Introduction

In today's competitive environment, developing an international

marketing strategy is common and used by many companies to open

business perspective, remain competitive and fulfill customer needs across

the globe. According to Catero and Ghauri (1999) International Marketing

is the flow of a company's good to consumers in more than one nation

with the objective of profit. International marketing allows enlarging the

company's target and increase the number of potential customers and

probable sales. Nevertheless, international marketing can be source of

success or failure if wrongly managed or implemented.

All products cannot be marketed on an international level, the potential

demand has to be effective, the product has to provide an added value for

the customer and be well marketed according to cultural, economical and

many other factors. This paper will develop the implantation of an

electric/hybrid car by the French manufacturer Renault in the U.S. Renault

is the French leader of the car industry in France, with a turnover of €38

billion and more than 3 million car sold in 2010 , the company recently

launched a new range of electric cars in France.

The car market is strongly developed internationally for the production as

well as for the marketing and selling process. Thanks to international

marketing, several brands have developed a brand strong recognition,

increased market shares and it benefited the company. However,

implementing an international marketing strategy is a long and expensive

process, especially in a competitive market such as the car market of the

United States. According to the US Bureau of Transit Statistics (2004), the

number of registered passenger vehicles in the US is 243,023,485.

Indeed, Americans are important car consumers; the proprietorship and

quality of the car are in the social standards. The social status can be

defined as the type of car and model of one's and it plays an important

role in the social and professional representation. With the environmental

issues such as global warming, gas emissions and limits of oil resources,

car companies started developing hybrid and electronic cars. This change

in product development allows providing innovative cars with an added

value of gas consumption efficiency and other environmental friendly

aspects.

In this paper, we will assume that the French company Renault is

expecting to launch its ZE electric product range in the United States. We

will discuss the reactive and proactive motives to this decision, the

influence of culture and its importance in international marketing. We will

then study the company's international competitiveness at the macro,

meso and micro level. Based on this analysis, we will propose a market

entry strategy and a marketing plan.

Reactive and Proactive Motives

We can assume that launching of an electric car in the U.S is a business

decision based on series of proactive and reactive motives that could

benefit the company and make the product a success abroad.

Proactive Motives (firm initiated)

The launch of the French manufactured electric car in the U.S has several

proactive motives, the first one being, the opportunity to generate profits

by capturing a new market and generating additional sales. The

company's growth would increase the company's market share as well as

its competitiveness on a national and international perspective.

Moreover, the French manufacturer can benefit from the technological

competence and knowledge of French engineers and its experience.

Renault and its expertise of the market and technological advancement

will help the process of implementing a product and marketing

diversification on an international level. The company has already

developed the product and faced technological issues: the product is today

available in France. (see picture below of Renault's electric range.)

Moreover, the company's success in Europe, and its market positioning of

leader in France allows the company to benefit from the economy of scale

to produce Electric cars destined to the U.S as the French supply chain is

already developed and implemented.

Reactive Motives (caused by the environment)

The market opportunity of electric and hybrid cars in the US has already

been adopted by Toyota, resulting in a type of competitive pressure that

Renault could respond to. If the company is not responding, it is losing a

market opportunity. The Japanese car manufacturer Toyota announced

that one million cars were sold in the U.S in April 2011, eleven years after

the Hybrid model of Toyota was introduced in the U.S. With 3 million cars

sold around the world, the U.S market represents more than 30% of sales

for the Toyota Prius. As a consequence of the above example of Toyota,

we can easily deduce that launching a hybrid car in the U.S is a foreign

market opportunity. Indeed, the American car market is strongly

developed and many foreign car manufacturers are already implanted.

This highly developed market can be explained by the social importance of

cars, the accessibility of the driver license and the abundant and currently

renewed offer.

Moreover, if we assume that Renault's recent launch of electric cars is not

a success as planned the company can still aboard the American market

with a different approach. However, this is an assumption based on the

case of stock but it cannot be proved.

In addition, we can assume that the important size of the American car

market allows benefiting from different advantages. Indeed, the French

car manufacturer Renault can benefit from the following experience curve

effects due to the large market factors. The importance of the market will

generate larger volume.

