Berliner Weisse Beer: Aspects of International and Local Markets, Research Paper Example

Justify Your Choice of The International Market. The Justification Should Employ Specific Data from Research Conducted

Denmark has an enormous market for beer products. Denmark was chosen as a second country for this case because various international research and studies show that the country has a growing market for beer product, especially for imported beer. For instance, the Euromonitor International carried out a study in which they found that the imported beer industry and market in Denmark appeared as the best performing industry in beverages and alcoholic drinks sector. This study was reinforced by the 7% growth of the industry in 2012, according to the Euromonitor International. During the recession, the Euromonitor noted that the beer industry was recession proof. Denmark was chosen because growth in the beer industry is driven primarily by the tendency of Danish youths and adults to consume imported beer. In addition, they like beer brewed using foreign brewing styles such as the Berliner Weisse style. Additionally, Danish people like entertainment, which goes with the consumption of beer. Denmark favors sustainable manufacturing through fostering emerging green manufacturing strategies, which have cost cutting capabilities, especially in the energy segments of business operations (Doole, & Lowe, 2008). The beer products in this case will be brewed using environmentally friendly strategies and techniques. It is essential to note that the Danish market for beer products ranks highly among emerging market compared to other markets such as Latin America and Eastern Europe, which recorded growths of 18% and 11% respectively, in 2012. The growth rate for the industry in Denmark in 2012 was 20%, which was slightly lower than the rates in established markets in Western Europe and North America.

The trends in the industry in Denmark include the recognition of the products by Danish retailers, competition in the market and intensive advertisement (Doole, & Lowe, 2008). It is essential to note that Danish women extensively use light beer, and they help in pushing the sales and performance of these products in the Danish market. In addition, leading retailers recognize the growth and market for beer products in Denmark. Competition and immense advertising capabilities in the Danish market act crucially in facilitating the performance of beer products in the market. The Danish beer industry will grow by 5% or 0.9 billion dollars in 2013. This is because the customers and users of the different brands of Berliner Weisse can afford these products. The industry recorded overall profitability of 5% in 2013. In the Danish market, beer products do not rely on innovativeness, but on brand strength and trust.

Select an Appropriate Channel Strategy for both Your Domestic and International Markets and Justify Your Selection.

In both the local and international market, the organization will approach the market through intensive advertisement and use of established retailers. In addition, the organization will employ product, sales and services channels. The sales channel will involve the use of intermediaries in the sales activities of the organization. This is effective because the intermediaries are well represented and spread in the markets. Additionally, the intermediaries have the capabilities of selling the products through their channels; hence, they can reach numerous customers and cover enormous sales locations (Doole, & Lowe, 2008). The product channel ensures the organization focuses on intermediaries who handle the products. This will ensure that the products reach the market in favorable conditions. In addition, they will ensure timely delivery of the products. The service channels focuses on the service providers involved in the production of the baby care products. They are also engaged in activities involved after the sale of the product.

Pricing Strategies for Entering both the Domestic and International Markets

The organization has different alternatives for its pricing strategies. Pricing strategies encompass ways for improving the organization’s profits. Pricing strategies require immense consideration of customer’s requirements and market situation. This is because hiking prices with an aim of gaining profits could lead to loss of business. The pricing strategy for the local and international market that the organization should use includes the cost-plus pricing, penetration pricing and skimming. The cost-plus pricing strategy, factors the costs of production and profit margins in obtaining the selling price. Skimming aims at recovering the business investments (Doole, & Lowe, 2008). This means that the merchandise will be sold at high prices in order to ensure quick recovery from the investment. Penetration pricing ensures effective entrance of the products in an international market. This means that the organization will price its products lowly to facilitate sales in the new market. This pricing aims at attracting customers in order to gain a market share. The organization can raise the prices later after the product has stabilized and gained a considerable market share.

Implications of Changing Environmental Factors on the Organization’s Choices

Changes in environmental factors will have immense impacts on the choices for the organization. The choices and strategies available for an organization depend on the organizational structure and its external environment. Most importantly, different market and organizational strategies are dependent or suit different environments (Fernando, 2011). Radical changes in governance or leadership will have negative effects on the strategies employed by the organization. This is because these governments may establish different financial and social conditions, which have the potentials of destabilizing the market. The main legal entity in Denmark includes the government and international bodies such as the E.U. These bodies can also influence the market conditions and strategies because law affects markets and businesses immensely. For instance, the international bodies may decide to institute regulatory laws on Denmark and other international markets, which will affect the business activities in these nations (Fernando, 2011). The risk factors in the local market include social changes, low birth rates, government ban, political instability and loss of brand strength and trust. The risk factors in the international market include changes in social set-up, low birth rates, loss of brand strength and trust and government restrictions and political instability.

Financial Factors

Changes in economic or financial factors have the capabilities of affecting the business environment of the organization. For instance, low interest rates have the capabilities of spurning spending and lowering saving. Low interest rates enable customers to spend on various items including the Berliner Weisse beer. Increases in interest rates or high interest rates force people to save because of the introduced market volatility. As a result, people cut their spending leading to low sales for alcoholic products, such as the different brands of Berliner Weisse. Extreme changes in interest rates have the capabilities of affecting the market immensely (Saleem, 2010). They affect the ability of firms to import or exports, hence, affecting the abilities of the organization to engage in international business. The organization can avoid risks that arise from these factors by apply innovative techniques and approaches to its local and international business. For instance, the firm should have market analysis capabilities for analyzing different market situations. This means that the firm should know when to engage in imports and export because of changes in exchange rate. Additionally, the firm should have mitigation measures for instances when the interest rates fall or rise.

Innovation and Technology

There are various innovations and technological advances available to the organization. These include the use of computer systems and systems integrations approaches. Since the firm is involved in international businesses, it is essential to consider systems integrations to ensure the streamlining of its business activities (Saleem, 2010). In addition, online transfers of money and online platforms of communications have an immense capability of helping the organization particularly in passing information.

Social and Demographic

Cultural diversity arises because the firm has operations in different global locations. This cultural diversity can be used in value addition by the firm. For instance, different cultures have different entertainment practices and engagements. The Danish culture accepts foreign beer, which the entrance of the beer product in the Danish market. The firm can harness these approaches and use them to market the beer products. The employees at the firm require communication and interpersonal skills, in addition to process and operations, management skills. This will ensure that the firm has adequate capabilities for interacting with the people within its areas of operation (Saleem, 2010). The costs for acquiring these skills are immense at a personal level. However, the firm can use the services of firms that offer training in these skills in order to pay for the training collectively. This will help in reducing the cost of training.

Reference

Doole, I., & Lowe, R. (2008). International marketing strategy: Analysis, development and implementation. London: Cengage Learning.

Fernando, A. C. (2011). Business environment. New Delhi: Pearson.

Saleem, S. (2010). Business environment. New Delhi: Pearson.