Professional Documents
Culture Documents
Prepared By:
1. SOLIYANA KELEMU
2. MERON DEGHIFIE
3. FRIEHIWOT HAILU
The contents of this topic
This project has three chapters
1. Introduction
Background of the study and the organization
Research questions and objective of the study
Methods of data collection
2. Literature review
Meaning of value chain, value delivery processes
Holistic marketing
Meaning International marketing and entry modes
3. Data analysis, conclusion and recommendation
Chapter one
1. Background of the study
Harvard Business School's Michael E. Porter was the first to introduce the
concept of a value chain. Porter, who also developed the Five Forces
Model that many businesses and companies use to figure out how well
they can compete in the current marketplace, first discussed the value
chain concept in his book "Competitive Advantage: Creating and
Sustaining Superior Performance" .
Porter suggests that activities within an organization add value to the
service and products that the company produces, and that all of these
activities should be run at optimum level if the organization is to gain any
real competitive advantage. In his book, Porter said a business's activities
could be split into two categories those are primary and secondary.
Cont…
( Doole and Lowe (2001). "International Marketing is the
performance of business activities that direct the flow of a
company’s goods and services to consumers or users in
more than one nation for a profit.
“(Cateora and Ghauri (1999)). "The international market
goes beyond the export marketer and becomes more
involved in the marketing environment in the countries in
which it is doing business.
The aim of the study is to assess the value chain processes
and the application of international marketing and the
modes of entry of DBSC.
2. Background of the case company
Robert Lauterborn suggested that the sellers' four Ps correspond to the customers' four
Cs.
Four Ps Four Cs
Product -------------Customer solution
Price -----------------Customer cost
Place ----------------Convenience
Promotion ---------Communication
Cont…
Internal Marketing
Internal marketing is aimed at catering to the specific needs of the
business's own employees.
Internal marketing ensures that employees are satisfied with the
work they perform each day as well as the philosophy and direction
of the organization as a whole.
Greater satisfaction among employees leads to increased customer
satisfaction over time, making internal marketing a key aspect of
the holistic approach.
In addition to working toward employee satisfaction through
internal marketing, businesses use this component of holistic
marketing to achieve coordination among internal departments.
The objective is to reduce departmental conflicts among the various
business arms within a single organization which leads to greater
synergy in marketing activities presented to the consuming public.
Societal Marketing
Effective internal marketing must be matched by a strong sense of
social responsibility. Companies need to evaluate whether they are
truly practicing ethical and socially responsible marketing. Several
forces are driving companies to practice a higher level of corporate
social responsibility: rising customer expectations, changing
employee expectations, government legislation and pressure,
investor interest in social criteria, and changing business
procurement practices.
The issues are complicated: It is not easy to draw a clear line
between normal marketing practice and unethical behavior. At the
same time, certain business practices are clearly unethical or illegal.
These include bribery or stealing trade secrets; false and deceptive
advertising; exclusive dealing and tying agreements; quality or
safety defects; false warranties; inaccurate labelling; price-fixing or
undue discrimination; and barriers to entry and predatory
competition.
Diagram of holistic marketing
Holistic marketing must meet all the challenges
of 21th century which are:
Globalization
Changing technology
Customer empowerment
Customization
Customer relationship marketing
customer life time value
target marketing
integrated marketing communication
channels as partners
every employee as marketer
Meanings of international marketing
International marketing is simply the application of
marketing principles to more than one country. However,
there is a crossover between what is commonly expressed as
international marketing and global marketing, which is a
similar term. For the purposes of this lesson on
international marketing and those that follow it,
international marketing and global marketing are
interchangeable.
International marketing is simply the application of
marketing principles to more than one country.
At its simplest level, international marketing involves the
firm in making one or more marketing mix decisions across
national boundaries. At its most complex level, it involves
the firm in establishing manufacturing facilities overseas
and coordinating marketing strategies across the globe.
