International Marketing - Case Study Example

Running Head: International Marketing International Marketing Customer’s name: Institution: Customer’s Course Tutor’s Name 10th December, 2013 Executive summary This report identifies pet care feeds as the new product to be introduced in China and the reasons behind choosing it. The report further offers the market segment as well as the key target markets. It further outlines the key cultural, economic, demographic, geographic, and legal and political issues that would make a market attractive for this product; this section is closely followed by the potential destination and a justification for the choice as well as the factors that would lead to success of the pet care products. The next section deals with the challenges that may be faced when introducing the new products and the most appropriate entry strategy. Lastly there is a recommendation which states that there should be development of clear distribution channels, development and selection of the most appropriate promotion strategy to market the new product and implementation of a strategy to solve the social issue and lastly there will be a concluding statement. Table of contents Executive summary 2 Introduction 4 Product and reason for choosing it 5 Market segmentation and target market and why 6 Factors that make a market attractive to pet care products 7 Assessment of three overseas countries 8 Challenges that may be faced when introducing the product 9 Positioning 10 Recommendations 11 Conclusion 11 Appendices 13 Introduction In the modern day that we are living with pets has become common and they have become the confidants of most people and mostly the elderly. In countries such as the United States pets are most common among all age groups. Pets in a way provide their owners with both the emotional and physical benefits. The most common types of pets that are usually kept include but are not limited to rabbits, dogs, cats as well as pigs. In countries such as Australia there are approximately 33 million pets and it has the largest incidences of keeping pets in the world since almost 36% of the households own dogs which amounts to 3.4 million while another 23% owns cats which amounts to 2.35 million (Euromonitor, 2009). The table below shows the current expenditure of pet care products in Australia. Table 1: consumer expenditure in pet care Type of pet $million % of total Dogs 3,597 59.7 Cats 1,415 23.5 Other pets 801 13.3 Pet care products 208 3.5 Total 6,021 100 Source: compiled by Rockwell communications Table 2: number of dogs and cats in Australia The very aspect of keeping pets at homes has led to the development of pet care products and services and people seems to willing to spend a lot of money for their pets to receive the best medical treatments. Product and reason for choosing it New and advanced products need to be invented or introduced in new markets so as to cater for emerging needs. With regard to this case the new product that will be introduced in the new market is pet care feeds. The feeds that will be introduced will cater for all the different kinds of pets (Wu & Zhao, 2007). The main reason for choosing this product is based on the fact that this kind of product seems to be offered by very few companies in China. Another major reason of choosing this product is based on the fact that there seem to be changing trends in pet care and the pet care industry seems to have a foreseeable future and thus the need to capture this industry by introducing pet care feeds (Joshi, 2005). The table below shows the most common places where consumers of pet care products to purchase them from Chart 1: major areas where pet feeds are bought Market segmentation and target market and why The market segment for the pet care feeds are government agencies, pet care professionals and individual customers. Pet care professional ought to have adequate access to a solution that is customized to their respective clients' needs and wants. The multiple pet feeds that are available will meet all the needs of the professionals. The other market segment is the government agencies. Fire and police departments usually make use of dogs. Thus they may benefit from the new product. The last market segment is individual users and this seems to be the largest potential buyer of the new product (Joshi, 2005). Based on report a great number of Australians homes have pets with some households having even multiple pets. The target market of the pet care products is the pet care professionals, individual users and government agencies. The pet care professionals were selected on the basis that they can assure, inform and at the same time influence the pet owners of the added benefits of these new products to their pets. The government agencies that use pets such as dogs will tend to benefit from improved levels of feeding of the pets and thus the pets will accomplish the allocated tasks effectively (Johnson & Tellis, 2008). The three target markets were mainly selected with the aim of ensuring that there is brand credibility, product reliability as well as brand recognition. After the product has been well established in the commercial target markets, it will be introduced to the individual consumers since they tend to think of their pets as a style, status connection or as a family. The chart below shows the targeted market segment for sale of the pet care products Chart 2: Targeted market segment for sale of the pet care products Factors that make a market attractive to pet care products In relation to the economic issues, the economic development usually makes a market more attractive since people have some disposable income which can be used in other activities such as caring for their pets (Xin, 2012). In relation to cultural and social issues, people have over time adopted keeping of pets in large number and this can in a way act as a strategy in making the market more attractive since one is assured of selling their product due to the numerous number of pets and the great attention being paid on the pets by their owners (Johnson & Tellis, 2008). Pet owners are more concerned about their pets and their good health and thus they are likely to spend more on their pets to ensure that they are healthy. The demographic factors that are likely to make the pet care products market more attractive are issues such as a high number of elderly and young people who have pets. The elderly people usually view the pets as companions since they spend most of the time together. In relation to the political issues china seems to have a stable. International companies like to base their operations in countries which are stable and this is usually coupled with the large and favourable economy (Xin, 2012). The country also has favourable legal policies which enable business men to conduct business in the most appropriate manner. Assessment of three overseas countries