication links, nanotech materials, and many others are the proof of their technological advancement.
The political conditions of japan is not so friendly, it is involved in many conflicts with its neighbouring countries and no one can enter into its market easily(Kotler and Armstrong 2013). On some point or other it is having issues with the other countries.
Japan has the third largest economy and the IMF ranked its GDP at $37,519. It has 27th of 185 countries rank in ease of doing business. The culture of japan is very famous for its professionalism. They have invented just in time techniques: when they stop the storing system and abolish the storage cost, keiretsu: when two companies allies together and does business. There are strict trade barriers in japan(Leonidou Barnes and Katsikeas 2010), everyone who has to do trading has to report to get the import permit and declare them to the director general of customs. The vital problem that japan is facing is with that they have rapidly ageing and declining population, they have limited resources and they are mostly dependant on imports. The crime level in japan is very low its minimal, it has a very safe working environment but there are some area in Tokyo where there are higher risks for crime especially in night.
Low threat of terrorism but there are risks that are arising on japan in terms of global risk. There are conditions in which japan can be affected and these are natural disasters(Li and Li 2010 Meissner 2012), and it is major earthquake zone so before setting up the Tingz they should be well acquainted with these situations and know how to cope up with these disasters.
The GDP per capita of Czech republic is 22,900 GBP. The market conditions in this country is very stable and its very prosperous. The country has a talent to attract many foreign direct investments. however the judicial procedure is very hectic and they need to make it transparent(Paliwoda and Thomas 2013). There are issues prevailing in Czech Republic about the bribery, and corruption is also there. The crime is not such a problem there as they are organised crimes and it usually happens in the intergroup and it rarely affects the business.
- Czech Republic
According to the evaluation, Netherland has been the most appropriate place to launch Tingz in. as it has the most favourable conditions that will be suitable for the business of the Peppersmith. The Netherland has the largest economy and they are open to international trade. People there are open and welcoming(Papadopoulos and Heslop 2014 ), so they will like the product. In Germany people are interested in oils, automobiles, chemicals they are not so much open to these types of products, Japan on the other hand is surrounded with the one or the other conflicts with his neighbouring countries. While Czech republic is having GDP 22900 GBP which is very less than the above countries and it also involves corruption and bribery related issues(Powers and Loyka 2010). Although the market is stable but other factors are not in favourable conditions of the business.
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Market entry and distribution strategy
Dan and mike has identified the distributor agent and he will be distributing Tingz to all the dentists in Holland. Here they are having two options; either they can go with the bricks for adding further channel or they can go for clicks and get the Tingz distributed to the dentists. The customers in the Holland are advanced and they are busy as well so they will not be having enough time to go to the brick store and collect their products. It would be a better and smart choice for them to go for the click option. They are neutral traders and has outward looking economy(Ruzo Losada and Díez 2011). People there are highly educated and will appreciate advance technology, and click options that is online stores is beneficial for Dan and Mark for the following reasons:
Easy access to market: it is very difficult to enter market through bricks as there are certain restriction on entry through that mode(Tan and Sousa 2013). Amazon.uk helps to set up simple online store and helps in sending and selling products within minutes.
Reduced overheads: It helps in eliminating the cost of premises as it would be in Bricks. Here it’s just the marketing and advertisement cost. It reduced the cost needed to spend on the staff and other resources that are required in the offline stores.
Rapid growth: Selling on internet via online selling sites help boost the sale and get easy access to the customers(Smith and Zook 2011). it saves the time to find the customers and follow the traditional supply chain. It just needs a good digital marketing strategies with a plan to scale up order fulfilment.
Wider market: it helps to expand its market beyond local customers(Terpstra Foley and Sarathy 2012). Through this Tingz can get a wide range of dentists and other customers can approach it too. It is not limited to a certain area. It can go beyond boundaries.
Cheap to set up: as they wanted to test the market first so nothing will be much better than the online stores(Tian and Borges 2011), as it will not involve much cost and they can see the response to their product and then take further step to expand.
While on the other hand there are some disadvantages involved in the Bricks options and these could be:
There clientele would be limited(Turnbull and Paliwoda 2012). The only people who would go to stores will be people living nearby. To reach a wider range of people many stores need to be open and that would cost them a fortune. It would involve a lots of cost to set up the offline stores in the Holland market ( Vrontis Thrassou and Czinkota 2011), and they are at risk whether it would get success in that market or not.
As per the above report it has been concluded that Netherlands is the country that would be most suitable for Peppersmith to launch Tingz and provide it to dentists and these will be preferable if it will launch it in clicks. As it will save them lots of unnecessary costs that will incur and it will be very effective with the digital strategies that will boost their sales in the new market. This result has been derived from the critical evaluation of the above mentioned countries, their favourable and unfavourable conditions of Holland, Germany, japan and …..
From the study of these countries conditions it has been found that Netherlands (Holland ) is the best suited for business expansion and launching the product as Germany is also good but they have lots of formalities and a very strict rule to the entry of new market.
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