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End of Semester 2, 2019

MKTG2002 International Marketing


Venue ____________________
Student Number 17893747
Family Name Deschezeaux
First Name Leithycia

School of Marketing
EXAMINATION
End of Semester 2, 2019
MKTG2002 International Marketing
This paper is for Bentley (Internal and External), Mauritius and Miri Campus students

This is an OPEN BOOK examination


This paper IS to be released to students

Examination Duration 48 hours


For Examiner Use Only
Reading Time Within 48-hours of Take-Home Examination Mark
Q
1
Total Marks 40
2
Supplied by the University 3
4
None
5
6
Supplied by the Student
7
No calculators are required in this exam 8
9
Instructions to Students 10
11
Supplied by the Student
12
No calculators are required in this exam 13
14
Instructions to Students
15
Section A: please answer all four (4) parts of question one (1) 16
17
Section B: please answer two (2) questions out of the five (5) questions on offer
18

Responses must be typed in 12-point Times Roman font with 1.5 spacing
Total ________
This examination cover sheet must be attached to your submission

You are required to submit a hard copy to your tutor’s pigeonhole (date stamped) and a soft
copy to Turnitin on Friday, 15 November 2019 by 11am

Penalty will be implemented for a submission after the due date and time

Examination Cover Sheet


End of Semester 2, 2019
MKTG2002 International Marketing

Section A.
Question 1.
a) There are two ways a company can take when considering growth. A firm can rely on
organic growth or growth by acquisition. Growth by Acquisition might be an option to 42
level in the future, but it mainly focuses on organic growth. There are two ways through
which a company can grow organically.

The first one is New product development, a strategy that implies the development of new
products to supply to an existing market .And secondly New Market development
involves finding new markets for existing products .We will look at how 42 level used
these growth path on the short term, medium term and long term.

For the short-term growth, 42 level used a new market development strategy, whereby the
company marketed its existing products into new markets. Instead of using conventional
entry-market strategies, 42 level decided to be unconformist and solicited expatriates
Kiwis, a term used for people from New Zealand living abroad, who are familiar with the
brand to market its products not to the end consumer but rather to bar owners and
restaurant managers in the targeted area segmented by a list of the most popular bars
within an area.

For the medium-term growth, 42 level used a new market development strategy. Once a
relationship in established from the expatriate kiwis and bar owners, 42 level moves to a
more conventional entry-market strategy and starts distributing through agents and
distributors which reduces its costs and where it gains benefits from an experienced
partner.

For the long-term strategy, 42 level new product development strategy. After the vodka is
distributed to bar owners and restaurant owners and official distributors and agents, 42
level gradually introduces new products into this market it has created, like South Gin,
Stil Vodka, 420 water, Tahiti Dark Rum and Seven Tiki Rum. The brand has also
positioned itself a premium product with additional features that differentiate itself from
its competitors offering substitutes. The well-known hotel Ritz has nominated the brand
as its cocktail supplier which renders its positioning as a premium product plausible.

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End of Semester 2, 2019
MKTG2002 International Marketing

b) The factors that lend to a broad geographical spread of markets and an international
firm being success full at it are (i) Redefining the business, (ii) Leveraging existing
capabilities of a firms and (iii) Re-appraisal of the firm in relation to its
competitors, not only local competitors but international competitors as well. 42
Below is at the export level and not yet offshoring the company to the overseas
market. But the factors mentioned above help companies be successful into
international markets. The following will explain what 42 Below should do.
i. Redefining the business.
42 Below needs to understand the customer benefits of its product. The
customer benefits vary between markets, what might be a high involvement
product to one customer in a market might be a low involvement product to
another customer in another market. Customer segments also needs to be
considered as in the domestic country it can be a particular segment while in
an overseas market it will be a different target segment. Technology also
needs to be considered by 42 Below, as technological advancement and
accessibility differs across country and the culture perception of these
technology also varies and can have an impact onto production. The
contribution of 42 Below into the value chain will also need to be revised as it
will need to convert raw materials with low value into a product pertaining
high value into that overseas market. 42 below will also need to re-evalute its
product life cycle. Its position into the product life cycle in its domestic
country will differ from the one in an international market hence will therefore
need to find ways to constantly innovate to stay above the decline phase.

ii. Leveraging Capabilities.


