International Marketing Management

Figure 1: Gousto

Source: https://www.bbcgoodfood.com/article/gousto-recipe-box

Task 1: Diagnosis and Analysis of Challenges in Global Marketing Strategies

 1.1 Analysis of Brazil Market

Political Environment

In recent years, the political instability suffered a peak causing deep fluctuations in Brazil (Campos et al., 2020). There has been political instability in the nation with a record of corruption scandals and leadership changes. These factors can affect how is done the business in terms of the rules imposed in the process for doing business. But Brazil is a democracy and has a stable government structure to some extent, making it less unpredictable session, the government has made commendable efforts to improve the business climate, as suggested by reform directed at lifting bureaucratic red-tape and boosting ease of doing business (Sabatini and Wallace, 2023). Any company visiting Brazil needs to follow the politics and be ready for changing legal landscapes.

Economic Environment

Brazil is one of the biggest countries in South America by economy and one of the most promising emerging markets (Bretas, and Alon, 2020). It provides a large population of over 200 million people; therefore, a large market is available. It has evolved into an industrial nation which major fields include farming, mining, production and services. In recent years Brazil has not been through a rose garden as it struggled with recession and slow economic growth but there is light at the end of the tunnel. There is a slow but steady rise in consumption and there is also a growth in the middle-class population and this means such businesses as Gousto can benefit. Nonetheless, inflation rates and high interest for funds are some of the constraints and the general economic climate can be unpredictable.

Social Environment

The social life and culture of Brazil is vast and colourful and has special valued to family and relationship bondage. Food also occupies a very important place in the life of the Brazilian people, the country has a rich tradition of Brazilian cooking recipes, including regional versions. The competition that has been observed among the Brazilians has been due to the necessity of healthy food products and organic food products (Feil et al., 2020). There is also the factor of convenience in the preparation of meals because of the hectic schedules that are associated with urban life. The concept of pre-measured ingredients, simple recipes is also going in line with above mentioned trends that Gousto is following.

Technological Environment

The Internet and mobile connectivity have grown tremendously in the last few years in Brazil, thus the use of digital channels is relevant in reaching the target consumers. It is socially connected, and at the same time, possesses a high level of computer literacy since 73% of Malaysians are using social media networks, and e-commerce growth is constantly intensifying. Brazilians are technologically advanced and improvingly open to purchase products via Internet and using mobile applications (Leite et al., 2021). Thus, these trends pose a great potential for Gousto to capitalise on by making digital marketing the principle battleground and ensuring that the online ordering experience is faultless.

Environmental Risks

The legal framework governing the Brazil’s food industry is highly ambiguous with strict laws and regulations governing on food safety, packaging and labelling. These regulations should be followed to avert legal problems and also to achieve the quality of the products. People in the country are becoming conscious on issues of sustainability and this social factor makes Brazil a good location to launch the product. Local sourcing and the general use of sustainable packaging can be another selling point for Gousto (Cecchinato, 2021). But it has been revealed that sourcing of the ingredients and control of supply chains in a country with such labelled climates and belts of farming is not an easy thing. Two more aspects that must be taken into account in the long-term vision are environmental threats, including deforestation and climate change.

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1.2 Analysis of South Africa Market

Political Environment

Political system of this country can be described as steady and democratic, however there are great internal problems in South Africa (Horowitz, 2023). The country has been through dramatic changes politically since the early 1990s when apartheid was over, and it is a democracy with free and fair elections, but it still has problems like corruption and rivalry within political parties. The mentioned factors can influence business functioning since they can be changed by the government at any moment and may concern such regulatory frameworks as tender and others. However, the government is trying to enhance the business environment as the existing strategies in the policies that stimulate economic development and minimize bureaucracy demonstrate.

Economic Environment

It has one of the largest economies in Africa, which is ranked second, with a population of about 60 million people (Gu et al., 2021). The economy is however quite energetic embracing mining, manufacturing, services, and farming as the significant sectors. It holds so much for the South Africa but the country is faced with some of the economic challenges including unemployment, poverty, and one of the slowest Economic growth rate in the word. But there are markets in the increasing middle income consumer and daily spending on health and wellness. For Gousto, the economic environment can be beneficial as well as disadvantageous; therefore, certain aspects of economic environment such as consumer trends and economic indicators of the location can be very influential for a firm choosing to enter a particular market.

