Assignment

On

International Marketing of Squidkids-Rainwear for Children

Module: International Marketing

Course:

Submitted To

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Word count: 2,095 words excluding cover page, contents, list of references and appendix

Date of Submission: 17 November 2014

Contents

Page No:

Task A 03

Task B 07

List of references 09

Table 1.1: Set of screening criteria to identify and evaluate four countries in European Union to enter by UK-based small business, Squidkids 03

Table: 1.2. Rank of order for the chosen four countries such as Germany, Italy, France and Spain in European Union for Squidkids, UK-based small business to enter a market 06

Table 1.3.Countrys cross-comparison 06

Task A

For the purpose of entering into European Unions markets by Squidkids, there is need to identify a suitable country(s) as well as evaluate the country(s) whether the entry of the UK-based small business would be most relevant and appropriate to expand the business outside the UK. So, it is required to develop a set of screening criteria in order to identify and evaluate countries in European Union and thus to justify the selection/choice of the country for Squidkids products in the defined market.

The following table has been shown as by developing a set of screening criteria for identifying and evaluating major four countries in European Unions market for the purpose of entering into one of chosen market by UK-based small business, Squidkids-rainwear for children.

Table: 1

Set of screening criteria to identify and evaluate four countries in European Union to enter by UK-based small business, Squidkids.

Selection criteria

Key feature of selection criteria

Trade policies and barriers to entry in European Union

It focuses on the rules and regulations for trading and some barriers that can affect the entrance of an organization into a new international market.

Major market factors within European Union

It identifies and analyse major market factors that either positively or negatively affect an organization for its enter into new market.

Market potential for the product in European Union

It identifies and clarifies the potential for a new product within the target market for an organization.

Nature of market competition within the industry in European Union

It focuses on the type and intensity of the competition within the defined industry and a way of creating competitive edge by an organization into the new market.

Availability of similar products in the market in European Union

It identifies and analyse major substitute products that can influence customers to switch to other competitors in the market for an organization.

Customer purchase behaviour at the markets in European Union

It identifies and describes the attitudes, perceptions, and patterns of buying a particular product from a particular business by a customer in the market.

Source: Morschett et al., 2010; and Welch et al., 2007

a. Reasons for choosing particular four countries in European Union to enter into market by Squidkids, UK-based small business: The author has chosen four countries such as Germany, Italy, France and Spain in European Union for entering of Squidkids, UK-based small business with products of rainwear for children. The main reasons for choosing these four countries in European Union for the defined products at Squidkids can be shown as follow (Authors analysis):

All of the chosen four countries have higher rate of rainfall and snowfall compare to other countries in European Union. So, there are huge opportunities for rainwear for children products of Squidkids in those markets compare to other countries in European Union.

The chosen four countries are more developed and have ability to spend more on a new product like rainwear for children compare to other countries in European Union. So, the living standards of the people as well as interests to spend on purchasing new product of chosen four countries can be most favourable factors for rainwear for children of Squidkids while entering into market in European Union.

It has been identified that most of the families in chosen countries are travelling with their children and kids during summer and winter reasons while other countries in European Union has low tendency to do so. So, the people attitudes of travelling with children and kids in chosen four countries in European Union can be termed as most supporting factors for Squidkids to enter into a particular market in European Union.

b. Discussion and justification of the choice of criteria for screening markets in European Union for Squidkids, UK-based small business: The author would like to discuss and justify of the criteria for screening markets in European Union for Squidkids for its rainwear for children products as follow ():

Trading policies and no barriers to entry: It has been recognized that trade policies and barriers to entry are most key criteria for international expansion of an organization in a particular market. In European Union, there is free movement of people, goods, services and capital with the aim of enacting similar legislation and maintaining common policies on trade. So, the criteria of trade policies and barriers to entry in European Union can be termed as most prior selection criteria for entering and expanding business of Squidkids in a particular market of European Union.

Major market factors affecting sells of products in the European Union market: It is very important for a business to identify and analyse major market factors to sell its products in a new international market. So, the identification and analysis of major market factors such as climate conditions, customers buying patterns, etc. can be termed as most important selection criteria for entering into a market in European Union by Squidkids, UK-based small business.

Market potential for rainwear for children of Squidkids in European Union market: It is needed to identify the market potential for defined products in the targeted international market by an organization in order to enter into that market. So, the overall market potential for rainwear for children is an important selection criterion for chooses a particular market in European Union by Squidkids, UK-based small business.

Nature of market competition for rainwear for children product at Squidkids in European Union market: The identification and analysis of the nature of market competition at the defined business industry is very common to expand business into a new international market. So, it is very key criteria to enter into a particular market in European Union by Squidkids, UK-based small business offering products of rainwear for children.

Product substitute for rainwear for children at Squidkids in European Union market: The availability of similar products in the market has huge influence and impacts an organizations decision to enter into a new international market. So, the identification and evaluation of similar products of rainwear for children of Squidkids is defined as most key selection criteria for entering into a market in European Union.