When entering a new market, 42 Below will need to screen the environment to
identify the opportunities to leverage capabilities. By entering a new market,
the company will gain access to a new network where there can be a
collaborative work approach when developing new products or sourcing for
supplies and production. Not only that but within that new network the
company will gain access to human capital to share knowledge and expertise.
Physical assets can also be shared whereby 42 Below comes to agreement into

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End of Semester 2, 2019
MKTG2002 International Marketing

the utilisation of a manufacturing plant with the same manufacturing


conditions as in New Zealand (Pure Air and Water).
iii. Re-Appraisal of the firm
42 Below will need to adopt a different strategy to segment the market.
Different to the strategy used in the domestic market and re-position the
product as per the target segment of this new market.

c) To assess its competitiveness 42 Below needs to look at the stage of development


into that particular country and needs to consider different factors. For instance:
(1) Income.
Gross national Income is the value that interprets the amount of goods and
services produced by a particular country over a particular period of time. The
income can also be measure using GNI per capita assuming that everyone in that
country receives the same income. The income distribution is an indication of
the wealth position of the economy.
(2) The Purchase Power Parity.
This is the amount of currency required in one country to buy a product compared
to the amount of another currency in another currency to buy the same product.
For example, how much euros are needed to buy the 42 below vodka and how
much Australian dollars needed to buy the same 42 below bottle of vodka.
(3) Population.
Further segmented by Age and Location, both of these two subfactors are
significant when measuring a market. Someone aged 20 does not gave the same
wants and needs as someone aged 50. Location greatly impacts on the overall
distribution and communication strategy of a firm in its aim to create brand
awareness.

It is said that the firm reported a 30% increase in revenues from export sales in 2006 in
contrast to 2005. To assess its international competitiveness 42 Below should further break
down its revenue reports and separate them into every country to which it is distributing for
example in Australia its 5% and the USA its 12% and the UK its 88%. To assess these the
company should measure the market above to know how to remain or gain competitive
advantage. The firm can also use Engel’s Law. Other factors important to look at when
assessing international competitiveness is the level of employment in that country, the prices

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End of Semester 2, 2019
MKTG2002 International Marketing

consumer are willing to pay for a product, productivity level of the economy, the trends in
foreign trades, exchange rates and debt level of the country ( Crawford and Fletcher, 2017).

Gross
National
Purchase Income Debt
Power Parity

Level of
Infrastructure
Employment

Population
Exchange
AGE and
Rates
LOCATION

International Physical
Prodcutivity Competitiveness Quality of life

Perceptual Mind Map

d) Internationalization is a term utilized when an organization needs to keep power over


its items and administrations in an abroad market by keeping its core exercises in
house and abandoning some control through devoted operators. On account of 42
Below, the organization stills hang on tight to its essential exercises in New Zealand.
The product is made in New Zealand and entered new markets right off the bat
through expatriate Kiwis and on a subsequent passage level through merchants and
operators, this is the place the business portions the sales responsibility to another
gathering. Nonetheless, the intentions of 42 Below to internationalize were to keep
control on the generation of its vodka and different spirits. The organization
guarantees and has been adulated by researchers that the vodka is made in the ideal
condition where the degree of air and water virtue is incredibly high. This sort of
condition is exceptionally hard to screen if the production of the items were
manufactured abroad plants. Other chance factors that 42 Below clears by
internationalizing incorporate that the organization keeps command over their states
of offer, limited time exercises, it can more likely ensure the company's notoriety, it
has better power over where to disperse its items, the association with the remote

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End of Semester 2, 2019
MKTG2002 International Marketing

government is overseen. By keeping control 42 Below holds its authority over the
nature of the items made, the conditions wherein it is fabricated and how it is
publicized (Crawford and Fletcher 2017).
e) Section B.

Question 6.

