Managers throughout the world perceive that international business operations become more and more necessary. Saturation of domestic markets as well as significant growth potentials of emerging markets confirm this necessity. Companies which solely rely on their existing markets often miss significant economic opportunities. However, the management of both an international company and international customers is a challenge; customer wants in overseas markets can dramatically vary from those in the home market.
This assignment gives an overview of the major managerial decisions that could have been made in a well-established South African company to enter the marketplace of India. Theoretical background will be discussed at the beginning of each chapter. In particular, the company and its products, a possible market entry strategy, and the four marketing controllables (product, price, pro-motion, and distribution strategy) will be discussed.
Table of Contents
1 Introduction
2 Company and product background
3 Market entry strategy
4 Product strategy
5 Communication strategy
6 Distribution strategy
7 Pricing strategy
8 Conclusion
Objectives and Topics
The primary objective of this assignment is to develop a comprehensive international marketing strategy for a well-established South African cosmetics company looking to enter the Indian market. The report explores how the company can successfully adapt its business model, product range, and marketing mix to meet the specific demands and cultural characteristics of the Indian consumer base.
- Analysis of market entry strategies suited for emerging economies.
- Adaptation of core product and brand strategy for the Indian market.
- Development of a culturally sensitive communication and promotional plan.
- Implementation of a direct-selling distribution model to ensure customer convenience.
- Formulation of a premium pricing strategy based on competitive market positioning.
Excerpt from the book
4 Product strategy
Products do not only consist of the material they are made of as customers expect more than physical goods. KOTLER/ARMSTRONG developed a theory (cp. [Kotl96], p.119) that a product consists of the core product (e.g. a car); in addition, there is the actual product (e.g. the quality, the styling of the car) as well as the augmented product (e.g. after services). These elements need to be treated as a unit when considering an international product strategy. Roughly speaking, there are two opposed product strategies: 1. standardisation or 2. adaption of the product (cp. [Lage06], p.8). The need for adaption of a product can be summarised as follows (among others) (cp. [Pali93], p.211; cp. [Dool04], p.257-258):
• Consumer tastes are not consistent throughout cultures.
• Usage of certain products may vary significantly throughout different cultures.
• Low income in certain markets may lead to smaller products sizes.
• Low levels of education will necessitate product changes or simplifications in certain markets, e.g. words could be replaced by symbols.
An important aspect within product strategies is the creation of a brand. Products that are distinguishable from one another often contain a means of identification for the buyer. Thus, a brand is important to increase sales. There are five strategies to implement a product in foreign markets (cp. [Chee98], p.382; cp. [Dool04], p.263):
Summary of Chapters
1 Introduction: This chapter outlines the necessity for international expansion due to domestic market saturation and defines the focus of the assignment on entering the Indian marketplace.
2 Company and product background: This section provides a historical overview of Avroy Shlain Cosmetics, highlighting its success in the South African direct-selling market and its commitment to equal opportunity employment.
3 Market entry strategy: This chapter assesses the suitability of the Indian market using the MACP matrix and concludes that a staged entry approach starting in New Delhi is the most effective strategy.
4 Product strategy: This chapter discusses the need for product adaptation, emphasizing the "dual adaptation" strategy required to align with Indian consumer tastes and middle-class preferences.
5 Communication strategy: This section details the promotional plans, focusing on personal selling, direct mailings, and PR activities to establish a premium brand image in India.
6 Distribution strategy: This chapter outlines the decision to bypass traditional intermediaries in favor of a personal selling division to maintain control over the brand's customer service experience.
7 Pricing strategy: This section justifies a skimming pricing strategy to position the brand within the premium segment of the Indian cosmetics market.
8 Conclusion: This final chapter synthesizes the proposed strategies, acknowledging both the growth potential and the inherent risks of entering an emerging market like India.
Keywords
International Marketing, Market Entry, Avroy Shlain Cosmetics, India, Direct Selling, Product Adaptation, Dual Adaptation, Consumer Behavior, Middle Class, Pricing Strategy, Personal Selling, Premium Segment, Brand Management, Distribution, Market Expansion.
Frequently Asked Questions
What is the core purpose of this academic assignment?
The assignment aims to compile a viable international marketing strategy for a South African cosmetics firm, Avroy Shlain, detailing how it can successfully enter and compete in the Indian market.
Which key areas of marketing are addressed in this strategy?
The report covers the four traditional marketing controllables—product, price, promotion, and distribution—alongside a thorough analysis of market entry techniques.
What is the primary research goal regarding market entry?
The main objective is to identify a logical and sustainable approach for entering India, ultimately proposing a staged, state-by-state expansion strategy beginning with New Delhi.
What scientific methodology is utilized in this paper?
The author uses portfolio analysis, specifically the Market Attractiveness-Competitive Position (MACP) matrix, to evaluate the viability of the Indian market compared to the company's existing capabilities.
What defines the content of the main body?
The main body focuses on adapting the business to local needs: modifying product design, creating a tailored communication plan centered on personal selling, and selecting an appropriate pricing tier.
Which keywords best describe this study?
The key themes are International Marketing, Market Entry, Direct Selling, and Premium Brand Positioning in emerging markets.
Why did the company decide to avoid traditional retail intermediaries?
To retain the core company value of "personal selling" and to ensure that the brand image remains consistent, the company chooses to operate its own sales force instead of using existing retail chains.
How is the pricing strategy for the Indian market determined?
The company employs a skimming pricing strategy, positioning its products at a premium level relative to the mass market to signal high quality and to offset the higher costs associated with direct sales and distribution.
- Quote paper
- Tobias Heinen (Author), 2006, International Marketing Strategy, Munich, GRIN Verlag, https://www.grin.com/document/54636
