Business and Marketing – Page 9

Canadian honey in the Korean market

Question 1

The Korean honey market is having a challenge giving their customers quality honey. The market is flooded with poor quality honey and this does give the Korean Food a chance to penetrate the market if they focus their production on quality honey. The cost of quality honey in the market is also so high reaching a price range of $ US 100. The introduction of cheaper quality honey from the Korean Food company will increase their market share in the industry (Lee et al., 2010, p. 25).

Moreover, the Korean’s who have visited Canada often send to their families 20 to 30 kilograms of honey when they visit (Tavares, 2014, p. 22). This is an indication of positive reception of the Canadian honey by the people in Korea. It therefore, means that entry into the market will work in favor of the Korean Food as they already have a ready market for their product.

On the unfavorable aspects, the Korean government still has a restriction on open trade policy, especially when it comes to the agricultural sector. This policy does make it hard for the company to venture into the country, despite the optimism that the Korean government is considering withdrawing the restrictions (Hayakawa et al., 2013, p. 499). Moreover, the Korean honey producers have enjoyed a monopoly in the market and may place a lot of hurdles that will make the market unfavorable for Korean foods.

Question 2

The uncertainties in the strategy arise from the fact that the company has limited experience in the export market in Korea. This does pose a huge challenge for the company as they need to conduct an intensive market research before they step into the country. This will cost them a lot of finances, considering that the maximum amount of profit that they are to make from this venture is by a margin of 20%. The Korean market is centered on their culture where most of the consumers consider honey as a medicinal rather than a food product (Sydkorea, 2017). This will pose a challenge for the company when it comes to extending their market share from the hotels to selling the products to the consumers.

Additionally, the Korean market does work on the perspectives that the company will require an intermediary to be able to penetrate the market (Yoon, 2017, p. 387). The involvement of the middleman does pose an uncertainty on the manner to ensure that the company does achieve the objective of making a profit. The company has been working directly with the suppliers, and the changes of the operations structure to relying on the middlemen to foster their agenda will force affect the management of the company.

Lastly, despite their being hope that the Korean government will open up the agricultural market to allow imports, there is uncertainty on the resistance of the Korean honey producers (Hayakawa et al., 2014, p.499). The Korean honey producers have a monopoly in the honey market and they, therefore, have the strength to influence the government not to open up the honey market (APHIS’ website, 2017). Moreover, they might consent the opening of the market, but place a lot of hurdles for the new entrants an aspect that will uneven the competition making the market unfavorable.

The uncertainties can be reduced by identifying a company in Korea and entering into a joint merger to enable them to penetrate the market. The merger will be a shield for them as they understand how the market operates and will provide them the needed information to venture into the market (De Mooji, 2013, p. 36). Additionally, it will enable the company to navigate any hurdles that will be posed by the Korean honey producers in a bid to protect their influence in the market. Furthermore, the merger does reduce the cost of market research that the company will have to incur in their bid to penetrate the market.

I believe that the company has an opportunity to achieve immense success if they apply the suggested solutions in reducing the uncertainties. The company will be able to increase their margin and market share from a maximum of 20% and 60% respectively. This is an opportunity that will be effective for the company.

Question 3

Canadian honey: Marketing

In looking for ways to improve the marketing plan to make it acceptable to all the management team members, the 3 phases that form the foundation of the plan will be evaluated. In the first phase, the distribution strategy needs to be altered to involve using the networks established by the company they decide to merge with to penetrate the hotels. The local company has been in operation in the country they, therefore, have connections in different sectors of the economy like the hotels. This will make market entry easier for the company instead of having two salespeople positioned in Seoul (Lee et al., 2015, p. 32).

Additionally, the advertising strategy in the first phase will cost the company a lot of finances. To ensure that the company saves money, the use of free samples to the hotels coupled with media advertising is sufficient. The provision of recipe booklets and carrying out person-to-person advertisement will cost the company a lot of money.

In the second phase, the company needs to focus on regulating the prices of the honey with time as they extend their control of the hotel honey market. The penetrating price strategy is used to enter the market but needs to be readjusted to ensure that the company can make more profit from this sector (De Mooji, 2013, p. 12). The minimum price is an introduction to the Korean hotel industry to the purity of the Canadian honey. Increasing the price will not alter the purchase, as they would have managed to create a customer base in the industry that is attracted to the new flavors of the honey.

Additionally, the distribution channel is effective, but the involvement of the company that they will merge with will inject efficiency in the operation. The partner comprehends the Korean honey distribution network this will, therefore, ensure that the products can reach the target customers on time.

Furthermore, the company needs to concentrate more on introducing the Canadian honey as food rather than a medicinal product. This will play a role in increasing their target market more effectively. The Korean’s already have had a negative conception of honey due to the poor quality that is present in the market. Their culture compounded with the bad honey experience has made them consider that the product can be used only as a medicinal product (Lee et al., 2010, p. 18). Emphasizing on the other uses of honey will not only revolutionize this perception but also provide them with mileage in the industry.

