Assignment 7
Assignment 7
Assignment 7
Student Id:
Table of Contents
Introduction......................................................................................................................................1
Company overview..........................................................................................................................1
Conclusion.....................................................................................................................................17
References......................................................................................................................................17
Introduction
International marketing is the effective implementation, adaptation and use of the marketing
techniques in several countries along with the home country. This report defines the international
marketing and analyses the key concepts to consider. As a consultant of AstraZeneca, UK-based
pharmaceutical companies, I discussed the challenges and opportunities they face from
international market. The criteria and the selection process to identify the most lucrative market
around the world are discussed from the perspective of AstraZeneca (Czinkota et al.,2018). The
key success factors for international marketing have been discussed and from the perspective of
AstraZeneca, it been explained how to adapt marketing plan in different regions. Using the
example of AstraZeneca, various international marketing approaches are explained and the best
possible one are recommended for the growth and success of AstraZeneca.
Company overview
AstraZeneca Plc. is one of the most renowned pharmaceuticals in UK and over Northern and
Western regions of Europe. Its business operation and research are mainly based in Cambridge
of UK, Sweden and USA. It was formed through the merger of two pharmaceutical companies-
Astra AB and Zeneca Group in 1999. The vision is to formulate different medicines through
innovative and scientific research based on the critical major diseases of patients. The portfolio
of its medicine products are diversified in several major modern day diseases from like, cancer,
gastrointestinal, respiratory, inflectional and inflammation. AstraZeneca continuously follow the
innovative and modern procedures to introduce new biotechnology and medicine products in
their various large customer based operational countries like, Japan, India, Brazil or Canada
following the new and prevalent disease with several product lines.
Learning outcome 1
P1 Scope and key concepts of international marketing
International marketing is termed as a comprehensively designed plan for pricing and promoting
the products and services of a company in several countries other the home. In this era of
globalisation and free trade, no company confine their operation within a border and every
company want to expand their products and services to the countries with large customer base,
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such as, India, China or USA (Groves & Brooks, 2015). Customers in different countries might
have distinctive pattern for choice and the market for any product is conditioned by their
consumers’ behaviour. So, any company willing to avail the potential market opportunity and
promote their product internationally have to devise a suitable and effective marketing plan and
strategies accordingly without which it can’t survive long (Czinkota et al.,2018).
With the widening scope of international market, it has become necessary for the companies to
learn about the changing taste pattern of customers and gain knowledge about the market to
assist in formulation of their international marketing plan. The scope of international marketing
can be broadly defined under following headings-
Import- Importing goods from one country and selling it to another is a common scenario for
most countries. Customers of a particular home country may be prone to buy different foreign
products. Considering the local needs and market opportunity, many company import goods
according to the customer choice and resell those products at higher price. It can be the strategy
for many company to introduce imported goods to create and improve a new product line in the
domestic market that offers a unique solution to their needs (Mayrhofer,2012).
Export- Exporting the final goods is another strategy of the companies. There might remain a
huge potential and unreached market for a good in a specific country. The companies can avail
the market by exporting the products to them at an affordable and cheap price. Thus they can
boost up their revenue by additional profit from export which can help to expand the company to
other market later (Groves & Brooks, 2015).
Joint venture- Joint venture is associative partnership between two companies- one local and
other foreign or both foreign. Through venture, the two company conglomerates into a new form
and make it a profitable partnership by reducing barrier for entrants into a new market. Local
companies who are unable can’t avail domestic market for lack of resource and skilled laborforce
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gets the opportunity to leverage the market potential with the help of their foreign partners
(Czinkota et al.,2018).
Businesses are making partnership more than before to find mutual benefit and generate value
from their contract in face of market constraints. They are focusing more to make their products
available and affordable to all walks of people in home and foreign countries. Reduction in cost
and risk, opening up the foreign markets, the rapid growth of free trade areas and involvement of
WTO countries, the influential impact of internet and global media and necessity for effective
resource management and environment have significantly increased the importance of
international marketing (Groves & Brooks, 2015).
There are a number of routes that a company can take to enter foreign markets. The selection of
the routes depends on the cost of taking it up, marketing and transportation cost and the adoption
of market strategy. These ways are-
Direct exporting- Directly selling the product in foreign is one of the basic strategies to enter the
market. Company can appoint local agents or distributors of its products who will promote and
distribute the product of the company in the foreign market and represent the company in face of
the customers.
