International Marketing
Management
EXECUTIVE SUMMARY
International marketing management is the process of expanding the business operations
across global boundaries. It is the exchange of goods and services between different countries
and it uses extension from the home country of company. This report is prepared to analyze the
international marketing management approach that can be use by Dominos in order to expand
their business operations and to enlarge their market share. In present competitive environment
the most adopted and common method available for entering into foreign market is franchising
as this strategy helps in gaining high significance in foreign world. The option for allotting
franchisee to foreign investor allows the business unit to earn revenue through its prestige and
brand image created. In order to expand business operations in different nation evaluation of
nation’s environment is essential as it will provide different sort of information which is required
to successfully start up a business in divers country.
It is important for an organization to consider geographical history of that particular
nation in which they will expand their business operations through franchisees system as it will
help them to successfully start up their operations and to gain success. Service oriented products
needs modes of market entry and management of the firm can sell their services to an overseas
consumers. For the purpose of expanding business into different other countries, it is required to
entail sound promotion tactics in order to get rid from the operational issues which firm may face
in international context. Dominos are able to establish themselves in UK region as there possess
effective policies and procedures for franchising and this offers high amount of benefits to
organization. Strategic marketing is one of the key elements that support organization in
managing their business at global level and certainly assist in enhancing customer base of the
company. Firm can easily include the product development and product innovation in their
strategies and improve the quality of product.
TABLE OF CONTENTS
INTRODUCTION .......................................................................................................................... 1
TASK 1 ........................................................................................................................................... 1
TASK 2 ........................................................................................................................................... 3
TASK 3 ........................................................................................................................................... 5
TASK 4 ........................................................................................................................................... 6
TASK 5 ........................................................................................................................................... 8
CONCLUSION ............................................................................................................................. 10
REFERENCES ............................................................................................................................. 11
INTRODUCTION
The concept of franchising now-a-days is considered as a significant element of business
strategies that account for long term business success. Expanding business in foreign countries
through franchising operations is one of the ways that gained huge significance in present
scenario (Brookes and Roper, 2011). In order to demonstrate the research work the analysis is
performed on Domino’s; a leading American restaurant chain that has created its presence in
entire world through franchisee options. The report provides a brief overview of various factors
that should be considered for the purpose of conducting research.
TASK 1
The scenario prevalent in present world aims at creating a brand image through providing
customers a competitive advantage. The businesses should formulate strategies for establishing
itself in a foreign market place. However, occupying a leading position in foreign land and
global market place involves lot of complexities. It is the responsibility of business unit to ensure
the expectations and demand of consumers from different land should be fulfilled. The consumer
behavior in foreign land is very uncertain. Moreover, their taste and preference also depends on
their traditions, geographical and historical pattern. The proper planning and business strategies
form the basis of long term organization’s success. The strategies at initial level should be so
strong that it assists business unit in gaining high significance (Bryson, 2002). The business can
establish its brand in foreign market through various strategies such as joint venture, strategic
alliance and merger and acquisition. In present world the most adopted and common method
available for entering into foreign market is franchising. The business strategy helps in gaining
high significance in foreign world.
The business although has provided with simple option for expanding its operations; it
needs to evaluate all opportunities and threats before implementing the business strategy. It is the
responsibility of businesses to judge the viability and profitability of market existing in foreign
countries. The option for allotting franchisee to foreign investor allows the business unit to earn
revenue through its prestige and brand image created. Domino’s being a leading Italian food
restaurant chain having its presence across the world. The country adopts business strategies that
aim at successful creation of brand image. The franchising option enables business unit to
integrate its operations across various branches. It is through proper co-ordination and
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integration that the business unit is able to achieve long term success. Moreover, the contract
established between the parties should be transparent and clear so as to achieve organization’s
objective. The revenue sharing model should also be framed in the manner that the business unit
is able to achieve its objective with sufficient return on investment. Every investor tends to invest
certain sum of money with a view to earn interest income. The franchisee is allotted on the basis
of credit worthiness of the foreign investor. It should be judged that franchising agreement helps
in generating adequate profits for both the parties (Cooper, 2000). This will help in developing
successful agreements on the part of business unit.
