BBIM 4103

Facul t yOfBusi ness& Management

SEME MESTER JAN 2015

  BBI M4103

I NTERN RNATI ONALMA MARKETI NG

MATRI CULATI ON NO

:

771205075862001

I DENTI TY CARD NO. O.

:

771205075862

:

0164400005

 TELEPHONE NO.

BBIM 4103

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EMAI L

: r i ffa@oum. edu. my

LEARNI NG CENTRE

: RECSAM

 TABLE OFCONTENTS CONTENTS  Ti t l ePage 1. 00I nt r oduct i onCompanyBackgr ound

2. 00Descri pt i onsoft hesi x( 6) dri vi ngf orcest hataffectan organi sat i on’ sdeci si on t oent eri nt ernat i onalmar ket

2. 01Mar ket Needsand, Wants 2. 02Gl obalEconomi cGr owt h 2. 03Technol ogi caladvance 2. 04Pr esur et ocutcost( Pr i ci ngConsi derat i ons) 2. 05I mprovement si nTr ansport at i on andCommuni cat i on  Technol ogyI nt r oduct i on 2. 06Pr ess ur et oI mpr oveQual i t y

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3. 00I dent i ficat i onandDi scussi on ofDr i vi ngFor cesThatAffect t hechosen organi sat i on’ sdeci si on t oent eri nt ernat i onalmar ket

3. 01Cul t ur alDi ffer encesandCommuni cat i on Probl emsWi t h I nt ernati onalBusi ness. 3. 02PoorMar ketAccept ance 3. 03Oper at i onalRi sk 3. 04Qual i t yAss ur anceI nPr oduct 3. 05 Macr oeconomi cRi sk 3. 06 PoorCommuni cat i on

4. 00Recommendat i onf orEffect i vemanagementofdr i vi ngf or ces t osel ect ed organi sat i on

4. 01ConductMar ketResear ch 4. 02 LegalandRegul at or yChal l enges 4. 03Countr yManagement 4. 04Adapt at i on

5. 00Summar y

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Ref er ences

1.00 Introduction Company Background

The spices business of Faiza started on the 1968, when founder of Faiza Marketing (formerl known as !arikat Faiza", Mrs #a$$ah Faiza %awumi !aed &hmad, formulated its own traditional heritage 'homemade blends) recipes* +uring that time it was more than tr and error recipes, where as it was produced for limited uantit and onl sold to relati-es and neighbors, in order to gain a feedback to the taste of the spice recipes* Faiza Marketing !dn %hd is a wholl bumiputera own compan based in %atu .ahat, /ohor* 0ts main business is food be-erage and its main product is spices * FM!% aim to be the leader  of %umiputera spices producer locall and internationall b pro-iding ecellent customer  ser-ice, emphasizing on ualit and human resource de-elopment generated from technolog ad-ancement

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F&02& M&345T07 !+* %#+* (:6:;" <=T 1>11 ? 1>1, %<=4 %, 4=M.<54! 40<&7 !M5 %&4   = 1>, /&<& @&@&!& ;T&M&, 4&@* 0+;!T30 !30 7&+07 00 8A::: %&T; .&#&T, /=#=3, M&<&B!0&  (C=.B@307#T www*faizaspices*com"

 owdas, with more than : tpes of products and proper promotion channel, F&02& spices has become one of the most trusted household brand name throughout the region, under the tagline #giene ? Dualit, clearl indicates the prime importance of the products to acuire high ualit of selected ingredients* FM!% has established her own brand locall

 (COPYWRIGHT www.faizaspices.com)

Faiza Marketing !dn %hd manufactures and distributes -arious tpes of spices and curr  powder * ow, the distribution of the product co-ers .eninsular Malasia, !abah and !arawak  BBIM 4103

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and has alread entered #permarkets such as 7iant, Tesco and others* The dedicated to  pro-iding the best food to people through their plan such E

•

To market Faiza products throughout all the countr in the world* To fulfill customer satisfaction b pro-iding assortments of hgienicall ualit

•

 product, ser-ices and product a-ailabilit* To enlarge the market to other countr and make -ariet of product under the brand

•

name of Faiza For the future, FM!% intends to epand into the international market

2.00 Descriptions of the six(6)driing forces that affect an organisation!s decision to enter internationa" market

@ith the aim of -enturing a business into the international market, FM!% compan must decide what steps to undertake b the compan to go abroad* The most important criteria would be what tpe of entr mode strateg a compan should be regarded b the potential compan when -enturing into the foreign market* 2.01 #arket $eeds and %&ants