- For instance, the size of the market will allow the French

manufacturer to benefit of economies of scale when manufacturing

products. Let's assume that many states have ordered cars, the general

order quantity will be more important than an order for the French car

market. We can assume that the car piece are standardized

- On the other hand, the distribution conditions (costs, availability,

margin etc.) are more advantageous in the U.S, simply because the

number of car dealership is more much more significant. The size of the

market can also strongly increase the product growth and expansion.

Barriers to Exportation

The above analysis allows us to determine a certain number of barriers to

the exportation of the Renault ZE electric cars in the U.S. Indeed, the

country's different functioning, on a political and economical perspective

will set barriers to this internationalization project.

From a political perspective, several barriers have to be considered when

exporting cars: The American government is directly involved in the

automotive industry. If we take the example of General Motors one of the

top 3-car company of the U.S treasury, the government owns 33% of the

company . (Brendan Moore, 2011). It allows us to assume that the

government has a certain control over American corporations. Another

example supporting this statement is the investments made by the U.S

Government in favor of Chrysler. Even though the government recently

ended its investments, it shows that the American government is

supporting national car companies . As a result, the exportation of Renault

cars in the U.S might be complicated as the government has more or less

a market control. We can also notice that the American government has a

strong influence on the legal system and it could affect Renault in its

launch.

Regarding economic barriers, the situation is complex. Indeed, the Euro-

Dollar rate and the fluctuations are relatively important in the beginning of

2012. First, if Renault exports its electric cars in the U.S, it will have to

sell cars at a much higher price in order to make the same benefit as in

France as €1 equals $1.26 . If we take an example of Renault selling a car

€10,000 in France, the company will have to sell it for $12,667 in order to

make the same profit on the car sold. This might represent a difficulty as

the car market is competitive in term of prices and the company could

loose potential market share if setting high prices, making cars

unaffordable. Moreover, the strength of the Euro stability is reconsidered

as the France recently lost its AAA rating . (Simon Kennedy and Patrick

Donahue, 2012).

We can also differentiate other barriers to international trade of cars.

These include the shipping costs, risks and other concerns of international

trade. More specifically we can distinguish some of these risk in the two

following categories

Tariffs: cars imported in the U.S are dutiable and it represents an

additional potential cost. Renault has to be aware of these potential costs

and highly informed about American standards and regulations in terms of

foreign cars.

Non-Tariffs: The American government has specific regulations that are

different from France standards. Agencies such as EPA (Environment

Protection Agency) and DOT (Department of Transportation) provide

information about requirements of the U.S Customs Service. These

agencies provide information about "safety standards, bumper

standards, and air pollution control (emission) standards." (Foreign-

Born, 2010). The above agencies also require some administrative forms

to be completed, making the administrative process longer.

The Influence of Culture

Hofstede's model

According to Hofstede (1980), different cultures have different perceptions

and interpretations of things. Hofstede's model of national culture

separates five different aspects:

- Power Distance: we can consider that some inequality can be

considered between French and Americans. In physical and educational

terms, both cultures have different values and principles. Even though the

politeness is strongly present in the U.S, a certain distance has to be

respected.

- Uncertainty Avoidance is much more present in the U.S as it is in

France. In the U.S, rules, norms and laws are strongly approved and

respected whereas in France, people often disagree an uncertainty is more

frequent. In the U.S, avoiding uncertainty results in strong planification

and coordianation. This aspect might cause some cultural

misunderstanding and tensions between both cultures.

- Individualism is present in the US culture, whereas in France, the

culture can be considered as group oriented or community. The social

status and person is considered and rewarded in the U.S, while in France,

groups and communities are favored.

- Masculinity is strongly present in the U.S, especially in the business

environment where success, salary, cars, watch and social representation

matter a lot. Masculinity is less present in France, where talking about

income is often perceived as rude. Moreover, the feminine role of women

in business is being defended and increasing in France (unions).

- Time perspective is completely different in the French and American

culture. Indeed, the American culture is focused on the future and often

projecting on future project, forecasts and expansion. On the other hand,

the cultural and historical background of France is part of the nation pride

and French often refer to the past as a reference. Protectionism of the

historical French culture and protocol is strongly implemented and

installed in the French values, making it more "past oriented".

This perspective might cause some issues when discussing future plans,

Americans can be perceived as too confident and optimistic, whereas

French might be focused on analysis based on the past.