Reasons Why Companies Go Into International Marketing
By George N. Root III; Updated September 26, 2017, There
are several reasons why companies go into international
marketing, and business owners need to recognize these
reasons to determine if it is their time to think global.
1. Regional Standardization
One of the reasons a company gets into international
marketing is to help establish a standard for particular
regions, according to marketing expert Lars Perner. For
example, your customers in Europe may not have access to
an accessory that you can make available in Asia. So your
European marketing will work to either offer a substitute to
that accessory or let customers know that they cannot get
that accessory in their part of the world.
Resources
If you are planning global expansion to take advantage of
resources available in other parts of the world, then you
need to create an international marketing plan to generate
interest in your company abroad.
Internet
The Internet can make any company into a global retailer
without that company needing to have any presence
outside of the your country.
Competition
Some companies may not feel the need to expand
internationally; however, their marketplace may force them
to move into international marketing. If your competition
has decided to go global, then that is something that you
need to investigate as well, according to marketing expert,
Professor W. Tim G. Richardson
Techniques to enter in international marketing/mode of
entries
Organizations exist in environments. The change in consumers
test, suppliers’ condition, government policies, political
conditions etc…results in the change production and trade
structure. New system and techniques are involved and
developed to conduct involved International business Modes of
entry into an international market are the channels which your
organization employs to gain entry to a new international market
1. Joint venture
A corporate entity created with the participation of two
companies that share equity, capital, and labor, among
others. Joint Ventures tend to be equity-based i.e. a new
company is set up with parties owning a proportion of the
new business. There are many reasons why companies set up
Joint Ventures to assist them to enter a new international
market:
Cont…
1. Access to technology, core competences or management skills.
2. To gain entry to a foreign market.
3. Access to distribution channels, manufacturing and R&D are
most common forms of Joint Venture
2. Counter trade
Trade carried out wholly or partially in goods rather than
money.
Denotes a whole range of barter-like agreements
Primarily used when a firm exports to a country whose
currency is not freely convertible
Developing countries or new states
Importing country may lack the foreign exchange
reserves required
3. International subcontracting
An arrangement by manufacturer in the developed country with one in
the developing country under which the latter agrees to supply the
parts and components and or do assembly operations for the former,
on a long term basis. Under this system the manufacturer of a final
product does not produce the whole product but imports some of its
parts and components from the manufacturers of those parts and
components in another country under specifications provided to them
by the former
Sometimes the contractee also supplies finance and technical
assistance to the contracting party
Such types of arrangements are generally made in labor-intensive
industrial products.
Reasons for growth of sub contracting
Capital scarcity(host country)
Labor-cost factor(coming one)
Lack of expertise(host country)
Lack of natural resources(coming one)
4. International Agents
Agents are often an early step into international marketing. Put
simply, agents are individuals or organizations that are contracted
to your business, and market on your behalf in a particular
country. They rarely take ownership of products, and more
commonly take a commission on goods sold. Agents usually
represent more than one organization. Agents are a low-cost, but
low-control option.
5. Strategic Alliances (SA)
A strategic alliance is a term that describes a whole series of
different relationships between companies that market
internationally. Sometimes the relationships are between
competitors. There are many examples including:
1. Research and Development (R&D) arrangements.
2. Distribution alliances
Essentially, Strategic Alliances are non-equity based agreements i.e.
companies remain independent and separate.
6. Overseas Manufacture or International Sales
Subsidiary
A business may decide that none of the other options are as viable as actually
owning an overseas manufacturing plant i.e. the organization invests in
plant, machinery and labour in the overseas market. This is also known as
Foreign Direct Investment (FDI). This can be a new-build, or the company
might acquire a current business that has suitable plant etc.
