Market Entry Strategies of Unilever to Entry to Turkey - Research Proposal Example

Market Entry Strategies xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Table of Contents Table of Contents 2 1.0 Introduction 3 1.1 Organizational Background 3 1.2 Objectives of the research 4 1.3 Research questions 4 1.4 Rational of the chosen topic 5 2.0 Literature review 5 3.0 Research methodology 8 3.1 Research approach 8 3.2 Case selection 9 3.3 Sample size 9 4.0 Date collection 10 4.1 Primary data 10 4.2 Secondary data collection 11 5.0 Pilot study 11 6.0 Data analysis 11 7.0 Resource Requirements 12 8.0 Ethical consideration 12 9.0 Time scale 12 10.0 Conclusion 13 Bibliography 14 1.0 Introduction 1.1 Organizational Background Unilever is a multinational corporation jointly owned by the British and the Dutch. It is among the biggest world producers of consumer product brands such as cleaning agents, food, beverages and personal care products. It was formed in 1930 from the merging of Lever Brothers, British soapmaker and Margarine Unie, a Dutch company and began its operations to other nations during mid 1930. The company has been a victim of the ever changing economic climate including the great recession that happened soon after its formation but it has been able to survive all of them due to its ability to build an efficient and stable system of controls. With growing demand and competition, the company has constantly expanded its plant capacities and products lines and it is currently able to produce many of the house use commodities. In addition, the company invests heavily on research and research facilities in order to fully satisfy the needs of consumers. For instance, there has been continuous research to modify and improve the quality of the original margarine. The mission of the company is to offer products that provide consumers with more advantages. Through the European Economic Community, Unilever has been able to hold several conferences to discuss issues of marketing, transport, cartels, factory locations and tariffs to be at par with the competitive global market. Unilever has undergone major acquisitions and restructuring in the past which has contributed greatly to its growth. In the 1980’s there was a total restructuring and redesigning of the company operations whereby it sold out several of its divisions and only remained with the most productive and those that were strategically placed. The company has been able to establish a stable ground in the European market and the international market as well. A well structured management and product diversity has played a major part in the survival of the company in the dynamic global market (Hansen and Haas 2002). (Bamberg 2000) (Tharoor 2010). . 1.2 Objectives of the research To determine ways of reaching consumers and promotional methods that can attract them. To determine general satisfaction of consumers about other products in the market. To determine the level of consumer awareness about Unilever. To determine ways of maximizing profitability in the new market. To determine ways of partnering with local firms in the industry. 1.3 Research questions The following are the research questions that were identified from the above listed objectives; Which are the considerations that Unilever needs to make before making its entry into the Turkey market? How can Unilever popularize its presence in Turkey and how will it achieve its profitability in the new venture? What market entry strategies can be undertaken by Unilever to enter Turkey Market? 1.4 Rational of the chosen topic Many companies in the UK have been forced to internationalize their operation due to increasing competition and saturation of the domestic market. However, the process of developing and sustaining the company in the foreign land is a difficult undertaking and the procedures involved are similar to those in establishment of a completely new venture. It is for this reason therefore, that the above research topic has been selected. The research is aimed at identifying and analyzing market entry strategies which were applied by Unilever, a UK company, to successfully penetrate into the Turkey market (Heery 2002). 2.0 Literature review According to Rugman and Verbeke (2003), companies venture into new markets because of varied reasons. However, the most fundamental reason is to grasp potential market demand in the new environment. Another reason is to react to the move taken by competitors in the same industry and to increase the company’s economies of trade. In other cases, the company will venture into the new market in order to develop itself as a key player in the global market. Mahoney (2005) argue that learning via the local partners might not significantly contribute to development of a company since it presents fewer challenges as compared to the international markets. Government incentives to promote global operations and exports encourage some companies to venture new markets they would otherwise not enter. There are many ways of market penetration which companies can utilize when entering a new market (Mata and Portugal 2004). Some might begin by exporting their products to the target market then making connections with the local producers or partners and later establishing subsidiaries in these countries which they will directly control. Goerzen and Beamish (2007) explain that the choice of market entry strategy depends on the expectations of the company in terms of profitability and risk levels. In a low-intensity mode, the company does not have direct contact with the new market hence the risk involved is reduced. It is not necessary for the company to make investment in the target market with regard to distribution facilities, offices, marketing campaigns and sales personnel as well as other activities such as marketing plan, distribution arrangements and service delivery. This strategy does not emphasis on accurate and timely market information in relation to market share, customer behavior and price level. A higher-intensity mode on the other hand involves much participation of the company in the target market. This includes investments in market programs, distribution and human resource which expose the company to greater risk. In a low-intensity mode, financial risk is reduced since the company has less participation. However, this mode increases marketing risk because many of the marketing decisions are left to the local partners (Frost 2001). Kor and Mahoney (2000) explains four main mechanisms of