Social Environment

The people of South Africa have a colourful week and are multicultural with more than 11 officially recognized languages and ethnic groups (Alexander, 2019). It is possible to state that diet occupies an important place in South African communities and people are proud of their unique cultural and traditional dishes. The population is becoming more concerned about its health and the demand for handy options for meal preparation due to the modern hectic South African lifestyle is constantly rising (Tleane, 2020). Such trends of cooking are compatible with the Gousto’s model of offering portioned ingredients and simple recipes. Nevertheless, the acceptance and approval of the local markets are another factor that cannot be compared to the global ones. Subsequently, reaching out to the masses and creating understanding that relates best to the cultures of the target markets will be crucial to the general market acceptance and customer retention.

Technological Environment

South Africa’s Internet connectivity rate is rather high compared to the rest of African countries where the citizens actively use mobile connections and social networks (Stremlau, and Tsalapatanis, 2022). The country is witnessing an emergence of e-commerce and other digital payment platforms hence making it efficient to use digital form of channels. In that regard, Gousto can benefit from these innovations to concentrate on a strong web establishment and the application of digital marketing. However, issues like the adequacy of these internet connection in the rural areas and cybersecurity are some of the issues that need to be observed.

Environmental Risks

Due to cross-sectional nature of the food industry, there are numerous regulations that govern the safety foods, packaging, and labelling in South Africa and these could pose legal implications and compromise product quality if not met by Gousto. Environmental sustainability has also emerged as a critical consumption concern for consumers in South Africa due to the rising concerns of ecology (Shittu, 2020). The promises of sourcing and delivering local produce and packing food in sustainable materials are viable ways that Gousto has established as a competitive edge. However, it can be very difficult to source foods from the environment sustainably as well as to handle the supply chain challenges in a country with diverse climate and farming practices.

 

Figure 2: Pestle Analysis

Task 2: Global Marketing Planning Process

2.1 Planning Process for Brazil

Situation Analysis

A detailed SWOT analysis for entering into the Brazilian market as Gousto will help in the identification of the potential strengths, weaknesses, opportunities, and threats.

Strengths:

• Innovative Business Model: Gousto performs operations with convenient and healthy meal kits on a subscription basis with portions of weighed ingredients for their meals.
• Sustainability Focus: Production and sourcing of products locally, using fresh from the farm produce in line with the season also practices sustainable packaging will go down well with the green consumers (Michaliszyn-Gabryś et al., 2022).
• Technological Infrastructure: Flexible online presence and an application to manage the customer interaction are strong points.

Weaknesses:

• Brand Awareness: One of the major issues, especially to Gousto as a new entrant is that it has low brand awareness in Brazil thus making it hard for it penetrate into the market.
• Supply Chain Complexity: The enormous size of Brazil may pose some problem in guaranteeing standardization of food and ensuring this gets to consumers in time (Esteves, do Amaral Vendramini, and Accioly, 2021).
• Cultural Adaptation: The process of changing the recipes to suit the given regions is also very enlightening and consumes lots of time in research.

Opportunities:

• Growing Middle Class: New middle class in Brazil wants fast and quality meals for their families and themselves.
• Digital Market Growth: Internet and mobile usage present a favourable outlook to e-commerce and digital marketing initiatives (Mishra, 2020).
• Health Trends: The growth in health consciousness and preference for healthy and quality food makes the market for Gousto’s services ready.

Threats:

• Economic Volatility: The Brazilian economy may rise and decline which may lead to low purchase power among the consumers and business instability (Campelo Jr et al., 2020).
• Regulatory Environment: Understanding and obeying the laws and regulations concerning food safety and packaging and labelling of foods in Brazil could be challenging and expensive.
• Competition: Existence of other domestic and overseas firms in the meal kit and food delivery segment increases rivalry.