In the third phase, introducing different qualities of honey in the market will cast doubt on the type of honey that the customers are purchasing for medicinal purposes. It will cast a shadow on the qualities of the Canadian honey that the company is introducing in the market, hence reducing their penetration. The company needs to concentrate on high-quality honey solely to get the customers goodwill in their product (Tavares, 2014, p. 25). I will recommend the company to use the warehouse of their partner as this will save them the cost of setting up one. They can then capitalize on the sales representative of their partner to increase their market penetration in the country.

Question 4

Kevin Lee at the beginning of the case study identifies pertinent issues that are linked to the difference between their way of operations and the new marketing plan. The company has immense knowledge in importing business and limited knowledge in the exporting business. They have managed to comprehend the needs of the North Americans when it comes to the Asian foods which have enabled them to raise the business to $30 million. The exportation of the Canadian honey to Korea is a new business venture as they do not know how to navigate the Korean industry with its restrictions (Anania, 2013, p. 25).

Additionally, despite the fact that the Canadian honey is loved by Korean visitors who send it to their families, this is not a guarantee that they will penetrate the market with ease (Tavares, 2014, p. 12). On the other hand, the Asian product is loved by North America and the company has managed to create a customer base that loves their products (Shaw, 2017). The company encountered challenges but managed to establish a reputable brand. Contrariwise, the only similarity is that the company has dealt with Korea on an international business level as discussed in the essay.

References

Anania, G., 2013. Agricultural export restrictions and the WTO: What options do policy-makers have for promoting food security. Draft paper prepared for informal ICTSD policy dialogue on, 25.

APHIS’ website. (2017). Korea Product Brief: Honey. [online] Available at: http://www.aphis.usda.gov/regulations/vs/iregs/products/ [Accessed 9 Sep. 2017].

De Mooji M., 2013. Global marketing and advertising: Understanding cultural paradoxes. Sage Publications, 2013.

Hayakawa, K., Kim, H., and Lee, H. H., 2014. Determinants on utilization of the Korea-ASEAN free trade agreement: margin effect, scale effect, and ROO effect. World Trade Review, 13 (3), pp.499-515.

Lee, M.Y., Hong, I.P., Choi, Y.S., Kim, N.S., Kim, H.K., Lee, K.G. and Lee, M.L., 2010. Present status of Korean beekeeping industry. Korean Journal of Apiculture.

Lee, Y.K., Kim, S.H., Seo, M.K. and Hight, S.K., 2015. Market orientation and business performance: Evidence from franchising industry. International Journal of Hospitality Management, 44, pp.28-37.

Shaw, M. (2017). Korea Food Trading | Canadian Business Executive. [online] Canadianbusinessexecutive. Available at: http://www.canadianbusinessexecutive.com/food-drink/case-studies/korea-food-trading-expanding-asian-foods-market-a-non-traditional-audience [Accessed 9 Sep. 2017].

Sydkorea. M. (2017). Korean Business Culture. [online] Available at: http://sydkorea.um.dk/en/the-trade-council/korean-business-culture [Accessed 9 Sep. 2017].

Tavares, A., 2014. Statistical overview of the Canadian honey industry 2013. Government of Canada, Canada.

Yoon, S. J., 2017. Cultural Brokerage and Transnational Entrepreneurship: Entrepreneurs in Beijing’s Koreatown.” Korea Observer, 48 (2), p.387

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National Appliance Inc Logistics Case Analysis

National Appliance Inc Logistics Case Analysis. According to Marchet, Melacini, Perotti, & Tappia (2016), correlations exist between organizational internationalization choices and logistics operations.

National Appliance Inc Logistics Case Analysis

According to Marchet, Melacini, Perotti, & Tappia (2016), correlations exist between organizational internationalization choices and logistics operations. Expressly, the authors point out that logistics serve as crucial enablers for company internationalization, which further contributes to a significant increase in logistics network complexity. Today, society is characterized by an increased demand for flexibility and speed, which require organizations to understand that their logistics strategy serves as a vital aspect of the overall operations and further contributes to achieving corporate objectives (Marchet, Melacini, Perotti, & Tappia, 2016).

In this case, National Appliance Inc has been operational for the past 35 years. During the past 15 years, they have experienced increased growth in their share of the products due to the provision of high-quality products at lower prices. This growth has been coupled with vertical integration in the company’s supply and marketing channels. Nonetheless, the company’s expansion into an international market, Paris, is characterized by various strengths and limitations, especially in logistics planning.

More precisely, the strengths associated with Mr. Reard’s international transportation plan include vast experience and considerable expertise in domestic transport management and logistics. These essential components have been acquired through the company’s successful transportation of their products domestically for the past 15 years, contributing to a significant reduction of transportation costs (Li & Sun, 2014).

