Market Across Culture - Dissertation Example

 Market across Culture Introduction The study is focused on analysing the cross-cultural differences in terms of the food market of Mexico. It is based on analysing and designing feasible market expansion and marketing strategies of a UK based fast food and confectionary manufacturing and marketing organisation for the food market of Mexico. The market of Mexico is growing rapidly with the increase in the multi-cultural population. The country has secured the position of third best emerging market across the world. Mexico is quite huge in size, and is the 14th most populated country in the world. The population of Mexico displays a combination of multiple cultures that impact the food habits and lifestyle of the population (Levkoe, 2014). The further discussion will evaluate ethical issues in the Mexican market. Hence, it will suggest recommendations regarding handling the ethical issues. Finally, it will also offer cross-cultural recommendations for the business expansion in the Mexican market. Market Expansion Strategies The new market expansion plan for the Mexico market needs to give equal importance to the market entry and market growth strategies (Gollnhofer and Turkina, 2015). Market Entry Strategy Direct exporting can be considered as the most favourable market entry strategy for the organisation to expand their business activity within Mexico. This market entry strategy involves direct sales and marketing of products to different foreign markets without any domestic export intermediaries (Piercy, 2014). The major reasons for choosing the direct exporting strategy include: The minimised trade barriers and free trade agreements between the European Union and Mexico can be considered as one of the major reasons for selecting this market entry mode. By the end of 2000, the EU and Mexico had initiated a free trade agreement known as ‘Global Agreement’. Direct exporting is one of the well-established market entry processes within the UK and Mexico. After 2000, the procedure of goods export from the UK to Mexico has witnessed a significant hike. During 2009, over 66%, i.e. almost 753 million pounds of the export from the UK to Mexico were goods (Appendix 2). From 2011 to 2012, export of the UK products in the Mexican market increased by 12.5% i.e. 1.13 billion pounds (Department of Business Innovation and Skills, 2012). Advantages and Disadvantages of Direct Exporting Advantages Disadvantages This strategy will enable the marketers to properly select foreign representative companies as per the market and product specification. This entry strategy causes minimum risk in terms of market entry and expansion. It also requires minimum investment. This process will provide limited access to the local information of the foreign market. Thus, the organisation needs to consider initial investment to gather information of the Mexican market. Most of the time the exporting company has been viewed as an outsider to a foreign country. Hence, building up a relationship with the local community can be considered as an issue for the organisation. (Source: Karajz and Gubik, 2014) Market Growth Strategy After the market entry strategy, the organisation needs to properly decide upon the market growth strategy. The analysis of Ansoff’s growth strategies will assist the organisation to properly evaluate the growth opportunities within the Mexican market (Appendix 3). 48% of the population of Mexico originates from the Mexican-American cultural background, while almost 25% of them are from Spanish cultural background. As a result, the organisation needs to select different market expansion strategy as per the differences in the culture. The food consumption pattern of Mexican-American population is highly influenced by the US and UK culture (Perales, et al., 2005). Therefore, the organisation needs to utilize the market development strategy that will influence the management to introduce existing product for the new market. The food preferences of Hispanic population are different from the UK food consumption pattern. They highly prefer corns, pepper and beans in their food items. Hence, the marketers need to adopt diversification strategy to expand their business in the new market (Appendix 3). Advantages and Disadvantages of Growth Strategy Advantages Disadvantages The market development strategy will allow the organisation to utilize its core competencies to expand their business in the new market. Thus, it ensures success while minimizing risks. The diversification of product will enable the marketers to properly attract the different segment of market. The highly diversified market may demonstrate negative interest in terms of the UK specific food items due to the less use of pepper. Diversification strategy causes high risk for organisation. The failure in diversify can cost a huge amount to the organisation. (Source: Proctor, 2014) Recommended Marketing Strategy The marketing strategy for expanding the business within the Mexican market will mainly concentrate on the product, promotional and distribution strategy (Doole and Lowe, 2012). Product Strategy The product strategy of the organisation during its expansion on the Mexican market needs to focus on the food preferences and culture of the population. Chocolate and sugar confectionaries have been considered as one of the major gift items in the Mexico. Therefore, the marketing strategy of the organisation needs to focus on developing different sugar and chocolate related confectioneries for the population of the Mexican market. Dishes of corn, beans and hot pepper are the most famous and well-received food items across the country. Consequently, the marketing strategy of the organisation must concentrate on introducing new corn related products such as tortillas and tacos. The product marketing strategy also needs to avoid GMO corns and alcoholic products due to the governmental as well as cultural restrictions (Cabada and Calvillo, 2014). Promotional Strategy The Mexican population prefers in-person discussion than the impersonal digital promotional procedure. As a result, face-to-face product promotion needs to be selected for the promotional strategy of the organisation. The organisation needs to consider promoting their product through events and contests that will ensure face-to-face discussion of marketing agents with the potential consumers. Direct marketing strategy is another promotional method that will allow the organisation to build up relation with the customers within the potential market through direct communication, flyers etc (Castro, 2014). Distribution Strategy The distribution strategy assists organisation to provide products in certain places that are easily accessible to the consumers. The organisation needs to distribute its products through local retailers of Mexico. They also need to ensure that all the products display Spanish labelling. They need to strictly avoid online marketing to distribute and sell their products to consumers (Doole and Lowe, 2012). Advantages of Marketing Strategies The product marketing strategy will allow the organisation to properly analyze the food preferences of the population of Mexico. Therefore, it will enable the markets to properly offer the customer centric products. This strategy will also assist the marketers to avoid the food ingredients which are restricted within the society (Castro, 2014). The face-to-face promotional strategy will enable the