Strategy Development

Market Segmentation:

• Demographic Segmentation: The audience should be young professionals and families with working parents in the age group of 25- 45 years belonging to middle to high income bracket (Cooper, and Pugh, 2020).
• Psychographic Segmentation: Consumers who are particularly concerned with their well-being, as well as the benefits and easiness of the process of obtaining some food products and being environmentally friendly.
• Geographic Segmentation: Target initially the largest markets with high population and income per capita such as the large metropolitan areas (Moreno-Monroy et al., 2021).

Targeting:

• Primary Target: Urban young working people who are engaged in busy schedules hence they need meals that are easily accessible.
• Secondary Target: Working parents who want to serve healthy meals to their families but have little time to prepare these meals (Mahmood et al., 2021).

Positioning:

• Value Proposition: Gousto is a subscription-based meal kit company, which aims to make convenient, healthy and sustainable meals available to people (Nast, 2021). Gousto makes it easier for the consumers to cook tasty, healthy meals without having to spend their time planning.
• Brand Positioning: Gousto targets itself as a premium brand that is sustainable and offers the method to make right nutritional choices easily in today’s busy world.

2.2 Planning Process for South Africa

Situation Analysis

A comprehensive SWOT analysis for Gousto's potential entry into the South African market is essential to identify key factors influencing the business.

Strengths:

• Innovative Model: Gousto’s subscription sales model of the meal kits makes it easy and more importantly healthier for the consumer.
• Sustainability Focus: Policies such as the use of local produce and packing to become environmentally friendly (Lăzăroiu et al.,  2020).
• Technological Infrastructure: Flexible online system and intuitive mobile application enable smooth customer acquisition and management.

Weaknesses:

• Brand Awareness: Firstly, Gousto operating in the South African market is unknown and may take time to penetrate the market.
• Supply Chain Management: Maintaining consistent quality and delivery time may prove difficult due to the geographically dispersed locations of various regions in South Africa (Luke, and Heyns, 2020).
• Cultural Fit: Catering meals for local cuisines and palate necessarily implies change and modifications with the basic meal kits (Olive, and Worosz, 2024).

Opportunities:

• Growing Middle Class: A growing middle class with rising discretionary income is in search of globally-accepted, easy and lawful food solutions.
• Digital Market Expansion: The increasing use of the internet and mobile phone accessibility is well suited for the growth of e-commerce and marketing strategies (Murdiana and Hajaoui, 2020).
• Health Trends: A major factor to consider is the exposure to and demand for healthy foods and fatty meals which are offered by Gousto.

Threats:

• Economic Instability: Common issues such as unemployment and slow economic growth can affect the purchasing power of the consumers.
• Regulatory Environment: Food hygiene rules as well as packaging and labelling rules are complicated hence their proper observance (Gordon and Williams, 2020).
• Competition: That competition from local and international players in the meal kit and the food delivery industry steepens the competition.

Strategy Development

Market Segmentation:

• Demographic Segmentation: Focus on young professionals and families with working parent who are within the 25-45 years’ age group, middle to high income earners.
• Psychographic Segmentation: Target the health conscious population that is concerned with the kind of food they eat and the ease involved in accessing them together with including aspects of sustainability (Sánchez-Bravo, 2020).
• Geographic Segmentation: Begin in the big cities most populated and with the potential to buy products and services among the zone’s inhabitants.

Targeting:

• Primary Target: Working young people in the urban centres who have little time to cook because of their busy schedules (Amankwaa et al., 2020).
• Secondary Target: Businessmen and businesswomen, effective especially during the lunch time, families with working parents and busy lifestyles who want to eat healthy.

Positioning:

• Value Proposition: Gousto effectively combines convenience, health, and sustainability through its subscription service offering of meal kits.
• Brand Positioning: Gousto operates as a high-end, sustainable meal kit company that aims to make healthy nutrition convenient for its target audience of urban consumers.

Task 3: Application of Marketing Models and Concepts

3.1 RACE Model

The RACE model, developed by Smart Insights, provides a practical framework for managing and optimizing digital marketing activities through four key stages: Reach, Act, Convert, and Engage (Sestino et al., 2023).

