1. 1
Programme: MSc International Marketing
Module Title: International Marketing Management
International marketing plan:
ASDA's entry into Pakistan
Word count:2511 words
(excludingtitle page,contentspage,references,
diagramsof models, andbibliography)
2. 2
Content Page
Introduction (4)
Analysis of target country (4)
Market entry approaches (5)
Joint venture (6)
Mergers (6)
Acquisition (6)
Pros and cons (6)
Market entry mode for Pakistan (6)
Segmentation, targeting and positioning (7)
Segmentation (8)
Target market --- The urban population (8)
Positioning (9)
Marketing mix 7p’s (10)
Product (10)
Price (10)
Promotion (11)
4. 4
Introduction:
Asda is the UK’s second largest supermarket. It was founded in 1949 under the name of
Associated Dairies and Farm Group but shortened this to Asda in 1965. It is a retailer focused
on selling food, clothing, electronics, toys, home furnishings and general merchandise In
1999 Asda became a subsidiary of Walmart, the largest supermarket chain in the world.
(Businesscasestudies.co.uk, 2014). Its success as a leading retailer is dependent on its trained
and engaged colleagues providing excellent customer service (Ukessays.co.uk, 2014).
The expansion of new business in new market various methods have been used to determine
favoured for development using product/market matrices. If considering a new market, the
firm can follow market development and diversification strategies involving related or
unrelated diversification (Johnson and Scholes, 2002). This marketing plan particulars the
planned strategy for launching ASDA in Pakistan.
Analysis of target country:
Pakistan culture and environment gives supermarkets a unique identification, Pakistan has 6th
largest population in the world more than 190 million estimated in 2014. Pakistan is an
agricultural based economy with 5.0% GDP. The Gross Domestic Product (GDP) in Pakistan
expanded 5 % in 2014 from the previous year. Pakistan is one of the poorest and least
developed countries in Asia (Tradingeconomics.com, 2014). Religions that exist in Pakistan
are Muslim (97%), Hindu (1.5%), Christian (1%) and several other minorities. National
language of Pakistan is Urdu and official language is English (Encyclopedia.com, 2014).
Age structure:
51.386% Male, 48.614% Female
0-14 years: 33.3% (male 33,595,949/female 31,797,766)
15-24 years: 21.5% (male 21,803,617/female 20,463,184)
25-54 years: 35.7% (male 36,390,119/female 33,632,395)
55-64 years: 5.1% (male 5,008,681/female 5,041,434)
65 years and over: 4.3% (male 3,951,190/female 4,490,045) (2014 EST.)
(Indexmundi.com, 2014)
5. 5
The advent of supermarkets/malls has, during the last five years, decisively influenced
consumers’ behaviour, creating a new community of enthusiastic shoppers drawn from the
upper and middle classes. It says there has been a massive growth of 130 per cent in private
consumption in the last five years (2007-12), even though the GDP growth rate during this
period was sluggish. The retail and wholesale sector has been growing at 5.3 per cent in real
terms for the past five years (InpaperMagazine, 2013).
Basic unit of currency is Rupee which divides into 100 paisa. In Pakistan different
hypermarket and super stores are running all over cities including national and multination
for example locally based stores are CSD and utility hyper stores while Makro and Metro
cash and Carry are multinational based companies. Neighbourhood stores in Pakistan are
accounted for 95% of retail business and have estimated annual turnover of $3 billion.
Market entry approaches:
The possible market entry approaches for Asda in Pakistan can be joint venture, Merger, and
acquisition.
6. 6
Joint Ventures:
A joint venture is a legal partnership between two or more companies. It can be for strategic
purposes or as a way of servicing a large project that requires capabilities beyond the scope of
each individual company.
Mergers:
Mergers happen when two companies agree to legally combine into one company, melding
their management. This can take the form of an amalgamation in which a new company is
created, or it can be an absorption in which one of the companies survives.