expanding a company in a foreign market which are exporting, joint ventures, licensing and direct investment. Exporting is one of the oldest methods which companies use to reach out to foreign markets. The only costs involved during exportation are those involving marketing expenses as the company does not have to establish production facilities in the foreign country. The four key players involved in exporting are the importer, the exporter, the government and the transport provider. In licensing, the company interested in venturing into the new market, obtains permission from a company in the target market by use of a license. Permission is granted to the licensee to use intangible properties of the licensor such as production techniques, trademarks or patents. Foss (2003) maintains that the advantage of using licenses is that the cost of entering into the new market is greatly reduced as the company has a ready platform from its partner’s past success factors. Joint ventures are a marketing entry strategy where the company takes part ownership of a firm in the target market. The two companies share the obligations of management, controlling operations and protection of company rights and properties. The benefits of a joint venture include sharing of risk and combination of technological know-how in the production process. The two companies also combine their financial strengths which might subsequently increase their supply inside and out of the primary countries. However, joint ventures are expensive undertaking and require commitment of many resources. Partners may also have differing points of views concerning operations as well as selfish ambitions. It might be difficult to share out capital and other properties if the companies split up (Kim et al 2003). A foreign company may also enter into a new market by way of complete ownership which is also known as direct investment. In ownership, the company commits 100% of the managerial and capital capacities of a company in the new market. Ownerships are risky and require the company to undertake intensive research before making the commitment otherwise the venture might fail if the environment is unstable. Kay (2005) identifies five main considerations that a company should look into when entering into a foreign market. The first one is technical innovation of demonstrable and perceived superior products in the new market. The company should have detailed information of the existing firms in the industry and consumer satisfaction towards them. The second consideration is product adaptation. This involves undertaking of a comprehensive study of similar products produced in the new market hence look for ways of improving or modifying them in order to obtain a market advantage (Chen and Zeng 2004). Cost of penetration is the third consideration. Expected results should be above the cost of penetration for the venture to make sense and be relevant. The company should also consider availability of resources necessary in the production process in the foreign country. These resources include information, raw materials and human resources. Security is also a paramount factor to be considered. Finally, it is important to consider the time frame expected to adapt and conform to the new environment. It should be noted that brand names, intelligence systems and company image are not created overnight and it is a process that takes time, money and effort. In this case, the company will need to invest heavily in promotional campaigns in order to popularize its operations in the new market (Chang and Rosenzweig 2001). 3.0 Research methodology 3.1 Research approach The research will adopt a case study approach so as to gain deeper understanding of events such as how Unilever marketing strategies can be used to enter Turkey market. In order to focus on one or several research units with a background purpose of achieving in depth information, the most appropriate research method is case study (Bryman & Bell 2007). It is evident that when a researcher has little or no control over events while his main focus is on current phenomenon in answering research questions especially those based on ‘how’ and ‘why the most preferred research methodology is case study. Comparative study will be carried out on Unilever which is a British firm on how it can utilize its marketing strategies to enter into Turkey market thus creating a qualitative approach. Creswell (2003) asserts that, within this study, qualitative study assists the researcher to interpret qualitative nature of the collected data which thus creating a focal centre. Firstly, the qualitative portion entails an in-depth review and study on the degree of literature and techniques applicable to this particular research question which will include understanding environmental issues within marketing strategies and mix developed by Unilever. The objective here is to fully understand how Unilever will develop its marketing strategies to enter into Turkey market as well as sustain in this particular competitive market (Ginsburg& Bloom 2004). 3.2 Case selection According to Donald (1999), basing on the observations made earlier in our literature review, Unilever Company in Britain is our case study since they widely engage consumers in buying their cements due to their well developed marketing strategies. The researchers used a highly convenient sampling method in selecting the company fully focusing on it marketing strategy background on these companies (Litosseliti 2003). 3.3 Sample size Gronhaug (2005) asserts that, for a comprehensive and conclusive study, it is suggested that 20-40 in depth interview are required for a qualitative research like this one. But due to time limitation as described in the time frame allocated and high cost involved in this present study, the research will conduct an interview session with Unilever management, employees, support staff and their customers (Bamford 1998). Based on management three managers namely those involved in marketing, business development and operational activities will be interviewed. Four employees in the marketing and business development department will be interviewed, three support staff will be interviewed and finally, two potential customers will also be interviewed basing on his views on Unilever marketing strategy (Zikmund 2003). The sample size for this present study was determine especially when saturation was attained for information and theory welcoming any new appropriate suggestion ( Donald 1999). 