Given a six-month promotional budget of US$10,000, what social media promotional


strategies would you recommend to an international firm, which intends to introduce a
start-up product into an overseas market? How would you evaluate the success of your
recommended strategies?

Given that the company is already an international firm looking to promote a start-up into an
overseas market, the company must have an insight of that particular target market. If the
start-up project is completely different to that of the parent company, then a new market
research needs to be conducted to better understand how to connect with them through social
media strategies. Globalisation has enabled and empowered marketing tools like social media
marketing tools which are becoming more and more popular among businesses considering
it’s a low investment marketing strategic tool in contrast to traditional marketing tools which
can be more expensive.

Social media marketing is an effective way for businesses to communicate with its targeted
audience. Generally, social media accounts are free, for example, Facebook and Instagram.
These two social media platforms are very important tools amongst businesses. They do not
only allow businesses to communicate and advertise but also allows consumers to
communicate enabling businesses to better understand the wants and needs of their target
market.

The first social media strategy recommended is to open business accounts on Facebook and
Instagram. Business accounts are still free for sign ups, but it comes with a price to advertise,
promote and increase visibility by utilizing metrics that brings targeted audience to the page.
Facebook and Instagram charges rates based on the number of followers you aim to achieve.
You can choose where to send people via the promotions you create on the accounts, to your
profile, website or to message you. Then you have the option of selecting whether you want
Instagram to regroup your target audience and send them to your profile or manually choose
your audience. Then the price that you pay is relative to the number of followers you want to

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End of Semester 2, 2019
MKTG2002 International Marketing

achieve. With a spending of $ 5.60 daily it is estimated that the account will reach between
1700 and 4600 followers. Let’s take it as an average of 4000 followers reached per month in
the best-case scenario. A budget of $250 will be allocated to Instagram’s business account, a
gross of $1500 for 6 months. Based on calculations with $250 monthly the company should
reach on average 5952 followers monthly and 345,714 followers over 6 months. Since
Instagram belongs to Facebook they have more or less the same rates. Hence the same budget
will be allocated to Facebook’s business account and is expected to have more or less the
same number of followers.

The second social media strategy recommended is content marketing strategy. Content
marketing strategy is about creating engaging content to keep the targeted audience
entertained and nurture their interest for the brand. Content marketing requires low amount of
investment and is about generating interesting articles through blog posts, videos and photos.
It is essential for social media business accounts as these accounts needs content for
promotion and if the post is not engaging enough it is likely that even the targeted audience
might not be interested. Content marketing helps in building a brand reputation and increases
website traffic (Tie, 2019). Through social media above, the content is distributed in a fast
and timely manner and also through Google searches.

Which leads us to the third recommended social media strategy, SEO. SEO works in parallel
with content marketing and social media business accounts, it is a process of increasing
organic searches that leads to the website. When a search engine like Google is used, the
result page is based on keyword or specific phrases used by the user. SEO helps companies
increase visibility via keywords and unique short phrases (Stanberry, 2019). The services of
an SEO consultant are between $80 to $150 the hour and the rates from a digital marketing
company is between $100 and $150 and hour. A budget of $5000 will be allocated to SEO
assuming that the consultant charges $80 an hour, the consultant should dedicate
approximately 10 hours over the course of one month over six months (Kendig,2019). To
evaluated the SEO, the website should be linked to Google Analytics to evaluate how much
traffic of the website came from organic searches through search engines, how much website
visits comes from referrals ( through other websites like Instagram or Facebook ), which
pages of the website are the most and least visited , what are the best performing contents of
the website and for how long on average a visitor stays on the website. This should be

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End of Semester 2, 2019
MKTG2002 International Marketing

evaluated after the first three-month post implementation giving time for brand awareness
and growth.

Content marketing and social media business accounts should be evaluated starting the first
week post implementation of the strategy. This is very important as insights comes integrated
with business accounts and can be used to better understand the target market, who visits the
profile more often, the age range among which it is the most popular, the most popular time
of the day and what are the products or types that interested the audience the most. The
insights will allow the company to better shape its content marketing strategies to increase
reach.

Question 2.