Acquisition:
An acquisition involves one company buying a controlling interest in the stock of another
company and managing both companies under one management team, which might consist of
a mix of managers from both companies or only the managers from the surviving company.
Pros and Cons:
Joint ventures can suffer from problems involving allocation of effort, authority and profits.
When these problems are contained, a joint venture operates smoothly, combining the
specialties of all companies involved toward a mutually beneficial goal.
Mergers often require downsizing of one or both companies, but the theory behind mergers is
that the best parts of each company survive. A major problem arises in combining the two
business cultures, and many mergers don't achieve optimal performance for this reason.
Acquisition is one of the most time-efficient growth strategies. An acquisition will quickly
build market presence for your company, increasing market share while reducing the
competition’s stronghold.
Market entry mode for Pakistan:
Retailing in Pakistan recorded strong current value growth in 2013 due to improvements in
the economy. An acquisition strategy would be appropriate to enter in Pakistan market.
Retailing increased as many new companies, both small and large, entered the industry with
strong online and offline marketing and promotional campaigns. “Acquisition is necessary
mature, concentrated markets where operation of a certain size is required to be competitive
e.g. takeover of Asda in UK in 1991” (Varley and Rafiq, 2004). The target company is Metro
7. 7
and to buy Metro's ownership stakes in order to assume control of this firm. METRO Cash &
Carry is different from B2C retail chains (such as Walmart, Carrefour or Tesco) in that its
business concept is targeted towards professional customers rather than end consumers. Asda
can meet to their objectives like low ‘price product’ with this acquisition because METRO
already has its value and knows customer behaviour very well. The growth of a business
through acquisition is a faster, less expensive, and a much less risky proposition than the
traditional methods of growth realized through expanded marketing and sales efforts.
Unlike growth through increased market share and sales, acquisition offers a host of other
advantages, including easier financing for future undertakings and immediate savings due to
economies of scale. Most businesses growing through acquisition will find a number of other
competitive advantages as well, ranging from catching the competition off guard to instant
market penetration. In some cases, competitors can be eliminated entirely via acquisition.
Pakistan has a high per-capita income which they are able to afford products from Asda, and
so it assists to rise in the employment rate. Meanwhile, the national GDP rate is 5.8%.
Segmentation, targeting and positioning:
(Smart Insights, 2011)
STP focuses on commercial effectiveness, selecting the most valuable segments for a
business and then developing a marketing mix and product positioning strategy for each
segment.
8. 8
Segmentation:
The market of Pakistan has been segmented into two separate segments, using a combination
of demographic and geographic factors to classify distinct groups of consumers. These
segments are based on ‘online shopper’, young professionals, female (age 25-40), and urban
population. The target segmentation would be Density (urban) of the population because it
has more possibility to get success in Pakistan.
Online shopper:
People who are educated in Pakistan have adopted the new system of online shopping for
them. They are already aware of using the computers and most of these people have internet
access at homes and work places so it will be a great convenient for these people to shop
online. But all the people do not have internet access so that’s why this approach didn’t
choose for Pakistan.
Young Professional:
In Pakistan, the percentage of 25-54 years old population is 35.7% that include male
36,390,119 and female 33,632,395. The literacy rate of Pakistan is quite low and one more
thing is the ratio of women is less than men in education. So, target segment of young
professional is good but not more profitable.
Female (25-40):
There is a trend in Pakistan that women go out for shopping more than men. Women have the
responsibilities to run the house by getting money from their husbands. They bring all
household things like food, clothes, and grocery things etc. The women have the great impact
to build economy in retail sectors because superstores in big cities of Pakistan always full of
women age (25-40)
Target market --- The urban population:
Asda will be targeting the urban population segment to market because the location of the
Asda stores, we can see all its stores located in urban and sub urban area in UK, so we
9. 9
believe that Asda serve its customer based on density of population. The people of Pakistan
living in urban areas have awareness of shopping, online shopping, men, children, women
and old person. The families living in rural areas are not so much rich and fashionable and do
not go out to the superstar because the women living in villages do not have a liberal mind
and they are restricted not to go out without the permission of their husband or father if they
are single.