Analysing customer purchase behaviour for rainwear for children at Squidkids in European Union market: Customer purchase behaviour is refers to the patterns, attitudes and approaches of a customer to make purchase of a particular product from a business in a particular industry. So, the analysis of customer purchase behaviour for the products of rainwear for children in markets in European Union is very key criteria for selecting a market to enter by Squidkids, UK-based small business.

Thus, it can be opined that all of the above mentioned criteria are most relevant and appropriate for the purpose of identifying and justifying a particular market in which an organization wants to enter with its product(s) such as entering into a particular market in European Union by Squidkids with its rainwear for children, which changes colour when it rains.

c. Suggesting a rank of order for the chosen four countries in European Union including evaluation and argument for ordering this rank: The author would like to rank of order among chosen four countries in European Union to enter into a particular market by Squidkids for its product of rainwear for children, which changes colour when it rains as follow:

Table: 1.1. Rank of order for the chosen four countries such as Germany, Italy, France and Spain in European Union for Squidkids, UK-based small business to enter a market

Rank of order

Name of chosen country in European Union

1

Germany

2

Spain

3

France

4

Italy

Evaluation and argument for above mentioned rank of order: The author has put Germany as top market for rainwear for children which changes colour when it rains. The author has named Spain as second most important market for rainwear for children, which colour changes when it rains. The author has ranked France as third option and Italy as fourth option for entering by Squidkids, UK-based small business with its rainwear for children, which changes colour when it rains.

Table 1.3.Countrys cross-comparison:

Year 2013

Spain

Germany

Italy

France

Criteria

Value

Points

Value

Points

Value

Points

Value

Points

Target population (Children under age of 16)

7,214.3

4

9,012.3

4

7,321.6

3

7,028.2

3

Number of days per year with precipitation (rainiest days)

84

4

33

2

59

3

26

1

Number of average days of snowfall

11

2

14

2

7

1

13

2

Average relative humidity

60.5

4

75.0

3

72.5

2

76.5

3

Average relative precipitation in inches (Wettest cities)

18.00

1

36.5

3

38.5

3

23.1

2

Consumer Expenditure on rain coat mn

3.2

2

4.4

4

3.1

2

2.4

1

Countrys GDP ($)

31,942

3

43,475

4

34,103

3

39,813

3

Total Points

16

18

17

15

Rank

2

1

4

3

Source: Authors Own Work; Source of data (http://web2.airmail.net/danb1/european.htm)

One of the prior reasons for considering Germany as top most market for the defined product at Squidkids is that the country is more developed and people have higher GDP (Gross Domestic Product) compare to other countries in European Union (Siebert, 2005).

An example shows that Germany has recorded the highest trade surplus in the world worth $270 billion, and making the country as the biggest capital exporter globally (The New Straits Times Press (Malaysia) Berhad, 2014; and Knig & Cie, 2014). In addition, it has been revealed that Germany is the largest national economy in Europe and is a founding member of European Union (Germany.Info, 2014).

Besides, the stronger position of the economy of the country, Germany has developed its economic policy based on the concept of the social market economy that is most suitable and favourable for a new business to enter into the countrys market of a particular industry (Siebert, 2005; and The World Bank, 2014). Although in other aspects of rainfall days like as in average number of rainy days and Spain seems to be potential but in terms of getting back to rainiest place it comes last interestingly.

So, it can be noted that the overall economic strengths, per expenditure on rain coat by Germans and opportunities for international business to enter and operate business in Germany are most relevant and appropriate reasons and arguments for choosing Germany as top most market for rainwear for children of Squidkids, UK-based small business while entering into a particular market in European Union.

Task B

An organization may follow or apply some particular approaches for internationalization of the business into a new market. It is very important for the organization to evaluate each of the approach for internationalization and thus to use one of the most relevant and appropriate for international operation and management of the organization (Kuada, 2005).

In order to enter into a market such as Germany in European Union by Squidkids, UK-based small business offering rainwear for children, which changes colour when it rains, there is need to evaluate and justify both stages and born global approach for this internationalization of the business.

a. Evaluating the main differences between stages and born global approaches to internationalization at Squidskids: The author would like to evaluate the main differences different stages approach and born global approach to internationalization at Squidkids, UK-based small business offering rainwear for children as follow:

Stages approach to internationalization: The stages approach to internationalization is a traditional approach to enter into a new market by an organization. Based on this approach, the business operates in domestic market and eventually thinks to enter into a new international market when the product gets maturity at the domestic market based on product life cycle concept (Vernon, 1979). There is another model for stages approach to internationalization that is known as The Uppsala Internationalization Model in which an organization gradually increases its international involvement (Johanson and Vahlne, 2006).

It has been argued that the stages approach represents an attempt to systemize development process of an organization in some phases, which rely on causal relationships between different sets of variables within the organizations inside and outside environment (Kuada, 2005).

So, it is clear that the stages approach to internationalization mostly depends on different things such as change in organizational structures, processes, planning and control system in order to start business operation in international market.

