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Key Topics
Expand current products and market globally.
Paper covers these competencies:
Paper covers these competencies:
1: Marketing Function
2: Customer Relationship Management
3: Evaluating Feasibility and Profitability
4: Marketing Strategy
5: Entrepreneurial Enterprise
ABSTRACT
In this paper the issues face by a company at the time of becoming global have been discussed. A California based Sunglass Company that specializes in beach sunglasses want to venture into Australian market. To make this transition smooth they need to take various measures and to become more competitive they have developed two new products. While many things can go wrong in this venture as the risks of entering a new market are numerous, the company needs to take this leap to become a truly global brand.
INTRODUCTION
BreakWater is a company that produces and sells sunglasses to be worn mainly in the beaches. They produce two types of sunglasses at present. The categories are Eco Shades and Hybrid Shades. They believe in eco-friendly products and all of their items are eco-friendly. Currently they are based in California and their shades are very popular in beaches likes- Venice beach, Santa Monica and Huntington Beach. Now the company wants to venture into global markets and to succeed in global market they need to develop a few more products and services.
DEVELOPING NEW PRODUCTS TO CAPTURE MARKET
A. The company has targeted the Bondi Beach area in Sydney, Australia as a place where they can expand their business. Like California beaches, Bondi beach also attracts crowd from all over the world and there a potential large market there.
a. As the company has core competency in the beach sunglasses market so they should not venture into other areas from the outset. They can introduce two new products that are suitable for beaches. The products are- wraparound glasses and disposable sunglasses. Wraparound sunglasses are preferred by many customers who go to beaches as they provide better protection from UV rays from all around. Disposable sunglasses can be targeted at the younger population. These glasses will be cheaper and parents can buy them for kids who are not regular visitors to beaches (Pukthuanthong & Roll, 2009).
i. Methods used to determine market requirements
For these purpose three different methods were used to gain knowledge about the Bondi Beach market. They are-
Primary Research- Primary research was conducted through the internet and via a local market study organization to find out about the needs of the beach going crowd. Emails were sent to the thousands to people living in that area and the market research organization asked the crowd in Bondi Beach about their needs about sunglasses.
Secondary Research- Secondary research data was acquired to get information about the market there (Widaman & Little, 2011).
Competitor Analysis- One of the best ways to get information about a market is by analysing thee competitor performance in the market. For this, the sales figures and product lines of the competitors currently active in that region were analysed.
ii. There are various advantages as well as disadvantages of entering a global market. One major advantage that BreakWater will get by going global is brand reputation. While their revenues will also increase because of their increased customer base, the advantage they will get from gaining brand reputation is very important in the long run. At the moment they are active mainly in California beaches. While this is good but they have no brand recognition in the international market. By entering Bondi Beach the organization will start getting international recognition.
iii. Risks
BreakWater is not only entering a global market but they are also launching two new product lines. The inherent risks associated with this are-
The organization has no past expertise about the products launched. The new design and concepts can easily backfire and the customers may not like them. To minimize this risk extensive research needs to be conducted about the viability and appeal of the products.
Another risk associated with this is the risk of increased competition. Various companies that are already catering to the needs of Bondi Beach market will give BreakWater tough competition and this might be fatal as they have experience about operating in that area and the local companies have very good idea about the local needs. To minimize this risk BreakWater has to analyse the core competencies of the competition and they have to find the need gap.
a. As the company has core competency in the beach sunglasses market so they should not venture into other areas from the outset. They can introduce two new products that are suitable for beaches. The products are- wraparound glasses and disposable sunglasses. Wraparound sunglasses are preferred by many customers who go to beaches as they provide better protection from UV rays from all around. Disposable sunglasses can be targeted at the younger population. These glasses will be cheaper and parents can buy them for kids who are not regular visitors to beaches (Pukthuanthong & Roll, 2009).
i. Methods used to determine market requirements
For these purpose three different methods were used to gain knowledge about the Bondi Beach market. They are-
Primary Research- Primary research was conducted through the internet and via a local market study organization to find out about the needs of the beach going crowd. Emails were sent to the thousands to people living in that area and the market research organization asked the crowd in Bondi Beach about their needs about sunglasses.
Secondary Research- Secondary research data was acquired to get information about the market there (Widaman & Little, 2011).
Competitor Analysis- One of the best ways to get information about a market is by analysing thee competitor performance in the market. For this, the sales figures and product lines of the competitors currently active in that region were analysed.
ii. There are various advantages as well as disadvantages of entering a global market. One major advantage that BreakWater will get by going global is brand reputation. While their revenues will also increase because of their increased customer base, the advantage they will get from gaining brand reputation is very important in the long run. At the moment they are active mainly in California beaches. While this is good but they have no brand recognition in the international market. By entering Bondi Beach the organization will start getting international recognition.
iii. Risks
BreakWater is not only entering a global market but they are also launching two new product lines. The inherent risks associated with this are-
The organization has no past expertise about the products launched. The new design and concepts can easily backfire and the customers may not like them. To minimize this risk extensive research needs to be conducted about the viability and appeal of the products.
Another risk associated with this is the risk of increased competition. Various companies that are already catering to the needs of Bondi Beach market will give BreakWater tough competition and this might be fatal as they have experience about operating in that area and the local companies have very good idea about the local needs. To minimize this risk BreakWater has to analyse the core competencies of the competition and they have to find the need gap.