#ence , FM!% must tr to understand the target markets needs, wants and demands* eeds are the basic human reuirements* .eople need food, air, water, clothing and shelter to sur-i-e* .eople also ha-e strong needs for education, recreation and other ser-ices* These needs are not created b societ or b marketers* The eist in the -er teture of human  biolog and the human condition* These needs become wants when the are directed to specific ob$ects that might satisf the gi-en need* & countr (sri lanka, us" need food but wants a rice and curr or noodles BBIM 4103

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,<hough peoples need are few ,their wants are shaped and reshaped b social forces and institutions including families, temples ,schools and business organizations* 2.02 '"oa" conomic 'ro*th

&n increase in the capacit of an econom to produce goods and ser-ices, compared from one  period of time to another* 5conomic growth can be measured in nominal terms, which include inflation, or in real terms, which are ad$usted for inflation* For comparing one countrGs economic growth to another, 7+. or 7. per capita should be used as these take into account  population differences between countries* 5conomic growth is usuall associated with technological changes* &n eample is the large growth in the ;*!* econom during the introduction of the 0nternet and the technolog that it  brought to ;*!* industr as a whole* The growth of an econom is thought of not onl as an increase in producti-e capacit but also as an impro-ement in the ualit of life to the people of that econom*

5conomic growth is usuall associated with technological changes* &n eample is the large growth in the ;*!* econom during the introduction of the 0nternet and the technolog that it  brought to ;*!* industr as a whole* 2.0+ ,echno"ogica" adance

=ne of the most striking manifestations of globalization is the use of new technologies b entrepreneurial and internationall oriented firms to eploit new business opportunities* 0nternet and ecommerce procedures hold particular potential for !M5s seeking to broaden their in-ol-ement into new international markets* Technolog is also one of the main tools of competition and the ualit of goods and ser-ices* =n the other hand it necessitates uite a lot of cost for the compan* The compan has to use the latest technolog for increasing their sales and product ua*  Pricing Considerations) 2.0- resure to cut cost (  7lobal product and promotion strategies must take into consideration the economic conditions of the countr where products are introduced* For eample, a price that might be discounted in BBIM 4103

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the ;nited !tates would be considered too high for poorer countries or perhaps not high enough in rich countries* To combat prices being too high in less affluent countries, a compan could make a smaller or less comple -ersion at a lower price* 2.0/ Improements in ,ransportation and Communication ,echno"ogy Introduction

&d-ances in technolog are one of the main reasons that globalisation has escalated in the  past decade* 0n information and communication technolog, inno-ations ha-e become smaller  in size, more efficient and often more affordable* 0n transport technolog, -ehicles ha-e tended to become larger and faster, as well as becoming more en-ironmentall friendl and cheaper to run* @hether for personal use or for business, technolog has made the world seem a smaller place and assisted in the rise of globalisation*

2.0/ (i)Communication ,echno"ogy

The last decade has seen dramatic de-elopments in telecommunication technolog* Communication has mo-ed on since the das of Gsnail mailG where it would take se-eral weeks for mail to arri-e from o-erseas .The internet has had an important role in connecting people* 0t allows people in countries around the world to instantl contact each another through email, chat programs and -ideo calls* This instant communication has re-olutionised business and social li-es* Transport has also changed the wa do business* !uper tankers ha-e increased the scale of  trade between countries, as these massi-e container ships are able to carr larger uantities of  goods,

including

oil

and

grain*

&s

a

result,

trade

has

become

increasingl

international*0nno-ations in transport often in-ol-e the use of information and communication technolog*
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0n de-eloping products and ser-ices, ualit assurance is an sstematic process of checking to see whether a product or ser-ice being de-eloped is meeting specified reuirements* Man companies ha-e a separate department de-oted to ualit assurance* & ualit assurance is said to increase customer confidence and a companGs credibilit, to impro-e work processes and efficienc, and to enable a compan to better compete with others* TodaGs ualit assurance sstems emphasize catching defects before the get into the final product* #ence ,  pro-iding consumers with products of the highest ualit is assured through strictest standards of reuirements set on the processes and the ualit of the material used* Dualit control is assured with a laborator euipped with the latest euipment and microbiological count analsis that complies with the 0nternational Food &ct and &!T& specifications*

+.00 Identification and Discussion of Driing orces ,hat ffect the chosen organisation!s decision to enter internationa" market