 

Figure 3: RACE Model

Source: https://www.davechaffey.com/digital-marketing-glossary/race-marketing-planning-model/ 

Application

• Reach: This stage aims at creating visibility and encouraging consumers to visit Gousto’s website and/or the mobile application through other avenues like social media, search engines, display ads, amongst others (Glenister, 2021). In the case of Brazil and South Africa, Gousto can leverage the social networks with sponsored advertisements, SEO and PPC promotions to reach potential customers.
• Act: This stage is designed to prompt customer reaction and reactions in response to Gousto content. For instance, Gousto can provide user trials, recipes, and slices that enable it to engage users through recipes, among others. Measured from one’s awareness of Gousto to actively evaluating the company’s meal kits, that is the aim.
• Convert: This is the conversion stage where the overall objective is to convert interested prospects into actual customers. First time buyers can indeed be persuaded by optimised landing pages, seamless check out and a special incentive (Villanen, 2022). Other factors that directly increase the conversion rates are clear calls to action (CTAs) and retargeting campaigns.
• Engage: The emphasis here is on customers and specifically, the goal is to keep them as loyal as possible. Thus, in this case, the target company, Gousto, can create e-mail marketing, promotions, and individual offers for regular customers. The communication of feedback and support services can further enrich their experience with one’s products.

Advantages:

• Structured Approach: The RACE model offers an excellent guideline for developing digital marketing strategies and for implementing them in a structured manner (Chaffey, and Smith, 2022).
• Focus on Customer Lifecycle: It focus on interacting with the customer once they are aware of services up to the end point of when they decide to remain loyal to the service provider.
• Measurability: Every phase can be quantified and analysed with help of suited KPIs which means that informed decisions should be made (Gilsing et al., 2021).

Disadvantages:

• Resource Intensive: Success in the application of all the stages effectively as well as its management is not easy and requires effort and considerable experience and personnel (Blanchard, and Thacker, 2023).
• Potential Overlap: These activities may not always be clearly separable between the main scope and other tasks, which makes it difficult to establish clear distinctions between stages.
• Dynamic Adjustments: Some of the key challenges that can be traced are the fact that it demands constant monitoring and readjustments, more so where there is growing dynamism of market environment (Haarhaus, and Liening, 2020).

3.2 SOSTAC Model

The SOSTAC model, developed by PR Smith, is a strategic planning framework that encompasses Situation Analysis, Objectives, Strategy, Tactics, Action, and Control (Innanmaa, 2020).

Application

• Situation Analysis: Gousto starts off with the assessment of the external environment including the competitors, customers, and organization environment of Brazil and South Africa. This all-round meaning constitutes the groundwork that supports strategic choices and actions (Goldman and Kruger, 2021).
• Objectives: Gousto has clear and quantified goals that must be met, specific goals that can be achieved, goals that are relevant to the firm and goals that have a time limit. For instance, raising the brand recognition to 25% for the first year or getting 10 000 subscribers in six months.
• Strategy: This entails a general map of the strategies that will be utilized to attain the set goals. One possible strategy Gousto might want to employ in the future the focus on the digital marketing channels, collaboration with local producers, and the coverage of a company’s environmentally friendly policies (Sheth, and Parvatiyar,  2021).
• Tactics: Tangible tasks that need to be accomplished in order to execute the plan. It can include starting engaging social media campaigns, SEO, cooperation with influencers, and content marketing (Atherton, 2023). The execution of the formulated strategy is done through deploying of tactics.
• Action: The specific action plan of each member based on direction, task, and schedule. In the case of Gousto, there would be responsibility assignment within the different subgroups within the marketing aspect, the logistics of delivery, and the customer relations aspects of the company.
• Control: Measuring and assessing the level of achievement to goals set. At Gousto, KPIs are employed, and analytics tools applied in tracking progress and using them to implement changes where necessary (Reddy, 2024). Updating of the plan necessitate checking from time to time to ensure that the plan is on track or if it has undergone some changes.

