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TO: THE MARKETING MANAGER

FROM: MARKETING ASSISTANT

SUBJECT: INTERNATIONAL MARKETING

DATE: 11TH JUNE 2010

WORD COUNT: 2105

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ACKNOWLEDGEMENT

The following assignment has been undertaken with the assistance from the sales and marketing Manger of
Southern Bottles Limited (SOBO) and the information included was gathered from sales and marketing
annual reports and other company¶s records.
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CONTENTS

1.0 Introduction

2.0 Audit finding Summary

3.0 Stakeholder Analysis

4.0 Stakeholder Level of Influence and Impact

5.0 Assessment of the Current Marketing Mix

6.0 Brand and Market Justification

7.0 Relationship Marketing

8.0 Extended Marketing Mix

9.0 Budget Recommendations

10.0 Measuring the Success of the Extended Marketing mix

11.0 Conclusion

12.0 Audit Assessment and Appendices

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1.0 INTRODUCTION

After carrying out an Audit as requested, I hereby report on the findings that includes a set of
recommendations for taking one of our brands into an international market.

2.0 AUDIT FINDINGS SUMMARY

Southern Bottlers Limited (SOBO) is a manufacturer and marketer of beverages, based in the central part of
Africa in a country called Malawi. Established in 1958, SOBO is a limited company and a licence of coca-
cola. SOBO operates under Bottling and Brewing Group Limited (BBGL) which has three SBU¶s namely
Carlsberg International, Malawi distillers and SOBO

2.1 MISSION STATEMENT

To produce quality beverages at all times to all available markets while optimizing stakeholders return

2.2 VISION

To be a leading manufacturer and marketer of beverages

3.0 STAKEHOLDER ANALYSIS

The figure below shows SOBO¶s influential Stakeholders based on there power and level of influence.








Y
 




Government Professional
Employees
bodies
Managers
Finance
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Pressure groups Retailers

Shareholders
Distributor

Customers

Local Communities

Figure 1: SOBO¶s Stakeholders. Adapted from BPP Marketing Environment text book

4.0 STAKEHOLDER LEVEL OF INFLUENCE AND IMPACT ON SOBO¶S DECISION TO MARKET

INTERNATIONALLY

This refers to power and interest that stakeholders whether internal, connected or external have in an
organization. Internal stakeholders impact greatly on SOBO¶s decision to export some of its products.

Mendelow developed a simple matrix which classifies stakeholders according to their power and interest in
an organization. Below is a diagram showing level of interest and power of SOBO¶S stakeholders and how
they impact on the company.

Low Level of Interest High

A B
General Public Community Government

------------------------------- -------------------------------
Minimal Effort Keep Informed
Power C D
Management Shareholders
----------------------------- -------------------------------
Keep satisfied Key Players
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High

Figure 2: Mendelow¶s Power/Interest Matrix. Adopted from BPP Marketing Environment text books.

Information related to the above diagram has been explained in 6.0 in the appendices.

5.0 ASSESSMENT OF THE SUITABILITY OF THE CURRENT MARKTING MIX

The marketing mix concept concentrate on the variables under the organisation¶s control. They can be
manipulated in order to achieve organizational marketing objectives and these include product, price, place,
promotion and of course the added elements of the marketing mix.

5.1 PRODUCT
è? SOBO has strong brands which are of high quality e.g Coca-cola
è? We are very innovative (coming up with new products)
è? Some of our products e.g Squashes are diluted with water because of their sweetness and this gives
our products a competitive edge.
è? Our staff are experienced in producing products
è? Differentiated brands
è? Squashes are packed in different sizes 500ml, 1 litre and 2 litre bottles.

5.2 Price
è? SOBO uses a penetration pricing strategy where relative low price is set in order to stimulate market
growth and market share. This pricing strategy suits the economy of our country as prices of our
products are affordable.
è? SOBO lets sets a standard price for each brand

5.3 PLACE
Our products are distributed by major retailers found through out the country e.g PTC, Mc Connel, Chipiku
stores, Metro shops and all reliable distributors in peoples location.

5.4 PROMOTION
SOBO uses both above the line (ATL) activities and below the line (BTL) activities to build brand awareness
of the products and loyalty to the brands.