marketers to properly evaluate the different market segment of Mexico while following the cultural norms of the country. This process will enable the marketers to influence and improve relationship with potential consumer within the Mexican market (Doole and Lowe, 2012). The product distribution through local retail marketing will enhance the visibility of their products. Thus, it will improve the product purchasing probabilities. The avoidance of online selling procedure will assist the organisation to eliminate the impersonal way of selling (Castro, 2014). Ethical Issues Corruption, bribery and tipping are the most common ethical issues that the organisation can encounter during its business expansion in Mexico. Various international organisations that are operating in the country face significant corruption risks. Demands of extortion payment and gifts are the common practices within Mexico which influence organisations to pay a certain amount to the police or public service agents in terms of accessing police patrolling or protection of property from the local criminals. Payment of this kind of money can cause ethical issue for the organisation as these practices are prohibited as per the government regulations (IFLR, 2012). The practice of receiving or giving bribes can be considered as another major ethical issue within the business environment of Mexico. Bribery and tipping can be seen in all levels of the Mexican society. Within the last ten years, the US government has enforced regulatory action against almost eight organisations for bribery practices in Mexico. Avon Products and Walmart are the major examples which have faced ethical issues in their business expansion program due to illegitimate practices of bribery. The food product exporting organisation possess high chances for facing various ethical issues, such as corruption, bribery and tipping, in terms of business development and relationship building within the Mexican market (Peppas, et al., 2014). Recommendation to Overcome the Ethical Issues The organisation needs to strongly structure their ethical codes of conduct in terms of neutralizing the chances of these unethical practices within the workforce. The ethical codes of conduct must include all the essential guidelines and regulations of the United States Foreign Corrupt Practices Act (FCPA), UK’s Bribery Act and anti-corruption regulations of Mexican Laws (Peppas, et al., 2014). Employees as well as intermediaries of the organisation also need to be properly trained and updated regarding the regulations and practices of FCPA, general business ethics and Mexican anti-corruption status. All the workers of the organisation must receive written documents regarding the ethical guidelines of the organisation and their consequences (Peppas, et al., 2014). Frequent auditing and controlling of finances is also essential to eliminate the hidden unethical practices within the organisation. Finally, the management needs to take strict disciplinary actions against any unethical practices within the organisation. The prompt actions to resolve unethical issues will enable the workforce to understand the importance of ethical practices (Ferrell and Fraedrich, 2014). Cross-Cultural Marketing Recommendation for the Mexican Market The business expansion within the Mexican market needs to consider the Mexican food habits and culture. A huge part of the population in Mexico belongs from Spanish colonial domination. Therefore, the food habit and culture of the country is highly influenced by the Spanish cultural guidelines (Kittler, et al., 2011). Language is one of the main factors that the marketers need to consider before expanding their business in the Mexican market. A large portion of the population speaks Spanish (Lizarraga, et al., 2015). As a result, the marketing management needs to consider the differences in the language and its meanings while communicating with the potential customers. The management should design the levels of the products by highlighting the name with the Spanish language. The product names need to be evaluated as per their meanings in Spanish. A number of words bear entirely different meaning when they are expressed in Spanish. As per instance, the market entry of ‘Fresca’ soft drinks in Mexico had caused embarrassment for the marketers as the word stands as lesbian, which is considered as a slang in Spanish (Ramirez, et al., 2014). Therefore, the brand names used in the UK market needs to be re-evaluated as per their acceptability in the Mexican market. The culture of the Mexican population is highly influenced by large and close knit family values. Most of its population belongs from large family background (Ramirez, et al., 2014). The product offered in the Mexican market need to consider the family size. The food products need to be offered in small, medium and large family packs. The advertisement and promotional procedure also need to focus on the language, cultural and family size differences (Hunter, 2014). The promotional process should focus on building interpersonal relationship with the customers. Therefore, they need to allocate direct selling and personal selling executives who can communicate with consumers directly to gather their trust for the brand. The advertisement processes should highlight the benefit of the food items in terms of elevating family wide good times. The advertisement of the products needs to be designed from the perspective of family values and the Mexican culture. Chocolate food products and chocolate confectionaries are treated as the item to greet hosts as well as guests in the Mexican society. Bringing chocolate during festive seasons has been considered as a good gesture within the culture of Mexico. As a consequence, the marketing executives should focus on manufacturing, selling and promoting different chocolate confectionaries during the festive seasons of Mexico such as Lent and Easter, Dia de la Raza etc (Hunter, 2014). The food culture of Mexico influences the population to consume corns in all possible forms (Hunter, 2014). As a consequence, the management of the organisation needs to focus on promoting a large number of different varieties of packaged corn recipes for the Mexicans. They also need to consider a high volume of hot peppers and beans in their food items as per the preferences of the Mexican people. Conclusion The overall discussion of this study has evaluated the cultural specification of the Mexican market in terms of their food habits. The discussion has recommended direct exporting for the market entry strategy of the food manufacturing and marketing organisation based in the UK. The analysis of the cultural differences in the population of Mexico has suggested the organisation to utilize the market development and product diversification strategies. The recommended marketing strategies of the organisation in terms of their market expansion in Mexico have recommended the elimination of the use of GMO corns as per government regulations. The marketing strategy has also influenced the organisation to utilize face-to-face promotional and marketing procedure. The further study has evaluated corruption, bribery and tipping as the major ethical issues of the Mexican market. Hence, it has detailed valuable suggestions to prohibit these practices from the organisation. Finally, the study has also elaborated culture and food habits of the Mexican market. 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