.art of global business failure in-ol-es a lack of planning* =ne moti-e for companies to go  beond local boundaries is access to new capital and customers* Tring to keep up with competitors, some companies $ump into foreign markets without a solid plan of action* The donGt research the markets, donGt assess differences in local -ersus global strategies and donGt  ponder the -ariance in costs in doing business globall* Companies sometimes ha-e pulled out of global markets because the went in without a plan* % taking steps to mitigate potential risks, business owners can a-ert legal and financial trouble before it starts* HForces that affect new technologies, creating new product and market opportunities*H 4otler et al* 0nternationalization is a process taken b compan to make their product or ser-ice a-ailable in the foreign countr (%loodgood,1996"*

+.01 Cu"tura" Differences and Communication ro"ems &ith Internationa" Business .

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+ifferent countries and different cultures ma ha-e different preferences, howe-erI what sells well in one place ma ne-er sell in another place*

+.02 oor #arket cceptance

/ust because the compan plan and ha-e a good solution doesnGt mean all foreign markets will accept it* 0n some cases, people donGt bu into certain brands or product concepts as consumers in other parts of the world* !ome companies ha-e struggled to de-elop  promotional campaigns that hit on the benefits that appeal to the local culture, wa of life and  people

+.0+ 3perationa" 4isk 

& global strateg includes an operational risk* 0f emploment laws or corporation laws change in the countr where a compan manufactures its global product, then that could ruin e-erthing*
The factor is euipped with modern machiner such as comprehensi-e drer, destoner, miller, crogenicgrinder, superheated steam sterilizer and packing machine in order to  produce the finest endproducts to meet the stringent reuirement of todaGs food industr* Toda, Faizas brand awareness stands at par with other famous international food product  brands sold in Malasia**0n March :1:, FM!% was awarded DM! 0!=9::1E::8 b 47! Certificate* 0t helps that 0!= and #alal certifications are in place* 0n recognition of this commitment to ualit, FM!% also has recei-ed numerous awards and accolades* &mong BBIM 4103

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other awards recei-ed are Mardi 3?+ adoption program , #ealth Certification (Free !ales" b Ministr =f #ealth, Malasia ,%est .roduct &wards ::8 (Meat Curr .owder" from Ministr =f &griculture (M=&" ,Certification of !udand e &nalsis (Free &dditional Color" and C5.T ? 7!. certificate* FM!% continuous commitment in To ensure that the products are alwas accepted, the method of product testing was conducted during the whole period* !ome of the client approaching method was performed b doing sampling in the supermarketI there are also  participation in the e-ents that in-ol-ed man people*Therefore, all Faiza products are guaranteed 1::J halal, hgienic, wholesome and health*

+.0/ #acroeconomic 4isk 

The ma$or downside to pursuing a global strateg is that a onesizefitsall approach does not work in all markets* !ome markets ha-e particular tastes or are more sensiti-e to pricing* Moreo-er, a companGs products in-ariabl are more popular in o ne countr than another countrI deciding in which countr a product will be popular is a problem* 0f a compan estimates incorrectl, the mistake could cost it a fortune* +.06 oor Communication

Communication is a ma$or challenge for businesses domesticall, and the burden becomes e-en greater when enter markets where the nati-e language is different from our own* 7lobal companies must consider affects of communication in hiring local talent, creating global workplaces and -irtual teams and interacting with local customers* #uman resources is a ma$or strategic concern as enter global markets* .eople who can speak the local language are -ital to success in doing business and ser-ing customers* Companies that fail to plan for these communication challenges rarel get a second chance*

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-.00 4ecommendation for ffectie management of driing forces to se"ected organisation

/ain(1996"added that before a compan decide to -enture into the foreign market it is important to consider the internal and eternal factors

etensi-el, when preparing for 

international epansion * The internal factors refer to corporate ob$ecti-es, technological changes, and economic,political or social changes * The monitoring of eternal and internal factors help in the decision of whether to adapt the proacti-e or the reacti-e strateg when going international

-.01 Conduct #arket 4esearch

& critical aspect of looking for new sales opportunities in foreign markets is conducting market research* To be successful, Faiza compan must pick the foreign market carefull* Focus on countries that alread show interest in the product or ser-ice* !tart b researching two or three international markets that offer the most potential for success* %efore a compan decides to in-est abroad, the compan has to decide which foreign countr to -enture into and what are the entr mode strateg options that are a-ailable to them* &ccording to &ndersen and !trandsko- (1998", choosing the right entr mode strateg is a -er important decision as it will determine the sur-i-al of the compan in the foreign countr* +omke K +amonte (:::" also eplained further that b choosing the right entr mode strateg when -enture internationall, it will be able to help the firm to identif and ad$ust its resources in the long run, as it attempts to generate a sustainable competiti-e ad-antage in the foreign market* Countries that are closer to each other will ha-e less cultural distance between host and home countr* This is because countries that ha-e similar cultures tend to beha-e the BBIM 4103