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Licensing- Licensing is a contractual arrangement where one company uses the right to produce
or serve the product or use the brand name of another company. Licensing can be helpful to
capture and enter a large potential market which has made it popular.
Piggybacking- Piggybacking is a unique and recently adopted way to enter into the foreign
market. In this process, a company which sells its product to a globally reputed domestic firm
can use the marketing and distribution channel of that company to promote its product abroad. It
can be successful when it will reduce cost and risk of the product (Rialp and Rialp, 2011).
Green field investment- Green field investment ensure the greatest involvement in international
market. The company owns a land in foreign country, establish production facility and operate its
business. It holds a higher cost and risk for the company and require use of skilled labour and
access of efficient technology but it provides sometimes a greater reward with return.
Localisation- The local people of Japan and Brazil preferred the medicines for gastric and
inflammation problems, which is a major barrier to introduce new product for AstraZeneca.
Moreover, most of the patients might want the delivery of the medicines through payment in
ideal virtual payment methods after regular interval of the medical check-up. Also, the local
doctors rely on the products of the domestic pharmaceuticals company. This problem of
localisation comes from external factors of the medicine industry.
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Compliance- There might remain different rules and regulations about pharmaceuticals industry.
Some may require ensuring the safety of medicine more rigidly after internal lab test and
delivering in air-tight bottles. They might have different compliance standard for communication
and marketing the features of new products. The proportion of a certain medicine builder
components might require different distribution considering the health condition of the local
people. To produce effective killer anecdotes, it might require addition of the other medicine
component which might work actively in a patient’s body. All these can be parts of their
compliance regulations. All these pose a challenge to launch the medicine in market (Rialp and
Rialp, 2011).
Culture- Culture of every country widely vary around the world. The way to promote medicine
in a country requires different and unique approach. Before starting the marketing campaign of
the product, AstraZeneca should consider the cultural differences and its implications in the
industry. The cultural habit and preferences of the customer and employees can be considerably
varied across the countries which is also a major issue for judgement (Mayrhofer,2012).
Being one of the largest pharmaceutical producers, AstraZeneca realises some opportunities to
avail from the market, which are-
Innovating biomedicine and orphan drugs- Rigorous price regulation, patent expiration and
changing market face are forcing a shift in the product line of AstraZeneca. Recently, they have
taken up research, amounting to £15.2 billion on introducing new medicine for orphans and
biomedicine to survive into competitive pharmaceutical market of many countries. High price
and tight regulation have always been an issue for medicine market in USA, Canada and UK. To
face these challenges, developing and capturing a market with unique medicine products can be a
good opportunity for AstraZeneca.
Biotechnology and advanced medical care- Improving complex diseases and intense
competition in growing global market has shifted the company to look forward to developing
new patient care technologies. These products are new addition to pharmacy products and range
from specific biomedicine to medical healthcare devices, which provides the patient real time
information about their condition and collect their health data to improve their treatment. It has
been considered as one of the strategies for AstraZeneca to capture larger market share in Japan
and UK medicine sector (Mayrhofer,2012).
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Learning outcome 2
P3 Key criteria and selection process for entrance in international market
Every company has to develop a number of specific marketing mix tools to sell their products in
foreign marketplace. The behaviour and scenario of foreign marketplace can be different than
those in home country and thus requires companies to consider certain specific economic and
social factors and analyse the market carefully through a categorical market screening process.
The whole process are described from the perspective of AstraZeneca below-
Step 1: Defining criteria- Considering the international market with a group of countries and
the customer with distinctive characteristics, some criteria are generally followed for effective
market segmentation-
Measurability- the degree to which the size and purchasing power of market can be measured.
Accessibility- the degree to which the segments can be reached and served.
Actionability- the degree to which company can use its resources to formulate effective
marketing plan and get into the market.
Following PEST (political, economic, social, technological) approach, the company can
determine the degree of influence of each factor in the market and have to evaluate some general
and specific characteristics from degree of measurability and actionability.
