Date of Submission:
Airbnb has adopted several marketing strategies to develop a niche for itself in the market. It consists of developing features that are related to the development of digital marketing that is obtained through the google ratings. The usage of digital marketing is a huge success as it involves developing various features that would be featured online and people would be accessing the places through the digital format.
One of the other significant strategy that has been developed by Airbnb for marketing in the global industry is the adoption of content based marketing that requires developing content strategies for the same. Hence, it can be stated that using the reviews of the people is very helpful, but ranking them or providing them with the priorities on the basis of the ratings that the places have obtained serves the purpose of the marketing strategy in the globalization of the industries. It involves developing advertisements on the google display that will help in reaching maximum number of people and provide the company and its services with the required exposure across the globe (Zervas, et al., 2015).
The segmentation of the customers by Airbnb has been the income as well as psychographic segmentation. These two types of segmentation would consider the economic spending capabilities of the customer as well as bifurcate them on the basis of their preference. It is through Airbnb targeted the customers that had to travel to different places and they did not go and stay into the usual hotels and other expensive options. Hence, Airbnb was developed with the strategy to provide accommodation facilities to the customers and it would be selected by the customers themselves by being thousands of miles far. Airbnb has a significant positioning that includes medium quality and low pricing strategy and it aims at providing maximum amount of feasible solutions at an assured quality. Airbnb promoted the brand through using the platforms that have been mentioned above that consists of carrying digital marketing of the processes. The pricing of Airbnb is very cost effective and it provides a complete view of the service to the customers. Thus, they believe in obtaining large customer base and hence they have kept low pricing structures. The channels used incudes the google display and providing advertisements across different platforms. It has also developed its mobile application and it has worked wonders for the company as the customer can access the availability of rooms and check its quality right from their phone.
In the beginning phase, Airbnb emphasized on the high profile and social events that involved emergence of a huge crowd. It considered the needs of the customers where there were many problems and discomfort faced by the customers while living in hotels that made a hole in their pockets, that is, were very expensive. There are different factors that are contributing to the rapid growth of Airbnb. It includes the development of digital marketing concepts and promoting the company through the content strategy that involves developing stories that consist of the experiences that the customers have while using Airbnb. The people across the globe tend to connect with the stories that are provided by others. Thus, they end up using Airbnb too. It tends to be the driving force for the success of the rapid growth that has been observed in Airbnb throughout the market. There has been a solid growth in its customer base through the adoption of technologies that are trending globally and are used by large of people across the globe. On the basis of the experiences that were shared by the satisfied customers, there is an extensive network of these customers developed at the cost of providing cost effective services to them. Developing an efficient amount of customer base also involves carrying sustainable customer relationship management in the market. It will be on the basis of this that Airbnb has obtained feedback from their customers and even obtained their stories in the form of warm experiences that they had using the service offered by Airbnb. It has developed customer oriented approach against the traditional approach (Wegert, 2014).
Airbnb has been very effectively implementing this strategies that consists of the above mentioned factors of developing an extensive customer base across the different countries of the world. It has inculcated wide scale promotion among the customers that mostly involve the young age travelers who are ready to adapt to any condition and circumstances that are provided to them. They are the ones who have to search for cost effective accommodation options for their sustenance in the foreign market. The main element that is developed by Airbnb is hugely based on the development of strategies that is based on reaching maximum number of people through different platforms. This has resulted in earning rapid growth for them in the industry.
Obtaining finance is a very critical factor for the startups. There are very few options for obtaining financial resources through initial investments made by the other people. Hence, there has to be an innovative idea, concept or product that should be developed and launched for ensuring that the company generates the minimum amount of revenue that is required for establishing its business and carrying the basic operations. It is on the basis of this that the founders of Airbnb developed the initial funding through developing and selling breakfast cereals that belonged to a special edition. They used Barack Obama and john McCain as their role model. It was observed that within two months of its operation, there were more than 800 boxes sold. The cost of each breakfast meal was $40. Hence, they earned a huge amount of $30,000 for investing in the inception of their company. During the startup phase, there are many factors to be evaluated while developing any approaching for the strategies that would be capable enough to provide the company with the required customer base as well as adequate amount of funding from them.
The strategy that is developed by the founders for obtaining funding and other financial resources for their business is a matter of choice. The ultimate goal is to generate sufficient amount of revenues that could support the beginning of a startup. According to me, the strategy that was selected by the founders of Airbnb to generate sum for their business was appropriate as the figures that were earned at the end of two months speaks it for all. It can be ensured that while developing such strategy, the company also focusses on maintaining the old customer base by providing them with an extensive customer service and special discounts. The strategy that was sued by Airbnb was appropriate as they did not approach investors with their concept and idea. Instead, they decided to generate the financial resources on their own through selling the special edition of breakfast cereals that emerged out to be a huge success in the global industry. It involves integrating the needs of the customers and developing customer driven marketing strategies that would help in capturing values from the customers.
I would require Maysoon to carry a testing of the concept that has been developed by her. She should derive a driving force or strategy for the business that involves developing marketing strategies for the development of the business and ensuring sustainability across the business carried in the Gulf countries. It involves the concept of generating ideas, screening them and then developing the concept testing of the model developed. Modelling of the ideology developed has to be done and on the basis of it, a proposal has to be developed that helps in obtaining the needs of the customers and aims at generating a significant amount of market share in the Gulf region. There should be strategies developed for the process of pre-launching of the product that involves the highest amount of marketing that can be done for creating awareness about the product and generate interest among the people regarding its launch (Benedetto, 1999). It also involves testing these strategies in order to attain maximum outcome from the efforts that are carried by Maysoon.
Market acceptance tends to be one of the most significant element that is required for establishing a firm and ensuring its success in the market. It is through this that the maximum amount of exposure would be obtained to the company and it will be able to create a niche for itself in the Gulf markets. It involves developing effective customer relationships and innovative strategies that would attract maximum number of customers. There are few risks that are to be identified and accessed for ensuring that the business idea that is developed by Maysoon does not fail. There are many features to be developed and then redeveloped after testing the product or service in the market. The company should always be ready for critical opinions as well as it should be flexible to incorporate all the possible needs of the customers in its redeveloped product. It should be observed that all the risks that are to be witnessed during the launching of the business should be projected ad evaluated. After evaluation, they should be analyzed for developing product and services that would cover all the risks through developing sustainable strategies. It also involves developing critical success factors in the society that would be requiring efficient amount of research that has to be done among the market. All these factors should be considered while launching a new business in the market and Maysoon has to make sure that she considers all the points and develops an optimum solution after evaluation, analysis and formulation of successful business model.
Benedetto, C. A., 1999. Identifying the key success factors in new product launch.. Journal of product innovation management, 16(6), pp. 530-544..
Wegert, T., 2014. How AirBnb Is Using Content Marketing to Stay on Top. [Online]
Available at: https://contently.com/strategist/2014/12/05/how-airbnb-is-using-content-marketing-to-stay-on-top/
[Accessed 26 April 2016].
Zervas, G., Proserpio, D. & Byers, J., 2015. The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry.. Boston U. School of Management Research Paper, pp. 2013-2016.