The three overseas countries that will be considered in this assessment are china, South Africa and the United States. All these countries seem to have an adequate customer base to market the pet products. The pet care markets in South Africa and United States seems to be saturated and thus leaving China as being the most appropriate one. China has achieved enormous economic development and this has also really impacted on the rearing and keeping of pets (Donaldson, 2013). Over time pet keeping and rearing has become a major activity among the Chinese people and they usually view the pet as a new family member. Though the pet care industry seems to have reached its potential in countries such as the United States in China there is room for further expansion. One of the major factors that would lead to success of the new product is the large number of pets being reared in china. This will provide the market for the new products. Also there exist reports that the pet care market in China is growing rapidly. Pet owners are demanding convenience and over time they have increased humanization towards their pets. A great number of households are also likely to switch from the home made pet care feeds to prepared and packaged feeds. This will in a way increase the pet care feeds sales and it will record stable growth. Thus in relation to the rising disposable income as well as the conception of the consumers, the pet care industry in China is expected to achieve robust growth (Donaldson, 2013). Challenges that may be faced when introducing the product One of the major challenges that may be faced when introducing the new product is the social challenges. In historical terms products were commonly developed so as to meet certain needs (Hooley, Piercy & Nicoulaud, 2008). Just because there is a need in one country does mean that the other countries also have the same need. The other major challenge is the distribution challenge. In some countries gaining access to big stores assures that there is an effective distribution of the product. Distribution can be a major challenge and it need to be addressed so as to ensure that the customers are able to get the product in good time (Hooley, Piercy & Nicoulaud, 2008). At first new products have to make use long channels such as the regional chains, distributors as well as independent stores before reaching the consumer of the product. The other major challenge is the promotional challenge. Promotional activities are usually costly and more precise if one wants to use channels which have national reach. New products are usually promoted by the use of grassroots approaches which seems to be harder. In addition to these there are also other cultural limitations since in some countries one may have to redo packaging and choose wisely on the gender being used for promotion (Johnson & Tellis, 2008). Positioning Market positioning mainly deals with the various efforts that an organization makes so as to affect awareness of their products as compared to the other competing products. Products that are positioned well have the ability to attract higher sales and thus there will be a boost in the company earnings. Companies willing to engage in market positioning usually find it essential to have an accurate knowledge as well as an understanding of their customer’s perception. In most instances positioning takes various forms and this is to a great extent determined by the type of business. In regard to positioning the company can produce feeds that are suited for different geographical areas or they can also produce pet feeds to suit the different seasons and the different kinds of pets. Market entry strategy Numerous market entry strategies exist and business can be able to choose the most appropriate one for their new product and market. In this case the most appropriate method of entry is joint ventures (Agarwal & Ramaswami, 1992). The company will partner with an already existing company in the pet care products and they will form a totally new corporation. In this entry methods both parties usually provide resources and equity to the joint venture and shares in the management process, profits and in the losses. The reason for choosing this entry method is based on the perceived benefits with the major one being the acquisition of skills and competencies that may not be available in the company. The other reason for choosing the entry method is to spread the risk and lastly joint ventures usually offers faster entry of the market and also there is faster payback. Also in china there is usually a restriction of ownership of companies by foreigners and thus by the use of joint venture we will be able to access the Chinese pet care market. Recommendations A number of strategies need to be put in place so as to deal with the challenges that the new product may face and the recommendations includes: Development of clear distribution channels Development and selection of the most appropriate promotion strategy to market the new product (Wu & Zhao, 2007) Implementation of a strategy to solve the social issue Conclusion Based on the above discussion China seems to be the most appropriate place to introduce the pet care products. This is solely based on the economic development and the culture that is being developed in relation to the raising of pets. Also the economic, political and social issues also make the market more attractive. Thus the new product will be introduced in China. References Agarwal, S. & Ramaswami, S. (1992). Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internationalization Factors, Journal of International Business Studies, 23, 1-27. Hooley, G., Piercy, N. & Nicoulaud, B. (2008). Marketing strategy and competitive positioning. London: Prentice Hall. Johnson, J. & Tellis, G. (2008). Drivers of success for market entry into China and India. Journal of marketing, 72, 1-13. Joshi, R. (2005). International Marketing. New Delhi and New York: Oxford University Press. Wu, D. & Zhao, F. (2007). Entry Modes for International Markets: Case Study of Huawei, A Chinese Technology Enterprise. International review of business research paper, volume 3 (1), 183-196. Xin, Z. (2012, August 30). Growth in the pet care industry unleashed by booming wealth. China Daily. Retrieved from http://www.chinadaily.com.cn/cndy/2012-08/30/content_15718496.htm Donaldson, D (2013, August 27). China pet care market growing rapidly. Pet care industry. Retrieved from http://www.petfoodindustry.com/China_pet_care_market_growing_rapidly.html Appendices Table 1: consumer expenditure in pet care Type of pet $million % of total Dogs 3,597 59.7 Cats 1,415 23.5 Other pets 801 13.3 Pet care products 208 3.5 Total 6,021 100 Table 2: number of dogs and cats in Australia Chart 1: major areas where pet products are bought Chart 2: Targeted market segment for sale of the pet care products Table 2: number of dogs and cats in Australia Read More