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Figure 1: Specific characteristics and the degree of measurement
Step2: Screening of markets/countries- The screening process can be done in two ways-
Preliminary screening- The markets in a particular country can be primarily screened with some
external criteria. This screening might consider size of the population, gross national income,
government regulations and others. Popularly, BERI method are used for this screening. BERI
measures the general quality of business climate in a country based on different economic,
political and financial factors on a scale from 0 to 4. These factors are presented in the table
below-
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Fine grained screening- Fine grained screening is broader approach which includes the use of
BCG matrix to find the best opportunities-from two-dimension market attractiveness and
competitive strength- in the market and create a list of major variables to consider. The variables
are listed below-
Step3: Evaluating sub segments- When primary segment has been identified, we can divide the
market into sub segment using standard techniques. Generally, micro-market is identified using
geographic characteristics and adopting unique and differentiated marketing techniques. The
firm can identify market defining the customer behaviour and strategically approach to the
market. The segmentation can be on the basis of buyer behaviour, economic criteria, lifestyle or
any other factor from the firm can derive maximum advantage and serve the market efficiently
with their existing resources (Rialp and Rialp, 2011).
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For selecting the most feasible one, we will describe the advantage and disadvantages of market
entry strategies and choose the right one for AstraZeneca to enter in Luxembourg. The strategies
are-
Export- Direct exporting is the most commonly employed option. It is placing and directly
selling the products into the chosen market. It requires setting up a primary goal and look out the
help of sales agents to get connected with local market to accomplish that goal. The advantages
and disadvantages of this method can be-
Advantages Disadvantages
Less expensive Limited knowledge about domestic market
information
Minimal investment Higher transportation cost
Joint venture- Joint venture is creating strategic partnership between two companies. The two
companies create this alliance through an agreement and the profit are split between two at
agreement rate. Franchising can come to aid where the foreign company has limited knowledge
about the particular market. Its advantages and disadvantages are-
Advantages Disadvantages
Foreign direct investment- This requires building production facilities in targeted country and
acquiring the growth of the market. The company has to operate everything from production to
promotion of the product. The advantage and disadvantages are-
Advantages Disadvantages
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Greater knowledge of domestic market Higher risk involved
Singapore:
Factors Outcome
South Africa:
Factors Outcome
Political South Africa has adverse political condition. Corrupted politics has created
inconvenient environment for business.
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Economic Economic condition is poor in South Africa. The value of Rand has significant
fallen last few years. Interest rate has spiked. The economic condition is
inconvenient for business expansion for poor labour market scenario.
Social Unemployment rate got higher. But entrepreneurial spirit among people is
existent.
Technological It has seen growing technological advancement in manufacturing sector.
Government is trying to promote this growth lowering the unemployment and
interest rate.
India:
Factors Outcome
Political Drug regulatory authority has implemented strict rules and regulation for
pharma industry. Necessary laws have made price of medicine remain fair
across the country.
Economic Economic condition has flourished and income per capita is increasing
constantly. Availability of loan and other facilities have made environment
convenient for business.
Social Social factors are affected adversely in India. Sanitation problem, unhygienic
health condition, aging work group have made the social condition poorer.
Technological Technological improvement has made business operation prospective. Demand
for improved healthcare technology and medicine have increased.
From the assessment above, it is clear that Singapore is the best from every aspect among the
three countries. India is also favourable, but they need to be strategic in facing social crisis in
long run. So, they should Singapore and India to launch Nexium.
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Learning outcome 3
P5 Key arguments in the global versus local debate
In this world of globalisation, most of the firms opt to run their business at global scale. But for
many different reasons, the particular market for a firm behave differently at home and in foreign
structure and the factors influencing them sometimes pose threat for them firms. There might
remain cultural, economic, and technological differences. Thus, a firm has to adopt distinctive
and different strategy for running their operation in global market and in home country.
There remains a long debate about whether a company should sell the same product across the
boundaries of home country and implement local strategies to respond for regional differences.
According to contingency approach, although there is no specific method for marketing
strategies in global scenario, it has to be fundamental. Researcher said that a firm need to
develop systematic planning for implementation of its marketing activities. They must have the
capacity to incorporate and manage the difference in cultural, economic and regulatory changes
into their organisational structure. For example, When Apple Inc. was founded in 1976, the CEO
Mike developed a three-point strategy with the core elements where they considered customer
behaviour, product quality and marketing philosophy and it contributed hugely to the success of
the company.
