Introduction
Globalization, also referred to as the process through which the world has become one single village has numerous effects (Gillespie & Hennessey, 2011, p. 16). The most notable effect of globalization is increased competition because all companies are in a position to access similar clientele. This poses a significant challenge many companies which are multinational in nature. This is because they have to devise new and better methods of attracting and retaining customers. The act of attracting and retaining customers is referred to as marketing (Chartier & Johnson, 2011, p. 211). Firms that operate globally engages in international strategic marketing, that is, marketing one`s products and services across various markets (Furman, 2007, p. 114). It is on this background that this paper seeks to discuss international marketing strategy with a main focus on Tesco`s failure in North America.
International Marketing Strategy
Marketing refers to the process of creating a lasting relationship between the consumer and the seller through various actions such as promoting goods, services, ideas and prices (Hollensen, 2009, p. 106). The main objective behind marketing is satisfying the consumers` needs and expectation with the sole purpose of creating lasting relationships (Mooij, 2009, p. 29). International marketing strategy, on the other hand, seeks to create lasting relationships with the sole purpose of gaining a competitive edge within a specific market (Hollensen S. , 2012, p. 75). International marketing strategies differs from one firm and country to the other. This is because different countries contain different markets whose expectations, values, belief, and cultures differ from each other. As such, a strategy used in one country may not necessarily work out in another country. Marketing involves a range of activities. These include product development, advertising, market research, and selling. In short, marketing encompasses five P`s which include product, place, promotion, price, and people. The five P`s are referred to as the marketing mix. One has to take into account of all the five elements when marketing both goods and services (Czinkota & Ronkainen, 2011, p. 26).
For a firm to compete well in the global markets, it has to embrace international marketing strategies. As such, it has to move from domestic to global marketing in order to attract and retain new consumers. This involves a four stage evolution with different marketing strategies, structures and focus. Stage one is referred to as domestically oriented as it only focuses on how to survive within one country; that is, the country of origin. Stage two is referred to as ethnocentric focuses on two or three countries (Agriculture and Consumer Protection). Nonetheless, the firm that seeks to market itself believes in the values of the home country. The third stage refers to polycentric. At this stage, organizations adapt to new marketing mixes that are brought new market structures and cultural practise. The last stage refers to geocentric. At this stage, the organization focuses on how to remain competitive within the global market. As such, the marketing strategies applied differ completely from one market to another (Agriculture and Consumer Protection)r.
A firm may decide to choose on localization, polycentrism or ethnocentric marketing approach. This is due to various reasons such as the product life cycle, the global environment, environmental sensitivity and the uncontrollable in the global market (Agriculture and Consumer Protection). First and foremost, a firm needs to carry out an environmental analysis before deciding on a marketing approach. This is because environmental analysis enables a firm to determine the manner in which a product reacts to political and socio-economic cultures. Other factors that should be taken into consideration include quality and price differentiation in various markets. Additionally, the product life cycle heavily influences the marketing approach applied by various firms.
Tesco`s Failure in North America
Tesco Plc, a British company, is deemed to be the second largest retailer after Wal-Mart. Tesco operates in numerous countries across the whole world. It mainly deals in general merchandise and grocery. In fact, it the largest grocery market in the United Kingdom. Founded in 1919 as a market stall, Tesco seeks to market its products worldwide with the main objective of maximizing its sales and, therefore, profits (Lowe & Wrigley, 2013). This section seeks to discuss the international marketing strategies employed by Tesco Plc in North America. Further, this section will highlight the themes that led to the failure of Tesco in North America. Tesco announced its entry into the United States in the year 2006 (Lowe & Wrigley, 2013). Tesco registered itself as Tesco Plc Fresh and Easy in the United States. In fact, in 2009, Tesco had over 115 stores in Nevada, Arizona and California. Tesco employs various marketing strategies. Tesco employs the standardization strategies (Lowe & Wrigley, 2013) that seek to view all markets as similar irrespective of the country of operation. This has not worked for Tesco. As such, I think Tesco should employ adaptation strategy that takes into account of various cultural practises and beliefs of consumers. Tesco built distribution centres due to logistical reasons. It would be easier for Tesco to attract more consumers by ensuring availability of their products.
Tesco expected to perform well in the United States. This is because The United States is considered as the largest market in the world. Nonetheless, Tesco`s performance in the United States was contrary to many people`s expectation. This is because Tesco lagged behind in the international arena despite increased sales. There are various reasons that led to Tesco`s poor performance in the United States. First and foremost, Tesco registered poor performance in the United States due to cultural differences that influenced consumer behaviour. Tesco hoped to change the Americans shopping patterns and habits. This did not go down well as there is nothing that is as difficult as changing one`s mannerisms. Tesco did not learn from Wal-Mart`s failure in the German markets (Iyobosa, 2013). It is essential for firms that seek to operate globally to consider cultural practices and beliefs among consumers. This is because culture contributes significantly to one`s purchasing habits and patterns. Tesco ignored this and only factored economies of scale in their decision to venture into the United States markets. Further, the fact that Tesco Plc decided to start from scratch other than purchasing a good will led to its downfall in the United States (Northedge, 2007).
Tesco`s failure in the United States can also be attributed to economic causes (Northedge, 2007). This is because the Tesco entry in the United States coincided with the global economic crisis that originated from the housing market within the United States. The global economic crisis saw the decimation of the United States markets that were targeted by Tesco. Additionally, the global economic crisis reduced the purchasing power of consumers (Lowe & Wrigley, 2013).
Conclusion
In conclusion, I can assert that increased competition that emanates from globalization has led to the adoption of international marketing strategies by multinational companies, with the sole purpose of attracting and retaining consumers worldwide. It is necessary to employ marketing strategies that would enhance the competitiveness of a firm in the global market. Tesco performance in North America was not good due to various reasons including global economic crisis and failure to assess the Americans shopping cultures before venturing into their markets.
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