An Assignment on International Marketing

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Introduction

Today, the world is more globalised which accelerates the inevitable economic shift across the world. Globalisation brings the world into a small village; hence, companies are expanding their business operations in international arena beyond the domestic market. This changing business situation gives the opportunity to the firm utilizing their competencies properly. With the passage of time, now organisations are facing fierce competitions while operating in international market because numbers of rivals existing in the market. As a result, to survive in this fierce competitive market, organisations require formulating and executing dynamic strategies that move them ahead over rival organisation (Dlabay and Scott, 2010). Business organisations should invent the best suited strategies and organisational structure for different international markets. This report will explain about the necessity of international marketing and reasons formulating new strategies for international market. In addition, this report will describe PEST analysis for Dassault aviation to determine their competencies in marketing internationally. The importance of marketing research, marketing plan, and distribution channel strategy for Brazilian market will explain descriptively in this report.

Task One: Understanding the concept of international marketing for potential foreign market

1.1.The reasons of formulating international marketing for Dassault Aviation

To gain the industrial leadership and utilise the competencies properly, an organisation wants to enter into international market. When the firm establishes a stronghold in the domestic market, the firm thinks about to fight in international market (Hill, 2009). The Dassault aviation is the leading aircraft manufacturing company in France dominating successfully in domestic market. Now, the company wants to enter in Chinese, Middle East, Latin American and Indian market. Thus, the company should take international marketing strategy for the given reasons;

New revenue potential: New market brings the opportunity for a firm to increase their revenue by expanding the business. Through international marketing, The Company may increase its revenue.

Proper utilisation of core competencies: Expanding internationally is the target of most of the companies. Domestic market is narrow and many companies cannot utilise their competencies properly in domestic market. As a result, a company cannot reach into economies of scope. Expanding business into foreign market helps Dassualt to utilise their core competencies properly. The company is a renowned aircraft manufacturing company in Europe. And, the company has full capabilities to enhance their business in China, India, Middle East and Latin America.

Grab new customers: Flourishing business into international market opens the opportunities to reach new customers. Latin America, China, India, and Middle East are developing rapidly as such the income level of their people is increasing (Kawa, 2013). The company has great opportunity to grab more customers through expanding their operations in these markets.

For these reasons the Company should expand their business in the foreign market. 

1.2.PEST analysis of Dassault

International market is always challenges for every company. So that organisation needs to conduct an analysis to understand the viability of that market. In international operation, huge amount of capital is needed. So, without PEST analysis investing in foreign market is not a wise approach for an organisation. PEST analysis is an external factor analysis tool by which management of an organisation can understand the suitable foreign market for entering (Geetanjali, 2010). PEST analysis has four factors such as political, economical, social and technological. The company’s PEST analysis is given below;

Political factor

In international marketing, political factor plays the vital role. Political factor means the degree of government intervention over the economy and business operations. Political factor includes consumer protection laws, employment laws, labour laws, tax policies, tariff and trade restriction, and environmental regulations. The company’s target market like China, India, Brazil and Middle East hold moderate political pressure which is considered favourable for the company.

Economic

Economic factor includes interest rate, monetary policy, employment/unemployment rate, inflation rate, exchange rate and other economic indicators. Unemployment rate is comparatively high in Brazil and India whereas favourable interest and exchange rate exist in all the target locations.

Social factor

Social factor includes demographic conditions, cultural and language and other factors that affect on organisation operations. Social factor has very little influence on The Company Aviation because the company is selling aircraft product and every cultural people can take this service.

Technological factor

Today, aircraft technologies are highly developed. The company is using high technological know-how in their produced aircraft. The new aircraft named Falcon 8X is the latest example of using the most advance technologies which increases the mileage and fuel efficiency of the aircraft.

Political, economic, and technological factors have great influence on Dassault international marketing approach in Brazil because Embraer is the leading aircraft manufacturing company in Brazil. The Brazilian government can oversee the interest of the local company. The company operation should be affected by Brazil’s monetary policies, exchange rate etc. However, aircraft product needs sophisticated technologies which is costly. As a result the prices of Falcon 8X will be higher than Embraer jet. 

