Students: Uriel Aguilar Verduzco, Laura Aldana López, Ana

Castillo Ballesteros, Mariana Soto Sánchez y Sebastián Ibarra

Cadena

Degree: Marketing

Subject: International marketing

Professor: Fernando Mujica

Activity: Evidence 1

Upload date: 15/september/2023

Organize your work in teams according to your teacher's instructions.

Select a Mexican company that does not currently export and that
hypothetically wishes to enter a German international market. Now imagine
that it hires you because it does not know how to do that, so you need to
perform the following tasks:

1. First, briefly mention the company's line of business (what does it sell?).

Tres Islas is an artisanal brewery from Mazatlán, Sinaloa operating since 2015 which
offers different types of beer such as: Scottish, IPA, Porter, Blonde, Oktoberfest,
Plumería, Hazy IPA and Vienna in cups of 5, 12 and 15 oz

This brewery was awarded in 2016 with the second place in the Copa Cerveza MX
in the Porter beer category. Edvin Jonsson Henderson, founder of Tres Islas,
explains that the process to obtain the beer is achieved by grinding six different types
of malt to then ferment for 14 days and have that characteristic flavor and nuances
contained in a beer.
2. Next, select a product or service of the company to enter an international
market. Describe 4 of the characteristics or attributes of the product or service
which will have to be adapted (brand, presentations, uses, benefits,
packaging, labeling, among others.), design the product with these
modifications and include the images.

Pilsner or Oktoberfest beer

Made with German malt, hops and yeast. A pale

yellow, bright, light-bodied blonde beer. Very
refreshing with a firm tone and a medium dry
finish. It has light grainy malt flavors with some
spicy and herbaceous hop notes.

We chose this product because it has a German

ingredient but at the same time combines flavors
that are related to what the brand sells. We
consider that they are new flavors and that they could undoubtedly make a set to
give a delicious drink.

Adaptation characteristics:

1. Product Quality: Germany is known for its high quality in beer production. To be
successful, a beer must meet German quality standards and offer a product that
is competitive in terms of taste and purity.

2. Compliance with the Purity Law: Germany has the Beer Purity Law
(Reinheitsgebot), which sets specific standards on the ingredients allowed in
beer. Make sure you comply with this law if you plan to market your beer in
Germany.

3. Participation in Local Events: Participating in beer festivals and local events is an

effective way to publicize your product and connect with German consumers.
4. Efficient Distribution: Make sure you have a solid and efficient distribution
network throughout the country. Germany is a large and diverse market, so
reaching a wide audience is essential. Competition in the German beer market
is fierce due to the strong presence of traditional local breweries.

We seek to show something different in the product, from the packaging to the
presentation. We will adapt the packaging to a special glass by adapting a small
shape of a Mikono glass with a mouthpiece of a traditional glass beer, the name of
our product would remain as: "Three Pilsner Islands", we would maintain the style of
the beer on the labeling, also the alcohol content, the milliliters it has, country of
origin (it would help us in positioning), ingredients, flavor description, expiration date,
nutritional information and any seal that considers a greater positioning in the
market, for example. example: a competition

Example:

https://www.canva.com/design/DAFug16MMso/lnMDNkDtEpxGedltomtpuw/edit?ut
m_content=DAFug16MMso&utm_campaign=designshare&utm_medium=link2&ut
m_source=sharebutton

3. Then, determine and justify the recommended mode of entry.

The most feasible way to entry in a new market under the concepts of testing the
market, having a polycentric perspective and setting the “orientation of the company
and international vocation” as main strategy to penetrate the market, is through a
commercial agent. When a company wants to internationalize a product to a new
country, one of the most common reasons of why a company would enter into the
process is because they have obtained a favorable response from consumers about
their products in a specific market and the company is willing to test a similar or
segmented market in a different country taking in consideration a market analysis by
defining the problem and setting the objectives in order to determine whether to
adapt (multidomestic marketing) or to do the same in the exterior as done in the
country of origin (domestic marketing expansion). Once the decision has been taken,
the first stage in the internationalization process is the passive export in which, the
company, will only fulfill the orders requested from Germany, thus, there is no
business generation or growth strategy because Tres Islas will only fulfill the
requested demand in local festivals like the Oktoberfest, local bars or specialized
beer stores and this is where the commercial agent enters in action.

Hiring a commercial agent instead of setting up an import company has its own
advantages when internationalizing a product. Here are 3 advantages of hiring a
commercial agent:

Local knowledge: sales agents generally have in-depth knowledge of the local
market in the foreign country. In particular, they are familiar with business culture,
trade regulations, market trends and consumer preferences. Their local experience
can be invaluable in effectively adapting your product and marketing strategy.