7. Internationalization Stages
So having considered the key modes of entry into international markets, we
conclude by considering the Stages of Internationalization. Some companies
will never trade overseas and so do not go through a single stage. Others will
start at a later or even final stage. Of course some will go through each stage
as summarized now:
Indirect exporting or licensing
Direct exporting via a local distributor
Your own foreign presences
Home manufacture, and foreign assembly
Foreign manufacture
8. The Internet
The Internet is a new channel for some organizations and
the sole channel for a large number of innovative new
organizations. The e Marketing space consists of new
Internet companies that have emerged as the Internet has
developed, as well as those pre-existing companies that now
employ e Marketing approaches as part of their overall
marketing plan. For some companies the Internet is an
additional channel that enhances or replaces their traditional
channel(s). For others the Internet has provided the
opportunity for a new online company
9. Exporting
There are direct and indirect approaches to exporting to other nations.
Direct exporting is straightforward. Essentially the organization
makes a commitment to market overseas on its own behalf. This
gives it greater control over its brand and operations overseas, over
and above indirect exporting.
Whether companies decide to export indirectly or directly, many
companies use exporting as a way to "test the waters" before building
a plant and manufacturing a product overseas.
Approach international marketing
Rachel Miller explains how to approach international marketing and why it is
worth doing
1. Find out if your product will travel. Many UK firms get occasional orders
from overseas - thanks to the reach of the internet. However, should you
actively market your products abroad? Not every product travels well so if
you plan to expand into new territories, find out if your product can be sold
widely without having to be adapted.
2. Research new territories. Your experience and the resources you have built
up in the UK means that you're not starting from scratch. But you need to
know how to leverage them appropriately - and that means researching new
markets and thinking about issues such as logistics, order fulfilment and
customer service.
3. Assess the size of the market. How big is the market for your product in
other countries? You'll have to see how established it is, find out how many
players there are in that sector and how big the customer base could be. Are
there any potential trade barriers or restrictions?
Cont…
4. Adapt your marketing strategy. You may have a product that can easily cross
borders but your marketing strategy will have to be adapted. Local values,
customs, language and currencies will all impact on your marketing plan. Look
at your unique selling points and your branding. Are they right for the new
markets you are targeting?
5. Work with local partners. Working with affiliates, partners, distributors,
licensees or agents can help you get established in a new market. Close
consultation with business partners on the ground will ensure that your
marketing materials have local appeal and don't include any mistakes.
6. Check your prices. Pricing is not just about understanding currency
differences - you need to research price levels in each new territory. Your
overheads may also be higher so ensure that your prices take into account the
cost of freight and transport, packaging and agent's commission.
Cont…
7. Adjust your media mix. The marketing channels you use will vary in
each territory. In some countries, you may rely mostly on social media or
online advertising. In other places, it could be local newspapers, outdoor
advertising or radio.
8. Learn local customs. When it comes to customer service, what works in
one country may not work in another due to cultural differences, language
and health and safety regulations. Levels of formality, business etiquette,
the way you address them - all these are issues that could make or break
your expansion plans.
9. Get the timing right. Timing is everything. In some places, what you sell
may be ahead of its time, in others it could be seen as outdated. Is demand
for your type of product already peaking? Or is it just starting to grow?
10. Exhibit overseas. Taking a stand at trade shows abroad is a good way of
dipping your toe in the water, meeting contacts and making your first
sales in a new market. It's also a chance to see what your competitors are
doing.
Chapter Three
3. Data analysis, Conclusion and Recommendation
3.1 analysis of the interview related with value chain.
As the sales and logistics department managers said Primary activities are the
activities from the reception of raw materials up to delivery of finished goods
and the secondary activities are supportive for the primary activities. As they
said the primary activities especially inbound and operations add the value to
the company as well as the customers. Generally the values are added when we
move from one process to another and the company primary activities are those
below:
1. Inbound logistics
1. Purchasing of raw material(barley, malt and hop)
2. Loading, transportation and unloading automation
3. Warehousing
4. Material handling
Cont…
2. Operational activities/production related activities
Grinding
Mixing raw materials with water and making ready for Fermentation
Bottling and branding
Labeling and packaging
Pasteurizing
3. Marketing related activities
Distributing the products: the Company does not sell directly to bars, liquor
stores, or grocery stores. It is the responsibility of the distributor to establish the
retail relationship. Dashen brewery use different agents found in different places
to distribute its quality beer to the ultimate customers and it sets different
criteria to select the qualified agents. In addition to the agents, the company has
three main warehouses found in three different locations. This includes Gondar
warehouse, Addis Ababa warehouse and Woldia warehouse.