The increase in the demand of petroleum in the Dubai industries and companies , as well as other plants have provided an enormous opportunity to the Emirat petroleum services to provide its product in the maximum companies. The major problem that poses in front of Emirat is reaching the companies and ensuring that the product is provided on time and its quality and other offers satisfies the client (Lev & Murphy, 2007).
The strategies and plans developed for improving the quality of the service that they provide have to be analysed on a pivot level before implementing it on large basis. The promotion of the company is also necessary to maximize its reach to the number of customers across the globe and this serves to be another P of marketing mix that refers to the promotional element. The company needs to obtain customized offers and concessions after evaluating the consumption from its contracts and orders from the current customers (Petit & McEnally, 1985). This offers would not only serve to attract more customers, but also lead to considerable amount of increase in sales from the long term perspective. For example, the petroleum industry that is the potential customers of the company involve daily consumers and few companies that purchase in bulk. So, for the daily consumers, they can develop various schemes that combine with the purchasing of petrol at the station. This involves providing food coupons for the bakeria, that is the cafeterias existing at the station and coupons that provide free service or concession on the use of various other services that is the automated car wash, change of oils, lubricants, etc.
The element of the marketing mix that needs to be focussed on a large scale here promotion of the service and merging it with attractive offers and schemes that would provide them with a niche over the other petrol service stations.
New marketing mix proposal:
The marketing mix refers to creating plans, strategies and analysis to increase the sales of the product and result in the growth of the business. The standard marketing mix has been developed by Jerome McCarthy in 1960 and is been widely adopted by the market researchers cross the globe. It has four P’s in it and they are namely (Kotler, 1964):
• Product- It refers to the needs and wants of the customers that they expect the product to fulfil.
• Price- It refers the cost of the product and service that the company provides to the customers.
• Promotion- It refers the advertisement and spreading awareness about the people among the masses.
• Place- it refers to the distribution of the product and service, means used for that and the ease in the method of vailing the product to the customers.
Here, for the Emirat petroleum, we need to develop a plan that adopts mix marketing and involves considering the importance of obtaining and understanding customer needs and demands accurately and this serves to be the first aspect of the marketing mix, that is, the first P of marketing mix that refers to the product. It also needs to focus on the convenience that they can provide to the customer in terms of the delivery of their order and this refers to the 4th P of marketing mix that is related to the place. With the proper understanding of the above two elements, Emirat needs to develop and implement strategies that would provide the best combination of the above two elements.
Date of Submission:
The research aims at analyzing the marketing strategies adapted by the Under Armour Company to give Nike and Adidas a run for their money. It has been evaluated through obtaining the Porter’s five forces model, developing a strategic group map, identifying and analyzing the key success factors for the Under Armour sportswear and apparel. It also involves developing the company value chain analysis for the competitive strength assessment of the competitor’s strategies and evaluating the same for developing an ideal strategy for marketing the products of the Under Armour brand. The key strategic issues have been discussed and potential solutions have been obtained. Developing optimum use of the resources available and promoting the product extensively across various markets is the chosen solution for increasing the market share of the Under Armour Company across the global market.
Table of Contents
1. Executive Summary 1
2. Market Analysis (External Environment) 2
2.1. Porter’s 5-Forces Analysis. 2
2.2. Strategic Group Map. 3
2.2.1. Product category: 4
2.2.2. Geographic coverage: 4
2.3. Key Success Factors. 7
3. Firm Analysis (Internal Environment) 8
3.1. Introduction 8
3.2. Company value chain analysis 8
3.2.1. Primary activities: 9
3.2.2. Support activities: 9
3.3. Competitive strength assessment 10
3.4. Analyzing the key success factors: 11
4. Analysis Summary 12
4.1. Strategic issue 13
4.2. Potential solutions 13
4.3. Recommendation selection 14
5. References 15
6. Appendix 15
Market Analysis (External Environment)
There are many factors that influence the success of an organization in the sportswear and apparel industry. It has been obtained through the variable available in them and on the basis of that, adequate theories and strategies have been discussed in the following section.
Porter’s 5-Forces Analysis.
The three companies Nike, Under Armour and Adidas are the leading companies in the production of sportswear and related apparel. Porter’s five forces Analysis have been carried out considering various elements as shown in figure 1 in the Appendix. It has been discussed below:
Rivalry among the existing competitors
There is a huge competition that is existing among the companies Under Armour, Adidas and Nike for occupying a significant position in the market. The competition is regarding the market share that they aspire to create for themselves in the global market of sportswear and apparel. These three companies constitute a large portion of the overall sales of sportswear and apparel in the market.
Bargaining power of suppliers
Bargaining power of the suppliers is very limited as there are a large number of suppliers available to these companies and the resources that they require are developed by many suppliers across the globe. So, there is a constant competition among the suppliers too.
Bargaining power of buyers
The bargaining power of buyers is extremely high. It is due to the increasing demands of the customers and a tremendous boost in the availability of quality products across the globe at feasible prices. Buyers have to be constantly upgraded with the new innovations and designs that are developed in the sportswear industry by these companies.
Threat of new entrants
There is a constant threat of new entrants that have the potential and capabilities to occupy a large share in the market through providing interesting offers to the customers at very effective costs. However, the threat of new entrants is harmful on long term basis as it would take time for the new entrants to develop a market share that would be comparable with Nike, Under Armour and Adidas.
Threat of substitutes
There is a threat of substituting the current designs and features offered by the leading sportswear companies by a more effective and feasible design, patter nor material. It has to be kept under constant check so as to ensure that the companies are staying upgraded with the new innovations made in the industry.
Strategic Group Map.
The strategic group mapping of the three companies, namely, Nike, Under Armour and Adidas would help in projecting the sales across different parameters of strategic importance. The strategy group map of these three companies is shown in the figure 2 provided in the Appendix.
These parameters are:
The product category is a parameter that refers to the different sections of types of products that are developed in these three companies. It would be including elements like:
• Apparel and
The mapping of the product category parameter would be in two scales and they are:
It refers to less production of the overall varieties of different products across the globe. It considers both the availability of different product categories as well as its sales for a specific company out of the three companies that are considered.
It refers to the production of several categories of products and its scale of availability across the globe among these three companies.
Geographical coverage refers to the reach of the products of these companies across the globe. It is carried on the basis of the number of stores and outlets that these companies have in different countries worldwide including the remote areas.
It is divided into two elements and they are:
It refers to the availability of the products across the globe in less number of localities as compared to its competitors.
It refers to the availability of the products across the globe to more number of localities on the basis of geographical diversity.
Hence, all these kind of groupings would help in achieving an understanding of the strategic positioning of these companies among different countries of the world.
Key Success Factors.
The key success factor for the companies tend to be the strategies, elements, variables and assets that are very much intangible and have a significant contribution on the success and growth of the company in the global market.
The key success factors that have been considered by us include the following elements:
Advanced technology and expertise in it:
• Efficient manufacturing through high capacity utilization:
• Appropriate distribution with extensive network of distributors:
• Adequate and active marketing to reach maximum mass worldwide.
• Strong brand building:
• High experience curve benefits:
• High level of innovation:
Firm Analysis (Internal Environment)
In the cutthroat competition among the companies across the world, Companies have to consider various internal variables in order to develop a niche for themselves. It includes the strategies that are formulated within the Under Armour Company to overcome the challenges and competition that it faces from strong rivalries like Nike and Adidas. The company has few specific issues which they are dealing through innovative design that develops new trends in the market. It has to constantly face this issue across its developing stage of getting a global presence for its products and create a brand name that would surpass all of its competitors in terms of sales, quality and product service as well as customer’s needs and demands across the globe.