Additionally, the plan formulated by Mr. Reard portrays strength based on the control and close monitoring of transportation activities via trucks, which allow him to remain in close contact with the drivers. As a result, this strategy fosters increased flexibility in services and the employment rate for many drivers. Besides, potential delays in truck transportation can be quickly addressed than other modes of transportation. Simultaneously, shipment of goods internationally from New Jersey to LeHavre, France, could significantly reduce transportation costs for the company compared to airplanes (Cook, 2016).

Conversely, Mr. Reard’s plan is characterized by several weaknesses that include a considerable distance between the United States and Paris. If the products are transported via shipping, they will take at least four weeks to reach the destination. As a result, the costs incurred during this period would significantly increase the lead times, ultimately affecting its price. Specifically, transportation of the finished products from the different plants, Memphis, Minneapolis, and Omaha, would significantly increase the costs and contribute to long lead times (Cook, 2016).

Besides, hiring an international transportation manager to take charge of Paris operations would lead to increased costs as he/she would demand a high salary. These shortcomings are coupled with the fact that Mr. Reard and his staff lack the necessary international experience and may thus be ill-equipped to prepare the plan.

An alternative plan that should be presented to Ms. Jameson entails:

Establishing a central hub between the three plants to facilitate management and assortment of the products and direct dispatched to New Jersey port to minimize the transportation costs and ensuring quality
Use rail transportation as the most reliable, timely, less costly, and risky mode in Europe for bulk products
Shift to shipment of the products from New Jersey to LeHavre, France, coupled with the relevant insurance before dispatching of the goods
Avoid hiring a transportation manager since it is not elaborately established whether doing business with the Paris distributor is on a contractual or regular basis
Engagement management in laying out the operational terms between the Paris distributor and National Appliance Inc

Visual Representation

National Appliance Inc Logistics Case Analysis Conclusion

As a justification for the strategy applied in Mr. Reard’s case, the international transportation plan formulated above focuses on cost reduction and the maintenance of quality and timely delivery of the company products to the end-user. Essentially, the central hub established will play a pivotal role in ensuring accuracy through the assortment and management of the products before they are dispatched to the New Jersey/New York plant.

This way, the lead time will be significantly reduced, and the goods meant for transportation to Paris will be readily available, fostering timely delivery to the final consumer. Nevertheless, this strategy harbors some shortcomings based on risks and losses associated with railway transportation. Additionally, in case of potential delays, accidents, or power outages, monitoring the transportation of goods becomes a challenge and can deter other sectors of the logistics and transportation process. Contrastingly, using trucks to transport goods may be effective but take more time.

References

Cook, T. A. (2016). Managing growth and expansion into global markets: logistics, transportation, and distribution. CRC Press.

Li, X., & Sun, X. (2014). Operations Management of Logistics and Supply Chain: Issues and Directions. Discrete Dynamics in Nature and Society. https://doi.org/10.1155/2014/701938

Marchet, G., Melacini, M., Perotti, S., & Tappia, E. (2016). Shaping the international logistics strategy in the internationalisation process. International Journal of Supply Chain and Operations Resilience, 2(1), 72. https://doi.org/10.1504/ijscor.2016.075914

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Facebook: The New Face of E-Commerce

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Facebook: The New Face of E-Commerce

Is Facebook: The New Face of E-Commerce? Facebook is considered by investors as the new face of e-commerce, bearing in mind that it is world’s most visited social website. On top of that, Facebook has created an international audience, third in number after Google and Yahoo search engines. For that reason, investors have for a long time been attracted to not only market their commodities in their website, but also conduct business transactions with their prospective customers logged into the social website (Clemons, 2009).

Strategic and financial analysis had an impact in investors’ decision to back Facebook. Considering Facebook’s positive performance in the past, investors have backed the company in large numbers. Investors are aware of Facebook’s high revenue growth, which is attractive to investors. Additionally, its sustainable revenue growth together with its real revenue growth has seen many profit making organizations use the company to further their money-making endeavors (Clemons, 2009).

Facebook: The New Face of E-Commerce

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One of the strategies that Facebook has employed so as to receive a backing from large corporations and small investors, is its pricing policies, which make them enjoy a competitive advantage by locking in and adding new clients. The company is known for having a good control of its pricing policies by encouraging the positive pricing. Thai is why they are in a beter position to attract more investors (Clemons, 2009).

Another strategy that Facebook has employed to attract more investors is that it has gone mobile. They have done that in order to reach out to as many clients as possible all over the world. In fact, over one billion people in the world have mobile handsets. Enabling Facebook applications in their phones increases the number of people subscribed to the social website. This has the effect of raising the probability of global growth in years to come (Clemons, 2009).

The concept of convergence entails enabling divergent kinds of networks to perform similar tasks. Facebook, being the new face of E-Commerce should have the ability to provide a range of services over a single network. If I am to develop a good convergent network for Facebook, there are several factors which I ought to consider, attracting both clients and investors to the social website, hence enjoying a competitive advantage over other competing firms (Holmes, 1999).