Promotional activities are activities used to introduce the product or services and
our case company uses almost all types of promotion mixes those are
advertisement, promotion and public relation. In the international market they
did not applied a good promotion because their potential market is local
countries.
As they said the company does not engage in after sales service because it
produces consumption goods .
Secondary activities are those of supportive activities
1. Procurement: about the selection of suppliers and the acquisition of raw
materials. In this step the purchasing department selects the potential and
capable suppliers. the company purchases their raw materials from the external
market and from the local farmers.
2. Technology development: currently the factory uses the latest brewery plants
and machines. DBSC uses advanced technologies while designing and
manufacturing new products. The factory has latest equipment that makes its
production modern. Among these equipment: CIP plant-the brewing equipment
is cleaned by 4CIP plants using recovered water, caustic soda, and acid; EBI:
removes products that do not fulfill the standards water treatment plant, C02
recovery plant, Air compressor plant, Cooling plant, Boiler plant, Conveyor;
Casing and uncasing, Crate washer, Bottle washer, Filler, Pasteurizer, Labeler, Keg
plant and others
3. Human resource management: those are activities related with staffing. They
have two types of employees i.e. temporary/wage based/employees and
permanent employees. Human resource related activities are in light with
Ethiopian civil service rules and regulations. It also uses different motivational
methods to maintain and retain employees. The company has a number of
employees from illiterate to highly trend and educated personnel.
4. Firm infrastructure: they have well constructed organizational structure having
almost all basic functions. And they used different automations in each activity.
Cont…
3.2. Interviews related with short term opportunities
and threats
As the sales manager said the opportunities, threats and
strategies as follows:
1. The key medium and short term opportunities of DBSC
are holidays
2. There is one major factors detect the utilization of this
opportunities that is the existence of competitors
3. DBSC upgrades its strategies in holidays to exploit short
term opportunities for example discount
4. It also makes integration with different private and
public organizations so as to announce the short term
discounts in the name of the holiday
Cont…
3.3. Interviews related with holistic marketing
As the sales manager said, the company practices holistic marketing by integrating
all stakeholders.
1. Relationship marketing: DBSC used relationship based marketing with
suppliers and customers so as to minimize the cost of customer acquisition and
supplier selection. The acquisition of both customers and suppliers requires
resources those are personnel (experts in the selection of suppliers and
attraction of buyers), time (most of business buying process needs time
from0.5-1year), money to run the activities and other overheads.
2. Internal marketing: it also uses different motivational method to satisfy and
keep the safety of employees for example: holiday bonuses, holiday based gift,
different allowances…
3. Social marketing: as the manager said DBSC executes the social responsibility
of itself by sponsoring different public programs and producing
environmentally friendly products.
4. Integrated marketing: it also works with different stakeholders by providing
important in formations to them and receiving from them by using different
research and survey for example about the tests and the alcoholic contents of its
product, price, advertisements in relation to cultures and norms.
Cont…
3.4. Interviews related with international marketing
The sales manager said that, the entry mode of DBSC is exporting (indirect
exporting or through agents). As we have written in our literatures
exporting through agents is an indirect exporting because they do not
take the ownership of the product.
There are two forces that push DBSC to inter in the international market:
1. Government influence: it is mandatory to the manufacturing co. to
participate/ involve in the international market and at least 25% of its
products must be exported to the international market.
2. To compete with its competitors our competitors are not only domestic
brewery factors but also international brewery factories
Cont…