INTERNATION MARKETING ASSIGNMENT “SPAR to commence operations in Sri Lanka by Q4
ID: 421512 • Letter: I
Question
INTERNATION MARKETING ASSIGNMENT “SPAR to commence operations in Sri Lanka by Q4 2017” SPAR is the world’s leading voluntary food retail chain. The business started with one Dutch store in 1932 and today, with over 12,100 stores in 42 countries worldwide, the retail partners of SPAR unite under one strong international brand. They represent a global collective of leading retailers working at a national, regional and individual store level, sharing common brand values and pooling resources for mutual benefit. SPAR’s success is based on fostering, protecting and growing local independent retailers in the face of international and domestic competition. SPAR is founded on a model of voluntary trading that encourages entrepreneurship, by providing a comprehensive supply and support network to stores owned and operated by local retailers and being committed to the growth of local farmers and suppliers. The SPAR business model of ‘voluntary trading’ brings numerous advantages for retailers, wholesalers and suppliers through lowering the cost of goods through bulk purchasing, efficient logistics and supply chain services, IT, marketing and operational support as well as the sharing of International best practices and resources to offer customers modern stores, excellent value, quality products, wide range and customer service. SPAR Sri Lanka has been granted a license to trade under the SPAR Banner in Sri Lanka and is passionate about empowering local entrepreneurs and look forward to growing the SPAR brand in Sri Lanka in the years to come to the benefit of all Sri Lankan citizens. By registering and retaining local ownership, profits are invested back into the country and community, thereby contributing to local development, employment opportunities and the growth of the Sri Lankan economy. SPAR has a major focus on enterprise development; growing & developing local suppliers and farmers to source and stock products in its supermarkets. Further to this is the central theme of community involvement which ensure that our retail stores and independent retailers are actively engaged with and supported to meet the needs of their local communities. Source: http://www.dailymirror.lk/article/SPAR-to-commence-operations-in-Sri-Lanka-by-Q--130101.html
Assignment:
1. Carry out your own research and discuss in detail the macro and micro environmental challenges and opportunities that SPAR can expect to face in their entry into Sri Lanka.
2. Based on your present understanding of international marketing, will SPAR succeed or fail in Sri Lanka? Discuss with relevant reasons / justification.
Explanation / Answer
ANSWER-
PART 1)Micro environment
Micro environmental components are related specifically to the organization, whereas macro environmental components are broader in nature & affect the entire industry of the region or country. Moreover the macro environmental factors cannot be eliminated through the efforts of the marketing department. So the marketing manager should be proactive in accessing & anticipating the changes of the marketing environment.
The marketing managers in the organization should be vigilant in facing the threats and opportunities of the marketing environment while collecting & processing the data from the marketing environment. The effective organizations do not only focus their customers, but also the forces of the marketing environment. The marketing department & other management area of the organization consistently consider the dynamic aspect of the marketing environment so that they can better adapt to the emerging change, develop certain long run strategies, maintain the ability to satisfy the current & future needs of the customers and develop the ability to effectively face the intense global competition.
Micro Environment and its Components
There are five components associated with the micro environment of an organization. These components are as follows.
The organization itself is the first micro environmental component which focuses on the role of the organization that it performs in the micro environment. The mission statement & long term goals or objectives of the organization are firstly developed by the top management of the organization. After which the tactical strategies, short term goals & policies are prepared by the middle level management, which are followed by the functional goals. The top management of the organization has confined the area in which marketing manager takes his decisions. The marketing manager works in collaboration with other departments of the Business Organization because most of the activities of the entire organization are interrelated with each other. Also the broader organizational goals are common for all the departments of the organization like purchasing department, Research and Development department, production department etc. The main focus of all the departments must be the customer oriented behavior that ensures the delivery of superior value to customers and this is made possible through the efforts of the marketing department.
Suppliers are the second micro environments component, which are those organizations that deliver the required resources to all the competing organizations for the production of goods or services. The delivery of superior value to the customers is made possible through the useful linkage of the suppliers. The availability of the supplies is permanently watched by the organization to ensure the smooth working of its operations. The prices of the key inputs are also analyzed by the management of the organization because it directly affects the costs of the organization which is resultantly influence the price of its final products. So any increase in the price of inputs is carefully analyzed.
The organizations that assist in promoting, selling & distribution of products to final customers of specific organization are called marketing intermediaries and are considered the utmost factors the micro environments. Marketing intermediaries include the following.
The organizations act as distribution channels in searching of customers for a particular organization and also helping in making sales for it. They may take the form of the wholesaler or retailer that performs the function of purchasing & reselling of products from certain manufacturing organizations. The costs of the organization are reduced with the utilization of the services of resellers, but it can cause problems in the smooth working of the entire system.
These are the firms that are helpful in distribution of goods from the manufacturing area to the selling points. The warehouse is a common example of such physical distribution firms.
The targeting & promotion of the products of an organization is done effectively with the help of marketing service agencies.
The finance is provided with the help of financial intermediaries like banks etc, which insure the risks of the organization.
The customer market must be closely studied by the organization because there are more than one customer markets with their own unique features.
It consists of household customers that purchase the goods or services of the organization for final consumption.
These included other organizations that buy the goods or services for the utilization in their production processes.
It consists of firms that buy the goods in order to resell them for profit.
It consists of agencies that purchase goods or services for the production & distribution of public services.
It includes buyer belonging to foreign countries.
Every organization faces the competition with certain competitors. So the competing organization should develop such effective strategies that can influentially position its products in the competing market. There is no single strategy which can be effective for all organizations. This micro environment component has great importance and analyzed deeply.