The corporate involving into franchising agreement should evaluate the taste and
preferences of target consumers. The sense of flexibility should also be included as a part of
agreement so as to enable the business unit to achieve long term success. Domino’s being in
eateries segment is responsible for evaluating consumer’s taste in foreign land. As an illustration,
the business unit has to design menu according to the preferences of consumers. The company
when entered in the market of India offered a range of vegetarian options. This is due to their
cultural beliefs and preferences for vegetarian options. The distinct menu options for distinct
group of countries enable the business unit to occupy a leading position in market place. The
company can gain competitive advantage through identifying of consumers’ demand and
satisfying them effectively. It is necessary that geography and historical environment should be
analyzed effectively for the successful implementation of business strategies.
The country’s geographic location also affects the eating habits. It is the availability of
natural resources, climatic conditions and other factors that assist in determining the eating
preferences for community at whole. It is through in depth analysis of economic geographic
location and climatic conditions that value preposition for consumers’ will be created. In case of
dominos the food items will be offered in the way that business unit is able to implement its plan
effectively. The historical beliefs, traditions and culture prevalent within the country also impact
the business success in long run. This is due to the reason that culture also effects taste and
preferences such as in India eating non-vegetarian is considered as bad habit. However, the same
is considered to be healthy in countries such as United Kingdom, china and so on. These
opposite owes its existence to historic culture of different countries (Hodge, Oppewal and
Terawatanavong, 2013). The marketing campaign should be planned after analyzing all the
country’s beliefs, traditions and geographical conditions. This analysis in turn assists in judging
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the company’s capability to generate profits and return. The test in turn decides success potential
for franchisee agreement and future growth perspective.
TASK 2
It is important to analyze the environment regarding the nation before expanding the
business operations in foreign. Evaluation of nation’s environment will provide different sort of
information which is required to successfully start up a business in divers country. Market
research will plays a significant role in expansion of business in foreign market as it provides
better understanding regarding the cultural, social, political and economic condition of particular
nation in which business will going to be start (Carrigan, Marinova and Szmigin, 2005). This
helps an organization to reduce threats in foreign market and provide opportunities to gain
competitive advantages.
Dominos uses franchise system for their international business operations and due to this
it is important for organization to evaluate the environment of that particular nation in which
they operate. In franchise model terms of contract are strict and it is concerned with
standardization. It is the method of direct foreign market entry which is depends on the
franchisor in domestic market (Esopo and Almquist, 2007). This model is relatively low risk,
low cost and potential return. Further while evaluating the different environmental factors
organizations are required to analyze the geography and history of that particular nation so as to
successfully use the franchisees model.
They are required to evaluate the geographical location where they will start up their
franchisees, size of market and climate conditions so as to gain success. In order to start up
business in different nation it is important for organization to investigate the size of territories as
it will be beneficial for them as too big territories may have to be brought back and can
negatively impact on growth (Hutt and Spech, 2012). Marketplace is also differs from one nation
to another so effective knowledge about the trends of market in that country is essential.
In addition to this culture, values, beliefs of people also differ from one place to another
which also impact on the strategy of organization. In the present era needs, preferences and life
style of people are constantly changing so it is important for organization to carefully study these
factors and to offer those products which highly satisfy the needs and expectations of their
customers and to provide satisfaction to them so as to gain their loyalty which is essential for
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business (Terpstra, Foley and Sarathy, 2012). In order to expand business in different nation it is
also important for an organization to analyze the physical infrastructure such as networks of
transits as well as transportation barriers so that they can take corrective measures while they
introduce their business in that country.
It is also significant to evaluate the geographical location so that best place can be
selected which can highly attract customers. Selection of right geographical location will be
highly beneficial for startup of franchised outlet for Dominos as it helps them to gain
successfully launch their business and provide satisfaction to their customers (Church and
Newman, 2000). Organization is also requires to analyze the accessibility, connectivity and
inhabitants of that places where they are going to start their business.