Hall's communication context

According to Hall's communication context, the French culture can be

considered as a high context culture whereas the American culture as a

low-context culture. As a result, many cultural factors differ between both

cultures, leading to potential cultural clashes. Elements such as time,

money, relationships, business, communication, beliefs, values and norms

constitute strong cultural differences. For example, it is common measure

to develop relationship at work in France and being 5 minutes late is

tolerated. In the U.S, business relations are based on deals and

achievements, and punctuality has a major importance in business affairs.

These two examples highlight the cultural differences that might lead to

cultural misunderstanding and inefficient business relationships.

If we take the case of Renault launching its electronic cars in the U.S, the

business relationships might be complicated and create barriers to

success. Being aware of these cultural differences will smooth the process

of conducting international business, whatever the company or situation.

The Customer-oriented culture

The American culture is oriented on customer service and its quality.

Indeed, companies view customer relationship management (CRM) as a

way to develop customer loyalty and improve customer service. As a

consequence, the approach of personal selling is very different from one

culture to another. In France, personal selling is much more impersonal

and sellers are only here if the customer requires any information. In the

U.S, we fall under the impression that the seller is here to guide the

customer through the brand, its product or services and convince him of

the company's products. Personal selling in the U.S will oriented on

communication and customer attention, whereas in France, the customer

first makes his own opinion of the product, and then the communication

will go from the customer to the seller. In the U.S, the communication is

more like a dialogue and starts from the seller to the customer. French

seller are convinced that if the product does not meet the customer's

expectations, then he will not be likely to buy it. In the U.S, even though

the product does not meet the customer's expectations, the seller will try

to convince the customer with commitment and defend its product/brand.

As a consequence, a French customer in the U.S will feel stalked whereas

the American customer in France will feel abandoned. Renault needs to

focus on these aspects if implementing a distribution center, a license or

any type of sales that could involve a customer.

Company International Competitiveness

Now that we have stated the motives and barriers to launch of the electric

cars of Renault in the U.S, it is relevant to examine the firm's

competitiveness on three perspectives:

Macro Level: National Analysis –> Porter's Diamond

Renault's national strategy, success and competitiveness have a major

influence on its internationalization.

Factor condition include Renault's important infrastructure in France and

abroad. Headquarters are based in Paris, France and this is where

important decisions are made. Renault uses external resources and

outsources its production. However, the assembling and manufacturing is

made in France and European countries, to keep control over the quality

of products.

Demand conditions involve the size of the French demand Renault faces

and its nature. In terms of electric cars, Renault's positioning is to offer a

range composed of four cars. Two small cars designed for cities and urban

rides, one berlin car and one utility car. Renault targets all type of

consumers, and offer a relatively wide range of products, as none of the

competition offers 4 different electric models. Renault's offer is affordable

and its targets environmental friendly consumers aged 20 to 60.

Renault's is the French leader in the car French car industry. This situation

gives the company credibility in terms of products. As stated before, the

company also benefits from its experience, and it has budgets to invest in

research and development and marketing. Renault currently uses an

important TV campaign supporting the launch of its ZE range. In France,

Renault cars are considered as reliable and affordable. In addition, the

company already competes with its direct competitors Toyota (with the

Prius), BMW, Volkswagen and other brands launching hybrid or electric

cars. American car companies such as Chrysler, Ford and GMC have a less

important market impact in France and do not offer any comparable

product on the same segment as Renault's ZE range. This analysis allows

us to affirm that Renault's national position and efficiency allows it to

envisage exporting its products to the U.S.

Meso Level: Competition analysis of the car industry → Porter's five forces

Threats of new entrants are relatively low as the market requires high

investments, and targets a large population. Renault's main competitors

are major car manufacturer and brands. However, the threat can be

considered to arrive from Asia, where several companies work of electric

prototypes. The threat of new entrants is relatively average be has to be

considered and watched. Moreover, new entrants can here be considered

as major manufacturers launching a new electric/hybrid range; in that

case, new entrants are dangerous and competitive on every level

(technology, price, distribution).

Threat of substitute products is low as the product is considered as

innovative and many researches are still made on electric and hybrid cars.

