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MARKETING ACROSS CULTURE

International Marketing Selection and Entry Strategy Plan for Brighton Gin

OCTOBER 29, 2019


REPORT ON BRIGHTON GIN
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LUCIE MCADAMS
THEGLOWWITHINBLOG@GMAIL.COM

YOU DIDN’T PAY ME FOR THIS

ASSIGNMENT AND I UPLOADED IT ON

SCRIBD. PEOPLE CAN TAKE BENEFIT

FROM IT
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Table of Content

Introduction ............................................................................................................................................. 3
Purpose of the Report.......................................................................................................................... 3
Overview ............................................................................................................................................. 3
Brighton Gin ........................................................................................................................................... 3
Initial Screening ...................................................................................................................................... 4
Macro Risks ............................................................................................................................................ 4
Macro Indicators of Potential.................................................................................................................. 5
Micro Specific Market Demand .............................................................................................................. 6
Ease of Entry ........................................................................................................................................... 6
Country Selected ..................................................................................................................................... 7
Market and Competitor Analysis ............................................................................................................ 7
SWOT Analysis .................................................................................................................................. 8
Entry Mode ............................................................................................................................................. 8
Distribution Channels ............................................................................................................................. 8
Market Segmentation .............................................................................................................................. 9
Conclusion .............................................................................................................................................. 9
References ............................................................................................................................................. 10
Appendices............................................................................................................................................ 12
Appendix A- Reasons for Selecting the Potential Export Markets ................................................... 12
Appendix B: Macro Risks ................................................................................................................. 12
Appendix C: Pestle Analysis of China.............................................................................................. 14
Appendix D: Porter Five Forces Competitive Analysis .................................................................... 15
Appendix E: SWOT Analysis for Brighton for Entering China ....................................................... 15
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Introduction
Purpose of the Report
As a marketing consultant, the purpose of the report is to identify the four new export
market for the Brighton Gin and then select one new export market after the brief research and
analysis. Also, as a marketing consultant, it is a responsibility to provide a report that gives a
piece of advice to Brighton Gin on new market entry strategy.

Overview
Nowadays many companies are already internationalized and many of other companies
decide to go international market. Such companies get their resources and material from other
countries and sell their services and products to internationally (Knight and Liesch, 2016). In
addition to this, to go internationally such companies even transfer their departments to another
country. There is a big difference between international and domestic business. The reason
behind this is that international business deal with different environment as compared to
domestic business (Grünig and Morschett, 2017). To select the export market from four
international markets there are different drivers which are needed to consider. Such drivers are
market, competitive, political, technological drivers.

Brighton Gin

In 2013, Brighton Gin was established after the months of experimentation by Kathy
Caton. Such experiments are based on the different combination, approaches, distilling
techniques, and ingredients. The most important things about Brighton Gin is that it offers
unique selling product such as 100% certified organic pure wheat spirit. The product is used
locally-grown coriander seed which is the UK's first commercially grown coriander seed from
the past 200 years (Muggleton. 2016). This seed provides many benefits to its customers as it
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is renowned for making the liver function properly. In addition to this, Brighton Gin uses a
distillation process which removed the gluten from the product. Not only this, the company use
top quality ingredients which make the product more special. Some of their products are the
combination of twist of orange and ice which attracts customer due to its uniqueness.

Initial Screening
In the internationalization process, the most important step is the market screening.
According to the Ozturk et al., (2015), the process of internationalization consists of market
screening, in-depth analysis and research of markets that are short-listed, selection of the final
market, mode of entry selection, preparation to entering the chosen market, and global
rationalization. For the selection of the international market, several markets to be considered
for in-depth assessment and only one will be selected based on cost and flexibility. The
international markets that are chosen for the export market are China, Japan, USA, and
Thailand (see appendix A for detailed analysis).