Advantages:

• Comprehensive Framework: SOSTAC covers all aspects of planning, ensuring a thorough and balanced approach (Mary, 2023).
• Clarity and Focus: Clearly defined stages help in maintaining focus and coherence in strategic planning.
• Adaptability: The model is flexible and can be adapted to various business contexts and objectives.

Disadvantages:

• Complexity: The detailed planning process can be time-consuming and may require significant effort to implement effectively (King, 2020).
• Resource Demand: Comprehensive analysis and continuous control require substantial resources and expertise.
• Rigidity: Over-reliance on the model may lead to rigidity, potentially hindering responsiveness to market changes.

3.3 AIDA Model

Application

The AIDA model outlines the stages a consumer goes through in the purchasing process: Attention, Interest, Desire, and Action (Baber, 2022).

 

Figure 4: AIDA Model

Source: https://www.giraffesocialmedia.co.uk/aida-model-revisited-applying-attention-interest-desire-and-action-in-social-media-campaigns/

• Attention: By using marketing campaigns, selling proposition, appealing graphics, and entailing information, Gousto grabs the attention of the potential customers. Getting the attention of the audience may be through paid promotions on the social media platforms, getting influencer to endorse your products, and optimization of the web pages for search engines (Tuten, 2023).
• Interest: After making sure the audience is paying attention, Gousto must engage them by demonstrating the added value of its meal kits. Emotional appeal, customer references and engagements increase the customer’s involvement towards what Gousto has to offer.
• Desire: Gousto must then create desire by promoting what makes its products different from others in the market and how they will satisfy consumer needs and wants. Stressing on aspects such as convenience, health, and environmental impact, one can develop a very strong want for a Gousto’s meal kit.
• Action: The last step is call to action to get the consumers make some shift, for example buying the product. Prominent call to actions, temporary offers, and easy buying processes are other features that help in moving from consideration to purchase which can help in making the sale (Singh et al., 2020).

Advantages:

• Sequential Approach: The AIDA model provides a clear roadmap for guiding consumers through the purchasing journey, ensuring no stage is overlooked (Sundman, 2021).
• Customer-Centric: It focuses on understanding and meeting consumers' needs and motivations at each stage.
• Versatility: The model can be applied across various marketing channels and industries, making it widely applicable.

Disadvantages:

• Simplicity: The linear progression may oversimplify the complexities of consumer behaviour, which can be influenced by multiple factors.
• Limited Scope: AIDA primarily focuses on the pre-purchase stages and may not fully address post-purchase considerations such as customer satisfaction and loyalty (Gelhever, 2022).
• Inherent Assumptions: It assumes a rational decision-making process, which may not always align with real-world consumer behaviour.

3.4 Blue Ocean Strategy

Application

The Blue Ocean Strategy focuses on creating uncontested market space by identifying and capitalizing on untapped market opportunities (Hokianto, 2023).

• Value Innovation: Thus, the strategic profile of Gousto includes a proposition of a set of unique value propositions that can be offered to consumers in Brazil and South Africa. This could be achieved through the addition of new unique features; this can be things like special meal suggestions or special deals with local producers (Atsız, Cifci, and Rasoolimanesh, 2022).
• Market Segmentation: Gousto also determines certain segments in Brazil and South Africa that are least served by current meal kit services. Indeed, by increasing its focus on the details of the clients from these segments and adjusting the food delivery accordingly, Gousto can easily come up with a genuine blue ocean strategy of its own by identifying new, unexplored market niches.
• Value-Cost Trade-off: Cost leadership is another strategic priority at Gousto since the company aims to provide customers with higher value in a cheaper way (Moir, 2023). Perhaps, this may entail the rationalisation and efficiency of its supply chain through process re-engineering and application of scale economies to deliver quality meal kits at reasonable prices.

Advantages:

• Market Differentiation: Blue Ocean Strategy can thus help a business like Gousto reduce Cutter’s competition threat by coming up with a range of value propositions the client will appreciate (Carton, 2020).
• Reduced Competition: Since Gousto can achieve a unique position in the market, this will help avoid the competition and become a market leader in Brazil and South Africa.
• Enhanced Profitability: By using BOS approach, Gousto is able to expand in the unexplored market area and thus increase the number of customers as well as the profit margin.

