Question

Select the correct answer from the drop-down menu. A local carbonated beverage business enters a foreign market. What problems could it face while entering a new country’s market? The business has to invest heavily in establishing a bottling plant or commissioning a concentrate syrup project, and for this the company has to revise or plan a . Advertisements and promotional schemes have to be introduced to make people aware of their product. The company also has to hire an so that it does not face issues in. In order to avoid hurting sentiments, advertisements should be in accordance with the region’s .

Answer 1

A local carbonated beverage business entering a foreign market must invest in local bottling or syrup production and navigate barriers such as large competitor advertising budgets and socio-cultural context. Hiring a local expert is also essential for legal and market navigation.

Step-by-step explanation:

When a local carbonated beverage business enters a foreign market, it may encounter several problems. The company must invest heavily in local infrastructure, either by establishing a bottling plant or commissioning a concentrate syrup project. This strategy aligns with the logic of bulk gaining industries, which are market-oriented and make products that gain weight or cost more to transport as they are manufactured. An example of this would be Coca-Cola, which produces its concentrate in Atlanta and ships it globally, where it is mixed with local ingredients and bottled.

Moreover, the business has to invest in advertisements and promotional schemes to gain market recognition against established competitors like Coca-Cola and Pepsi, which have large promotional budgets that act as barriers to entry for new entrants. They also have to ensure that their advertisements are culturally sensitive and match the socio-cultural context of the region, avoiding any mishaps that could harm their brand's reputation.

Finally, hiring a local expert or liaison is crucial for navigating the local market's legal and business requirements, which can be complex and varied compared to the company's home country.