When starting a business in local market, a firm has to find out the similarities and differences
between their local and global strategy. The manager has to intelligent here to combine and
formulate a unique strategic model to run into the local market. For example, when Macdonald’s
started its business in UK, most of the food shops were being operated by the local
entrepreneurs. It was risky and challenging for Macdonald’s to start their food chain at such
condition. But they considered the local needs, changed the global campaign into local one and it
became a cost saving structure which can be attributed to their success in UK.
Every firm have to consider several factors at-global and local-level when designing their
marketing plan, which are-
Factors Implication
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to their best interest.
Customer Specify the audience for a product and serve
them effectively
Product quality An approach to maximise the quality of product
can help the company sustain in long run.
Balancing act Brand values should be maintained consistently,
and content of plan should reflect those values.
But regional should not be ignored at all.
Table 3: Strategic factor for marketing plan, source: (Michaux et al., 2015)
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Figure 2: 4Ps of marketing mix
Price: AstraZeneca customises their pricing plan in line with competition in the market. Cost
leadership is one of the propositions the followed to gain market share in UK and other
countries. It follows the marginal benefit analysis to get the most return out of its research.
Through overhead cost control, reducing unnecessary costs and avoiding marginal customer
account has made them achieve their goal in marketplace (Michaux et al., 2015).
Place: The headquarters of research and development unit of AstraZeneca is at Cambridge. The
others are at- Warsaw in Poland, Mondal in Sweden and Maryland of USA. It established Global
Technology Centre at Chennai in India from where they continues their clinical operation and
various services to worldwide operation. Most of their products are available at the clinics and
pharmacies and also at online shopping store.
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Products: Being among the global leaders of pharmaceutical industry, AstraZeneca maintains a
diverse portfolio of its medicine products for major diseases, and it has made alliances with
several local brands. Their products are developed focusing on diseases of- anaesthetics,
cardiovascular, gastrointestinal, inflectional, neurological and oncological. AstraZeneca has
recently been approved in USA to produce orphan disease medicines and inflectional diseases. It
provides medical service on trial on its products and also manufactures technology-based health
care products (Michaux et al., 2015).
In different context and circumstances, several situations calls for unique actions by the firms.
These circumstances are described below from the perspective of AstraZeneca with what should
be the proper action for them-
When the market needs better The firm should invest in research to find out how to
product at lower price deliver best quality medicine at reasonable price
When market show opportunities Firm should integrate a change management program and
with domestic challenges diversify the medicine with unique disease curing
features
When there is lack of experience Firm should run a survey among the customers to know
about customer preference their preferences and consider their position in existing
market.
When the business operation Firm should adopt risk management technique to manage
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becomes risky risk properly with maximum possible outcome
When foreign regulations makes the Firm should determine well-structured local adaptation
company incur unexpected cost technique to achieve economies of scale in production
How they adapt their marketing mix elements in different market is explained below using 4Ps
of marketing-
International strategies for product: This strategy requires all decisions relating to the product
or services offered by the firm. It considers also what product or product line will be offered and
how the product or product line will be designed- through standardised approach or customised
approach. It is one of the major areas where firm carefully design their product and service
offerings because the core benefits come from the product (Hoekman and Zarrouk, 2012).
Different product design policies are adopted to modify product according to local needs. For
example, AstraZeneca uses modular design approach to decide how standard components of
medicine worldwide can be integrated into local products. Common approach are also used when
the core values of the product are need to be customised with additional features. The main part
of their strategy underlies on how they customise products with additional benefits in local
market and keep the core benefits standardised.
International strategies for pricing: Pricing is another vital element of marketing mix. It need
to include prices for all monetary and non-monetary benefits for which customer will spend his
money. Pricing strategies can be locally adopted but they need to consider the global
standardisation. Price differences may arise in different countries because of import, parallel
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market or grey market situation (Paliwoda et al.,2013). To avoid these problems, AstraZeneca
choose geocentric pricing approach where the price of similar medicine product is not same in
different countries and local distributors does not have freedom to set prices. Thus, the
biomedicine and healthcare medicine price are not equal in Japan, UK, Canada or others. Degree
of globalisation of industry are considered for any modification in pricing.
International strategies for promotion and place: Promotion strategies decide how the
necessary information about product and company will be delivered to all stakeholders including
customers in a particular country. There are several promotional channels that are used by
AstraZeneca in their operational regions in UK, China, Australia, India and many other Asian
countries (Hoekman and Zarrouk, 2012). These channels are standardised with cultural factors
and a theme for awareness in different market situation depending on the type of product. They
are-
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Standardised campaign To reduce the cost, standardised global approach are considered
relevant.