4.0 Date collection 4.1 Primary data In response to gather all important data as well as providing profound insight into the topic of market entry strategies that can be taken by Unilever to enter the Turkey market, the researchers widely considered interviews to be most appropriate. Sundar (2004) asserts that, interview was a suitable method since permit has been obtained from Unilever to have face to face interviews with the named respondents. Further, the interview assists in obtaining richest data, new insights, exploration of the research question in depth, cognitive response from the respondents, clarification of designed questions and flexibility in interview administering to both the interviewer and interviewee (Perry 1998). For even data collection, use of semi-structures interview guide questions will be proposed. Interviews question will be expected to vary based on the selected sample size described above. According to Perry (1998), interviews are known to create access to interpretations that respondents have in regard to events and actions which have or are continuing to take place within their workplace environment. Based on the chosen qualitative research methodology there is an added advantage since the researcher is able to go back and evaluate various interpretations provided by respondents in some defined details where generalized methods do not allow (Perry 1998). The following questions are considered to be semi-structured questions for the interviewees; What are the company’s core business objectives? What is the current Company’s marketing strategies used? What current strategies can be adopted when entering Turkey market? What are the challenges affecting Unilever in its urge to expand into international market? Do you think Turkey is a good market venture? 4.2 Secondary data collection Secondary data will be collected from various website, Unilever annual reports, journals, newspapers, books, case studies and articles. Secondary data is aimed at finding out related data regarding Unilever Company marketing strategies and mixes, this therefore indicate that data obtained will be an essential part of understanding the research question (Yin 1994). 5.0 Pilot study A pilot study is important to be conducted among respondents so as to make sure that all the terminologies in use are appropriate and correct. Interview will be conducted through face to face method as this will assist the respondent to ask questions which are not generally within the interview guide depending on the interviewees answers (Bestley 2005). 6.0 Data analysis Data will be analyzed by way of content analysis. After completion of the interview, data analysis is important so as to identify themes and patterns as a way of gaining understanding and insight. According to Cresswell (2003) data will be coded, compared, examined and categorized based on the designed research question. If data is required further or new question arise, further data collection will be taken. Throughout the analysis process various comparison of strategies that are likely to be used in understanding the research question will be intense so as to achieve the required discussion. 7.0 Resource Requirements The following are the necessary required resources to facilitate data collection and analysis thus success full research on this particular designed question. These resources are namely; transport to Unilever Company, both photocopying and printing cost, binding and researching via online cost to obtain secondary data (Nell 2011). 8.0 Ethical consideration Permission was sought from the university to collect data from students. Permission was easily granted due to the assistance given by the University in making the request. Belk (2006) asserts that, participants were assured that the findings would remain anonymous. None of the participant was forced to participate in the research. In this regard, each participant was made to clearly understand the purpose of the research through word of mouth and writing. Those who agreed to participate in the research were then given a Research Consent Form so as to give their informed consent. 9.0 Time scale The table below gives a suggested time frame for this research. When the project is underway, we will send weekly progress on the research. This is important as it will summarize week’s time giving time to relevant corrections. Timing should be strict, so that if the research is to match the designed deadlines provided it is important that we sign-off within the next three weeks. Weeks Activity 1-3 Identifying a suitable organization to conduct a research 3-5 Posting letters requesting organization to allow a research conducted on them 6 Researching on Unilever background information 7-8 Conduct interviews 9 Refine draft questionnaire 10-11 Issue out the designed questionnaires to be answered 12-13 Start updating data collected from the questionnaire 13-14 Code data for analysis 15 Presentation of the research work 10.0 Conclusion The above proposal will ensure that the research question which is “how Unilever marketing strategies will enable it venture into Turkey market”. The developed research question will give the researcher an understanding on the various strategies that are important in venturing into international market. Such strategies will be important for Unilever expansion not only in Turkey but also across the globe. It is also evident that the outlined strategies will create an advantage over BP competitors. The literature review gives numerous market entry strategies that can be adopted by BP to venture into this new market. Bibliography Bamford, C, 1998, ‘Differences in Large and Small Firm Responses to Environmental Context: Strategic Implications from a Comparative Analysis of Business Formations’, Strategic Management Journal, vol.19, no. 8, pp. 709–723. Belk, R, 2006, Handbook of Qualitative Research Methods in Marketing. Cheltenham, UK: Edward Edgar. Bestley, R, 2005, Visual research: an introduction to research methodologies in graphic design, Lausanne Switzerland: AVA Publishing Bryman, E. & Bell, A, 2007, Business Research methods. Oxford University Press Inc., New York. Chang, S., and Rosenzweig, P, 2001, The choice of entry mode in sequential foreign direct investment. Strategic Management Journal, 22(8): 747–776. Chen, S., and Zeng, M, 2004, Japanese investors’ choice of acquisitions vs startups in the US: The role of reputation barriers and advertising outlays. 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