5.4.1 Above-the-line activities

è? Traditional mass media such as TV, radio, as they allow us to reach mass audiences easily and to
build brand awareness which is important for our products.
è? Out door advertising
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5.4.2 Below ± the ± line activities
è? Sales promotion e.g buy 2litre of any squash and get 500ml of squash for free
è? Sponsorship

5.5 PEOPLE
è? Staff are well experienced and trained
è? We recruit qualified individuals in specified fields
è? Our staffs are well motivated and rewarded i.e. given contribution scheme based on individual
performance.
è? Our staff are empowered to take decisions which will attract and keep customers and distributors
è? We have sufficient number of administrative staff

5.6 PROCESSES
è? The process is faster as we have renovated two of our processing factories in order to meet our
customers on time.
è? We have efficient customer friendly systems
è? We have effective feedback systems eg. Free-call lines

5.7 PHYICAL EVIDENCE

Customers know our products through
è? Branding
è? Packaging
è? Logos and other physical evidence of brand identity
è? Staff uniforms
è? Colour of our vans

6.0 JUSTIFICATION OF THE BRAND AND INTERNATIONAL MARKETS

After an assessment of our products, I suggest that it will do our organization good if we introduce the
squashes into international markets particularly those countries that are within the SADC (Southern Africa
Development Community) region.

6.1 REASONS FOR THE CHOICE OF TH BRAND

è? We are seeking growth
è? Exporting will be a way of increasing our market share
è? We want extended the lifecycle of the squashes
è? Squashes are packed in plastic bottles which do not need to be related to us for future use
è? Exporting will mean increased revenue and profitability
More information relating to the choice of the brand is explained in 4.2.1 and 5.2 in the appendix

6.2 INTERNATIONAL MARKETS

As Southern Bottles Limited (SOBO) is extending to start marketing internationally. The idea is for the
company to export its brand in the SADC (Southern Africa Development Community) region limiting itself
at first to those countries that share borders with Malawi, namely Zambia to the west, Mozambique to the
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east and south and Tanzania to the north. Pestle factors, logistic issues, trade liberalization and demand have
dictated the choice of these markets.

6.2.1 POLITICAL FACTORS

The chosen countries have got political stability, Mozambique for example is now a peaceful country and has
embarked on reconstruction and developments on large scale after the civil war of the 70s and 80s.
International developments include formalized trade agreements are becoming increasing important in all
these three countries.

6.2.2 ECONOMIC ISSUES

Economic situations in these countries will help our bran to succeed in international markets as their
economy is growing Tanzania for example has a booming economy, Mozambique economy is the fastest
growing economy. In this part of the SADC region, where as the metical was relatively lower in value for
kwacha, the currency has now regained its value.

6.2.3 SOCIAL FACTORS

Community with potential customers will be easier as the four countries of Mozambique, Malawi, Zambia
and Tanzania share almost the same Chichewa language. Some culture like the way of dressing, beliefs and
lifestyles are the same in all the four countries, this will save us money and time for creating other adverts.
Large populations in countries like Mozambique and Tanzania.

6.2.4 TECHNOLOGICAL FACTORS

The introduction of new technologies e.g Internet and Computers will enable us to manage our relationship
with customers from this countries and with the boom of technology in these countries we will able to
identify our key customers and community with our customers more easily.
6.2.5 LEGAL FACTORS
Each of these countries restrictions that apply to advertising, packaging, sales promotion and direct
marketing are almost similar.

6.3 LOGISTIC ISSUES

Malawi has a healthy transport linkage. There are rail and rod links between Zambia and Malawi, Tanzania
shares the lake with Malawi on the northern border. Two railways lines link Malawi to Mozambique i.e
Nacala to the east and Beira to the south. Malawi is at the moment constructing the Nsanje world inland port
near the south boarder in Mozambique, when this port is completed it will be possible for all small ships to
bring Malawi imports at the same time collecting our exports. All these rail and road linkages among the four
countries will make it easier for the distribution of our products as we can export by road, rail even air.

6.4 TRADE LIBERISATION

Four countries i.e. Mozambique, Tanzania, Zambia and Malawi belong to COMESA (Common Market for
Eastern and southern Africa) and SADC. These trade blocks covering countries eastern and southern
countries part of Africa. To facilitate between SADC and COMESA countries tariffs have drastically been
reduced. There are even plans to remove customs duties completely on goods moving from one SADC
country to another SADC country.
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6.5 DEMAND
SOBO participated in the Zambia trade fair last year and there was high demand for our squashes.

7.0

8.0 EXTENDED MARKETING MIX

As we are intending to market our squashes to international markets, it is very easy to do so through
assessment of the suitability of our current marketing mix and factors that influence international customers
buying behaiour and there after decide whether to standardize or adapt the marketing mix to suite the needs
of international customers

STANDARDISATION VS ADAPTATION
Standardisation/adaptation are strategies adopted by companies operation outside their countries.
The table below shows a standardization/adaptation approach

Figure

standardize Product adapt

Standardize

COCA-COLA OMO
WASHING POWDER

Communication

HORLICKS CORNFLAKES

adapt

Coca-cola is a standardized product and has a standard message. This means that coca-cola is a global
product is the same everywhere and its promotional message is also the same.
Omo washing powder varies from country to country depending on water conditions and washing machine
technology, for example Omo in south Africa may not work in Malawi because Omo in south Africa is made
specifically for washing machine use. However the communication message of clean clothes is the same
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Horlicks is promoted as a relaxing bed time drink in the UK and as a high protein energy booster in
India.Horlicks is a standadised product with adapted communication message.
Products like Conflakes are adapted to suite different needs and tastes and their communication is also
adapted eg.Kellogs conflake in China are made from rice.