Facebook: The New Face of E-Commerce

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Facebook has often made use of wireless medium more than it has used the wired medium of communication. A proper model of Facebook convergence should have both the wired and wireless media. This has the effect of hoisting the traditional business models and value chains. In the long run, there is competitive substitution as well as complementary merging of products and services at the same time (Holmes, 1999).

It is also important to harmonize the infrastructures, contents, storages and storage capabilities of computer systems. This brings together communication industries, software and the internet, towards a common objective.

The most appropriate infrastructure should be selected for the emerging trend of network convergence. This is because the digital networks dictate which type of infrastructure should be used. Flexibility is thus important so as to accommodate new trends in convergence. There are three levels under which network convergence take place.

These are at; transmission, terminal, and the service level. In the event that core technologies converge, the diversity of applications of services increases. Thus by coming up with such a model, the barriers posed by impropriety solutions which enable firms to integrated voice and data applications are dealt with (Holmes, 1999).

Facebook’s economic viability is on the rise especially internationally. This if for the simple reason that its membership growth by far surpasses those of competing social websites such as Twitter and MySpace. Besides, it is the only social website enjoying an international audience in the third position to Google and Yahoo. Therefore Facebook’s economic potential cannot be overlooked. For the 800 million active users of Facebook is an attraction to large multinational companies seeking to market their products and services (Traver & Loudon, 2005).

Facebook: The New Face of E-Commerce

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Facebook has shifted from the traditional e-commerce trend of companies merely advertizing their commodities over their website. It has also moved from the old norm of prospective customers being redirected to other pages upon clicking on an advertisement link. Instead Facebook now boasts of hosting the contents of these organizations. A Facebook user does not need to leave his Facebook page in order to conduct business transactions.

The customers just purchase and pay their dues right within Facebook, increasing their level of commitments. Thus new companies have their pages in Facebook where they communicate with their clients and ease their transaction burden. This new wave of change makes Facebook remain economically viable in the face of economic depressions (Traver & Loudon, 2005).

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While speculations are rife over the firm’s economic viability following the decline in the number of subscribers in the United States, international subscribers continue to rise by the day. To add on that, Facebook has a potentially lucrative market, even posing a competitive threat to the traditional search engines such as Google and Yahoo. The bone of contention is that Facebook is increasingly restructuring itself to become the world’s largest search engine (Traver & Loudon, 2005).

References

Clemons, E. (2009). Business Models for Monetizing Internet Applications. Journal of Management Information Systems, 26 (2), 15-41. Retrieved October 23, 2012, from http://www.ebscohost.com

Holmes, T. (1999). The Art of Convergence. Black Enterprise, 29 (10), 48. Retrieved October 23, 2012, from http://www.proquest.com

Traver, G., Loudon, C. (2005). E-Commerce: Business. Technology. Society. Wesley: Pearson.

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Facebook: The New Face of E-Commerce

Company Acquisitions Essay Paper

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Company Acquisitions

Issue and Case Analysis: Company Acquisitions

Question 1: Merge the acquired company into your company. The result of this strategy will be one company containing the elements of both companies.

Since 1990s, there has been an accelerated pace of global mergers and company acquisitions as companies use them as a tool for competitiveness and to expand to global markets. A strategic manager must carefully look into both the pre-acquisition phase and the post-acquisition phase to execute a successful acquisition (Lasserre, 2003).

When the value of operational synergies of the companies operating in similar business contexts is expected, the absorption mode is appropriate. This enables necessary consolidation and rationalization necessary, to occur in the soonest time possible. The company is able to evaluate the best business practices to be adopted and find sources of savings by absorbing the competencies and competitive products of the other company (David, 2012).

The challenge in absorption occurs when there’s rationalization by the company being acquired hindering the process due to resistance to change and difference in culture. A SWOT analysis of the new merger would help to identify the areas to strengthen and areas of potential threats that may hinder successful acquisition (Lasserre, 2003).

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Question 2: Operate the acquired company as a separate business entity. The result of this strategy will be two separate companies under one senior management “umbrella” (the senior management team that is responsible for running both companies).

Where the company is allowed to operate as a separate business entity, Preservation Mode, is when very few operational synergies can be gained. This is important when large autonomy of decision making in the acquired business is required. The existing management is kept in place while the parent company learns the ‘rules of the game’ of the new business. The benefits accrued include enlargement of products and markets and also the transfer of new competencies or resources.

The disadvantage is the acquired company could behave opportunistically by ‘siphoning off’ resources of acquirer if there’s ‘weak’ management (Hitt, Ireland & Hoskisson, 2011). A balanced scorecard could be used to measure the acquisition in terms of customers’ opinions and views, financial position and advantages, improvement and value creation through growth and learning among others.