Company value chain analysis
Value chain can be termed as a phenomena where a company or an organization performs various set of activities for developing a product or a service with very high quality and value. Providing a valuable product to the people is a responsibility if the organization and ensuring that it gets done through innovation in the sportswear industry is the major concern of Under Armour Company. For developing a value chain analysis, there are many factors that are identified for improving the performance of the organization. There are two kinds of activities associated with the development of value chain analysis in the manufacturing of a product or a service in a company. They are:
The primary activities are directly connected to the core requirements and functioning of the company. It is the main component of the value chain analysis. It consists of the following sub activities in it:
• Inbound Logistics
• Outbound logistics
• Marketing and Sales
These are the activities that complement the flow of the activities and ensure its smooth functioning of the tasks that are shown in the above section of primary activities. It consists of the following sub activities:
• Infrastructure of the firm
• Human Resource management
• Technology (Noke & Hughes, 2010)
There are two types of value chains that can be taken into consideration and they are:
Company’s Value chain in the manufacturing
It involves the various processes that are carried within a company where obtaining a proper management process within the organization is very important. It would help in ensuring that a number of activities are carried out efficiently and productivity is not kept at stake while completing these activities. At the same time, there is a crucial element that states the importance of the above mentioned primary as well as support activities across the organizations.
Industry’s value chain.
Industry’s value chain refers to the method of adding different activities and processes across the industrial market prevailing across the globe. It also involves the different stages that are concerned with the development of the product from its initial raw materials and developing them in such a way that the industrial value chain is maintained and it serves to be one of the most important element of this industry. It involves processes like the raw materials, intermediate goods, it’s manufacturing, marketing and sales and the after sales service that is provided by the companies regarding their products or services reflects their importance and establishes a clientele across the globe. It has been shown in figure 5 in the Appendix.
Competitive strength assessment
Competitive strength assessment refers to the process that is carried out to determine the core strategies and policies that have been developed by the company to overcome the strategies used by their competitors in the global market. It helps in deriving decisions that are related to the development and expansion of a business across the global market. Competitive strength assessment help the companies to identify the strengths of their competitors and act accordingly. On the basis of it, there are special technological innovations, strategies and maintenance functions carried out for counter attacking the strength of the competitors and measure their success (INSTITUTE OF MANAGEMENT ACCOUNTANTS, 1996).
Analyzing the key success factors:
It involves identifying the key success factors for the establishing a niche for the Under Armour company in an industry that is ruled by Nike and Adidas. These key success factors help to provide an overview of the variables that are to be considered while developing strategies related to different products and services that are available in the organization. These key success factor are discussed in the section below:
• Efficient manufacturing through high capacity utilization:
Developing innovative and creative means of production to observe high productivity across the organization serves to be the major role of providing optimum utilization of the capacity that is available.
• Appropriate distribution with extensive network of distributors:
In the processes that are related to the marketing of a new product, the distribution of the product or services play a very important role in pioneering the base for the growth and success of an organization. It involves developing an extensive network of distributors above the general level where the main task refers to establishing an adequate share in the market across the globe and replacing the products of its competitors like Nike and Adidas.
• Adequate and active marketing to reach maximum mass worldwide.
The success of any new product belonging to an organization depends on the level of marketing and awareness that it generates among the people from different countries.
• Strong brand building:
Brand building refers to the spreading and trending of the brand among the people belonging to different countries across the globe. It also involves demonstrating the brand over a range of potential customers through extensive promotion and brand recognition. The brand image that the product carried along with the company it belongs to is very important for the Under Armour Company to develop a niche for its brand in the market.
• High experience curve benefits:
There are many benefits that are achieved through developing the experience curve that consists of the cost of the product to its volume of production. It has been shown in figure 5. It is expressed for the units of cost vs cumulative volume where the main purpose of the process is to obtain a balance between the costs of the product and achieve high volumes of production
• High level of innovation:
With the advancement in technology and a tremendous increase in the demands of the customers across the globe, the companies have to be extremely innovative at regular intervals of time so as to ensure sustenance in the global market. Innovation brought about by Under Armour brand involves sweat absorption technology that would help the athletes and sportsperson to improve their performance through getting less exhausted due to the above technology that has been incorporated by the company in the sportswear and apparel industry.
There are several potential areas of strategic fit that can be determined through the above mentioned external and internal analysis of the market as well as the factors that were available. It involves
The strategic issue that is witnessed by the Under Armour Company is the lack of awareness among the people of several countries regarding its products and services. It has very limited reach inspite of the good quality and comparative prices they offer. This is a matter of great concern as it limits the reach of the company and it reduces the global market share of the company.
The problem that is faced in the form of a strategic issue requires developing solutions through innovative and quick analysis of the conditions prevailing in the market and developing an innovative strategy for it’s the sustainability of the company in the market across the globe.
The major issue in the marketing analysis of Under Armour serves to be lack of awareness among the people and hence, it has to be tackled appropriately to increase the data base of the potential customers who would be attracted to the digital or simple advertisements. Another major issue that is faced by the company tends to be the low amount of market share and there most important solutions from among them and they are:
• Imbibing sufficient promotional strategies and implementing for reaching the mass across the globe.
• Using public transport to connect to a large number of people travelling in them.
• Innovative advertisements is one of the best solution for the problem persisting in the company.
Thus, potential solutions refers to the marketing strategies that are adopted to increase the awareness among the people and draw people to the Under Armour brand developed for their benefits and a better life.
There are many alternatives available to the Under Armour Company regarding the development of marketing strategies and its implementation to obtain results on a global level. It would be very convenient to multiply the number of promotions regarding the new strategies and offers developed by the company for its customers. The flow of the products from one end of the manufacturing chain to the customers involves a large chain of middle level players. However, by gaining popularity in the market through attractive promotions and connecting to the daily lives of the people would help in overall increase in the performance of the Under Armour Company. There are
INSTITUTE OF MANAGEMENT ACCOUNTANTS. (1996). Value Chain Analysis for assessing competitive advantage. New Jersey: Institute of Management Accountants.
Noke, H., & Hughes, M. (2010). Climbing the value chain: Strategies to create a new product development capability in mature SMEs. 132-154.
Figure 1: Porter’s five forces model
Figure 2: Strategic Group Map
Figure 3: Key Success Factors
Figure 4: Company Value Chain Analysis
Figure 5: Experience curve
Table of Contents
1. Introduction 3
2. Industry Analysis 3
3. Country and Market Analysis 4
3.1. External factors: 4
3.2. Customers/ Competitor based factors: 5
3.3. Industry and Business related factors: 5
3.4. Trade Barriers in International businesses through market analysis 6
4. Target Market and Market Positioning 6
4.1. Product 7
4.2. Price 7
4.3. Promotion 7
4.4. Place 7
5. Market Entry Strategy 8
6. International Competitive strategy 8
7. International Human Resources strategy and Organizational structure 9
8. Conclusion 9
9. References 10
With the advancement in technology, the entrance of products into the market has become very easy. Though the pre-processing and planning involved in the launching and introduction of the new product requires extensive research of the current trends in the market and the behavior of the customers as well. The success of any company, these days, depend on the strategies and techniques that is uses while launching the product. Industry environment plays a significant role in developing these plans and strategies. Industry environment refers to the conditions pertaining to the social, political, economic factors that are existing in the market of a country. These factors cannot be controlled through the company, but a company can surely adopt policies and develop products after evaluating the industry environment of their target market (START UP OVERSEAS.CO.UK, 2014)
The product which has been selected is dates syrup and the local company selected which is involved in producing it is Al Foah Company. The target market in which the product is to be introduced is New Zealand. For this, the industry environment in New Zealand has to be obtained. The trends in the markets of New Zealand are evaluated and analyzed (ALFOAH.AE, 2015).