Substitute products such as public transportation, electric bikes and

motorcycles do not represent an important part of the market and cannot

be considered as a threat.

Bargaining power of Suppliers is average as car corporations purchase

important quantities and suppliers have built long-term relationships with

major brands. However, the main issue is to meet order deliveries and

handle new development of technologies. In the case of a supplier being

qualified to provide high technology equipment, the bargaining power of

the supplier can increase.

Bargaining power of buyers is the main threat of the car market. Indeed,

on an international or national perspective, buyers have a large choice of

products, creating a highly competitive market. Moreover, today's

customer expectations are high in terms of technologies and modernity.

The technologic evolution forces car manufacturer to constantly come up

with innovative product and solutions. End customers have a relatively

strong bargaining power as the used-car market is currently booming and

customers are budget-minded. As a result, we can observe the price of

new vehicles strongly decreasing and companies offer new financing

methods adapted to the customer buying power. If Renault decides to

export is products to the U.S, but to a distributor, the bargaining power of

the distributor will be high, as he will take a major risk by offering a

product that is not present on the market.

The above analysis of Porter's 5 forces model allows us to affirm that the

international car market is highly competitive and that current

manufacturers are in an intense rivalry to find the best innovation of

electric/hybrid cars and conquest the most customers or distributors. The

diversity of the market and economic conditions allow buyers to have an

important bargaining power, pushing companies to provide innovative and

customer oriented products. From Renault's perspective, entering the

national market of France with its electric cars is justified as it has a

position of leader and has a high market share. On ther other hand,

exporting its ZE range of products in the U.S might be a more difficult

challenge. The competitive environment is intense, and the acceptation of

the brand and its products by customers can be compromised.

Renault's position on the international market could lead to horizontal

collaboration and related diversification. An alliance for instance, could

help Renault gain credibility of the market and apply its technologic

knowledge for a new market.

Micro Level: Value Chain Analysis

Renault's value chain is well implanted and efficient in France, and its

structure is part of its success. Renault strongly invests in research and

development in order to provide constant innovations. The production is

mainly outsourced, but the assembly is made in France and over Europe

as specified earlier. Renault has important marketing budgets and uses

advertisement as a competitive tool. Regarding sales and service, Renault

owns its own car dealership in France, and some other have the

exclusivity to sell Renault cars. This way, the company has a maximum

impact in the market and controls its sales and customer service in official

dealerships.

In the U.S, the company would have to review is marketing and sales

process of the value chain. Indeed, Renault has no presence in the

American market and car companies have different approach of marketing

and sales in the U.S. (cf customer service) marketing techniques are the

core solution to generate sales as well as customer retention and

customer service. Customer relationship management is much more

evolved in the U.S than it is in France.

In order to best deal with these differences, Renault should establish a

strong competitive analysis on competitors, a behavior analysis on

customers and an in-depth bench-marking about American marketing

strategies. This way Renault will benefit from the U.S market knowledge

accumulated in research marketing and combine it with its national skills

of leader and develop a potential sustainable competitive advantage. More

precisely, the competitive benchmarking should be conducted from two

perspectives. First, an analysis of each step of the competitions value

chain in order to distinguish the competition core competences. This will

allow Renault to understand the competition strengths in terms of

production and supply. The second benchmarking perspective should be

conducted on customers, their expectations and behavior. This benchmark

will allow Renault to understand the customer mind-set and its perceived

value. As a result, Renault will be able to adapt its upstream and

downstream strategy in order to compete with American car

manufacturers and offer an adapted value proposition to the market.

The macro, meso and micro analysis of the market and correlated with the

case of Renault exporting its products in the U.S allows us to state that

key success factors for the American car market result in:

- Research & Development: Innovative products, aiming to gain

competitive advantage.

- Supply Chain Management: Competitive prices due to reduction of

costs linked to the supply chain management and efficiency.

- Diversification Strategy: Based on alliances and horizontal

collaboration.

- Understanding of the market: Based on marketing research

including: customers, competition, target culture and behavior.

- Brand Recognition and positioning: Brand image has a strong

importance in the US, it can be implemented and emphasized using

advertising and communication.

Market Entry Strategy

Now that we have a clear idea of Renault's business structure, its ability to

compete in the U.S and its situation in France, we can establish

propositions regarding the type of entry mode that should be considered.