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According to David (2012), research shows twenty percent of all mergers and acquisitions are successful, approximately sixty percent produce disappointing results, and the last twenty percent are clear failures. Continuous evaluation and correction after acquisition is a critical factor to avoid the pitfalls that result in failure of acquisition (Lasserre, 2003).

References

David, F. R. (2012). Strategic Management: A Competitive Advantage Approach, Concepts and Cases (14th Ed.). South Carolina: Pearson Prentice Hall

Lasserre, P. (2003). Global mergers and acquisitions. Global strategic management. New York, N.Y: Palgrave Macmillan.

Hitt, M. A., Ireland, R. D. & Hoskisson, R. E. (2011). Concepts-strategic management: competitive & globalization (9th Ed.). Natorp Boulevard Mason, USA: South-Western Cengage Learning

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Company Acquisition

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Company Acquisitions

Issue and Case Analysis: Company Acquisitions

Question 1: Merge the acquired company into your company. The result of this strategy will be one company containing the elements of both companies.

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References

David, F. R. (2012). Strategic Management: A Competitive Advantage Approach, Concepts and Cases (14th Ed.). South Carolina: Pearson Prentice Hall

Lasserre, P. (2003). Global mergers and acquisitions. Global strategic management. New York, N.Y: Palgrave Macmillan.

Hitt, M. A., Ireland, R. D. & Hoskisson, R. E. (2011). Concepts-strategic management: competitive & globalization (9th Ed.). Natorp Boulevard Mason, USA: South-Western Cengage Learning

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Geox case study

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Geox case study

Case analysis: Geox shoe company

GEOX: BREATHING INNOVATION INTO SHOES

The impact of innovation has been increasing in the recent few years. Innovation is taking place in all products including shoe manufacturing factories. Mr. Palegato’s story points to “necessity” as the driving force behind innovations.

However, we also learn that most innovation ideas are not put to use due to lack of ability to implement them. He approached different shoe manufacturing firms who did not buy his idea of ‘breathing shoe’ product.

Product diversification and development is seen as another driving force behind the success of many companies. Geox Company realized the importance of product diversification and extended their breathability technology into fabric products. Geox embraced innovation in its operation which gave the company a competitive advantage.

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Important points

Geox history

GEOX: BREATHING INNOVATION INTO SHOES

Continuous innovation is necessary for the survival of human race due to the ever changing natural demands. Product development is essential for company’s performance in the current competitive world markets. Though initially started by manufacturing shoes for the children, Geox extended breathing technology into jackets and other fabric items.

The company invested heavily in research and development by involving engineers and best universities. The company carried out continuous experiments in its state of the art laboratories, continuously generating new research ideas for the company.

Patents and copyright laws are important in driving innovation. Gaining patent rights has helped many companies to survive in the world market. Geox shoe producing company is known for innovation and company patent rights have been protected sufficiently and their innovations are not under threats of copying and imitation by its rivals.

Geox investments in research and development yielded a stream of patents; over 50 patents were obtained to its name by September 2009. There were patents related to equipment, machinery and even processes and materials.

Smart people with smart ideas have always found their way out just like Mr. Polecat. Although most people are creative, many lack the ability to translate their good ideas into business opportunities. Engaging in marketing research gives any given company an opportunity to be competitive.

Technological development is necessary to support innovations. Goex did not enter into main shoe market until they introduced a different technology in their breathing technology to help them expand into producing sports shoes. Technology is seen as a pre-condition for innovation. Innovation alone cannot guarantee good performance of company products especially in the fashion-mindful shoe industry.

Competition should not deter the implementation of business ideas. Fierce competition in the shoe manufacturing sector did not deter Polegato from pursuing his business idea. Instead it helped him come up with better ideas to win customers. Competition from other players in the industry helped the firm to grow in strength.

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Global footwear industry

The world market is growing and more so the demands for shoes just like other goods and services. The USA provides the biggest market for shoes although Asian market is growing rapidly. This market is highly segmented hence provides manufacturers the opportunity to specialize, for instance in casual wear, children and sports.

Market segmentation gives new entrants an opportunity to venture into big market by starting off with a particular market segment and later expand into the bigger market. Geox entered the shoe market by producing shoes for children before venturing into the larger market.

We should be flexible and avoid sticking to our areas of specialization all the time. Although specialization has been found to increase individual competence in a particular area, overspecialization may lead to loss of opportunities for many people. Having interest in things outside your area of expertise helped in establishment of Geox company which is quite different from Polegato’s areas of specialization.

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Geox profile

Setting clear company objectives is necessary for the performance of any company. Geox Footwear Company just like other firms in footwear industry has clear objectives that guide their operations. Their operations are lined towards achieving the set objectives.

