Table of Contents
1) Introduction 3
2) Industry Analysis 4
a) Internal Factors: 5
b) Market potential for the product 6
c) Market regulation 6
d) External factors 6
e) Tax regulations 6
f) Foreign exchange policies 7
g) Public demand in the market 7
h) Trading policies and laws: 7
i) Customers/ Competitor based factors: 7
j) Industry and Business related factors: 8
3) Target Customers 8
4) Market Positioning 9
a) Product: 9
b) Place: 9
c) Promotion: 10
d) Price: 10
5) Market Entry strategy 11
a) Exporting: 11
b) Licensing and contracting: 11
c) Franchising: 11
d) Joint Ventures: 12
e) Direct investments: 12
6) International Competitive Strategy: 12
7) International Human Resource strategy 12
8) Conclusion 13
9) References 13
Introducing new products in foreign markets has become very easy due to the growth and development of market strategies and increasing adoption of technology in these processes.
At the same time, while introducing any product in a new market requires great research and analysis. This is because of the increasing number of competitors in the market and introduction of high quality at very optimum prices. It is very necessary for any company to keep their product cost effective, in order to obtain the required share in the new foreign market. There is an extensive research carried on the development and evaluation of an industry life cycle. It may be seen that developing resources available and developing marketing strategies in such a way that it the product profitably fits in the foreign market is achieved through a successful industry life cycle.
New Zealand has been chosen by me for the introduction of a new product in their markets and the product is Feathers perfume brand in UAE (FEATHER-FASHIONS, 2015). The targeted customers and sections of the market that the product would focus on has to be evaluated. It involves a complete and appropriate form of logistics to be adopted. It requires effective handling of the procurement process, movement of materials through the supply chains right from the suppliers to the customers. Providing the perfumes online would be very easy option for connecting with a huge mass in New Zealand. Also, in the case of our product, developing shops and carrying extensive marketing would also be required in its logistics as the product is new to the market and requires establishment of customer base.
Depending on the entrance strategies and market conditions, industry life cycle is projected, and then the product is launched into the market after making it suitable for the target market.
Perfume industry has been blooming since the last few decades in New Zealand. There has been considerable changes in the trend of the perfume industry. This includes a shifting of the buyer’s approach from strictly brand oriented high standard perfumes of high costs to good fragrant perfumes at affordable prizes. This kind of change is inculcated by the new generation where they need cost effectiveness in the product. An industry life cycle of any product consists of the following 5 factors (Hill & Jones, 2009):
This refers to the launching of the new product in a market or launching an old product in a new market.
This is the phase in which the product grows in the market where it has been recently launched
It is the phase where there is maximum rivalry among the competitors. During this phase, we have to launch specific and attractive offers to outperform the competitors.
It refers to the highest or peak values of sales and profit for a company’s product.
It refers to the decline in the business of the product after achieving its peak business (Hill & Jones, 2009).
It can be seen that our product is in mature stage in UAE as it has generated a huge share in their markets. This would help in introduction of the perfume in New Zealand. Using the mature stage of the industry life cycle, the product entry would be made very easy in the markets of New Zealand. On the basis of this, there are about 10 factors which have to be analyzed while entering a new market, that is, the perfume market in New Zealand. These factors are also scored at the end on the basis of their suitableness out of 10 points. High scores of around 8 or 9 out of 10 would refer to a favorable factor for the business, whereas rankings below 6 would indicate severe problematic factors for establishment of the business. These factors are (Dean, Menguc, & Myers, 2000):
The internal factors refers to the development of the product and strategizing its features and planning the final outcome or appearance of the product. In the perfume industry, this serves to largely focus on developing a good fragrance of the perfume. Their score of suitability in the New Zealand market is 8/10.
Market potential for the product
There has to be consideration of the market potential for the product, where here we have to consider the fragrance market in New Zealand for our product. Their score of suitability in the New Zealand market is 9.5/10.
The regulation policies and legal framework regarding them in New Zealand, are important to be studied and developed by the Feathers perfume industry. The regulations in New Zealand are developed by the “Cosmetic Toiletry And Fragrance Association Inc. (CTFA)”. Their score of suitability in the New Zealand market is 5/10.