There a large number of companies which are establishing their hold in the markets of New Zealand. This is due to the very friendly business policies being present in New Zealand. The location of New Zealand is very favorable for carrying conflict free business as it does not have any conflicting or controversial neighbors. In our case, the product is a specialty of the Middle-east countries as they are the 8th highest producer of dates in the world. The highest quality of dates is obtained in UAE. The agriculture and dairy industry in New Zealand is very well developed. There are low temperatures in most of the parts of New Zealand throughout the year. Hence, date palm trees are not grown on an extensive scale because of the unfavorable cold climatic conditions (INTERNATIONAL COMPETITION NETWORK.ORG, 2015).
Country and Market Analysis
There is very low pollution observed in New Zealand. The population is very les as compared to the large land area of the country. Adding to this, the people of New Zealand have a high standard of living. People are very much interested in carrying new businesses and investing in the business through effective measuring and evaluation.
There are large number of products which are exported from New Zealand to other countries of the world. The trade policies, law and legal framework in New Zealand is extremely favorable for carrying of trade. It has been called as the most business friendly country in the world, by the World Bank. Analysis of the market in New Zealand includes considering the following factors:
The political condition in New Zealand has been very stable since many years. There are hardly any conflicts with other countries, rebels and riot cases and any kind of corruption seen in New Zealand. Owing to a very limited population and a large land available, people are easily employed and can earn their living in a good way. The New Zealand government has been very effective in controlling any kind of inflation in their economy. This has led to extensive development of the country over a period of few years. Government regulates the policies and incentives for the private companies to help them cover their debts and help in the development of the country through their products and services continue to pose a threat to the launching of any new product in the market of New Zealand (START UP OVERSEAS.CO.UK, 2014). Hence, the suitability score on the basis of the above factors would be 9/10.
Customers/ Competitor based factors:
The market has a large base of customers who are ready to purchase newly introduced products and try them for themselves. The needs of the customers are related to high quality and easy availability of the product. There is a huge competition in New Zealand, due to the ease of trade and international relations policy. Hence, it would be very competitive for Al Foah to develop a good share in the market. The large number of competitors continue to pose a threat to the launching of any new product in the market of New Zealand (START UP OVERSEAS.CO.UK, 2014). Hence, the suitability score on the basis of the above factors would be 7.5/10
Industry and Business related factors:
There are very few trade barriers in entering the markets of New Zealand. These trade barriers are made to control the flow of companies and ensure that quality products are introduced in their markets. Labor force are easily available, but their pay scale is quite high as compared to their countries like China, Japan, and India. There is a huge scope of expansion available in the markets of New Zealand, as government provides incentives to the companies who have been offering good and genuine products for more than 2 years. The costs of establishment would be high as compared to other countries but it would be low as compared to the costs involved in the European countries and UK (START UP OVERSEAS.CO.UK, 2014). Hence, the suitability score on the basis of the above factors would be 8.5/10.
Trade Barriers in International businesses through market analysis
There are many trade barriers on the development of international businesses in New Zealand and they are:
01. Tariffs imposed
02. Licensing problems
03. Export or Import limit
04. Currency fall down in global market
05. Subsidiary companies and departments
06. Taxes collected on different basis.
07. Harbor and Airport permissions.
08. Customs clearance and policies.
09. Packaging as well as shipping considerations.
10. Cultural impact or restrictions on specific businesses (INFOPLEASE.COM, 2003).
Target Market and Market Positioning
Target market for the product involves many super markets and super departmental stores in New Zealand that keep a wide range of products. Market positioning refers to the ideal position or share that a company tends to obtain in the target market. It is very important in developing strategies for the launching of a new product in the market. Positioning of the product in the market is done on an initial testing level for some time. On the basis of that, after some years, the products are evaluated and the strategies are modified for developing a significant position of the date syrup product in the market of New Zealand.
It is the base of any marketing policies and it provides the company with a future potential of success. For Al Foah Company, it has to be the unique and high quality date syrups and the brand value that it has in the UAE food industry.
It is one such component in the development of the product which helps the organization to plan their strategies and develop a product that would generate profit for the company and at the same time, its price would be accepted in the market. Al Foah Company has to ensure its competitiveness in the market.
Promotion refers to the steps or medium adopted by the company for marketing its products or services. It plays a very critical role as to create a hype in the market regarding the product that would get maximum number of people to the company for its product. Al Foah Company have to adopt promotional strategies for the product that would help them to sustain in the highly competitive market of New Zealand.
Place refers to the location where the product or service is being delivered to the customers. It plays a very important role in the success of the product as the customers rank their experience on the basis of the taste and quality that they get from the products of Al Foah Company.
Market Entry Strategy
In the licensing style of market entry strategy, one company provides the license in the form of permission and rights to the other company or dealer for selling the company’s product in their local market. It is generally carried for a specified period and a fee is collected from the dealers to whom the license is provided that is the licensee. This would be a good strategy for the Al Foah Company to adopt the entry for its date syrup product in the market of New Zealand.
It is the business strategy that provides the entry in the market through direct selling of the product to the suppliers in the foreign markets through exporting the products. This would not be a good strategy for the Al Foah company s there would be no awareness regarding this product in the New Zealand market.
In this strategy, the company provides a very limited freedom to their dealers and suppliers in the foreign markets and all the steps and processes are handled by the company itself. It requires an excessive daily control over the market operations carried by the dealers and main suppliers of the date syrup for Al Foah Company in New Zealand.
Franchising is one kind of licensing where the company not only provides the rights to the foreign markets dealers through franchises, but also takes care that the franchise developed follows the rules regarding the quality and service as mentioned by the company very strictly. It would be a good strategy for the Al Foah Company as it would provide them with a control over the quality and delivery of the product in these foreign markets.
A joint venture firm includes developing partnerships with a host country firm where the rights and ownership would be shared between the two. This would not be appropriate for Al Foah as it would not be getting the required partners in the New Zealand market.
Wholly owned subsidiary:
In this strategy, the company develops an entire firm at the foreign location. All the operations are completely controlled by the company and the stocks as well as the rights are possessed with the company. It would not be viable on a short term basis as it involves large investments to be made by the Al Foah Company in the foreign market. However, it can be adopted after some time, when the estimated sales of the product is achieved easily.