Macro Risks
Risks are identified by the companies so that they can minimize future potential risks.
There are many factors related to the economy that directly affect the overall operations of the
Brighton Gin. As the company offering various products to its customers and now want to enter
into a new market for this company have to analyse different aspects of different countries.
Brighton Gin will face many legal and political risk when entering into the new market. When
the company enter into China the thing that first experienced is that Chinese people less believe
in the advertisement of the product and if they did such promoting then their do it at a lower
price. Whereas, people of Japan want that company must spend a lot of money over the product
promotion so that everyone knows about the product with full features (Calvelli and Cannavale,
2019). Not only this, the USA and Thailand people also relay on heavy advertisement and
promotion of the product.

calculated by using all 17 risk components from the PRS Methodology including turmoil,
financial transfer, direct investment, and export markets.

Macro Risk China USA Japan Thailand Source


Indicators
Political risks 69 88 85 76 prsgroup.com
Economic risks 56 75 72 70 prsgroup.com
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Legal risks 70 73 80 71 prsgroup.com

So, it is necessary for the Brighton Gin that its marketing firm must communicate with
the local firm about the promotion of the product successfully. Not only this, as compared to
other countries Brighton Gin have to hire a local lawyer in the USA as the laws of the USA are
ambiguous. The local lawyer helps out the company about the selling price of the product of
Brighton Gin products (Quer et al., 2018). In addition to this, it is also very important for the
company to analyze financial and economic risk analysis, cost-benefit analysis, and minimum
wages of such countries. It is found that China is the country where labour cost is low as
compared to the other countries.

Also, China and USA are more stable countries than Japan and Thailand. According to
the World Economic Forum, Chana and USA are more stable countries as compared to the rest
of the countries. Not only this, but China also has a low inflation rate as compared to other
countries so Brighton can easily establish its company in China as it requires low investment
(Calvelli and Cannavale, 2019). The sales of the company will increase as the market of China
is large and people easily switch from one product to another. The overall macro analysis shows
that from all the countries, the most reliable country for the export market is China (See
Appendix B for detailed analysis).

Macro Indicators of Potential


Macro-economic indicators can be described as the piece of information that is related
to the economic data which help the companies to judge the overall health of an economy.
Gross national product (GNP), Gross Domestic Product (GDP), Consumer Price Index (CPI),
and Consumer Confidence Index etc. are the part of the macro indicators. The population of
China is about 1.482 billion which shows a great market potential for the company. In addition
to this, this market is still growing for the beverage’s products. On the other hand, the USA
ranks third in market population in the world in terms of population (Grünig and Morschett,
2017). The population of USA is approximately 1.22 billion which is less as compared to
China. In addition to this, other countries such as Japan and Thailand have less population as
compared to others, so it is hard to attract a large population for Brighton Gin.

Moreover, the GDP of China is also ranking on the top with $28.30 trillion, however,
the GDP of the USA is 20.01 trillion dollars as compared to China. It shows that in terms of
beverages China has a better economic development because of the increasing trends of
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beverages in the country. Japan and Thailand GDP's are 4.872 trillion dollars and $445.3
billions respectively which are less likely to consider as an export market for Brighton Gin
(Alkemade et al., 2015). This analysis shows that China is the most reliable country for
Brighton Gin for the expansion of its export market.

Macro Indicator of China USA Japan Thailand Source


potential
GDP (per capita) 9,770.8 62,641.0 39,286.7 7,273.6 Worldbank.org
US$
GDP per capita 6.1 2.2 1.0 3.8 Worldbank.org
growth (annual %)
Total population 1,392,730 327,167.43 126,529.10 69,428.52 Worldbank.org
Population growth 0.5 0.6 -0.2 0.3 Worldbank.org
Net national income 6,568 51,485 31,107 4,968 Worldbank.org
Net national income 5 2 1 3 Worldbank.org
per capita (US$)

Micro Specific Market Demand


The demand and supply of a product are very important for the company. The company
must meet the demands of the people where they are going to integrate as a new company. The
market of China is relatively large as compared to the USA, Japan, and Thailand. The main
reason for the population of the country and also in terms of dollars. According to the report of
Statista, the size of the China market is amounted up to approximately 17.9 billion yuan in
2016 (Grünig and Morschett, 2017). However, the number of this figure will grow up to 60
billion yuan by 2020. China as compared to other countries has a large market size which also
has a great demand for the beverage’s product. This micro specific analyze that China has a
good market for foreign companies.