Mostly rich people from rural areas go to the big cities and visit superstores and shopping
mall for shopping. So every big city has many villages around itself. So the idea of
segmenting urban population will be a big success because already the rest of other big
superstores are existing in the big cities even not in small cities like Gujrat, Wazirabad, and
Gujranwala etc.
Positioning:
Asda promise of "everyday low prices" was helping it win over hard up customers in all over
the UK because it got good position in the mind of the people with this promise. The update
came as the UK's second largest supermarket reported slowing quarterly sales but said profit
margins had improved. The same position will apply to Pakistan because its population is not
to rich so Asda stores will remain of its promise of low prices and good quality and get the
population towards it. It would be a great success for Asda because the other competitors are
already expensive so Asda meets to requirement of every person living in Pakistan.
High Price
Low Quality High Quality
Low Price
10. 10
Marketing mix 7p’s:
In marketing, marketing mix has the core value, marketing mix initialled as the 4p’s but later
on extended by including people, physical evidence and process. There are assured origins
that may need to be adapt to specific market requirement, while other elements may be
standardised and left unchanged across different markets (Kotabe and Helsen, 2010).
Product:
Product means totality of ‘goods and services’ that company offers the target market (Kotler,
2005). Asda sell variety of products and services that make them unique, definitely they sell
most things from average groceries to clothing, mortgage and insurance. Asda use their
product range to create a strong experience by ensuring customers can do a one stop shop,
instead of having to go numerous supermarkets and this appropriate store can fill the gap of
Pakistani customers because they struggle a lot in shopping by going one place to another
place. According to the demand of the Pakistani customers, they want quality and low price
and Asda can fulfil their requirement by giving those good products and services in various
sectors. Their products can also be purchased online for home delivery. Online shopping
trend can be created by Asda because most of the people in Pakistan are not aware of this
service but few people are using this service.
Price:
As competition enters the market, the price level would be adjusted as necessary (Westwood,
2011).The demand of the most of the customer in Pakistan is to get things in low price
because Pakistan is not a rich country. Asda can sell their products according to the market
demand as low as possible because Asda is the trend setter in the market. Another feature that
Asda have based on pricing, customer is being able to go on their website, enter the receipt
number after shopping and can compare what price you have paid at other superstores. So it’s
a great benefit for the Pakistani customer that they can compare the quality and price with
other superstores and can make their decisions. Definitely, as the consumer behaviour of
Pakistani customers to retail sector is they always want low price and good quality. Because
of the large variety of the products that they sell Asda promise to be 10% cheaper than their
rivals while in Pakistan Asda can go for 15% cheaper because of poor population.
11. 11
Promotion:
Pakistan is an Islamic country and their events and cultures are different from other countries
e.g. European countries. “The promotion mix is the direct way in which an organisation
attempts to communicate with various target audience” (Brassington and Pettitt, 2006).The
promotion would be in according to the values of Pakistani people like Asda can provide
major deals in the month of Ramzan. Special offers on Eid-Ul Fitr and Eid-Ul-Azha as well
as at the time of Christmas and Eastern as because there 1% population of Christians. Asda
can promote its brand by advertising on TV because in Pakistan every house got a TV and
people like to watch TV. Asda provide vouchers after you shop if you have spent over a
certain amount of money, this gives customer more of a reason to shop here again and this
approach does not exist in Pakistan before. They have all kinds of offers, the most popular
one is buy one get one free.
Place:
Asda has over 200 stores in the UK alone so in Pakistan the location of the stores would be in
the main cities because people living in main cities use to go to shopping on daily and weekly
bases. Customers of Pakistan have done a great role to increase the economy in the retail
sector. Asda need to open at least one store in each of the main city of Pakistan. The customer
living all those cities can get easy access to the store in their city. Location of an extended
business depends upon the nature of the product, it set up interaction between the customer
and the supplier (McDonald, Payne and McDonald, 2006).