The best strategy that should be adopted would be licensing for some time. After the success of the product, developing a wholly owned subsidiary could be considered as a viable option for reducing the costs and increasing the responsiveness. Al Foah company can use the positioning structure on the basis of the level of implementation of their strategies as well as they have to develop a pilot testing phase for the entrance of the product of dates syrup in the market of New Zealand. The strategy requires proper evaluation of the sales in the first month for a limited quantity of product in a very famous super market of New Zealand. On the basis of this, logistics would be developed and statistics related to the projection of estimated sales in the future would be developed. At the same time, it is very important to understand the needs of the customers while launching the product and entering a new market. The strategies that are involved in developing of markets in New Zealand has to be carried considering the legal structure, policies and other regulations offered by the New Zealand Trade Authority and New Zealand Food Safety Department (INTERNATIONAL COMPETITION NETWORK.ORG, 2015).
International Competitive strategy
The relationship of New Zealand has been very supportive with the trade unions, organizations and trading bodies of the world. Hence, there are fewer problems that would arise while setting up a business and globalizing any product by launching it in New Zealand. New Zealand has large number of competitors who consider their market as a huge potential for selling their products in New Zealand. The international markets are striving hard to develop a niche for their products in the markets of New Zealand. Hence, it needs extensive research in terms of marketing strategies, quality and pricing of the product. Al Foah has always been known for its wide range of products and high quality standards. The international policies and framework developed for the product should be such it provides a complete understanding of the market policies and conditions prevailing in the market. These factors are utilized for developing competitive strategies for the international markets (ALFOAH.AE, 2015).
There are 4 types of international strategies available to any business for developing their competence in the market. They are:
Global standardization strategy:
It is one kind of strategy which focuses on the development of a cost effective product in the market and has least dependence on the local responsiveness from the foreign markets. This could be considered for the Al Foah Company as entering the new market of New Zealand would be made possible only through low cost structure.
It involves developing the product initially for the local market and then selling it to the foreign market. This is not suitable for the Al Foah Company because the taste of the people would be different in New Zealand as compared to UAE.
It is the business strategy where there is customization of the product as per the needs of the customers. It helps in ensuring that the local needs and requirements are satisfied and hence it would not be appropriate for the Al Foah Company as the cost pressures are high on its product of date syrup.
It is one form of business strategy that would provide both high cost pressures as well as heavy local responsiveness of the local people in the foreign market. It is not suitable for the Al Foah Company as it would requires a considerable amount of time and resources.
For the launching of the date syrup product in the markets of New Zealand, the cost factor would be the most critical factor for the entry of the product. Hence, the globalisation or the global strategy would be the most appropriate as seen above as it provides a considerable less cost which his very necessary for entering the foreign market of New Zealand.
The evaluation of the above mentioned strategies is done on the basis of the local responsiveness pressure obtained to the cost reduction pressures and it is shown in the figure below:
International Human Resources strategy and Organizational structure
The market for the sale of date syrup can be very well developed and it has huge potential to absorb good quality products of dates in abundance. Al Foah has an organizational structure which is mostly based in UAE. Hence, they would be requiring marketing consultants and experts from New Zealand itself that would help them in developing a proper and fruitful strategy for launching of the date syrup in New Zealand’s markets. The strategies pertaining to the Human resources management in the international involves considering the policies and human factors of the target markets. Organizational structure has to be maintained flexible for adopting the international structures and conditions prevailing in the foreign markets (ALFOAH.AE, 2015).
It can be concluded that entering new market of New Zealand involves developing products on the basis of a complete synchronization between condition of the markets and the needs of the customers. This has to be blended with the quality and services offered by the product. On the basis of these factors and their evaluation, it can be stated that Al Foah can carry expansion of their market in New Zealand through the launching of date syrups in New Zealand.
ALFOAH.AE. (2015, February). DATE SYRUP. Retrieved from http://www.alfoah.ae: http://www.alfoah.ae/contentPage.php?pid=16
INFOPLEASE.COM. (2003). Barriers to International Trade. Retrieved from http://www.infoplease.com: http://www.infoplease.com/cig/economics/barriers-international-trade.html
INTERNATIONAL COMPETITION NETWORK.ORG. (2015). CHAPTER 5 – ASSESSMENT OF MARKET ENTRY AND EXPANSION (BARRIERS TO. Retrieved from http://www.internationalcompetitionnetwork.org: http://www.internationalcompetitionnetwork.org/uploads/library/doc559.pdf
SLIDESHARE.NET. (2012, may 6). IKEA: Furniture Retailer To The World. Retrieved from http://www.slideshare.net: http://www.slideshare.net/kuszczakowski/ikea-furniture-retailer-to-the-world
START UP OVERSEAS.CO.UK. (2014). Why Expand to New Zealand? Retrieved from http://www.startupoverseas.co.uk: http://www.startupoverseas.co.uk/expanding-a-business-in-new-zealand/entering-the-market.html
PRINCIPLES OF MARKETING
1. Introduction 2
2. Industry Analysis 2
2.1. TV industry introduction: 2
2.2. Key competitors in the market: 3
2.3. Marketing strategies of the competitors: 4
3. Company background 5
3.1. SWOT analysis of the strategy: 6
4. MARKETING STRATEGY 7
4.1. Marketing strategy overview 7
4.1.1. Marketing strategy Statement 7
4.1.2. Objectives 7
4.2. Strategic marketing components 8
4.2.1. Market branding: 8
4.2.2. Image & Positioning 9
4.2.3. Sustainable Competitive Advantage (SCA) 10
4.3. Marketing tactics 10
4.3.1. Product Issues 10
4.3.2. Placement / Distribution 11
4.3.3. Pricing 12
4.3.4. Advertising & Promotions 12
4.3.5. Service Elements 13
4.4. Implementation 13
4.4.1. Resources Required 13
4.4.2. Time Line 14
4.5. Contingency Plan & Evaluation 15
5. Executive summary 16
6. Appendix 18
6.1. Worldwide differentiation of the TV market 18
6.2. Market share of the TV industry 19
6.3. Distribution of the sales and the share of various products in LG’s share 19
6.4. Swot analysis for LG Company 20
6.5. Contribution of the smart TVs and the plasma TVs in the last two quarters 20
6.6. Distributors of plasma or flat TVs in the global market 21
6.7. The share of LG in LED and LCD market across the globe 22
6.8. “Porter’s five forces model”. 22
7. References 23
PRINCIPLES OF MARKETING
In the 21st century, there has been a tremendous increase in the competition among the television industry. With the entry of several potential competitors, the old companies who were enjoying huge market share are bound to suffer. They have to continuously upgrade their technology and keep on adding new features so as to survive amongst the competitors and maintain their market share in the industry. The television industry has seen a wide range of discoveries and inventions that have revolutionized the complete industry. The utilization of television has increased on a large scale ranging from using them for entertainment purpose to playing games, interactive learning for kids to watching videos over the internet through it.
The development of LG in the entertainment industry is an area of research that can be understood through the strategies used by them. The report tries to establish the relationship between the marketing strategies that have been developed by LG and compares it with its competitors. These marketing strategies have helped LG to develop a niche for itself in the TV industry and also provided them with a respective market share across the globe.
TV industry introduction:
The television industry has seen a tremendous amount of change and modifications in its concept since the time it was developed. These modifications have completely changed the overall experience of watching a television.