Outsourcing is necessary for cutting costs and helps in saving costs associated with setting up new firms in a new area. The money saved can be utilized in other areas that are more demanding. For instance, Geox outsourced its production to Asian shoe factories which contributed over 95% of its total production. Outsourcing was the company’s easiest way of entering new markets of Asia without necessarily installing full operational plant.

Brand name is necessary marketing tool for company products. Geox name had been established as a popular brand name across the globe, this acted as a major marketing tool for its products. Company brand name differentiates its products from those of its competitors and is easily accepted in the market without even much advertisement and sales promotion.

However advertisement and sales promotion plays a crucial role in popularizing company products. However, communication strategy determines the effectiveness of advertising to the audience.

A well established distribution channel is equally necessary for company performance. Customers require goods when they need them and this depends on the efficiency of company’s distribution network. Geox had excellent distribution network spread across the globe of over 10,000 multi- brand stores and 997 single stores Geox stores located in major world cities.

Staff development through training and promotion cannot be underestimated. Staffs need to be motivated to give their best in terms of performance. For instance, Geox School was established in 2001 which was training school for both new recruits and company staff.

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Footwear key players

Footwear industry is one of the most competitive industries in the world today. The major players includes boss holdings, brown shoe company, coach inclusive company, Iconix Brand Group, Rocky Brands, skin Inc. among others.

However, challenges are inevitable and companies should be prepared for the challenges that arise. For instance, global economic downtown exhibited in 2009, adversely affected Geox just like many others.

However drastic measures are called for to overcome external challenges. For example, the company halted its expansion strategy until the period of economic recovery to consolidate its weakened financial status. In most cases, strategic change is necessary to minimize production and operational costs sometimes leading to the laying off some staff to cut down company costs.

Opinion

From the story of Mr. Mario Polegato and Geox Shoe Company, we realize that most innovative ideas are left unutilized due to lack of ability to implement them. It’s my view that had not Mr. Polegato had the ability and means to raise funds to implement his breathing shoe technology, the idea could have been wasted.

Innovation is key for survival of any company in the evolving world market hence patenting laws need to be enhanced to promote innovation. Governments should embrace the idea generation to encourage creativity among its citizens.

Companies should carry out industry and external market analysis to inform its strategic marking process. Analysis of industry will assist in establishing company strengths and weaknesses as well available opportunities to exploit, and threats posed by the industry players. External analysis will prepare the company for unforeseen challenges and benefits.

Investment in research and development should be accompanied with investments in new technology and infrastructure that provide conducive environment for the function of companies. Globalization and opening of borders have greatly contributed to the growth of many firms by offering markets for their goods and services.

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Conclusion

Innovation is taking its rightful place as the main weapon for company survival in the global market. Therefore, this noble concept should be supported by all governments and major players tasked with regulation of trade and patent rights. Technological development, political stability, favorable economic environment and ecological and social factors have both negative and positive influence on performance of manufacturing firms. Companies should always be prepared for the unforeseen circumstances that have led to downfall of many companies in the past.

Reference

Ali Farahoomand. (2011) Breathing innovation into shoes; Asia case research Centre, University of Hong Kong. POON Kam Kai series; 10/472c

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International Retail Marketing Research Paper

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INTERNATIONAL RETAIL MARKETING

International Retail Marketing

Critically evaluate different concepts and theories relating to the marketing mix. Explain the role that the marketing mix plays in the formation of a marketing strategy for a retail organisation today. Discuss key factors that may cause the international retail marketing mix to differ from the retailer’s domestic marketing mix, and how these might be implemented.

And

Critically examine the retail marketing mix of your chosen retailer for their current domestic market, and, in the context of the issues discussed above, justify what modifications you consider may be necessary in order to internationalise their mix for a specific foreign destination country

INTRODUCTION

The aim of any company that is in business is to grow and expand in terms of market share and product range. Many companies usually employ various optimal techniques towards these objectives and the choice of the concepts and theories to use is very important. There are various ways in which the company can achieve these desired results and one of them is through the use of the marketing mix strategies that target the key elements involved in market analysis. These key elements are the product itself, the price of that product, its placement and also the promotion modes employed to ensure the customer accesses the product.

PART (A)

In this part we are going to explore the various theories and concepts that pertain to marketing mix and the role they play in the designing of a marketing strategy for a retail organization. We shall also look at the main differences between an international retailer marketing mix and a domestic retail marketing mix.

MARKETING MIX THEORIES AND CONCEPTS

In seeking to understand the optimal utilization of a company’s resources to enhance product penetration and affordability there is the 4Ps concept (Luan, 2010). It focuses on the product, price, place and promotion.

Product

This refers to a good or service that is the end result of a process initiated either by the company, subsidiary or trading partner. It is what the company offers to its customers.

The producer must ensure that the product will satisfy the customers need adequately. It must be of the required quality standards and before production starts the company must carry out surveys on the exact requirements by the consumers. The company should be able to offer assurances on the safety of use of the product through warranties and safe packaging. This will ensure brand loyalty from the consumers which will lead to higher sales volumes and it will increase the market share of the product.