CRM
B. Customer Relationship Management (CRM) is an integral part of a business and to ensure good relationship with customers a great CRM software system needs to be there. For this purpose Pipeline CRM is a very good choice. It has global presence and it supports various platforms and it is comparatively cheaper than its competitors.
a. Information generated by the CRM system can be used in many ways like – track customer feedbacks, tend to customer complaints, based on the feedbacks develop new product ideas by getting information about customer requirements (Ngai & Xiu, 2013).
a. Information generated by the CRM system can be used in many ways like – track customer feedbacks, tend to customer complaints, based on the feedbacks develop new product ideas by getting information about customer requirements (Ngai & Xiu, 2013).
SUPPLY CHAIN
C. BreakWater is in the initial stage of entering global market. For them direct exporting is not a viable channel as the overheads will be much greater. They need to use indirect exporting method to reach consumers there. They can use online retailing as opening retail outlets will again become very costly.
a. The organization can come to agreement with local cooperative organizations to enter the market. In this way they will have regional trade alliance with their partner for distribution of products.
b. A global supply chain can increase the overhead costs of a product. They need to be competitive in the cost department as they are not a premium brand for sunglasses. Also, the cost of their new disposable sunglasses has to be low as that is the main advantage of such product. For them providing service to the customers can also become complex as they don’t have a proper system for servicing in the new market (Bernard & Grazzi, 2013).
a. The organization can come to agreement with local cooperative organizations to enter the market. In this way they will have regional trade alliance with their partner for distribution of products.
b. A global supply chain can increase the overhead costs of a product. They need to be competitive in the cost department as they are not a premium brand for sunglasses. Also, the cost of their new disposable sunglasses has to be low as that is the main advantage of such product. For them providing service to the customers can also become complex as they don’t have a proper system for servicing in the new market (Bernard & Grazzi, 2013).
PRICING STRATEGY
D. The pricing strategy that needs to be adapted in this case is penetration-based pricing in the initial stages as the organization is trying to enter the market and there are many competitors in the market.
a. Costs associated with developing and launching new products are- planning cost, research cost, design costs, manufacturing cost etc.
b. Customer acceptance of the price is very important for a product. The price cannot be so low that the customers think that there might be quality issues and it also cannot be so high that the customers are not willing to pay for it. The second case is applicable if the product is not premium quality (Yan, 2011).
c. Competitor prices need to be analysed while entering a market. This provides information about the pricing strategy of the product, expected revenues etc.
a. Costs associated with developing and launching new products are- planning cost, research cost, design costs, manufacturing cost etc.
b. Customer acceptance of the price is very important for a product. The price cannot be so low that the customers think that there might be quality issues and it also cannot be so high that the customers are not willing to pay for it. The second case is applicable if the product is not premium quality (Yan, 2011).
c. Competitor prices need to be analysed while entering a market. This provides information about the pricing strategy of the product, expected revenues etc.
PROMOTIONAL STRATEGY
E. A promotional strategy is imperative for an organization which wants to enter a new market. For a small organization like BreakWater which doesn’t have international brand recognition, promotional activities are more important. For this mass media and social media channels can be used (Tuten & Ashley, 2014).
a. As traditional mass Medias like television advertisement is very costly, BreakWater can chose email advertising as well as newspaper advertising in the Sydney local newspapers. They can use Facebook and Twitter for social media advertising.
i. This mediums are chosen as these are relatively cheap and young as well as middle aged demographics use these mediums.
b. BreakWater can organize various fun activities on the Bondi Beach to attract crowd and they can provide coupons with discounts for their sunglasses in the initial stages.
a. As traditional mass Medias like television advertisement is very costly, BreakWater can chose email advertising as well as newspaper advertising in the Sydney local newspapers. They can use Facebook and Twitter for social media advertising.
i. This mediums are chosen as these are relatively cheap and young as well as middle aged demographics use these mediums.
b. BreakWater can organize various fun activities on the Bondi Beach to attract crowd and they can provide coupons with discounts for their sunglasses in the initial stages.
CONCLUSION
BreakWater needs to enter the global market in order to expand their business. The tourists of California and Sydney beaches have similar types of needs as both these places have similar type of weather and economically the local consumers are both from upper income groups. This venture can become their stepping stone for becoming a global brand and if their products are good enough then they can succeed in that market as they have specialisation in this field.
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1. Bernard, A., & Grazzi, M. (2013). Intermediaries in international trade: Direct versus indirect modes of export. Agribusiness, 69-71.
2. Ngai, E., & Xiu, L. (2013). Application of data mining techniques in customer relationship management: A literature review and classification. Expert systems with applications, 12-14.
3. Pukthuanthong, K., & Roll, R. (2009). Global market integration: An alternative measure and its application. Journal of Financial Economics, 45-47.
4. Tuten, T., & Ashley, C. (2014). Promotional strategies for small businesses: group buying deals. Small Business Institute, 21-23.
5. Widaman, K., & Little, T. (2011). On creating and using short forms of scales in secondary research. Historical Social Research/Historische Sozialforschung, 78-82.
6. Yan, R. (2011). Cooperative advertising, pricing strategy and firm performance in the e-marketing age. Journal of the Academy of Marketing Science, 36-37.
2. Ngai, E., & Xiu, L. (2013). Application of data mining techniques in customer relationship management: A literature review and classification. Expert systems with applications, 12-14.
3. Pukthuanthong, K., & Roll, R. (2009). Global market integration: An alternative measure and its application. Journal of Financial Economics, 45-47.
4. Tuten, T., & Ashley, C. (2014). Promotional strategies for small businesses: group buying deals. Small Business Institute, 21-23.
5. Widaman, K., & Little, T. (2011). On creating and using short forms of scales in secondary research. Historical Social Research/Historische Sozialforschung, 78-82.
6. Yan, R. (2011). Cooperative advertising, pricing strategy and firm performance in the e-marketing age. Journal of the Academy of Marketing Science, 36-37.
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