Though the concept of television was introduced in 1884 by Paul Gottlieb Nipkow, television industry came into existence in the beginning of the 19th century. However, first kind of television that displayed images was developed by John Logie Baird in 1925. He had also developed one of the world’s first video recording system. It was after this that the mechanism of continuously displaying images in the form of videos came into existence. Until then, there was only displaying of images on the screen which did not have continuity in the form of a video.
There were black and white TVs until 1953, when there was first broadcast of coloured TV sets on 1st January of 1954 which displayed the “Tournament of Roses Parade”. However, the sales of the coloured TV sets was very low and due to this most of the TV shows were broadcasted in black and white display. Between 1960 -1970, the sales of the coloured sets of TV increased tremendously and this prompted all the channels and TV shows to be broadcasted in coloured format. Along with this evolution from the black and white TV to the coloured TV sets, there were many companies which entered the market of the television industry, who were earlier involved in the production of other electronics.
The TV industry has evolved largely ranging from the coloured sets to the cathode ray tube sets. Recently, in a span of 10 years it has been completely revolutionized. There was introduction of new features in the display technology that revolutionized the complete experience of watching TV. It involves development of the LCDs which is “Liquid crystal Displays” and “Light emitting diodes that are the LEDs.” The entry of High Definition TVs in the market provided the customers with complete experience.
The trend in the modification and up gradation of the technology since the last 10 years plays an important role in establishing awareness among the people regarding the various means of comfort that they can enjoy in the ultimate experience of watching TV. There are large number of channels showing programs that are telecasted all around the world which involves display of different cultures in it.
Key competitors in the market:
There were many competitors that entered the TV market during the time when there was evolution in the industry. The majority of the market share was divided among Samsung, LG, Sony, Panasonic and the remaining part was distributed among the Sansui, Toshiba, Sharp and other such companies. The strategies that were developed by them involved giving a personal and customized touch of the features that the company has introduced to overcome the key competitors in the TV industry.
The competitors have been striving hard in the last few years to develop the strategies that would provide them with the niche in the TV industry. The competitors have observed the potential that the TV industry has got in terms of revenue and profitability. The competition has boosted since the demands of the people from the industry has increased and the level of comfort and luxury that the people need has also increased.
Marketing strategies of the competitors:
There were different strategies which were developed and implemented by these companies where the major focus was to increase the sales as well as the market share in the TV industry.
The marketing strategies that were developed by the companies like Samsung is very much customized where it provides variety of features along with the products that involved making the life style simpler. Marketing strategies of the company focuses on the technology which involves using voice modulated remote technology and view the desired files by connecting any other external device to the TV. Samsung have developed this tagline for marketing its new smart TVs which states that “Look, Don’t touch.” This informs the customers about the technology that it has developed in simple terms through the tagline. They have promoted a smart TV with touch screen feature in the recent marketing strategy. They have always been the leaders in inculcating changes in the TV industry, with its large variety of products which are specially carved for the people’s comfort and excellent experience. The strategies considered the concept of having a monopoly in the TV industry over other companies. This provided them with the flexibility to develop customized strategies as any such kind of product was not launched in the market earlier.
Sony, on the other hand has always promoted its quality as the marketing strategy to achieve the desired sales. They have recently developed a tagline that states “looks better on a BRAVIA”. This directly informs the people that the picture quality that would be obtained on the screens of Sony would be very different and of high quality as compared to any other screen provided by other companies.
Panasonic which also has a huge portion of the market share in the TV industry has developed the slogan which states that “A Better Life, A Better World”. This has helped the company to make the people think about the simplicity that it offers in its products especially in TV that would help people to live a simpler and better life.
The marketing strategies would be a great failure if the product does not provide the features that were proposed in its marketing. The experience that a customer gets is considered to be of prime importance in developing the strategies for the marketing of the product. It is also observed that few viewers were very loyal to a particular TV brand and would never try or experiment with any other TV brand even if they provided superior quality and features to the customers.
LG is a company that is a merger of two companies which are Lucky and Goldstar respectively. This gives the abbreviation of LG to the company and since 1995 it is been known with this name. It is a company which is located in the South of Korea where its headquarters is situated at Seoul. It has approximately 82,000 employees working in it for a network that is spread across 100 countries. It had an overall sale of USD 53.10 billion in the year of 2013. All this figures have been achieved due to the sincerity and dedication of the LG’s staff. It has helped the company to be the second largest firm in terms of the sales of TV sets across the globe.
LG has been a great contributor in the electronics industry and at the same time has ensured in providing a quality service to the customers. It has developed the slogan which states that “Life’s Good”. It has been constantly working in providing the customers with a wide range of products that would help the people in creating a happy and better life. This would be obtained through the ultimate experience that people would get by using LG’s products. It has always focussed on developing strategies that makes sure that the customers are satisfied with the quality and service of the products.
LG has made it a point that they get the feedback of the customer regarding the improvements in the product and using this feedback they ensure that excellence is achieved in terms of satisfaction that it could provide to the customers. The satisfied customers would be the biggest branding assets of the company and they would result in recommending the product to their closed ones and in their networks. Owing to this strategy of innovation, LG has introduced “OLED’s (organic light-emitting diode)” and Ultra HD TVs in the market during the year of 2013. It introduced a 55 inch as well as 65 inch screens to view this two technologies that provided high quality of display.
LG Company has been continuously developing and emerging with new innovations to satisfy the customers and increase its sale in the global market.
SWOT analysis of the strategy:
LG focusses on the needs of the customers and their strategies involves providing a complete solution to the customers in terms of ultimate experience obtained by the various range of TVs. There are various strengths of the marketing strategy that LG has adopted. This involves providing Return on Investment Capital to the customers. It makes a sincere effort to introduce innovation in the product and its design that would provide an increased level of comfort to the customers. It ensures that it has a very excellent quality of HR that will help them to develop strategies that would help them sustain in the industry with potential competitors.
There are few weaknesses that needs to be worked upon which involves less focus on the branding and promotion of products as compared to the other competitors. It focusses on the export more than the sales within. It also has to make sure that the prices it offers to the customers are competitive enough to overcome the sales and market share of its competitors.
The strengths and weaknesses are developed due to the internal reasons whereas the opportunities and threats are provided due to the external reasons. This reasons are classified as internal and external on the basis of the sources involved in them.
There are various strategies which are analysed to develop a marketing plan for the industry while launching its new series of TV models that are specially designed for the comfort of senior citizens. These strategies are discussed along with the marketing mix that LG could adopt to ensure that there is achievement of the position that they aspire to reach in the TV market.
Marketing strategy overview
Marketing strategy Statement
The technology that LG is going to introduce has to be highlighted in promoting the product. In this case, the innovation is in the form of new range of smart TVs that are going to be introduced in the market. The model that has been launched by LG contains special features which focuses on the section for the society that are senior in age.
When LG has to develop its international business, it involves understanding that people across the globe have different needs and requirements. International marketing also involves understanding of people’s needs, lifestyle, standard of living and then developing a customized solution incorporating all the above factors. International Marketing involves introducing the product of the new smart TV design in a foreign market either with a standard marketing strategy or with a customized adaptable strategy depending upon the nature of the market and the organizational strategies of the business firm. (Cateora, et al., 2007). It also has to ensure that this strategy which is developed for launching the new range of TVs provides them with the desired penetration in the TV industry where they can have their estimated market share.