Ease of Entry
In industry analysis, the most important part is the ease of entry as it provides a brief
analysis of the industry’s existing competitors, buyers and supplier, nature of products, and
substitute products. In addition to this, it determines the company will face new competitors in
a new market. There are two factors on which a company depends such as existing competitors’
reaction towards the new entrants and the barriers that prevail the company to enter into the
market. It is analyzed that it is easy to produce a large volume of product in China as compared
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to other countries (Crick et al., 2018). The reason behind this is that the existing company have
the advantage to produce a large volume of products as compared to a new company which
gives pressure over the new company. So, it is easy to produce a large scale of volume in China
as they have labour and resources at a low price. Not only this, Brighton Gin can easily
advertise its product in China as a promotion in China requires less investment as compared to
the USA, Japan, and Thailand. Moreover, China also has flexible government policies as
compared to the USA, Japan, and Thailand as they impose high tariffs and duties over foreign
companies.

Country Selected
The country that is selected for exporting the products Brighton Gin is China. The
reason to choose China for the new export market is based on the PESTLE analysis:

 Political: China is a politically stable country


 Economical: In recent decades, China has a constant economic growth rate which is
high as compared to other countries.
 Sociologically: a Large number of population and provide good working condition
(Chhabra and Kiran, 2015).
 Technology: Most of the Chines have literacy about the internet and other advanced
technology.
 Legally: China impose low trade tariffs and duties, also both countries have bilateral
free trade agreement.
 Environmentally: Larger investor in renewable energy and invest in solar and wind-
generated power (Chhabra and Kiran, 2015) (See Appendix C for detailed PESTLE
analysis).

Market and Competitor Analysis


Whenever a company wants to enter into a new market the company needs to use
Porter’s Five Forces as it gives a brief overview of the news industry.

 The threat of new entrants: Growing demand for beverages and alcohol consumption
products.
 The bargaining power of buyers: As the industry is highly competitive due to which
buyers of the product have multiple options.
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 The threat of substitute products: There are a low number of substitute products in
China which gives a positive impact and allow other companies to enter into a new
market (Lee and Cho, 2016).
 The bargaining power of suppliers: China beer market has an unlimited number of
suppliers.
 The rivalry among competitors: The current competition in the market is fierce as there
two main types of beer are available pasteurized beer and draft beer (See Appendix D
for detailed analysis).

SWOT Analysis
SWOT analysis provides a brief overview of the threats and opportunities for the
Brighton Gin in China:
 Strength: from the past few years the GDP of China is continuously increasing which
is good for new foreign companies.
 Weakness: an Unemployment rate in China is very high which is 71%.
 Opportunity: China pays its attention to the development of the manufacturing sector
(Xing and Guo, 2017).
 Threat: Countries such as South Korea, Japan, and China have a dispute over the East
China Sea which can threaten the future trade (See Appendix E for detailed analysis).

Entry Mode
There are many modes for entering into a new market acquisition, joint venture,
licensing, and export. The mode that is chosen for China is export as it is towed export products
to china through the sea (Sadeghi et al., 2018). In addition to this, potential buyers of the
product can take the products of Brighton Gin due to which it minimizes the supply chain.

Distribution Channels
The distribution channel of the Brighton Gin is to distribute the wholesaler then retailer
and finally, a customer gets a product (Gillespie, 2015). Most of the places that required beer
consumption are hotels and restaurants.
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Market Segmentation
The main market segmentation of the Brighton Gin would be Beijing as it is the capital
of China. In addition to this, most of the international activities are also happen in the capital
city.