REASONS FOR STANDARDISATION

Economies of scale-a single world wide advertising campaign,packaging etc saves the organisation both time
and money
Technology complexity-it may not be easy to modify some products to suit the special requirements or
conditions found in foreign markets
A consistent and strong brand image is to be presented, wherever users see the brand they are reassured
because the message received is the same.

REASONS FOR ADAPTATION

Cultural differences-different cultures eg.Language beliefs force an organisation to adapt its marketing mix
so as to suit different cultures
Legal restrictions prove to be a stumbling block eg cashback sales promotions are not allowed in Italy, this
makes organisation to adapt some aspects of its marketing mix eg promotion to suit customers needs.
To suit customers different tastes

FACTORS INFLUENCING STANDARDISATION AND ADAPTATION STRATEGIES

The organizations decision to standardize or adapt its market ix is influenced by a number of factors for
example Culture,Legal and Media considerations just to menton a few

(a) CULTURAL CONSIDERATIONS

Organisations operating beyond the borders of their countries must be aware of the implications of cultural
differences for all aspects of the marketing mix.The following are some of the examples of various
dimensions of culture relevant to the international marketing communicator
Verbal and non-verbal communications
Family roles and relationships
Beliefs and values
Advertising culture

Marketing communications need to be sensitive to different cultures if the messages are to work in
international markets

(b) LEGAL CONSIDERATIONS

Different laws and regulations govern marketing communications, each country has its own set of restrictions
that apply to advertising, packaging, sales promotion and direct marketing.
Packaging regulations vary in most European countries, in Denmark soft drinks are sold in glass bottles only
with a refundable deposits.This is because of packaging regulations which encourage companies to use more
environmentally friendly packaging.
It is a law in most African countries that the manufacturing and expiry dates and ingredient contained in
Food product be written on the packages.
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(c ) MEDIA CONSIDERATION
Media availability, cost and coverage varies from country to country.Media conventions that apply in
Malawi may not apply elsewhere.factors influencing the choice of the media must be known as that
companies can choose the appropriate media to use.
Malawi, mocambique, Tanzania and Zambia have almost same culture,Legal restrictions that apply to
advertising, packaging and sales promotion and the availability and cost of media is the same.The
standardization strategy is therefore an appropriate strategy for SOBO to adopt.SOBO can standardize its
marketing mix in foreign countries, this means that SOBO can standardize its products (squashes) and also
standardize its communication message.

8.1 EXTENDED MARKETING MIX THAT ENHANCES SOBO¶S COMPETITIVE ADVANTAGE IN

INTERNATIONAL MARKETS

8.2 PRODUCT
High quality squashes, this will attract customers to us
Squashes are diluted in water because of their sweet taste, this gives SOBO a competitive advantage
Experienced staff
Squashes are packed in different packages ranging from 500ml, 1 litre to 2 litre bottles

8.3 PRICE
A penetration pricing strategy will also apply to international markets.This strategy will give us a
competitive advantage since demand for beverages is price sensitive in most African countries.The low price
approach must be used with heavy promotional effort to penetrate the market and take market share.

8.4 PLACE
The best entry mode is to export the squashes manufactured locally to the international markets.There is
minimal financial risk involved.
Squashes should be exported directly by using foreign based distributors/agents
In the near future we can set up operating units in foreign countries in the shape of subsidisies

8.5 PROMOTION
Just as we do it locally, above-the ±line and below-the ±line activities will also be used internationally.

ABOVE-THE ±LINE ACTIVITIES

Media use such as television,radio and print.The messages should focus on
Raising awareness of our brand,interest in it,desire to try it and action to buy it (AIDA)
Maintaining on-going contacts and offerings to encourage repeat purchases and customer loyalty
Creating brand as well as company image

BELOW-THE-LINE ACTIVITIES
Sales promotion, this should also be used in trade marketing to encourage distributors to stock and
Sale more of our brand.
Sponsorship-sponsoring international event,activities etc would give SOBO some advantages eg
Exposure of our brand, Logo or advertising messages.
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Giving internal customers information about international marketing plans and customer needs so
That they can coordinate their effort in line with the shared marketing objectives eg through the
Use of notice boards,intranets,telephones and staff meetings.