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same wa and it will ease the business processes as business counterparts will understand each others wa of doing business %efore a compan decides to in-est abroad, the compan has to decide which foreign countr to -enture into and what are the entr mode strateg options tat are a-ailabale to them * &ccording to &ndersen and !trandsko- (1998", choosing the right entr mode strateg is a -er important decision as it will determine the sur-i-al of the compan in the foreign countr* =sland et al*(::1" stated that once a firm has decided to enter or epand into foreign market , it must determine the structural nature of its operations in that nation * The importance of  choosing method of entr into foreign markets can not be o-er emphasized, e-en thought , it is one of the most critical decisions that a co mpan must consider 

-.02 5ega" and 4egu"atory Cha""enges

!ome countries prohibit the importation of certain items to protect domestic industries* =thers might reuire go-ernment appro-al to operate or reuire ou work with local partners* Trademark, copright and patent protection laws might be noneistent* +ifferent en-ironmental regulations might ha-e to be obser-ed* Certain products might be banned for   political or religious reasons* .ermits or licenses might be needed to perform basic acti-ities* Bou ma not be able to o-ercome some of these challenges, so it is important to understand them before ou in-est resources* #ost countr go-ernments ma ha-e a set of polic intiati-es designed to attract specific tpes of in-estment * &s a conseuence , a firms in-estment seuence in a host countr,s will -ar with a countrs le-el of polic uncertaint* -.0+ Country #anagement

FM!% compan should appoint countr manager, heLshe will be responsible for handling all operations of the firm in the host countr, and is directl responsible for the firms success or  failure* &n ideal candidate will possess a background in management and will ha-e an in BBIM 4103

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depth knowledge of the compan* The perfect candidate will also be knowledgeable of the  political, legal and cultural landscapes in the host countr* -.0- nderstanding 5anguage and Cu"tura" Differences


-.0- daptation

.roduction and promotion adaptation strategies are used in a global market for a product that ma be popular but needs to be adapted to meet local customs and demand* For eample, customers of less affluent countries ma need a product of similar ualit (spice" that has been downscaled to be more affordable to purchase* Technolog products must be altered to meet the specific language of the countr being marketed to*&long side with /eannet and #ennese (199>"&garwal and 3amaswami (199"also suggested that when a firm seeks to enter into foreign market the firm must make the important strategic decision of which is the most appropriate choice of entr mode strateg to use for that particular identified potential market

/.00 7ummary

7lobalization leads to increased competition* This competition can be related to product and ser-ice cost and price, target market, technological adaptation, uick response, uick   production b companies * 7lobalization also pro-ides business some le-el of insulation from BBIM 4103

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slumping performance in one countr or region* 0n essence, global customer di-ersit spreads  business risks across a broader customer base* This means that if the econom, suppl issues, en-ironment or go-ernment regulations in one countr negati-el affect the can still find success in other countries* +omestic companies are often o-erwhelmed b economic shifts in the local market* #ence, FM!% compan must alwas be read for price, product and ser-ice and customer preferences because all of these are global market reuirements* Companies de-elop marketing strategies to build a loal customer base, to build relationships with those customers and to create -alue for the customer* 5ffecti-e product and promotion strategies are essential in making sure the product is readil accessible in the global marketplace*

Conduct international market research to analze a countrGs regional demographics, market trends and economic conditions* 5ducate about the cultural differences that might encounter, especiall those relating to how foreign companies do business*
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3eferencess http E www*faizaspices*com .an*B*?Tse*+*4*(::1"*The #ierarchical Model of Market 5ntr Modes* /ournal of  0nternational %usiness !tudies *A1("*pp*>A> +e

%urca,!*,%rown

,0*?Fletcher,

3*(::"0nternational

Marketing

E&n

!M5

.erpecti-e,.retice #allEew /erse &ndersen,.*?!trandsko-*/ (1998"*0nternational Market !election E& Cogniti-e Mapping .erspecti-e* /ournal of 7lobal Markting*-ol 11*pp 6>8

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