1.3.Evaluation of Falcon 8X international marketing research techniques

New market is always unknown to an organisation. That’s why organisation needs to conduct research of the market which helps the organisation to understand whether profitable or not. The marketing research should be conducted very carefully because small deviation in the research may destroy millions pounds of investment. Marketing research means the processes through which an organisation collect information of a specific product or service, analyse the information and based on the result decisions are taken (Turnbull and Paliwoda, 2013). There are two research techniques; primary research and secondary research. Both research techniques are necessary for analysing Dassault’s international marketing feasibility.

Primary research:  There are several ways to conduct primary research such as

ü  Focus groups,

ü  Interviews,

ü  Observations,

ü  Questionnaires.

Secondary research: There are two types of secondary research such as internal and external research.

Internal secondary research ways                                                 

ü   Regional product sales                                                        

ü  National product sales

ü   Customer comments or complaints

ü  Sales people, research and development staff

ü  Previous research result.

External secondary research ways

ü  Periodicals

ü  Specialist marketing reports i.e. Mintel

ü  Industry magazines

ü  Chamber of commerce report

ü  Government statistics

ü  Internet

ü  Professional bodies

In international marketing research, both primary and secondary research techniques have important implications for Dassault Aviation. For instance; primary research provides latest information about the market, customer behaviour, culture, economic conditions, and many other issues. The main advantages of primary technique are addresses specific research issue, greater control over the research, and collect more accurate information. On the other hand, the advantages of secondary research are extensiveness of data, time and cost effective. The company Aviation needs to conduct both primary and secondary research techniques. Primary research the company gets more accurate result and from secondary research the company gets previous extensive information. These two techniques will assist the company to analyse the Brazil market too better.

1.4. Evaluating the effectiveness of the Brazilian market for Falcon 8X

Past several years, numbers of countries are developing very quickly in the world. Brazil is one of the most developing countries in the world that attract the attention of multinational companies as an attractive market. However, Brazil is an important member of BRICS. Brazil is one of the largest countries in the world having large population and resource. The GDP of the country is $2.347 trillion; GDP growth is 3.8% and per capita is $9,312 in 2015 (Focus Economics, 2016). The income level of Brazil is increasing regularly. Brazil also dominates in manufacturing aircraft both in local and international market. Embraer is one of the largest manufacturing companies that exploit regional aircraft market by 62% market share which value is £6 billion (Fisher, 2015). The company is the main competitor of Dassault in Brazil. However, aircraft qualification process is very strong in Brazil but if Dassault qualify the certification process, they can get a great deal of opportunities. However, numbers of business tycoons are growing in Brazil. It brings the opportunities to the company Aviation to grab new customers for their new aircraft Falcon 8X. Initially, the company have to face strong challenges from Airbus, Embrear and Boeing. The weakness of Embraer is that still the company does not develop cost efficient technology which will give the company jet more mileage (Fisher, 2015).  But, Falcon 8X jet plane has some unique features such as fuel efficiency, high mileage without break etc. which will give extra benefit to Dassult Aviation in competing Brazil market against rivals.

Task Two: Understand how to make export channel and distribution decisions

2.1. Explaining the channels evolve in distributing the Falcon 8X for Brazil market

Entering into international market is not easy task for a firm. Exiting firms in the host country are always trying to prevent the entry of foreign company. Without proper decisions regarding distribution channels, Dassault cannot survive in Brazil market where strong rivals are doing their operations. Hence, firms require adopting unique distribution channel for target market. For example, Airbus is one of the leading aircraft manufacturing companies. Many entrepreneur rejects to start new firm of manufacturing complete aircraft rather they are producing aircraft accessories for Airbus. The distribution channel in Brazil, India and China is different, though all these countries are belongs to similar per capita income. The distribution channels are evolved by following ways;

Manufacturer: Manufacturers are the producer of a product. The manufacturer transfers ready product to import agent in exporting.

Import agent: The import agents are emerged in host country. They collect ready product from manufacturers.

Wholesaler: Import agents are sending product to various wholesalers.

Retailer: They collect products form wholesalers.

Final customer: Retailers will sell the products to final customers.

The other distribution channels are

ü  Manufacturer-----Import agent------Final customer.