Before an international firm introduces a start-up product into an overseas market, they need
to consider the driving and the restraining forces of that overseas marketing and assess the
risk factors associated with this process during negotiations. The driving forces include the
market needs, Technology, Cost, Government and Communications. The restraining forces
included political system, the legal requirement, the cultural and societal values and
economic development. Market needs to be the first factor identified by the international
firms before introducing the product into an overseas market, a market research needs to be
done to identify the right target market within that overseas market to better meet the needs of
the consumers and increase profitability. The product should meet customer demands, wants,
needs and expectations. To add value to the product, the company should add value with
additional features. For example, Apple is a provider of smartphone, smartwatches,
television, computers, earphones and all of these items comes with additional features like car
play, Bluetooth connection, fingerprint, face ID among many which exceed customers’
expectations. Technology is also an important factor to consider, with its rapid evolution,
technology enables the creation of innovative products. The cost of the product in the
overseas market is very important as this determines its position in the market. By setting a
high price, the product is categorised as premium and not always accessible to everyone, with
a cheap price it becomes accessible to a wider range of consumers based on finances, but it
loses it sense of exclusivity. The government in the overseas market is also very important as
despite the international firm being a popular company and market leader it needs to ensure
that there is a good relationship between the host and its home country. Communication is
key when it comes to promoting a product and is even more important when promoting into

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End of Semester 2, 2019
MKTG2002 International Marketing

an overseas market. The correct communication channel is very important, and it is


imperative to understand the target market to choose the correct marketing strategy whether it
will be traditional marketing strategies or digital marketing strategies or both.

Coming to the restraining forces, political system of the overseas market needs to be
considered therefore a firm needs to assess of the government within that overseas market are
participators, facilitators or regulators. Legal requirements imply that the international
company needs to screen the law regulations and the business agreements, copyrights and
trademarks. Culture is another important aspect to consider, the firm needs to know the
overseas market, are they early adopters or late adopters of a product. The economic
development states that the company need to assess if that overseas market is more of a
protectionist type about imposing tariffs or are more open in providing subsidies to their
products.

Apart from the driving and restraining forces before bringing a start-up into an overseas
market, the international firm needs to consider the Risk factors such as

1) Commercial Risk.
This relates to the firm’s agreement with the government from the overseas market
and its channel members.
2) Currency and financial risk
This is related to the economic and financial environment and is external to the firm’s
control.
3) Country Risk.
This is the political and legal environment and is also external to the control of the
international firm hence a proper screening needs to be done prior to the introduction.
4) Cross-Cultural Risk.
This involves the social and cultural environment of the overseas market and is also
out of the firm’s control (Crawford and Fletcher, 2017).

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End of Semester 2, 2019
MKTG2002 International Marketing

References.

"How Much Does It Cost To Advertise On Instagram? - Strike Social". 2019. Strike Social.
https://strikesocial.com/blog/instagram-ads-costs/.

Keegan, Warren J, and Mark C Green. 2015. "Global Marketing: Pricing Decisions Chapter 11".
Lecture, , 2015.

Kendig, Preston. 2019. "How Much To Budget For SEO". Webstrategiesinc.Com.


https://www.webstrategiesinc.com/blog/how-much-to-budget-for-seo.

redsicker, patricia. 2019. "Start With Content Marketing Strategy Before Social Media
Strategy". Content Marketing Institute. https://contentmarketinginstitute.com/2011/05/content-strategy-
before-social-strategy/.

Standberry, Shermann. 2019. "What Is SEO Content Marketing Strategy & How To Create
One". Digital Marketing Blog. https://www.lyfemarketing.com/blog/seo-content-marketing/.

Tie, Tony. 2019. "9 Low-Budget Marketing Strategies Every Startup Can Afford". Entrepreneur.
https://www.entrepreneur.com/article/297515.

"What Is SEO Content Marketing Strategy & How To Create One". 2019. Digital Marketing Blog.
https://www.lyfemarketing.com/blog/seo-content-marketing/.

Examination Cover Sheet


End of Semester 2, 2019
MKTG2002 International Marketing

Examination Cover Sheet

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