However history of nation also plays a significant role in development of business
strategy as well as marketing plan. Dominos is also required to consider this factor while they
start their business as it will help them to formulate effective strategies which will help them to
gain success. For example Indian people proud of their history so start up of franchisee of
Dominos will require to touch the heart of people by reflecting their culture, tradition and history
in their advertisement and other strategies (Richter, 2012). If Dominos introduce traditional
flavor and consider the beliefs, culture and social system of India people in their product and
services that it will help them to attract customers and to gain their commitment.
Effective knowledge about the history of nation will help organization to provide
satisfaction to their customers by making aware about their sentiments which is required to keep
safeguard. Evaluation of history will help organization to identify the needs and expectations of
their customers which is required to develop their product according to that so as to gain their
commitment (Craig and Douglas, 2006). Further it helps in development of effective marketing
and business strategy that helps to increase growth in context f market share through customer
satisfaction. Hence it is important for an organization to consider geographical history of that
particular nation in which they will expand their business operations through franchisees system
as it will help them to successfully start up their operations and to gain success (Lamb, Hair and
McDanial, 2012).
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TASK 3
Entering into international marketplace is a challenging task. It follows the long process
and the entire process gives the international capabilities. It can be easily describes that
international marketing provide business managers with untapped potential and a huge range of
opportunities. Diversity can make the international marketing quite complex. Where penetrating
a new nation’s market is quite similar to start up situation. It may occur when there is less
knowledge about the market and no marketing and sales infrastructure. Most of the organizations
think that this situation will help in the extension of their business. There are various different
strategies that can be adopted by the company in order to achieve their target (Terpstra, 2000). If
the main objective of the company is to entering into new foreign market then they can go
through the several situations. They may start their business with the very basic level and they
can also obtain another organization. Dominos is the first preference of all the consumers
according to the taste and their services. They need to maintain their service in order to increase
their productivity (David, 2006). For this purpose company can either starts their business with
entering into franchising which Dominos usually follows. Franchise is the right or privilege to
use services and practice of selling. It is an alternative to build chain stores to distribute goods
that avoids the investment and liability of a chain. Dominos usually follows this strategy in order
to grow their business and providing their service facility in different cities. Acquisition is the
process which might attract less than enthusiastic reaction from the government.
In order to settle down with the new business the main strategy which can be adopted by
the company is the joint venture or sole venture. Joint venture can be described as a business
agreement in which both the parties are agree to develop (Czinkota, Rnkainen, and Zvobgo,
2011). They can easily pool their resources for the purpose of accomplishing the task. Each and
every participant is individually responsible for the profit and losses. The firm inhabits on
starting a new business overseas, sole business offers the company with the higher profits. Firm
can easily achieve their objective with the sole business. Joint venture mainly mitigates the risk
and if any of the specific market has been chosen all the market entry strategy must be verified.
It is one of the most important strategies which have its own strength and weaknesses. These
strategies are not mutually exclusive and manufacturer must use multiple strategies in distinct
market. There are various strategic options but the suitability and correctness of these options are
based on the several political realities. It can also be measure by the market conditions as it is
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necessary to adopt various latest and emerging trends according to the market conditions and
consumers wants (Branine, 2011). Dominos continuing royalty based upon the percentage of the
monthly performance. They need to look after the enthusiasm of franchisee and they have the
main fear of their future competitors. Dominos is making joint ventures and putting up their
equity share capital in the marketplace. Its stores are spread across 87 cities in India and it is the
largest network of outlets across the world. Single strategy for market entry is appropriate for all
the nations and with the help of curtained strategies they might have performed well in the past.