Born global approach to internationalization: The born global approach is most recent approach to internationalization in which an organization start its international activities operations at its birth of the business. According to this approach an organization enter into different international markets at once. There are two main concepts behind the use or apply of born global approach to internationalization by an organization.

The first concept of born global approach to internationalization is that an organization views the world as its marketplace from the outset and considers domestic market as a support for its international business (McKinsey & Co., 1993). The second concept of born global approach to internationalization is that an organization seeks to derive significant competitive advantage from the use of resources and sales of outputs in multiple countries (Oviatt and McDougall, 1995).

So, it is clear that born global approach mainly focusing on starting international business operation and management of an organization during its born with the aim of increasing competitiveness of the business both in the domestic and international markets.

The basic difference between stages approach and born global approach to internationalization is that the former one focuses on business expansion to international market after having maturity of the business in domestic market, while the later one focuses on entering into new international market at the very beginning of the business and thus to create strong position both in domestic and international markets.

b. Advising a suitable approach with justification of internationalization at Squidkids: The author would like to advise to apply born global approach to internationalization in Germany in European Union market at Squidkids, UK-based small business for rainwear for children. The main reason is that however, the business has been operating in UK since 2008 with the aim of providing quality products for its target customer and very different from other competitors in the market, but the current business of Squidkids starts in October 2014 at Regent Street, London, UK through offering rainwear for children that changes colour in the rain (Squid London Ltd, 2014). The other main reasons for applying born global approach to internationalization at Squidkids include: creating competitive edge in the targeted Germany market; developing strong brand image among the customers in European Union markets; and making higher profit and growth of the domestic (UK operation) market through international operation in Germany. So, it is clear that born global approach to internationalization may bring huge opportunities and benefits to Squidskids compare to traditional or stages approach to international operation in Germany, a leading market in European Union.

The author would to opine that born global approach to internationalization would be most appropriate and relevant for Squidkids to enter into a market such as Germany in European Union.

List of references

Euromonitor (2014) Consumer Life-styles. Available at: http://www.euromonitor.com/countries-and-consumers?id=1&pageSizes=10&sortBy=1&fs[0].Code=ConsumerLifestyles&fs[0].Group=product,1,9&fs[0].Name=Consumer+Lifestyles&fs[0].hasChildren=False&fs[0].Expanded=False&fs[0].Type=Child [Accessed, 17/11/2014]

1. Germany.info. (2014). German Economy Returns to Growth - GDP Growth 2014 webapp". [Online]. Available at: Germany.info. 2014-04-16. [Accessed date 13 November 2014].

2. Johanson, J. and Vahlne, J. E. (2006). Commitment and Opportunity Development in the Internationalization Process: A Note on the Uppsala Internationalization Process Model, Management International Review, 46 (2), pp. 165-178.

3. Kuada, J. (2005). Internationalization and enterprise development in Ghana. London, UK: Adonis & Abbey Publishers Ltd.

4. Knig & Cie (2014). Germany: worlds biggest capital exporter in 2013 | [Online]. Available at: Koenig-cie.de. 2014-01-14. [Accessed date 12 November 2014].

5. McDougall, P. P., and Oviatt, B. M. (2007), Exploring the Role of Industry Structure in New Venture Internationalization, Entrepreneurship Theory and Practice, 31 (4), pp. 517-542.

6.McKinsey & Co. (1993), Emerging Exporters: Australias High Value-Added Manufacturing Exporters. Melbourne: McKinsey & Co., Australian Manufacturing Council.

7. Morschett, D., Schramm-Klein, H. and Zentes, J. (2010). Strategic international management: text and cases. 2nd edition. Germany: Gabler Verlag.

8. Oviatt, B. M., & McDougall, P. P. (1995), Global Start-Ups: Entrepreneurs on a Worlwide Stage, Academy of Management Executive, 9 (2), PP. 30-44.

9. Siebert, H. (2005). The German economy: beyond the social market. New Jersey, USA: Princeton University Press.

10. Squid London Ltd (2014). Squidkids: bringing colour into little lives [Online]. Available at: http://www.squidkids.co.uk/about.php [Accessed date 15 November 2014].

11. The New Straits Times Press (Malaysia) Berhad (2014). German trade surplus soars to all-time high in 2013" [Online]. Available at: http://www2.nst.com.my. [Accessed date 13 November 2014].

12. The World Bank (2014). Ease of doing business in Germany [Online]. Available at: http://www.doingbusiness.org/data/exploreeconomies/germany/ [Accessed date 13 November 2014].

13. Vernon, R. (1979), The product life cycle hypothesis in a new international environment, Oxford Bulletin of Economics and Statistics, 41 (4), pp.255-67.

14. Welch, L. S., Benito, G. R. G. and Petersen, B. (2007). Foreign operation methods: theory, analysis and strategy. Cheltenham, UK: Edward Elgar Publishing Limited.

15. WorldWeather.com (2014) Interesting European Weather Facts and Extremes, Available at: http://web2.airmail.net/danb1/european.htm [Accessed 17/11/2014

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