The main objective of the LG Company is to bring innovation in the TV industry by developing a smart TV that would be dedicated to providing comfort to the senior citizens of the society. This objectives can be achieved by developing the strategies accordingly. Strategies can be developed for the target customers, which are the senior citizens that involves providing various safety and comfort features. This has to be branded well by using the emotional concept of promotion.
The theme of marketing has to be on the basis of the feelings and emotions that are pertaining to the targeted section of the society which is the senior citizens. Developing strategies which involves considering the senior citizens as the target market has been introduced for the first time ever in the TV industry.
Strategic marketing components
It refers to the various marketing components like branding, positioning, obtaining the target markets and developing strategies to inculcate all the components to achieve a successful market share.
Market Branding of a product relates to the image and the value of a product in the eyes of the consumers. It has to be uniform for all the foreign countries pertaining to the wide spread digital awareness across the globe. (Douglas, 2001) Brand performance, brand value and orientation of the brand play an important role in the planning for the success of international business marketing plan for the launching of the new range of smart TVs by LG. (Wong & Merrilees, 2007)
LG has always focused on innovation and customer’s satisfaction as its priority in branding of the products. LG has developed a private kind of branding strategy in the market unlike its competitors like Videocon who have adopted multi brand strategy of branding. In this kind of branding, LG develops customized features and carries its marketing under the label of LG Company only without involving multiple brands and multiple products at the same time.
Market branding has gained importance in the last 3 decades owing to the growth in television industry and entry of potential competitors in the market. The increase in the available media for promotion of these companies has also contributed to its widespread sales across the globe (Whitelock & Fernando, 2007).
Image & Positioning
The product that LG is going to launch recently is first of its kind in the TV market. So, there has to be hype and market attention that it has to get from the people. The market of the TV that LG is going to launch is already achieved through the promotion of the product in a much customized manner by making it specific for the particular section of the society, that are, the senior citizens.
Positioning of the product involves a complete study of the four P’s of marketing which are Product, price, place and promotion that would provide them with the required position in the global TV market. These four P’s involve developing a marketing mix that would provide them with the required position in the market.
The company has to focus on the first P which stands for the product. This refers to the uniqueness in terms of product design and features that the new TV that is to be launched has over its competitors. The design of these TVs has helped the company to focus on a particular section of the society for whom the product is dedicated to.
The second P that is important is the price that it has to offer to the customers to make the product stand apart from its competitors in the global market.
The third most important element is the promotion of the TV that is going to be launched in the market. It has to be ensured that the promotion is made effective enough so as to consider its target customers and provide them about a clear understanding of the theme of the product. This product has been launched in a large number of countries and its target customers are limited to the section of senior citizens in the society. If the desired output in terms of sales and satisfaction of the customers is received, then LG can revise its strategy and redesign the product to make it acceptable among a wider range of target customers. The promotion and advertising that the company carries needs to consider the earlier sales that it had in the earlier designs of the company’s product which is different models of TVs in this case.
Sustainable Competitive Advantage (SCA)
The strategies that we are going to adopt while launching the product has a great influence on the sales and success of the product. There has never been a TV which had it target customers as the senior citizens of the society. This would provide LG with an extra point over the innovation of the promotional term from the design and dedicated use point of view. LG has gained the support of the people and emerged with third highest number of users of plasma or flat TVs in the global market. These numbers indicate that there has been huge improvement in the sales of the company with respect to the Plasma type of TVs. This has greatly influenced the trust of the customers in a positive way and developed loyalty for the company.
The strategies and marketing plans that are developed while introducing the product in the market are of prime importance. It considers various static as well as dynamic features of the market that tend to affect the sales and revenue of the product in the TV industry. The strategies that are adopted need to consider various elements before they are being adopted and used for the launching of a specific product in the global market. The tactics that are used by the company needs to analyse and evaluate certain factors which are very important from the product’s development and promotion point of view in the market. It requires an in depth analysis and understanding of the marketing concept while developing strategies that would provide the customers with the required quality and service in terms of the product. Its design is to be understood from the requirements point of view and has to be developed accordingly considering them.
The product that has been developed by LG which is dedicated to the senior citizens of the society has provided the company with a niche in the market for it. However, the only issue that it faces is the limited set of target customers and their availability in the target market that it has featured during the development of the product’s design. It will also be affected by the least desire in the target customers to purchase this product that they like as they are senior citizens of the society. This strata of the society is hard to influence due to their experience and stubbornness that has developed in them owing to their age. This has to be altered by inculcating an emotional connect and developing sentiments and emotions in the promotion of this TV.
However, as LG has been the challenger in innovation to the core competent company of Samsung and not the follower, they have emerged with a very creative concept in launching this range of TVs in the market. The strategy that is going to be developed by LG has to be so strong that it motivates and pushes the target customers to demand for the product. These set of customers will be easy to satisfy as they would not be having a variety of requirements in terms of demands and other elements and this would help LG to manage and fulfil their requirements more easily.
Placement / Distribution
The selection of the distribution channel also plays a significant role in the success of the product in the TV industry. It can adopt a creative strategy of promoting the TVs in maximum number of countries across the globe to enjoy the benefits of international business. International Business has gained popularity and significance in the last decade owing to the modernization adopted in the production, advancement of technology, easy and quick mode of advertisement, reduced barriers from the government and liberalized laws for international transactions and outsourcing of business by different companies. These kind of international business strategy will help the company to establish its hold in the entire TV market that is available across the globe. This would ensure that the product’s information is reaching to the maximum number of people possible.
The strategy developed by LG is also affected by the sales that it had generated in the TV industry by its last products. This involves the highest number of users for the LED and LCD based shipments in the global market. It also ensured that LG has achieved a huge share in terms of market share in the last products that were introduced by it in the market. This will help LG to have the support of the masses and the large number of sales also display that there will be a huge amount of trust on the products that are going to be developed by the company in the coming time. There has been a significant share of LG in the LED and LCD TV market across the globe.
LG believes in involving small number of intermediaries between the company and the customers. This will help in reduction of a considerable amount of cost that the customers otherwise had to pay due to the profits of the various channels that was added in between them and the company. The distribution is carried out with very few, but genuine and large company dealers. This would make the service and customer care facilities much easier and flexible as there would be no chain of people in between the process that would have consumed a large amount of time.
The pricing of the product refers to providing an estimation of the product cost to the customers during the launch of the product. The style of pricing that is adopted provides the customers with the estimation of the product’s quality and performance. The price has to be estimated after calculating the actual production cost of the product involving labour, electricity and machine cost, cost of promotion and advertisement, profit margins and the savings cost. The pricing of the TV accurately defines the impact that it is going to have on the people belonging to different class of the society. The impact has to be somewhat neutralized so as to develop results that would be even for all the classes of the society. This has also been evolved from the fact that the target customers of the product, that are, the senior citizens are very much affected by the cost and they try to prefer those products that would be very economic.
Advertising & Promotions
Another significant concept refers to advertising the product in the global market. Advertisement of a product is important for any company in today’s world, when there is a cut throat competition among the companies for their existence in the market and a large number of potential competitors developing in the market. In such scenarios, the awareness of a product or a service plays a crucial role in determining its success in the market.