There are various features that determine the appropriateness of entry strategies such as type of
product, type of country, regulations, political risks and competitive advantage. These features
must be associated with the help of selecting the proper strategy. In free market economies
different multinational firms can select any of the entry strategy (Rust, Lemon and Zeithmal,
2004). It is much more essential to go through the best suitable strategy for free market
economies. For the control economy the alternatives are limited and firm can go for the selected
alternatives.
Market entry strategy is highly impacted with the type of product. Each and every
organization needs to sever proper services and products to all their consumers. There are
various manufacturing goods which needs to be customized cannot be easily exported to other
nation. At the time of manufacturing any of the part of product needs which is service oriented
should be created at the area of consumption. Service oriented products needs modes of market
entry and management of the firm can sell their services to an overseas consumers. There is a
management contract to sell the service which mainly covers that franchisee might be trained and
local producers can set up their business branches as well (Doole and Lowe, 2008). The market
entry strategy also supports different theories of decision making procedures with aggressive and
focused entries. So it can be easily determined that there is no single market entry strategy for all
circumstances and culturally diverse market can pose huge investment risk.
TASK 4
For the purpose of expanding business into different other countries, it is required to
entail sound promotion tactics in order to get rid from the operational issues which firm may face
in international context. However, organization faces series of problems when they initiates their
business into international context and one such problem is related to development of marketing
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campaign for two highly distinct market that can very well classified into developed and
developing countries (Cant, 2009). It is so required because both set of counties possess high
among of differentiation in term of standard of living, mental stability, need, wants other related
attributes and therefore it is not feasible to incorporate same set of marketing practices in both of
the countries. Considering this, Dominos also faced same set of problem while operating into
different market of different countries (Govindarajan, 2007). Due to this, they enjoys a leniency
in setting their establishments in a developed countries due to systematic approach but same is
not the scenario in developing countries and hence they faces different sort of problems in those
regions.
In order to articulate this scenario, two countries is being taken into account i.e. UK as
developed country whereas India as developing country. Cited country possess high amount of
differentiation on the grounds of culture, language traditions, needs, wants, business environment
and numerous other factors. However, due to non tariff barriers, it is bit complex to spared
franchise in a developed country like UK and basic non tariff barriers are embargoes and
sanctions, etc. However, this can be managed as there are various options available in this
context and one such is to assess global marketplace (Singer, 2006). With the help of it,
organizations are able to acknowledge about confront that lies within the sphere of non-tariff
barriers and hence able to desirable information about the external environment in which
organization will operate. In this context, franchising is one of key tactics that aids Dominos in
expanding into global market, however, non tariff barriers in this regard can act as restriction
factors. For the purpose of managing this section, Dominos have to focus more over food policy
in order to establish in that particular market effectively. In India, pork is not being preferred by
any of the individuals and also this is banned in India and therefore it is required by Dominos to
avoid using such ingredients in their food products in order to safeguard them from landing into
problems (Atorough and Martin, 2012). This scenario can be clear to organization only if they
pursue through research in this regard and gains proper knowledge about the products that can be
served and that cannot be offered. By doing the same, they can able to take proper decision in
this context which ultimately leads to situation of attaining efficiency in the market place.
Apart from this, Dominos are able to establish themselves in UK region as there possess
effective policies and procedures for franchising and this offers high amount of benefits to
organization. However, organizations are not permitted to acquire raw materials from outer
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world because of the barriers that are being imposed over import and export but for getting rid of
the same, tactics of strategic alliance and agreements can be done (Mathur, 2006). By enter into
agreement with that of local distributors, they able to conduct their franchised business in more
effective manner. Dominos had developed agreements with different local distributors for the
purpose of acquiring raw materials of different sort. However, this concept is not being
prominently utilized in India due to potential factors like poor quality of raw material that are
being produced by local distributors as this essentially make a serious impact over the brand
image of Dominos (Layton, 2011). However, this practice are being utilized in UK more
prominently as there are different types of firms that can assists in offering high quality products
in regular basis to Dominos. In India, Dominos first provide professional training before making
contract with any vendors in order to ensure supply of quality product from their side (Glynn and
Woodside, 2012).