Disadvantages:

• Risk of Imitation: It is also a possibility that due to the success of Blue Ocean Strategy other competitors will try to mimic Gousto’s value proposition leading to dissipation of the strategy in the longer term.
• Resource Intensive: Blue Ocean Strategy involves the commitment of a lot of resources in research and development as well as marketing which could be problematic to Gousto (Amjad, 2024).
• Market Uncertainty: Essentially, the pursuit of unspecified marketing prospects has inherent risks because it is based on the ability to foretell the consumer’s preferences or future market trends.

Task 4: Reflection and Recommendation

4.1 Reflection on Task 1 and Task 2

When reflecting on the outcomes of Task 1 and Task 2 including the analysis of the prospective obstacles and difficulties that Gousto may experience while launching and implementing global marketing strategies/methods and creating global marketing planning for each country, Brazil and South Africa, the following findings are marked.

First of all, there are the certain prospects and risks associated with the expansion of Gousto in both countries. The Brazilian market is vast and a relative untapped market with a growing base of middle class residents who are keen to incorporate easy and healthy meals into their diets (Lapedra, 2022). However, there are immense challenges that Gousto needs to face, namely on account of economic instability of the country, the issue of the regulatory framework and the highly diverse cultural situation in the country.

However, South Africa also has its own peculiarities, which can be viewed as opportunities or threats. Nevertheless, the South African state faces severe economic and political problems today, but it is a country with a multicultural population that is gradually developing a middle class (Mamogale, 2020). This trend of focusing on health and wellness is aligned well with Guosto’s proposition of providing meals to the homes. However, issues such as political instabilities, food hygiene regulations that are rigid, and the chain of supplying the raw components are some of the existing challenges for Gousto.

While building the marketing planning process for each country, the organization identified that Gousto requires adjusting its plans to the nationwide conditions. In the case of Brazil, the primary strategic developments would be the increased focus on digital marketing campaigns, partnerships with local supply chains, and adaptability in terms of recipes that would appeal to the consumers of the region (Pohlmann, 2020). However, what would be more relevant for South Africa is focus on the health and sustainability initiative, engaging customers through the digital media, and forming the right strategic partnership with the local delivery service providers.

Finally, the said expansion decision is based on a company’s evaluation of multiple factors concerning a specific country. Even though it is a bigger economy and may consequently generate more revenues, Brazil comes with linked risks inherent with its economic and political structure. Although South Africa is not as large as some of the other African countries, it has a more consistently positive outlook for business; the country has its own sets of problems though (Cilliers, 2021).

4.2 Recommendation

After comparing the situation in Brazil and South Africa, along with Gousto’s goals and strengths, selection of the most appropriate country to enter is South Africa. Although Gousto has a significantly greater market within Brazil, South Africa presents itself as a more stable nation with better business conditions in accordance with its target audience and objectives. Also, it is important to note that South Africa has a growing middle income and there is a raised awareness towards the health and wellbeing which is ideal for Gousto’s meal kit subscription service.

However, the most appropriate market entry strategy that can be chosen by Gousto as it extends its operations to South Africa is the direct investment strategy (Yeboua, 2021). This would include acquiring their own subsidiaries or operations within the country so that Gousto enjoys full ownership of the business and the ability to directly influence the public’s image of the brand. Direct investment proves as more accessible and elastic compared to the indirect one, as this approach allows Gousto to promptly respond to changes in the market and the consumers’ needs.

CONCLUSION

In conclusion, this report highlighted several areas to its client, Gousto, to inform its strategic decisions towards expanding into foreign markets, such as Brazil and South Africa. Both the countries await significant opportunities for the subscription service business of Gousto’s meal kits, however, South Africa is more favourable to do so because of its steady political environment, more suitable consumer preferences, and perfectly aligned with the goals and objective of Gousto. Customised marketing initiatives and Direct investment have been identified as potent for ushering Gousto into the South African market and prepares a foundation for future expansion. The decision illustrates Gousto’s focus on steady growth and development and establishes the firm as a strong contender in the global market. 

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