Advise the Board of Directors on a marketing strategy to use when BV enters the market in country X.

Mark scheme

Marking points from the official mark scheme (May/June 2023). The mark or mark type is shown in brackets.

1. Knowledge can be awarded for knowledge of marketing strategy, including: The 4 Ps: product, price, place and promotion; Marketing objectives; Marketing resources; Market research
2. Knowledge can be awarded for any knowledge of strategies for international marketing: the implications for marketing of increased globalisation and economic collaboration; the importance of international marketing for a business; international markets – identification, selection and entry; whether a business in a given situation should develop an international market through pan-global marketing or maintain local differences; choosing a strategy, in a given situation, to develop a global market; the factors influencing the method of entry into international markets.
3. Data from Appendices 4 and 5, including: Brand awareness: lower in country X (5%) than US (60%); Target market: lower in country X (8%) than US, but Government policy may support future growth.; Core competencies: corporate identity – however not in country X, consistent quality (may support pan-global strategy), customer loyalty (but not in country X).; Scenario planning: driving forces support targeting of country X, critical uncertainties show need for promotion and may support a strategy to maintain local differences, plausible strategies.; Decision tree: pan-global = 0 EMV, local differences = -2.8m – pan global may have less risk based on EMV.
4. Allow relevant context from the timeline if used correctly.
5. Arguments may follow the plausible scenarios, or any valid strategy based on the context. BV has a successful marketing strategy in US with a consistent brand image that has worked. Using this established strategy would allow BV to use their knowledge of the market in US to enter country X's market and give them a basis for decision making that has been tried and tested. This may include: An objective of growth which has seen BV increase significantly in size from 2009 until 2022 with a current focus on franchise growth. By using the franchise model in country X, BV can capitalise on the owner's market knowledge and work within the known corporate culture and marketing strategy. Use research gained in the US market to forecast the behaviour of customers in country X. However, this market shows signs of divergence from the US market (brand awareness and target market size). Focussing on a pan-global marketing strategy has the better EMV and has a lower risk of initial capital ($2m compared with $4m), but a lower chance of success (50% compared to 60%). BV's current marketing mix has worked in US, which is a diverse market, so there may be good reason to think it will work in country X. BV's current marketing mix is the only tried and tested model for BV and therefore carries less risk.
6. If BV focuses on maintaining local differences this may allow the business to be more customer orientated in country X and develop a business model that is more likely to succeed. However, it may require significant changes to the marketing strategy. This may include: BV may need to focus on survival as an objective in the first few years of development of the country X market, instead of the growth it has aimed for in US. BV will need to research the market to be able to develop a marketing mix that still uses the core values of BV but is more suitable for country X, including a new product portfolio (to suit the country X palate), pricing strategy (depending on the income levels and PED of the target market) and a new distribution strategy, assuming the joint venture does not operate in country X. Maintaining local differences has a better chance of success (60% compared to 50%) but a lower EMV (-$2.8m), which suggests that BV may lose money as it establishes itself with a new marketing strategy. BV has maintained its brand identity in US (60% brand awareness with a strong growth in franchise purchases) and changing the strategy as it moves into country X may weaken the image in US and damage the basis of the business.
7. A judgement about a marketing strategy for BV to develop a global market.
8. Judgement may depend upon: market research findings, external influences in country X (PEST), internal and external influences on BV (SWOT), the reactions of potential competitors in country X, the extent of the differences needed to maintain local differences, the cost of promotion for BV in country X to increase brand awareness.
9. Weighing up of the relevant arguments for different international strategies.
10. The board of directors (and shareholders) level of risk that they would be willing to accept.