Less initial investment: When you work with a sales agent, you don't have to set up
a local company or absorb the costs associated with importing, such as investing in
inventory and logistics. This reduces the initial investment and financial risk.

Established network of contacts and commercial relationships: Agents usually have

an established network of contacts and relationships in foreign markets. This speeds
up market entry and makes it easier to find business partners, distributors, and
potential clients.

4. Moreover, mention at least four obstacles or possible risks that the

company could face during the internationalization process.

1. Exterior factors risks

In the process of internationalization one of the main risks that we can find are the
external factors to the company depending on the destination country, such as the
economic, legal, political and technological situation because much of the success
of the product and the company will depend on external factors and the strengths,
threats, weaknesses or opportunities that will bring to the product and its
commercialization. Properly evaluating these factors will allow Tres Islas to balance
its SWOT to penetrate the market and its segment.

2. Tax rates

Not knowing the processes of taxes and tariffs applied on the exported product can
lead the internationalization processes to failure because if you do not have the
appropriate requirements to export and market the product to the destination country
you can lose thousands and thousands of dollars in losses due to poor administration
and management of foreign trade processes. That is why, knowing about the code
system and the tax authorities that regulate the country ensures a successful export.

3. Socio-cultural environment

The socio-cultural environment plays an important role in achieving success in

foreign trade because you may already control the two points mentioned above but
if you do not know your market or segment and their behaviors, preferences, culture
and social structure you will be doing in vain everything involved in the process
because the main objective of internationalizing a brand or product is to generate
demand and satisfy it through marketing efforts and if you do not know who you are
going to address or what is the situation in which your consumers are surrounded
you will fail to position your product and much less you will be able to create loyalty.

4. Reinheitsgebot (Purity law)

In Germany, the purity law determines and regulates the ingredients that beer must
contain in order to be considered beer. The ingredients that beer must contain are:
water, yeast, barley malt and hops. This law is applied to all breweries in order to
prevent the addition of impurities to the final product. Although this law ceased to be
in force in 1986 when it was replaced by European Union regulations, studies show
that 89% of the country's consumers support this law and do not drink beer that does
not comply with these requirements.
5. Also, analyze four factors of the micro and macro environment, as well as
the international environment of the target market (Germany).

Analyzing the micro and macro environment, as well as the international

environment of a target market like Germany, involves considering various factors
that can impact a business. Here are four key factors for each category:

Micro Environment

• Customers

Understand the preferences, needs, and behaviors of German consumers. Analyze

their buying power, demographics, and psychographics to tailor products and
marketing strategies accordingly.

• Competitors

Identify and evaluate local and international competitors operating in Germany.

Analyze their market share, strategies, strengths, and weaknesses to develop a
competitive advantage.

• Suppliers

Assess the reliability and availability of suppliers in Germany. Consider factors like
the cost of inputs, supplier relationships, and potential risks associated with supply
chain disruptions.

• Distribution Channels

Examine the distribution networks in Germany. Determine the most efficient and
cost-effective channels to reach consumers, whether through physical stores, e-
commerce, or partnerships.
Macro Environment

• Economic Factors

Analyze Germany's economic conditions, including GDP growth, inflation rates, and
unemployment rates. Consider how these factors can influence consumer spending
and business operations.

• Legal and Regulatory Environment

Understand the legal and regulatory framework in Germany, including taxation, trade
policies, and industry-specific regulations. Ensure compliance and adapt business
strategies accordingly.

• Social and Cultural Factors

Explore cultural norms, values, and trends in Germany. Consider how these factors
impact consumer behavior, product preferences, and marketing campaigns.

• Technological Factors

Evaluate the level of technological advancement in Germany. Consider how

emerging technologies, such as e-commerce platforms and automation, can be
leveraged for business growth.

International Environment

• Political Factors

Assess the political stability of Germany and its foreign relations. Consider how
political events and policies can affect international trade and business operations.
• Economic Integration

Examine Germany's role in the European Union (EU) and its impact on trade
regulations, tariffs, and market access. Understand the implications of Brexit on
trade with the UK.

• Cultural Adaptation

Ensure that marketing and product strategies are culturally sensitive and tailored to
the German market. Understand the nuances of doing business in a foreign culture.

• Currency Exchange and Risk

Monitor exchange rates and consider currency risk management strategies.

Fluctuations in currency exchange rates can impact the cost of imports and exports.