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Price

This is the value attached to a product or service and it must be paid in monetary terms to the producer.

The company must know how much the target customers are willing to pay and also their ability to pay for the product (Pitsaki, 2011). This will have a direct effect on their demand for the product. Therefore the product must be priced competitively to ensure affordability and also profitability on the part of the producer or company.

Place

This is the venue where the buyer of the product expects to find it and all relevant information that pertain to the product.

The consumer should know where to find the product easily at any time and at the right quantities. This will call on the sellers to devise clear places where the information on the product can be accessed easily. They can use the internet and even mobile phones because majority of the people have access to them.

Promotion

This is the process of reaching out to current and prospective customers to ensure the product has a wide customer base.

This calls for the stakeholders to come up with ways to inform the consumers of the presence of the organization and also its products. They must advertise their products through aggressive techniques (Peter, 2007) like sales promotions and also conduct public relations campaigns to make sure the company’s presence in the market is known by many.

PRICE

PRODUCT PLACE

PROMOTION

The 4Ps model clearly indicates that the marketing mix is surrounded by the four elements which must be carefully determined to enhance success in the market.

Growth strategy mix

This concept focuses on the use of the internet to ensure product penetration in the market (Yanan , 2000).

Market Development Strategies

The company can adopt the use of the internet to penetrate international markets. They can start advertising their products early in the potential market to make sure when they finally enter that particular region there products will already be known in various segments of the markets.

Market Penetration

The marketing team will be required to devise the strategies to be used to increase the market share of the products. They must increase their presence online to target new customers. This will also improve the loyalty of the existing customers because they will be able to engage more with the company.

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Diversification

The internet will be used to ensure that the company engages fully with its suppliers and intermediaries. This will make them identify potential target areas and also whether they can develop other products to compete with those that are already in the market.

Development of the product

Through the use of the internet the firm will know the strategies to use in the development of their products. They will be able to know how to add value to existing products, how to improve efficiency in the subscription procedures and also how to increase the product range so that to bring on board more e-retailers as possible. They must seek good service providers who are reliable in the market and who will offer competitive prices.

The 4 C’s Model

The customers being the target of many marketing initiatives take the centre stage in this model. The model focuses mainly on the pull marketing strategy as opposed to the push strategy adopted by the other models.

Customers: Their needs must be fully satisfied by the products in the market.
Cost: The cost of the product to the consumer should be analyzed to enhance affordability.
Convenience: The product should be readily available to the consumer anytime and anywhere.
Communication: There should be more interaction between the sellers of the product and the customers. This will ensure customer satisfaction

*CUSTOMERWhat do they need? How do they need it?***	*COSTHow affordable is the product?***
*CONVINIENCEWhere are they getting the product and how much is it costing them to reach the venue?***	*COMMUNICATIONAre they aware the product is available?***

ROLE OF THE MARKETING MIX

The role the marketing mix plays in the formation of a marketing strategy for a retail business will determine the suitability of the strategy and definitely the success of the business (Albers, 2010).

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The marketing mix will ensure the product chosen for sale by the retailer is suitable and fit for the particular market. This is because the success of the business will be determined by how good or bad the product is. The suitability of the product in the market will be determined by several factors which will revolve around the geographical area, the income levels of the consumers since it will affect their purchasing power and also their consumption and buying habits. The retailer will decide the units or packages of the product that best suit that market to ensure there are sales volumes and also customer satisfaction.
The marketing mix will also help the retailer in knowing the pricing modes he is going to adopt for his products. If he prices his commodities very highly they will not get customers and again if he prices them low he won’t meet set revenue targets. The retailer will therefore be required to analyze all the factors that will influence his product prices such as supplier prices, price of substitutes, competing retailers’ prices and transportation costs. This will ensure the retailer does not lose customers and he gets the expected profits from his business. The company will also be able to meet its obligations like payment of taxes, rents and rates.
Also the marketing mix will make the retailer know how his product will have wider reach to its customers. This can be done through opening more retail stores in different localities to enhance wide coverage. He will also be able to evaluate the additional costs that will result from such expansion such as increased rental bills, more wages because of the additional employees hired and even more utility bills.
The retailer will decide whether he will advertise his business. This may not be feasible because majority of the commodities he could be dealing with are normally advertised by the producer. The only advertising he can do is to inform the prospective customers of the location of his business.