People:
The most important part of any business is their people (staff). Asda employees are the ones
who think of that great idea, deliver that great customer service and represent its brand.
Pakistan is a big country it include various kind of people, and every person different
behaviour and way of talking to others. So, the staff should be well-trained according to
values and expectations of the Pakistan which are well mannered, knows different languages,
and give good customers services.
Process:
Asda process starts from the distribution of the jobs and manage the selected candidates. To
check how convenient and well-disciplined is this staff and customer are satisfied with their
12. 12
performances. The process is based of strategies flexibility of response in strategies that
enables it and come up with realistic responses to changing situation (Cannon, 1998). In
Pakistan, most of the people self-service is not common so all customer use to get help of the
staff so it all based on the staff to help the customer so that they may visit again and again.
Physical evidence:
Asda is a large brand and have great worth in UK and its physical evidence would be its logo,
name, staff performance, store themselves and customer attractiveness towards Asda stores.
“The store arena offers the opportunity as a stage of delivering an excellent standard of
customer services” (Varley, 2006). Pakistan is that kind of country where people unwillingly
use to do person to person marketing for example if someone go Asda and he/she got good
service, good quality product, and got satisfaction, the other will also go there and have some
shopping. So, good image of the brand and customer confidence is the physical evidence.
13. 13
Bibliography
Businesscasestudies.co.uk, (2014). Introduction - Effective recruitment and selection - Asda |
Asda case studies, videos, social media and information | Business Case Studies. [online]
Available at: http://businesscasestudies.co.uk/asda/effective-recruitment-and-
selection/introduction.html#axzz3MLl5cGcu [Accessed 19 Dec. 2014].
Ukessays.co.uk, (2014). The ASDA case. [online] Available at:
http://www.ukessays.co.uk/essays/business-theory/the-asda-case.php [Accessed 12 Dec.
2014].
Johnson, G. and Scholes, K. (2002). Exploring corporate strategy. Harlow, England:
Financial Times Prentice Hall.
Tradingeconomics.com, (2014). Pakistan GDP Growth Rate | 1952-2014 | Data | Chart |
Calendar | Forecast. [online] Available at: http://www.tradingeconomics.com/pakistan/gdp-
growth [Accessed 12 Dec. 2014].
Indexmundi.com, (2014). Pakistan Age structure - Demographics. [online] Available at:
http://www.indexmundi.com/pakistan/age_structure.html [Accessed 17 Dec. 2014].
InpaperMagazine, F. (2013). Boom in the retail market. [online] Dawn.com. Available at:
http://www.dawn.com/news/1035249 [Accessed 17 Dec. 2014].
Kotabe, M. and Helsen, K. (2010). Global marketing management. Hoboken, NJ: Wiley.
Kotler, P. (2005). Principles of marketing. Harlow, England: Prentice Hall/FinancialTimes.
encyclopedia.com, (2014). South Africa Facts, information, pictures | Encyclopedia.com
articles about South Africa. [online] Available at:
http://www.encyclopedia.com/topic/South_Africa.aspx [Accessed 19 Dec. 2014].
Westwood, J. (2011). Marketing your business. London: Kogan Page.
McDonald, M., Payne, A. and McDonald, M. (2006). Marketing plans for service businesses.
Oxford: Butterworth-Heinemann.
Brassington, F. and Pettitt, S. (2006). Principles of marketing. Harlow: Financial Times
Prentice Hall.
14. 14
Varley, R. and Rafiq, M. (2004). Principles of retail management. Basingstoke: Palgrave.
Varley, R. (2006). Retail product management. London: Routledge.
Cannon, T. (1998). Principles and practice. [Place of publication not identified]: Cassell.
Smart Insights, (2011). Digital marketing strategy. [online] Available at:
http://www.smartinsights.com/digital-marketing-strategy/ [Accessed 19 Dec. 2014].