Conclusion
To conclude that the most important things about Brighton Gin are that it offers unique
selling product such as 100% certified organic pure wheat spirit. There are many factors related
to the economy that directly affect the overall operations of the Brighton Gin. Moreover, the
GDP of China is also ranking on the top with $28.30 trillion, however, the GDP of the USA is
20.01 trillion dollars as compared to China. It shows that in terms of beverages China has a
better economic development because of the increasing trends of beverages in the country. It
is analyzed that it is easy to produce a large volume of product in China as compared to other
countries. The mode that is chosen for China is export as it is towed export products to china
through the sea.
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References
Alkemade, F., Heimeriks, G., Schoen, A., Villard, L. and Laurens, P., 2015. Tracking the
internationalization of multinational corporate inventive activity: national and sectoral
characteristics. Research Policy, 44(9), pp.1763-1772.

Calvelli, A. and Cannavale, C., 2019. Key Risks of Internationalization. In Internationalizing


Firms (pp. 129-164). Palgrave Macmillan, Cham.

Chhabra, S. and Kiran, R., 2015. An Empirical Analysis of Total Factor Productivity in Food
and Beverage Sector. Productivity, 56(2).

Crick, J.M., Crick, D. and Chaudhry, S., 2018. Entrepreneurial marketing decision-making in
rapidly internationalising and de-internationalising start-up firms. Journal of Business
Research.

Gillespie, K., 2015. Global marketing. Routledge.

Grünig, R. and Morschett, D., 2017. Facts and Figures About Internationalization at the
Macro Level. In Developing International Strategies (pp. 9-18). Springer, Berlin,
Heidelberg.

Grünig, R. and Morschett, D., 2017. Reasons for the Internationalization of Companies.
In Developing International Strategies (pp. 29-43). Springer, Berlin, Heidelberg.

Knight, G.A. and Liesch, P.W., 2016. Internationalization: From incremental to born
global. Journal of World Business, 51(1), pp.93-102.

Lee, H. and Cho, S., 2016. Hitejinro Sustaining Success in the Korean Beer
Market. International Journal of Business Management & Research (IJBMR) ISSN
(P), pp.2249-6920.

Muggleton, D., 2016. Brighton Pubs. Amberley Publishing Limited.

Ozturk, A., Joiner, E. and Cavusgil, S.T., 2015. Delineating foreign market potential: A tool
for international market selection. Thunderbird International Business Review, 57(2),
pp.119-141.

Quer, D., Claver, E. and Rienda, L., 2018. The influence of political risk, inertia and imitative
behaviour on the location choice of Chinese multinational enterprises: Does state
ownership matter? International Journal of Emerging Markets, 13(3), pp.518-535.
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Sadeghi, A., Rose, E.L. and Chetty, S., 2018. Disentangling the effects of the post-entry
speed of internationalisation on export performance of INVs. International Small
Business Journal, 36(7), pp.780-806.

Xing, Y. and Guo, Y., 2017, March. A Review of the Research on the Competitiveness of
China's Beverage Industry. In 2017 7th International Conference on Education,
Management, Computer and Society (EMCS 2017). Atlantis Press.
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Appendices
Appendix A- Reasons for Selecting the Potential Export Markets
China USA
 The global ranking of china is 50.  The global ranking of USA is 7.
 China has a high potential for beer  The USA also has a large market
markets. for beer but the growth of the beer
 China is continuously growing in industry is low.
the technology sector which  The rules and regulation about the
decreases the cost of the company. export are flexible.
 The good Transportation system for
export.

Japan Thailand
 The global ranking of 27.  The global ranking of Thailand is
 Easy to target Japan because of the 34.
business environment.  Low transportation cost for foreign
companies.