It promotes the brand name in same ways across the countries. It helps
to capture the target market with high-quality product.
Sales promotion Catalogues and brochures, samples, price discounts are part of this
channel that promotes its products.
Learning outcome 4
P7 Various international marketing approaches
International market for any product is always tough, competitive and requires taking a lot of
risk. As a multinational firm, AstraZeneca maintains flexibility and adaptability to economic
condition in their marketing strategies across and beyond the boundaries of home country. As a
global leader in pharmaceutical company, it can follow several marketing approaches, which are-
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launching a new product in foreign market, AstraZeneca can pick up what similarities its market
has with UK and synthesises the similarities into the pricing and promotional strategy.
Polycentric marketing: Polycentric marketing means that the business will have different
model for marketing its product in multiple countries. Polycentric approach considers each
marketplace as distinctive, find outs regional similarities and differences with home country and
develops an equivalent marketing approach to positioning and promoting its product in different
market (Hoekman and Zarrouk, 2012).
With the vision to bring greater goods to people with medicine, AstraZeneca look for sustainable
growth in their business revenue throughout the regions. Around the world, they have five key
growth areas that brings long-term revenue, where Japan, Brazil, Emerging markets, China are
on the main focus (Paliwoda et al.,2013). To achieve target business development, it wants to
transform its business into a global shape with special medical care and biogenetics, maximise
the growth of assets, and leverage the global revenue at large scale. So, given the scenario, I
recommend the global marketing approach would be the best solution to marketing strategy.
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As a multinational manufacturer and seller of pharmaceutical product, AstraZeneca has to
manage the environmental and risk-generating factors gracefully and integrating their strategic
objective through pricing and production differentiation. Some of the key difference areas in
global and home orientation are-
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Evaluation of Regio centric approach: Regiocentric approach is rationalisation of function on
the basis of the countries on the region. The advantage of this approach is the company can
improve local responsiveness; subsidiaries become grouped so the regional efficiency increases.
A company which want to reach worldwide audience can’t break out of the regional boundaries,
which is one of its disadvantages.
Evaluation of Polycentric approach: Polycentric approach can understand the local standards
and develop a strategic fit with the culture. It does not have to bear the cost generated from
transferring skilled labour to inefficient areas and there is no need of centralised policy. The
disadvantage is headquartered does not have control over local units and thee remains less
opportunity to achieve benefit of synergy.
Geocentric approach compensates all the disadvantages that arises from these approaches.
Because it develops global standard irrespective of national culture, intake of skilled labour
become convenient, build up a strong culture among them and a widespread and shared
management network (Eliot, 2016). It creates a balance between global integration and
sensitivity to local culture. AstraZeneca is a multinational company which operates its business
in several regions of Europe, America and Asia. The geocentric approach will work out best for
them and it will be easy to align with global strategic objectives and can help to leverage the best
result from their structure and resources (Paliwoda et al.,2013).
Conclusion
The necessity and benefit that a multinational company derives are countless. It helps immensely
a company to achieve successful and constant growth around the market. Through geocentric
marketing approach, company integrate the demand, preferences and regional differences into
their strategy and make the operation seamless and smooth for company. The company can
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determines the risk factors, manage to keep those under their fold and identifies the opportunities
and takes advantage of them through bringing innovation and positive change in their product
and throughout the company. The financial success and growth of my chosen company,
AstraZeneca proves these truth.
References
Bischoff, A. (2012). Porters Five Forces. Innovation through Business, Engineering and Design.
Eliot, G. (2016). The mill on the Floss. New York: Open Road Integrated Media.
Kotler, P., Somkid Jatusripitak. and Suvit Maesincee (1997). The marketing of nations. New
York: Free Press.
Michaux, S., Cadiat, A. and Probert, C. (2015). Porter's five forces. [Place of publication not
identified]: 50Minutes.
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Paliwoda, S., Andrews, T. and Chen, J. (2013). Marketing management in Asia. New York:
Routledge.
Rialp, A. and Rialp, J. (2011). International marketing research. Bingley: Emerald Group
Publishing Limited.
Smith, H. and Westkamp, G. (2016). Emerging issues in intellectual property. Cheltenham, Glos,
UK: Edward Elgar.
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