We could argue that considering exportation as a market entry strategy is

a valid option. Indeed, if Renault decides to limit its investment in this

project by exporting its products, it will allow the company to analyze

customer reaction and limit expenses and implication. Exporting a limited

number of Renault's ZE would be a way to test the market reactivity and

determine a future strategy. However, as we determined the market

competitiveness as intense, this strategy could rapidly be inefficient.

As stated above, developing horizontal collaborations will benefit Renault

when entering the American market with its new electric cars. Renault

brings the technology and models to the U.S and the American

corporation helps to introduce, market and distribute the models. This is

why we can state that Renault should establish a joint venture with an

American car manufacturer. This type of alliance will also help the

company to be accepted by the competition, the government, and most

importantly, customers. Using the joint venture strategy will also allow

Renault to keep a minimum of control upon its products.

Moreover, Renault has a good experience in joint ventures with Joint

Venture as it developed an alliance with Nissan in 2009.

What about Acquisition?

Renault could consider acquisition as an entry strategy but it would be

risky for the following reasons:

The market could disapprove this act and reject the brand and its

products. Americans tend to favor American brands and consumer

American products. If the acquisition of an American brand by a French

corporation is wrongly perceived, it can quickly lead to a boycott from

customer. The government who supports national corporations could also

slow the process and maximize barriers to the acquisition.

Besides, the acquisition usually involves heavy investment that could

affect the company's health if not successful. One major issue is also

Renault's corporate values and image. If entering the market with an

acquisition, it might not be adapted to Renault's mission and vision. It

would lead to internal confusion and misperception for employees and

customers. This strategy of acquisition is not the best way of smoothly

entering the American car market.

International Product Lifecycle

The international product lifecycle is different from the traditional product

lifecycle. The IPLC (International Product Life Cycle) is unstable compared

to the usual product lifecycle. The IPLC is considered from a

macroeconomic perspective that views the product past national

boundaries. The curve is influenced by countries where the product is

exported, innovating countries leading to a second (launch, growth,

maturity decline) curve in other countries.

Based on Renault's case of launching Renault's ZE electric cars in the U.S,

the IPLC could have two growth curves; one in France and one in the U.S.

The product is new on the market and it still at an early growth stage in

France. In a few years, we could consider another growth curve starting at

the level of the first maturity curve. This second growth would be

explained by the success of the ZE cars in the U.S, while the French

market is already reaching the maturity.

However, the PLC of electric cars can strongly vary, as it is an innovation

that is needed today and still will be over the next years. The particularity

of this product and the long-term investment of companies in electric and

hybrid technology will strongly influence the PLC curve and hopefully

highlight the beginning phases.

Conclusion

As a general conclusion, we can argue that the analysis conducted with

this paper on the French manufacturer launching its electric cars in the

U.S market allows us to establish a marketing plan for this project. As a

consequence, in the following statements, we assume that Renault

chooses to internationalize its products using a Joint Venture.

Before entering in the details of the marketing plan, it is also relevant to

notice that Renault should pay particular attention to the control of this

project. Indeed, loosing control of one of the four P's could result in a

direct failure. In order to limit these risk, Renault can require regular

feedbacks and set up monitoring in order to keep a maximum of control

over its international marketing strategy. Indeed, the constant following of

the activity and the regular updates are mandatory for this type of

internationalization.

Renault's products should be innovative and affordable. Based on its

relationship with an American corporation, products should be perceived

as qualitative, affordable and innovative in terms of electric technology.

Regarding, the pricing strategy, Renault should adapt an alignment

strategy in order to be competitive and remain accessible with the current

economic situation described earlier. In terms of promotion, the marketing

and communication plays a decisive role in the U.S. If the marketing

campaign succeeds in convincing Americans of the quality of the product

and its functionality, it will be a significative step forward for the company.

For the promotion, the expertise and knowledge of the American firm will

help the French company to penetrate the U.S market. Last but not least,

the place of distribution, as well as the selling process is vital. Marketing

research should be combined with national expertise to allow Renault to

set the right distribution and selling strategy. If Renault succeeds in

implementing its electric cars in the U.S, it opens doors to the other

international perspectives, leading to brighter opportunities.