3.6: Benefits of Global Branding and Foreign Market Expansion Feasibility

Question 1

What are three Benefits of becoming a Global Brand?

Answer 1

• consistency
• minimised risk
• lower cost

Question 2

Describe consistency as a benefit of becoming a global brand

Answer 2

Enables a business to communicate consistent marketing messages to consumers globally, which can result in stronger brand awareness and positioning as all of the marketing supports the same message.

Question 3

Describe minimised risk as a benefit of becoming a global brand

Answer 3

Businesses can utilise marketing strategies that historically have worked in domestic markets and globalise them. By using strategies that have succeeded in the past, there is less risk of them not working in other demographically similar countries.

Question 4

Describe lower costs as a benefit of becoming a global brand

Answer 4

a multinational business will be able to achieve economies of scale by using the same advertising and packaging. Multiple teams for research and marketing strategy will not be needed, a centralised team of people will develop marketing strategies for all markets, thus saving time and money

Question 5

What are the three factors determining the feasibility of expanding into a foreign market?

Answer 5

• level of demand by consumers
• consumption patterns
• competitor activity

Question 6

Explain the level of demand by consumers as a factor determining the feasibility of expanding into a foreign market

Answer 6

( how ) - The ability and number of customers willing to purchase a product at a given time determines the level of demand for that product. For businesses selling niche or luxury products, whether customers can or cannot afford these products must be also considered.
( why ) - This will influence feasibility of an investment for expansion as if the level of demand in a market is relatively low, a business would be less likely to expand, whereas if the level of demand is high, a business would be more likely to expand to that market.

Question 7

Explain consumption patterns as a factor determining the feasibility of expanding into a foreign market

Answer 7

( how ) - Consumption patterns refer to the factors deciding how and why a households’ purchases on goods and services; this includes househould discretionary income, social norms and religion. A business must consider the consumption patterns of a market they are planning to expand into to ensure their product is appropriate for the current market conditions.
( why ) - These factors can seriously affect the success of a business’s products/services if not appropriately considered, especially when first entering a foreign market.

Question 8

Explain competitor activity as a factor determining the feasibility of expanding into a foreign market.

Answer 8

( how ) - Competitor activity refers to the number of competitors in a market and their respective market share; these competitors can be local, international and/or online. Before considering entering a foreign market, a business must analyse this number of competitors.
( why ) - It is far easier to enter a market and capture market share when there are limited competitors, particularly in a global market. If a business can quickly increase its market share after entering a foreign market, it can solidify its place within the market for the long run.