ü  Manufacturer------Final customer

ü  Manufacturer-----Wholesaler------Retailer------Final customer

ü  Manufacturer-----Retailer----Final customer.

For Dassualt’s Falcon 8X jet, manufacturer to import agent to final customer, this distribution channel is appropriate. 

2.2. & 2.3. Describing the suitable export channels and evaluation the export distribution channels for Falcon 8X

Determining the best fitted distribution channel is very essential for the company because it reduces the costs and satisfies customer needs. Organisations today, like small distribution channel to enhance the speed of transferring the product to the customers (Lu, 2013). Not only that, small distribution channel reduces the costs of product that also attract customers.

Retail distribution is very familiar in most of the countries like India, China, Brazil, and other. The length of distribution channel depends on the products and the host market. For example, Unilever follows long distribution channel in India to sale their consumer products in the market. Some areas in India are so remote as such long distribution channel if suitable for Unilever products (Hill, 2009). The Falcon 8X is a costly aircraft product which is manufactured for certain customer.

So, wholesale, retail and long distribution channels are not suitable for the company in Brazil market. The most suitable distribution channels for Falcon 8X in Brazil is using import agent to sale product to the final customers. 

2.4. Assessing foreign manufacturing and investment decisions

Foreign manufacturing refers when a firm establishes their operational facilities into the foreign market. For example; If Dassault Aviation establishes their aircraft production plant in Brazil then it is known as foreign manufacturing for the company. Investment decision refers taking decision by investment managers and investors whether investment will be conducted or not based on investment analysis. Many firm primarily operates domestically then enter into foreign market, many firms establish for direct export. Firms’ investment decisions are depending on pressure for local responsiveness and pressure for cost reduction (Hill, 2009). Manufacturing Falcon 8X in Brazil depends on several issues such as;

Cost: Establishing operational facilities in foreign market is costly. Aircraft manufacturing plant will incur huge amount of investment for the company.

Time: When fierce competition exists in any foreign market, firm requires entering quickly to grab opportunities (Rugman and Collinson, 2012). Establishing new operational facilities need more time.

Country’s infrastructure: If the infrastructures of the expected country will poor, establishing new manufacturing plant is not appropriate.

Raw materials availability: When the foreign country holds available raw materials for desire product, establishing manufacturing plant is profitable.

The Brazil market is very challenging for the company because several companies are already competing in the market. However, establishing new manufacturing plant for Falcon 8X is too costly and time consuming. Currently, the company is manufacturing their aircraft in France. The cost of aircraft is high and it is not consumer product. As such, price factor has low influence in this product. However, Falcon 8X includes some special features that other companies could not install in their aircraft. So, Dassualt should abandon establishing new operational plant in Brazil rather the company should manufacture Falcon 8X at home and export it to Brazil. 

Go here to see Task 3 & 4

References

Dlabay, L. and Scott, J. (2010) International Business.  4^th Edition. Mason: Cengage Learning.

Fisher, M. (2015) Brazilian aircraft maker Embraer’s decision to target regional jet market pays off. [Online]. Available from: http://news.nationalpost.com/news/world/brazillian-aircraft-maker-embraers-decision-to-target-regional-jet-market-pays-off (Accessed: 1 April 2016). 

Focus Economics (2016) Brazil Economic Outlook. [Online]. Available from: http://www.focus-economics.com/countries/brazil [Accessed: 2 April 2016].

Geetanjali., (2010) International marketing. Jaipur: Oxford Book Co.

Hill, C. (2009) International Business. 7^th Edition. New York: McGraw-Hill Companies Inc.

Kawa, L. (2013) The 20 fastest-growing countries in the world.  [Online]. Available from: http://www.businessinsider.com/fastest-growing-economies-through-2015-2013-1 [Accessed: 1 April 2016].

Lu, C. (2013) Managing international distribution channels. [Online]. Available from: https://www.tradegecko.com/blog/managing-international-distribution-channels

Rugman, A. and Collinson, S. (2012) International business. Harlow, England: Pearson.

Turnbull, P. and Paliwoda, S. (2013) Research in international marketing. Oxon: Routledge.