8.6 PEOPLE
Train international distributors on customer care as they present our image
Offering incentives discounts to sale-or-return terms to reduce distributors risk
Offering distributors marketing/promotional support such as point-of-sale display materials

8.7 PROCESS
We must establish effective feedback systems and procedures
Follow up documentation
Putting in systems and procedures that make it easy for customers to complain eg placing our
Telephone numbers, email address and postal address on the packages will enhance our competitive
Advantage

8.8 PHYSICAL EVIDENCE

Physical evidence is a marketing communication tool as the physical evidence alone sends out a brand or
organisation message
Our international customers will recognize us through our
Packaging
Branding
Logos and other physical identity

9.0 BUDGET RECOMMENDATION

Marketing budget are set using a number of methods. Marketing costs can be budgeted using percentage of
sales, competitive parity or the objective and task method.

1.? PERCENTAGE OF SALES

If SOBO decides this method to devising a budget for the proposed international expansion, it will have
to base its budget on
è? Percentage of the previous years sales
  The budget will be set based on the previous years sales, for example last year we sold 12 million
units of our products and we will choose any percentage say 40 % this means that our marketing
activities will be budgeted from 40% of 12 million which will be K48,000.00. the K48,000.00 will
then be allocated to different marketing costs e.g. salaries and wages of staff, travelling and
distribution costs, advertising e.t.c.
è? Percentage of the budgeted annual sales
In this method revenues of previous years sales are estimated and the budget is based on the sales of
previous year.
è? Percentage of previous years profit
Last years profits could be used as a basis of setting a budget. SOBO made a profit of
K1,000,000.00 kwacha last year, just as you when setting a budget based on the previous years
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sales, a percentage is used e.g 40% of K1,000,000.00 which is K400,000.00 will be divided
amongst different activities.

Short falls of devising a budget using the percentage of sales method

U?Behind this method there is no logic as we are simply guessing
U?The method may not work internationally aw we do not know much profits we are going to make
and the quantity of our products that will be sold.

2.? COMPETITIVE PARITY

The marketing environment is characterized by increasing competition, SOBO just like other
organization has competitors. In the competitive parity method, competitors will be the basis of our
budget. This will mean that SOBO fixes its marketing expenditure incurred by competitors. This method
assumes that competitors decisions are the best

LIMITATIONS OF COMPETITIVE PARITY

U? Competitive budget may not be enough for our international marketing activities
U? SOBO can not use local competitor¶s budget for international marketing expenditure as the
economic situation in different countries differs
U? Competitors may set little funds which may not fulfill our objectives

3.? OBJECTIVE AND TASK METHOD

SOBO has marketing objectives with it intends to achieve. The objective and task method allocates the
budget in order to achieve a set of organizational marketing objective. Marketing objectives are set and
the tasks needed to accomplish them identified. The budget is set estimating the cost of the identified
tasks.

WEAKNESS OF THE OBJECTIVE AND TASK METHOD

U? It is much more difficult and time consuming to prepare such budget .

Having assed the three methods of devising a marketing budgets, I would recommend the objective and task
method as an appropriate approach of devising a market budget for the proposed international expansion.

MEASURE OF SUCCESS OF THE EXTENDED MARKETING MIX

This involves looking at the effectiveness of products, place, promotion, price and added elements of the
marketing mix. Below the recommendations of mechanism which should be used to measure the success of
the extended marketing mix

PRODUCT
Product effectiveness should be measured by
U? Analyzing and monitoring the products life cycle (PLC) and the Boston Consulting Group Model
U? Looking at the budget endorsed at the beginning of the financial year and the capital returns to see if
our products have made profits.
U? Analysing the numbers of our new products per year.
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PLACE
Place as an element of marketing mix is concerned with the selection of the distributional channels and
logistics.
The access of the distributional channels should be evaluated for
U? Effectiveness of getting the product to customers
U? Efficiency and economy in terms of the costs of distribution
U? Level of customer service

PRICE
Price element is important within the marketing mix as it influences our profitability, communicates so much
about the image of the company and differentiates our products from competitor¶s products. Methods that
should be used to measure the success of price includes,
U? Market test to estimate market perception of price
U? A direct altitude survey to test buyers reaction to price
U? Analyzing quantity sold

PROMOTION
Promotion effectiveness should also be analyzed to make sure the message is being properly understood and
utilized i.e.
U? Measuring the overall impact and effect of the message after the communication campaign
U? Analyze the awareness levels of our products
U? Customer feed back and word of mouth recommendations by customers
U? Media reports and the general public point of view of our organization

PEOPLE
The success of people should be measured using the following methods
U?Success of customer care programmes and public relations
U?luantity work force
U?Staffs skills and experience

PROCESS
Process involves the way in which marketing tasks are achieved. The success of process can be measured by
analyzing,
U?The speeding/timing of our services e.g. delivering our products on time
U?Information flow to service units/customer
U?Accessibility arrangements