There are various factors that may cause the international retail marketing mix to differ from the domestic retailer’s marketing mix. These include;

The international retailer will be expected to heavily advertise his products in the new market as opposed to the domestic retailer who expects the advertisements for the products to be done by the producer. This means the international retailer will incur heavy advertisement costs which in the initial stages may eat into his profits. This implies that profits may not be realized in the short run for the international retailer as opposed to the domestic retailer. The product may therefore take long to penetrate the international market due to these initial costs. The domestic retailer is already established in the market and his product enjoys loyalty from his customers and is already in profitability.
The international retailer will have no control of the prices that are in the market. The prices will already have been set by the local operators in that market (Rossi, 2000).The international retailer will be forced to take the prices as they are in that market to ensure that there are sales volumes. This is despite the many expenses he has incurred at the set up stage which if taken to account will mean his product price should be higher, but because the international retailer wants to enhance competitiveness he will take the market prices so that he can compete adequately with the rival products.
The international retailer will be supposed to carry out very intense promotional campaigns for his products. This is as opposed to the domestic retailer whose promotions are minimal since his goods which are mostly locally produced are mainly advertised by the producers. The domestic retailers can devise to block the international retailer by adopting low price strategies (Harald, 2008). This will mean the international retailer will take a long time to attain a considerable market share in the foreign market for his products. The international retailer will be forced to seek favorable distribution channels for his products to ensure they reach the target consumer.
The domestic retailers will be on the look out to dominate the places the international retailer may choose to advertise his products. They will adopt defensive techniques to guard against their market share which is under threat from the international retailer. The international retailer will therefore be expected to identify areas where those in the domestic market have no full control over. Such areas may include the internet and other social sites frequented by many people.

PART (B)

In this part we are going to review the retail marketing mix for Superdrug Company and what they are supposed to do so as to internationalize their marketing mix when they venture in Australasia.

The Superdrug Company will have to study the marketing mix in the foreign market carefully to enable it come up with a good strategy to enter that market.

Product

The market mix for Superdrug is very strong in the UK which is their home market (Meyer, n.d). They are major players in the beauty and cosmetics industry and their products enjoy wide appeal. The products are of high quality and the company enjoys sizable market share. This is because the products have fully penetrated the market. However the beauty and cosmetic industry in Australasia is saturated with many players.

The company must maintain the same quality for the products to ensure customer satisfaction. Product quality as seen in the 4Ps model is very important as it will determine the customer satisfaction levels. The satisfaction derived from the product will guarantee the sales volumes the company will achieve and the market penetration levels.

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Price

Superdrug will be forced to adopt a price reduction strategy for their products to realize sales volumes. There are many substitutes for their products in that foreign market and each of the domestic players will be seeking to guard their market share. Reducing prices will increase the preference of their products to many consumers and this will enhance market penetration (Edwin, 2007).

However this can only be done in the short run when the products are still in the initial introduction stages. The company after securing a sizable market share should revert to applicable prices in order to realize profits.

Promotion

The company being a foreign entrant will be expected to heavily promote its products among the consumers. This will make the majority to be aware of their presence. They will conduct sales promotions in the key areas they will identify. They should convince the consumers why they should stop using their current products and adopt theirs. This means the advertising budget will be huge because the local companies will also be guarding against their market share.

Place

Superdrug on evaluating the market will be required to identify the most convenient places to place their advertisements to ensure wide accessibility. They should consult with the major advertising consultants in the new market and seek their advice. Interaction with the consumer will be very crucial (John, n.d) because this is what will determine the demand for their products.

The company should also adopt the use of the internet to alert customers of their entrance to this new market. Loyal customers like the tourists will be happy to know their favorite products from the company are also available.

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CONCLUSION

The role played by the marketing mix in the formulation of marketing strategy to be adopted by companies is very important. It is used to identify key variables that determine the suitability of a particular product being in the market. This is because many industries today are dominated by players who will not give in easily to their market share. The local players want to maintain their profit margins and when any foreign entrant attempts to venture in to their market they will employ defensive tactics to ensure they preserve their market share.

To overcome all these obstacles a company should fully understand the market in which they are operating because the information gathered in local markets may also be important in the foreign markets. Failure to do this will place firms at a disadvantage whenever they seek expansion and it will be very harming to the business and to the industry as a whole.

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References

Albers, M (2010) Marketing Demand. London. Penguin Books, P. 9

Edwin, S (2007) Product Management. Bristol. Ace Publishers Ltd, P.23

Harald, J (2008) Brand Evaluation. Berlin. Dietz Printers, P.41

John, E (n.d) “ Relevance of Competition”( Online). Available from http://www.markettrends.org/ (Accessed on 28^th April 2012)

Luan, Y (2010) Marketing Mix Responsiveness. Brisbane. Senton Publishing House, P.17

Meyer, P (n.d) “History of Superdrug company” (Online). Available from http://www.superdrug.com/ (Accessed on 28^th April 2012)

Peter, E(2007) Marketing Mix methodology. Cambridge. Cambridge Press, P.25

Pitsaki, J (2011) Strategic Brand Management. Dublin. Alwin Books Ltd. P.31

Rossi, P (2000) Marketing Research. London. Pearce Publishers Ltd, P.53

Yanan, W (2010) Internet Marketing. Dublin. Green Books Ltd, P.39

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