The last component of micro environment is a public, which include a group of individuals that can influence the ability of the organization to accomplish it objectives. So the organization should develop an effective marketing plan for both the public as well as customers. Publics can take the following forms.
Financial Public: It can affect the ability of organization to obtain funds.
Media Public: It carries an editorial opinion, features & news.
Government Public: It considers the developmental aspect.
Citizen Public: It includes consumer organizations that can question the decisions of the organization.
Local Public: It includes community organizations & neighborhood residents.
General Public: It simply includes the general public.
Internal Public: It includes employees, managers and board of directors of an organization.
Macro Environment and Its Types
The organization along with its other forces carries its functions in the larger area of the macro environment. There are certain factors and forces of macro environment that are responsible for the provision of opportunities & threats to the organization. Six types of forces are present in the macro environment of the organization, which are as below.
Now, each one is discussed below in detail.
The demographic force of macro environment is related to the study of human population with respect to their location, size, density, race, sex, occupation, age & other factors. The marketer of the organization has a keen interest in this actor of macro environment because it relates to the people, which are the foundation of any market. The trends of demographic force are changing at a constant rate. Below are few examples of such change.
01- The rate of increase in population is growing in a speedy manner that will ultimately badly affect the supply of food & servicing ability for the population. The poor countries are the victims that would suffer most. The enhancing market of china is getting attention of marketers around the world.
02- The changing age structure is another important trend of the population. The reasons for this increase in the age structure of the population are the increasing life expectancy and the downfall in the birth rate. After World War 2, the baby boomers have contributed much in the increasing age of the population. The age group of people is divided into many sub-divisions by the organization. The most important one is a middle age group which would become senior citizens in the future. Other groups include the generation X & the echo boomers.
The economic factor of the macro environment includes those that influence the purchasing power of customers along with their spending patterns. Certain important trends of the economic environment in the USA are as follows.
01- The personal consumption becomes the reason for the recession in the country that affects the personal & corporate actions. Now customers become more careful shoppers.
02- The customers are aware of the rise in the real income & so they adopt the strategy of value marketing.
03- The distribution of income in the country is in skewed shape which means unequal distribution. The majority of the customers is showing the spending patterns in the e basic areas of food, transportation & housing. Moreover the unfair distribution of income is resulted in the formation of two kinds of classes of the people which are affluent and less affluent.
The marketers of the organizations should develop & implement such strategies that benefit them from the changing economic trends. So they should carefully monitor the altering trends of the economic system in order to prevent their organizations from the side effects of the changing trends.
The natural force of the macro environment consists of the natural resources that are required by the organizations as inputs or that is influenced by the marketing activities. The trends of the natural environment are becoming quite important since few years like
01- The industrial expansion has seriously affected the raw materials by creating their shortage. Moreover, certain nonrenewable inputs are depleting due to their improper usage like oil, coal etc.
02- The environment of the world is badly affected by the improper production procedures of the organization. The organizations are adopting the environmental friendly trend by which they have produced safe, biodegradable or recyclable products.
03- Now, the government is also affecting the operations of the organizations in the area of natural environment damage. Certain policies & regulations are implemented throughout the world and the marketers should focus these changing trends that are related to the energy & material problems.
The organizations are promoting the green environment by developing & implementing the environment friendly strategies.
The technological aspect of the macro environment includes the actors that are responsible for the creation of new technologies, new products & new market opportunities. For this purpose following are the important trends of the technological area.
01- The technology is changing at a speedy rate and the new products are emerging that replace the previous ones.
02- A large number of opportunities are emerging in the expanding fields like, space shuttle, health care, robotics & biogenetic industries etc.
03- The technical & commercial challenges emerged for the organization to develop affordable products. Also mew regulations are implementing from the government about the product safety & individual privacy that must also be considered by the organizations.
Those actors and forces that relate to the government agencies, laws & other pressure groups that affect the organizations or individual persons in a specific society. For this purpose following are some of important trends.
01- Public policy is implemented by the government that guides the organizations to produce products that are beneficial for the society.
02- Regulations are implemented that protect one organization from another.
03- Customers are protected from unfair business practices by certain laws of the government.
04- There are also certain policies of the government that protect the interests of the society from the unfair business behavior of the organizations.
Those actors & forces that affect the basic values, preferences, perceptions & behaviors of the society are included in the cultural factor of the macro environment. There are certain cultural characteristics that influence the decision of the marketers. Some of the characteristics are as follows.
01- There are certain basic beliefs & perceptions that remain constant throughout several generations of the society.
02- There are certain secondary beliefs that can be altered through the effective strategies developed by the marketing department of the organization. These secondary concepts should be identified by the marketer in order to get advantage through these concepts.
03- The personal views of the people are also helpful for getting an advantage for the organization by the marketers. Also the views of people about others are helpful for making effective strategies of the organization.
04- Moreover, the views of people about the organizations, society, nature & universe are important considerable features of the cultural aspects that should be concentrated by the marketers for development of their strategies.
PART 2
Yes SPAR will succeed in Sri Lanka. Below is the justification-
SPAR Sri Lanka has been granted a license to trade under the SPAR Banner in Sri Lanka and is passionate about empowering local entrepreneurs and look forward to growing the SPAR brand in Sri Lanka in the years to come to the benefit of all Sri Lankan citizens. By registering and retaining local ownership, profits are invested back into the country and community, thereby contributing to local development, employment opportunities and the growth of the Sri Lankan economy. SPAR has a major focus on enterprise development; growing & developing local suppliers and farmers to source and stock products in its supermarkets. Further to this is the central theme of community involvement which ensure that our retail stores and independent retailers are actively engaged with and supported to meet the needs of their local communities.
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