A thorough analysis of these factors in the micro, macro, and international

environment will provide valuable insights for businesses entering or operating in the
German market, helping them make informed decisions and develop effective
strategies

6. In addition, research and explain who are the competitors that the company
will be facing.

In Germany, the beer is a passion, even non-beer drinkers know that Germany is
synonymous of beer culture. So much so that its most internationally famous festival
(with the exception of the Love Parade) is the Oktoberfest, dedicated to beer. Such
is their passion for beer that it led them to legislate its formula in what is considered
the oldest food law in the world. The Reinheistgebot (purity law), a rule that sets the
ingredients that this drink can contain to be called beer in Germany, in force since
1516. It is perhaps the origin of so many food designations of origin that exist today
in the world to protect gastronomic culture.
Germany has about 110 brewery companies and has just over 1,400 breweries
spread throughout its territory, and is also one of the countries with the highest per
capita consumption in the world, just behind the Czech Republic. Some of the most
popular and positioned brands of beer in Germany are:

König Ludwig: The brewery was founded in 1858 by Theodor König in Beeck, just
outside Duisburg. The brand as such has existed since 1911.

Erdinger: The Erdinger Privatbrauerei brewery has been in existence since 1886,
and is based in Erding, Bavaria. Its beers range from traditional wheat beer to non-
alcoholic beers.

Radeberger Pilsner: Based in Radeberg, Saxony. The brand is known for its long
tradition of its Pilsner beer. It was founded in 1872, by five friends who had the idea
while drinking wine.

Paulaner: The Paulaner brewery is based in Munich and has been producing its
beers since 1780. Known mainly for the Oktoberfest and Bayern Munich, it is a brand
with a great reputation. Its name comes from the religious order of the Minims,
created by St. Francis of Paola. The members of this congregation brewed beer for
their own consumption as early as 1634.

Hasseröder: Named after Hasserode, a district of the town of Wernigerode, in the

state of Saxony-Anhalt. The brewery has existed since 1872, and brews Pilsner,
Export and dark beers, as well as the traditional Fürstenbräu, brewed under license
from the Prince of Stolberg-Wernigerode.

Veltins: This brand, specializing in lager beer and beer blends with other beverages,
has existed since 1824 and is located in Grevenstein (North Rhine-Westphalia).

Beck's: This traditional brewery was founded in Bremen in 1873. The brand is known
for its export beers. It has been owned by the brewing giant Anheuser-Busch InBev,
headquartered in Löwen, Belgium, for more than ten years.
Warsteiner: Based in Warstein (North Rhine-Westphalia), this brewery has been in
existence since 1753 and offers, in addition to Warsteiner Premium pilsen, other
pilsen blends, such as Radler Grapefruit (with grapefruit), Warsteiner Lemon (with
lemon) and Warsteiner Ginger (with ginger).

Bitburger: Possibly the second favorite beer in Germany, one of the sponsors of the
German soccer team based in Bitburg (Rhineland-Palatinate), where its Bitburger
Pils has been brewing beer since 1817.

Krombacher: Undoubtedly the Germans' favorite, located in the district of Kreuztal,

in North Rhine-Westphalia. Since 1803, in addition to their traditional pilsen, they
have produced many other varieties, such as a wheat beer, a dark beer and a Radler.

The main breweries that will compete directly with Tres Islas from the above list are:

1. Krombacher: because it’s the most popular and consumed beer in Germany.

2. Paulaner: Because is one of the officials Oktoberfest type beers, exactly as the
Tres Islas Oktoberfest type beer that will be introduced.
3. Bitburger: Because its possibly the second favorite and most consumed beer in
Germany and it is strong positioned in the breweries industries.

Maybe at this point, you might ask yourself, why would you recommend Tres Islas
to introduce a beer type that is already saturated in the market? The answer is simple
and funny; They have pride and defend their beer as we defend and have pride for
tacos. Imagine, you as a Mexican, that a German person offers you tacos of fried
sausage with a rice-based tortilla and tells you that in its country are the best seller
and everybody loves them, personally, I would laugh about that and I know that you
too, because we know how a taco has to be made, the process, we were raised
eating tacos and we have all the motives to laugh over the german tacos and reject
the offer without doubting, that the same thing that would happen to Tres Islas if they
decide to export Oktoberfest beer to Germany without having an adaptation strategy
and the perfect strategy for them is: Commodity or product disruption.