On the basis of this, marketing strategies are developed. Social media has gone viral in the 21st century with the number of users is about to touch the figure of 2 billion (McCaughey, et al. 2014). The number of people creating new social network accounts is also on the increase. People are immensely effected and connected through the promotions and advertising shown on the social media. People can also connect to their loved ones on a large scale through using the social media and this serves to be one of the major reason that contributes in influencing through viewing the products and passing them on to their contacts. Social media emerges to be one of the major tool in the promotion strategy of any organization today (Tuten 2008).
The product designed by LG in the form of TV in this case has to be very user friendly. It provides a clear understanding of the features that are involved in the product. There has to be special service in terms of customer care that provides the customers who would mainly comprise of senior citizens with a clear understanding of its operations. This is the speciality of the product.
There are various elements that are to be considered while developing a strategy for the LG Company and its effects have to be analysed before implementing them on the marketing plan for the new TV launch by LG. Neglecting them would indeed lead to huge consequences in terms of incomplete design of the product as well as lack of awareness among the target customers and other people who are linked with them and help them in getting a product that would provide them with the required programs that they want to view.
LG believes in involving small number of intermediaries between the company and the customers. This will help in reduction of a considerable amount of cost that the customers otherwise had to pay due to the profits of the various channels that was added in between them and the company.
The implementation of the strategy for the launching of the new range of TVS by LG has to undertake and evaluate the five factors that are very commonly known as “Porter’s five forces model”. In this, they have to consider the behaviour of the suppliers and the buyers while implementing the strategy in the market. The other two forces described in the model refers to the threats that are posed from the entry of potential competitors and the threat of substituting the product by another one. This forces are considered to be the industrial rivalries among the companies and are to be considered while developing and implementing marketing strategies.
This helps to evaluate the strategy and develop a HR plan that will help us in handling the target customers which involves a very delicate section of the society. Special trainings and recruitments are to be made on the basis of this factors.
It helps to discuss the factors that are internal which relate to the strengths and weaknesses and the external elements that relate to the opportunities and threats. These elements serve to understand the behaviour of the customers while launching a specific product. This are the various marketing slogans and strategies that are developed by the companies to ensure that they have the attention of the people so as to get the maximum share in the TV industry and increase their sales as well as earnings every year. The attitudes and behaviour of the customers help in estimation the strategy that would be appropriate in the successful launching of the TV by LG. these elements are necessary to be understood from the implementation point of view while utilizing and developing the strategies for the LG smart TV that is going to be launched keeping in mind the senior citizens across the globe.
Here, the main work of developing the product is to set up a time line for the execution of strategies that would be implemented in the launching of the TV. LG has to develop a monthly plan for evaluating the design of the product in the target market and considering the product’s performance among the senior citizens from the time of its launching. It involves various measures and evaluation from the R&D department to understand the behaviour of the people while using the product.
This can be achieved by observing the market in the first month of the launching and then making prompt changes that are necessary to provide the customers with an increased level of service and satisfaction from the product. The profit should not be considered from the first month but it has to be evaluated after 3 months of launching. It involves believing in the product’s design and developing necessary amendments in it so as to provide the customers with an increased level of customer service.
The profit that is obtained from the sales of the product in the first three months after the launching is to be critically used and distributed among the tasks that are necessary for the future expansion and development of better technologies and terms related to the TV industry.
Contingency Plan & Evaluation
The marketing plan that has been developed by us in the discussion provides the company with an advantage over the other companies due to the sheer innovation and quality that it offers. However, there has to a strategy that would help the company to sustain in the market if this TV set does not become successful in the targeted customers. The reasons of this outcome has to be evaluated and analysed and on the basis of this the product can be redesigned and improved in terms of the features that it provides and its quality.
There has never been a TV which had it target customers as the senior citizens of the society. This would provide LG with an extra point over the innovation of the promotional term from the design and dedicated use point of view. The promotion strategy should be more simple and easy to accept by the target customers. This would help in achieving the required revenue that was not achieved in the first instance without even reducing the price. However, if the cost seems to be too high for the customers, then an alternate and effective method of production could be studied and examined to reduce the cost of the product. This can be achieved by customizing the plans and developing them to include the needs of the customers across the globe.
The company can also turn to Customization. When a company follows a customized and differentiated structure for the design of the product for all of its international markets, it is termed as Customization. It is quite costly as compared to the standardization process, but it’s more flexible as it involves customizing the product for every market which results in increased satisfaction among the customers. Customization helps to attain characteristics like variety, specific customized product and desirable features at comparative prices. (Pine, 1999)
This will not only help in achieving the desired position in the global market but also contribute in the level of trust and loyalty that the customer has on LG Company. This can be ensured by following the planned strategies and keeping a scope for improvement in the design that could easily be incorporated as and when required as per the requirements. The plans have to be analysed and evaluated critically to observe the influence of the product in the target market.
In this report, we have analysed and studied the marketing strategy that has been adopted by the LG Electronics for promoting their TV designs and new models in order to sustain itself in the global market which is getting all the more competent in the recent years. The needs and demands of the users have also increased largely owing to the increase in awareness and providing of different features by the various companies. Their style of branding that feature also influences the customers. There are various strategies that were developed by LG after analysing the market and the scenario which consisted of a large number of companies entering the entertainment industry and providing wide range of products.
The emergence of LG in the entertainment industry and its journey is also discussed in the report. The report tries to establish the relationship between the marketing strategies that have been developed by LG and its comparison with the strategies developed by its competitors. It has helped LG to develop a niche for itself in the TV industry and also provided them with a respective market share.
We have developed a marketing plan that provides the launching of the new smart TVs by LG that are dedicated for the senior citizen with the required boost in the TV industry. We have used the porter’s model and analysed the various strategies that are to be developed to ensure that the new product becomes a huge hit in the market.
The strategies that we have developed will help to increase the market share of LG Company in the TV industry from 16% to a minimum of 20% by the end of the year. This has been supported by the introduction of one of its kind of OLED and Ultra HD TVs by LG. this would help in boosting the popularity and brand value of LG and result in positive feedback from the customers regarding the new product of smart TV that is specially carved for the senior citizens. This is also for the first time that any company will be producing a product by keeping this section of the society as their target customers. This would help in achieving the success of the product in the Television industry.
These strategies are focused on the behaviour and attitudes of the potential customers that we have analysed and described in our report that are related to the success of the product in the TV industry. Along with the strategies, we have also observed the ways in which it has to be implemented to ensure that the product becomes a huge hit in the global market. This involves understanding the behaviour and the strategies that have been adopted by its competitors that proves to be a threat for the launch of the smart TV by LG in the market across the globe. Various tactics that are to be defined and observed while developing the product and selling it are discussed. These elements also help in providing an estimation of the product’s success in the market. We have emerged with an in depth understanding of the strategies that LG can use for the launching of the new smart TV that it has designed dedicated to the senior citizens of the society. This has helped me in providing a very good knowledge regarding the principles of marketing that are used to develop and launch a product in the local as well as international markets.
Worldwide differentiation of the TV market
Market share of the TV industry
Distribution of the sales and the share of various products in LG’s share
Swot analysis for LG Company
Contribution of the smart TVs and the plasma TVs in the last two quarters
Distributors of plasma or flat TVs in the global market
The share of LG in LED and LCD market across the globe
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