The political stability, inflation rates and economic condition of the target market is obtained in this factor. New Zealand has very stable economy based on very low cases of inflation and there is no corruption and political conflicts in New Zealand. Their score of suitability in the New Zealand market is 9/10 (Dean, Menguc, & Myers, 2000).
There are few taxes collected or imposed on the products in UAE. However, that would not be the case in New Zealand, where there would be high imposition of taxes. This has to be considered while developing the costs of the products. Their score of suitability in the New Zealand market is 4/10.
Foreign exchange policies
New Zealand has very friendly foreign policies for the introduction of new product in their markets. Their score of suitability in the New Zealand market is 9.5/10 (Dean, Menguc, & Myers, 2000).
Public demand in the market
There is a huge demand for the perfumes as the people in New Zealand have a high standard of living. Their score of suitability in the New Zealand market is 8.5/10
Trading policies and laws:
The trading laws, policies and regulations are very friendly for entrance of a new product in the market, but it also has certain specific provisions regarding the quality of the product. This is to maintain certain predetermined standards of quality and safety in New Zealand. Their score of suitability in the New Zealand market is 7/10
Customers/ Competitor based factors:
There ae many competitors who are trying to establish their share in the Kiwi market. Hence, Feathers Perfume Company has to come up with cost effectiveness and high quality for entering in the Kiwi market. Rivalries are included in this factor. There are many existing perfume brands who have established a firm share in the perfume industry and they are Opium, Giorgio Armani, Chanel, Gucci, Dior, Their score of suitability in the New Zealand market is 4/10.
Industry and Business related factors:
These are the factors that affect the success of the business in New Zealand (Dean, Menguc, & Myers, 2000). The scope of the business is very high for this factor. Their score of suitability in the New Zealand market is 9/10.
The segmentation of the market is very important while developing target customers and market positioning for our product. There are many types of segmentation like geographic, behavioral, psychographic, demographic, occasional, cultural and multi variable account segmentation. For our product, the best segmentation would be behavioral segmentation which involves considering the choice and attitudes of the buyers while purchasing a product (INTERNATIONALCMO2GO.COM, 2015). The segmentation of the perfume market for the Feathers brand has to be carried precisely and accurately as it is not a new product and similar products already exists in the market.
The target customers for our product should not be in general and for our product, it would be the young section of the society. They would be very enthusiastic in trying new things and hence the concept of using perfumes would blend well with them. They would also require the product to be cost effective. After some time, the focus would be expanded to older sections of the society where, they believe in class and standard irrespective of the costs (Chung & Enderwick, 2001).
Market positioning would be done so as to establish a specific position and share in the perfume market. It would be determined on the basis of the factors of attraction and distinction among the customer’s point of view regarding the perfume. The 4 P’s of the marketing mix are to be evaluated for this (Gronroos, 1994).
It refers to the development of a product or service pertaining to the needs of the customers. The perfumes developed by Feathers would be specially designed to cater the tastes of the young people. It would have strong fragrance and a touch of excellence in its designing would help the product to attract large youth customers.
The channel that would be used for the distribution of the product in the market refers to the place factor of the marketing mix. The channels would be developed in such a way that it could connect with the young people. The retail chain would be maintained mostly through super markets and big stores which would reduce the purchase cost for the customers due to lesser number of people in the chain.
Since, the perfume targets the young people, it promotion has to be technologically driven and upgraded. It involves promoting the perfumes online and making them popular among the masses using social networking websites like Facebook, WhatsApp, Tumbler, Twitter and other such platforms where a large number of viewers are available. There has to be many tie ups in campus festivals and occasions where a large gathering of youth population would be there. Selecting marketing strategies from among the push or pull type is significant for the success of the product. In our product, push strategy would be more useful as it involves providing attractive offers, discounts and schemes to the target customers and also, the retailers in the process. This kind of direct approach would be accepted easily by the young customers.