Hence, these are the manner in which cited organization is able to manage the scenario of
restricted export and import. By performing the practice of agreement and strategic alliance,
Dominos is able to offer quality products to their customer throughout the globe without being
sacrificing their quality at any cost (Motta and Schewe, 2008). Also, they able to raps
opportunities of both develop countries like UK and developing countries like India in most
effective manner without getting distracted with non tariff barrier and challenges. Beside this,
Dominos may issue license for importing goods which will essentially support in maintain
quality in their products in more effective manner.
TASK 5
For any organization, strategic marketing is one of the key elements that support
organization in managing their business at global level and certainly assist in enhancing
customer base of the company. However, there are different sort of challenges and barriers that
lies in business of international format and same can be managed by employing different tactics
in this regard. One such tool is product life cycle that aids in taking proper decision form which
better and effectual results can be attained from different phases of products (Senior and et.al.,
2007). Dominos can able to boost the brand image in global market along with gaining high
amount of revenue from different market place.
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This is one of the key tools that supports in deciding whether to entail further innovation
in product base or not for the purpose of catering the attention of large set of customers on their
side. Majorly, product life cycle possess four phases i.e. introduction, growth, maturity and
decline. With consideration to these phases, it is being required that cited organization must
incorporate innovation and extra feature in product at the time of maturity for avoiding the
situation of declining (Hughes, 2007). Moreover, early phase requires high cost in advertisement
in order to cater the attention of large set of individuals and hence same have to be done by firm
in order to reach effectively into growth phases.
The introduction stage of product life cycle is highly beneficial in international market as
it increase profitability of an organization. It provides various opportunities to sell the products
as there is large amount of public. In this stage organization is requires to put their efforts in
order to increase customer awareness regarding the product and services introduce by them. In it
they are required to disseminate information about their unique attributes (Dana, 2004). It is
important for organization to create positive image in their introduction stage so as to effectively
carry out further stages of product life cycle. While company attains the growth stage they are
required to put more efforts in order to maintain their growth and to gain success. In this stage
they can earn profits as well as competitive advantages.
In growth stage organization is requires to focus on quality of their product in order to
maintain trust of their customers with company and to provide satisfaction to them which is
essential to gain profitability (Hodgetts, 2005). Dominos is also requires to use effective
marketing strategy if they introduce variety in their product range so as to attract customers and
to increase profitability. They are requires to effectively communicate with their customers
through different promotional strategy in order to increase customer awareness and to increase
sales of organization at this stage in international market. They are requires to select best
marketing strategy in order to gain competitive advantages. Common people will show their
interest in that product and if people like the product than the sale will be automatically goes up.
Consumers need to show the full response towards the food item if they like the taste otherwise
they will show the cold response (Buckley, 2002). Organization need to rectify their strategies in
order to overcome with this problem and retrench their product. Organization need to manage the
quality of their food items. Nature of dominos business is that they are working in highly volatile
industry. It is essential for the company to change their products according to the taste and
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preference of their consumers. They cannot sell the same eating product for the long period of
time (David, 2006). They need to understand the maturity stage of the product and company can
use the product life cycle concept as a marketing tool. Company can go through the several new
and latest marketing strategies in order to achieve their target. Firm can easily include the
product development and product innovation in their strategies and improve the quality of
product.
CONCLUSION
The report has provided valuable insights about the manner in which successful franchise
agreements can be establishes. Through the report the case for dominos is considered into
consideration that in turn provides valuable insights for business development. It is seen that
business unit can occupy a leading position in foreign market in different ways. The allotting
franchisee is considered to be most popular option in modern era (Harmon and Griffiths, 2008).
It is the responsibility of the business unit to co-ordinate the activities at two ends. Moreover, the
organization is also responsible for analyzing consumers demand and other factors in foreign
market. The analysis ensures effective formulation and implementation of business strategies in
long run. Throughout the report value creation methods are described in the form of merits and
demerits associated with franchising alternative.
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