Appendix B: Macro Risks


Macro Risks China USA Japan Thailand
Analysis
China has been The government Japanese are The
Political considered as on of the USA is ranked over the government of
System and the communist based on top ethnic Thailand is
risk states that governmental group as Japan failed to
consists of 95% democracy. has been address the
of ethnicity USA believes in considering as a issues related to
belong to chines the new relatively the minority
hands. The business as it friendly nation. groups and
ruling party is increases the In addition to ranks 3.3 out of
responsible for employment for this, in Japan, 7.
controlling the the people of the there is a
economy. Due USA. Also, the democracy and
to which there is USA provides government of
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a less chance for safety to the japan is


the Brighton minority people. friendly with
Gin to take the new foreign
complete business. As
ownership of its compared to
company. In a China, Japan is
successful a good option
business, even a for a stable
franchise cannot business. The
help in this ruling party of
regard. It has Japan is the
been considered Democratic
as one of the top party which is
disadvantages supposed to the
for Brighton most dominant
Gin. As the hold party
of the
communist
party is quite
strong due to
which the
stability of
China is stable.
Economic Based on GDP, The GDP of the With $6 trillion The GDP of
Risk China ranks USA is 1 per growth in 2019, Thailand is 0.5
with $28 trillion cent of the gross China has been per cent of the
as economic domestic considered as budget deficit.
development. In product of the the leading In addition to
addition to this, USA. In GDP nation. this, the
the industry of addition to this, The trends in inflation rate in
the beer is also the USA also the beer Thailand is 0.9
growing the have high industry also per cent.
passage of time inflation rate increase by 8%
and it is which is 3%. in 2020.
estimated that
this trend would
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be 4.1% in
2020.
Legal System The laws and The legal The legal The trading
regulations of system of the system of Japan laws of
China legal USA has been is based on the Thailand is
system are considered as an European uncertain due to
considered as independent system. The Brexit.
very strict for system. most important
foreign thing is that the
companies. European
However, such system is the
laws provided civil law
maximum system.
benefits to the
new business.

Appendix C: Pestle Analysis of China


Political China is a politically stable country. The economy of china is
continuously growing after the economic reform in 1978. This reform
supports and motivates new business development.
Economic In recent decades, China has a constant economic growth rate which is
high as compared to other countries. The factors of the economy
directly affect the business such as its cost, supply, demand, and
capital availability. Due to which China pays its more attention
towards the stability of the economy which encourages the new
foreign business.
Sociological A large number of population and provide good working condition
(Chhabra and Kiran, 2015). Moreover, the distribution of income
among different classes is equal.

Technological Most of the Chines have literacy about the internet and other advanced
technology.
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Legal China imposes low trade tariffs and duties, also both countries have
bilateral free trade agreement.
Environmental Larger investor in renewable energy and invest in solar and wind-
generated power (Chhabra and Kiran, 2015).

Appendix D: Porter Five Forces Competitive Analysis


Bargaining The growing demand for beverages and alcohol consumption products.
Power of Buyers Moreover, it has been analyzed that customers in China can easily
switch towards the competitor's product due to the intense competition.
This shows that the bargaining power of the buyer is high in China due
to the low transformation cost.

The threat of As the industry is highly competitive due to which buyers of the product
New Entry have multiple options. The beer industry has been considered as one of
the capital-intensive industries which required a great amount of
investment. The barrier for New entrants is that already existing
companies have strong distribution channels.

Threat of There are a low number of substitute products in China which gives a
Substitution positive impact and allow other companies to enter into a new market
(Lee and Cho, 2016).

Supplier Power China beer market has an unlimited number of suppliers.

Competitive The current competition in the market is fierce as there two main types
Rivalry of beer are available pasteurized beer and draft beer.

Appendix E: SWOT Analysis for Brighton for Entering China


Strength Weakness
from the past few years, the GDP of China is The unemployment rate in China is very high
continuously increasing which is good for which is 71%.
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new foreign companies. In addition to this,


the expected GDP of China exceeded the
expectation of China's government and hit
8% instead of 7%. Not only this, but the
country is also known for cheap labour.

Opportunities Threat
China pays its attention to the development Countries such as South Korea, Japan, and
of the manufacturing sector (Xing and Guo, China have a dispute over the East China Sea
2017). which can threaten the future trade.