Taking the previous example, have you ever heard about a product that is sold in 7-
eleven, whole foods and even nightclubs without being an alcoholic drink? Im talking
about Liquid Death a clever, attractive and disruptive way to commercialize sparkling
water in a can that appears to be an alcoholic drink. Liquid Death overcame the
barriers of a saturated market to become a $600 million dollars’ worth company and
to close sales in 2022 with $130 million dollar´s since the product was launched in
2019. This a clear example of disruptive products, just by their slogan “Murder Your
Thirst” you can tell that the level of differentiation that this product has over the
competence is huge, even their membership is not the typical offer of “buy our
membership and receive important offers” they literally offer it by telling you “Sell
your soul to join the club”

Did you ever think that a plain and simple sparkling water brand would ever sell its
product as attractively as Liquid Death does? That is what Tres Islas needs to enter
a saturated German beer market, in addition to meeting these characteristics:

1. break or sudden disruption: referring to the traditional process or way of doing

things.

2. Use it in saturated markets.

3. Combine preset elements and give them another use: For example, sell the beer
with a different appearance, innovate in its presentation for consumption, define a
brand archetype different from what is expected of a beer, etc.

7. Furthermore, research and explain the consumer behavior patterns of the

target segment to which the Mexican product will be directed.

Rational behavior

*Search for competitive prices influenced by the product or service additional values.

*Decision making based on social circles opinions.

*Tendency to buy popular recent products.

*They look for products made of the essential ingredients of an original German Beer

Emotional behavior

*Decision making based on the social situation such as party, talking in the bar, etc.

*They look for beers socially accepted categorized as “good or traditional beers”

*Decision making based on the pride of where´s the beer from (munich,
Wernigerode, etc)

8. Likewise, investigate what are the minimum standards required for the
product's access to the German market.

For Tres Islas beer to access the German market, it must comply with a series of
standards and regulations that are common in the European Union and specific to
Germany. These standards apply to the production, labeling and distribution of food
products, including beer. Here are some of the minimum standards required:

Beer Purity: Germany is known for its Beer Purity Law, or "Reinheitsgebot", which
states that beer can only contain basic ingredients: water, barley malt and hops.
Although this law was modified to allow other ingredients, such as wheat malt and
yeast, there is still a strong tradition of beers that meet this standard.

Labeling and Marking: Labeling must be clear and precise, including information on
alcohol content, ingredients, manufacturer's name, and other required details.
Furthermore, it is important that the labeling is in German or in a language that is
understandable to German consumers.

Food Safety: Beer must comply with European Union food safety standards, which
include quality and hygiene controls during the production process.

Alcohol Regulation: Beer must comply with regulations on alcohol content and limits
of alcohol consumption permitted in alcoholic beverages in Germany.

Taxes and Customs Duties: Applicable taxes and customs duties must be paid for
the importation of alcohol into Germany.

Health Registration: It is necessary to register the product and the place of

production with the competent German authorities.

Packaging and Transportation: Products must comply with packaging and

transportation regulations, ensuring that there is no contamination or damage during
transportation and storage.

Compliance with Specific Regulations: Depending on the type of beer and its
presentation, specific regulations may apply. For example, if it is an organic beer,
organic certification standards must be met.

Responsible Drinking Warning Label: It is common in many European countries,

including Germany, for alcoholic beverages to carry a responsible drinking warning
label.

It is important that Tres Islas contact the German regulatory authorities and conduct
thorough research into the specific requirements and current regulations that apply
to the import and sale of beer in Germany, as these regulations may change over
time and vary depending on the country. the region. Additionally, working with a local
distributor with experience importing beer into Germany can make the market entry
process easier.
REFERENCES

*Mundi. (2021, diciembre 11). exportación de México a Alemania [2021]. Mundi.

https://mundi.io/exportacion/hacer-exportacion-mexico-alemania/

*Alemania: Economía y demografía 2023. (s. f.). Datosmacro.com.

https://datosmacro.expansion.com/paises/alemania

*Ambar. (2021, 17 junio). Ambar. Cerveceros independientes desde 1900. Cervezas

Ambar, cerveceros independientes. https://ambar.com/noticias/reinheitsgebot/

*Kommen Blog. (2023, 25 agosto). Tipos de cerveza alemana: Las cervezas más
típicas de Alemania. Kommen Blog - Recetas, novedades, consejos y noticias sobre
la gastronomía y cultura alemana ¡Visita nuestra tienda gourmet online!
https://kommen.es/blog/tipos-cerveza-alemana/

*Las cervezas del Oktoberfest: Información y curiosidades - HOPT. (s. f.).

https://www.hopt.es/magazine/cerveza/3/las-cervezas-del-oktoberfest-informacion-
y-curiosidades/402

*Oftex. (2023, 23 mayo). Exportar a Alemania: qué debes saber | Oftex. Oftex
Empresa Consultora de Exportación. https://www.oftex.es/exportar-alemania-
hacerlo/

*oktoberfest.de. (s. f.). Welcome to the Oktoberfest. Oktoberfest.de.

https://www.oktoberfest.de/en