Pricing refers to evaluation the costs incurred in production and other processes and then pricing the product accordingly. There are different types of pricing techniques which can be used for pricing of the product and they are, Skim pricing, Penetration pricing. For the introduction of our product penetration pricing would be best as it would help developing a firm customer base among the young people through large discounts and schemes. Competing with the rivalries involves pricing like predatory pricing, multi-point pricing and experience curve pricing. Predatory pricing would help in overtaking and out powering the small competitors from the market through reduced prices of the perfumes by Feathers Company.
Owing to the market positioning strategy involving effective pricing and promotion of Feathers perfumes, they would tend to have a good position in the global market for its quality products (Gronroos, 1994).
Market Entry strategy
The strategies which hare introduced to enter a new market for any product have to be evaluated, analyzed, tested on a small scale, modified and then finally implemented on a large scale. There are five modes of entering the foreign market which hare mentioned below (Chung & Enderwick, 2001):
This involves selling of products to the international market through shipments and deliveries. Exporting requires less manpower and setting up of business does not involve developing the company in New Zealand. It just involves exporting of the products from UAE.
Licensing and contracting:
It refers to the provisions of providing the rights regarding the products to other local company or store in New Zealand. This involves developing bonds and contracts with the company or store with whom the license is provided.
It is one form of licensing where the company provides the rights to other companies or stores, but it has a direct control over the quality and standards which hare prescribed to be followed by them to the companies or stores that are selling their product.
It refers to developing of joint bonds and tie ups with firms in partnerships with other company. Feathers perfume brand can tie up with any local perfume brand or sports brand or even beauty brand for the launching of the new perfume in New Zealand.
Company can directly invest in the foreign markets for launching the new perfume in the Kiwi markets.
For our product, Franchising would be the best way to enter the market as it would help the company to maintain the high standards and quality of their perfumes. Franchising would be easy as the company is very well known in UAE for their perfumes and cosmetic products.
International Competitive Strategy:
The international competitive strategy refers to the development of factors that are critical in the development of the product, evaluating it and quantifying them and setting business goals according to that. It also involves adopting a suitable international business strategy to compete in the foreign market. It requires development of tactical plans for the development of the product after setting the objectives and vision of the perfume which has to be launched in the markets of New Zealand (Chung & Enderwick, 2001).
International Human Resource strategy
It involves various steps starting with the development of ideal product and organization structure for the target market in New Zealand. It further involves developing the HR policies and legal framework which has to be followed in the markets of New Zealand. It involves appropriate recruitment at regular intervals of time and managing the new market in such a way that it influences the maintenance of the HR policies set by the Feathers perfume company for New Zealand (Chung & Enderwick, 2001).
Thus, it can be concluded that while entering the new market in New Zealand, Feathers Company would have to ensure their high standards and exclusive fragrance to be maintained and it also has to adopt cost effectiveness for its target customers in the New Zealand’s market. The strategies and methods provided would help the company to establish a good share for them in the markets of New Zealand.
Chung, H. F., & Enderwick, P. (2001). An investigation of market entry strategy selection: Exporting vs foreign direct investment modes—a home-host country scenario. Asia Pacific Journal of Management, 18(4), , 443-460.
Dean, D. L., Menguc, B., & Myers, C. P. (2000). Revisiting Firm Characteristics, Strategy, and Export Performance Relationship:: A Survey of the Literature and an Investigation of New Zealand Small Manufacturing Firms. Industrial Marketing Management, 461-477.
FEATHER-FASHIONS. (2015). About Us. Retrieved from http://www.feathers-fashion.com: http://www.feathers-fashion.com/
Gronroos, C. (1994). From marketing mix to relationship marketing: towards a paradigm shift in marketing. Management decision, 32(2), , 4-20.
Hill, C., & Jones, G. (2009). Strategic Management Theory: An Integrated Approach. Cengage Learning.
INTERNATIONALCMO2GO.COM. (2015). Critical Components to Marketing Your Business Effectively: 8) Market Segmentation. Retrieved from http://www.internationalcmo2go.com: http://www.internationalcmo2go.com/icmo2go-blog/
Koch, A. J. (2001). Factors influencing market and entry mode selection: developing the MEMS model. Melbourne, Victoria,: School of Business, Swinburne University of Technology, .