Marketing Strategy of the Mantec Technical Ceramics Limited - Case Study Example

? International marketing Contents Contents 2 Company Overview 3 Overview of Market 3 Identification of Market 4 Market Opportunities and Challenges 6 Market Opportunities 6 Challenges 6 Marketing Strategy Justification with a Model 7 Marketing Communication Mix 8 Product 8 Place 8 Promotion 9 Price 11 Conclusion 11 References 12 Bibliography 12 Company Overview Mantec Technical Ceramics Limited has evolved from the pre-existing Technical Ceramics Division. The company is a subsidiary of the UK based parent corporation named Mantec Group Limited, which is a manufacturing related technology group, and has a diversified business portfolio (Mantec Technical Ceramics, 2012). The company’s offerings comprises of providing product based solutions of world class stature to various market sectors of individual nature. As a brief overview for the company’s product offering, it can be said that, the company’s product offering includes mainly developing latest technology devices in the field of pyrometrics, ceramic insulation, ceramic filtration, technical ceramics and various kinds of products of porous nature. The company, Mantec Technical Ceramics Limited is a leader all over the world in the B2B domain, in regards to their solution based offerings for highly innovative process and materials of ceramic technical (Mantec Technical Ceramics, 2012). Overview of Market The world, today, is getting increasingly dependent on technology. Ever since the widespread evolution of internet, emerging from the US during the middle of 1990’s, people have started to integrate and align their lives in relation to the developments happening in terms of technology and the latest communication devices. The four generations comprising of Baby Boomers, Generation X, Generation Y and the Millennium Generation have increasingly got dependent on the latest technological developments like the high end touch screen mobile phones, tablets PCs, laptop computers and the highly modernized I pads for availing the convenience and facilities provided by various products and services offered by today’s fast evolving Ecommerce based companies (National Tour Association, 2002, p. 17). This huge inclination of consumers worldwide for various kinds of technological devices have automatically triggered the demand for various small and vital components required for the production of these high tech devices. One particular product, which has become a key component for the development of these high tech technological devices and has experienced a sudden peak in demand, is the multi layer ceramic capacitors. The need for these ceramic capacitors has been tremendously high in markets, which produces high end portable devices in mass scale. As of today’s date, a large amount of these portable technological devices in manufactured in China and South East Asian countries, with them being recognized as the global hub for manufacturing of portable electronic products (Rajan, 2010). Identification of Market With the increase in demands for the latest technology high end portable devices by consumers all around the globe, there has been a tremendous spike in demand for the production of capacitors of ceramic nature. This demand for ceramic capacitor products has been increasingly high in markets where there has been a massive and large scale production for these high end technological devices. The entire Asia Pacific markets are increasingly considered as a global hub for production of electronic devices of portable nature (Rajan, 2010). Going by a micro level comparison of the demand forecasted for this multi layer ceramic capacitor on a market by market basis, it can be said that there are three scenarios that are arising in terms of future growth prospects in this particular capacitor segment. In China, there has been a rising demand for the production of various portable devices like laptops, mobile phones and devices of similar nature. As a matter of fact, the demand for multi layered ceramic capacitors are huge in this market. On a more factual note, China has also catered to the huge need for these high level capacitors by manufacturing around one third of the total capacitors produced all over the globe, the majority of which is consumed locally, by the companies catering to the global needs for electronic products. As per forecast, the market for capacitor production in China is supposed to grow at a rate of 30 % on an annual basis and is currently serviced by the 20 players already existing in the market (Asian Ceramics, 2011, p. 39). In the Hong Kong market, there has been a similar spike in demand, due to the increasing demand for electronic products like e book reader, gaming devices and touch pad devices. Also, a huge amount of demand is going to be generated for the production of high end digital technology based devices like Smartphones, LCDs, portable media players, etc. At the present scenario, the demand for multi layered ceramic capacitors for this market segment is serviced by a total of 10 suppliers. This is making the China market; a highly competitive one (Asian Ceramics, 2011, p. 40). The market in Taiwan is also highly competitive due to the emergence of needs for similar kinds of digital and technology based products, which has fuelled the demand for ceramic capacitors. So judging by the scenario, it can be said that though there is high level of competition that is existent in the ceramic capacitor market, yet there are chances of attaining growth in the business by entering the market of China as the country is trying to cater to the emergence of demand for electronic products by consumers across the globe. Market Opportunities and Challenges Market Opportunities China is witnessing a tremendous growth in the demand for multilayered ceramic capacitor requirements, due to the increase in global consumer demand for electronic and technology based modern communication devices. China, being a part of Asia Pacific Region, which is considered as a global hub for manufacturing is trying to cater to this huge spike of demand. On an annual note, the market in China for the multilayered ceramic capacitor is growing for the last three years at a fast pace of over 30%. Another important factor is that, at the present scenario, there are only around 20 manufacturers, who are trying to cater to half of the global market for this line of products. These manufacturers are running short of production capacity and in order to cover up for the deficits in production limits, these pre existing manufactures are trying to maximize their capacity utilization. Also, 80 % of the total output of multi layered ceramic capacitors is consumed locally. So, it is clearly evident that, in the economics of supply and demand, demand has outstripped supply for multilayered ceramic capacitor segment. As a result, it can be said that there is a huge market opportunity for multilayered ceramic capacitors in China that can be tapped successfully by entering the Chinese market. Challenges As mentioned in the case study, secondary reports have verified that USA based Ferro Corporation has emerged as a strong competitor for the pyrometrics product offering of Mantec Technical Ceramics Limited. This particular organization has penetrated in the electronics sector with similar kinds of product offerings much before Mantec Technical Ceramics Limited. So as a matter of fact, there are chances that Mantec can face competition from Ferro Corporation, who might have established a strong foothold in the Chinese market. Marketing Strategy Justification with a Model The strategy to enter the Chinese Multilayer Ceramic capacitor market can be explained by taking the help of Porter’s Diamond model. Though Porter’s Diamond Model is applicable for determining competitive advantage of nations, but in this case of Mantec Technical Ceramics, it can be fitted properly to justify the firm’s entry in China. Porter’s Diamond model talks about the four most vital factors like the factor relating to firm strategy, structure and rivalry, its demand conditions, related and complementing industries and finally the most important of all, the factorial conditions (Tamer, Knight & Riesenberger, 2009, p.101). These 4 factors comprise the key factors to the entry or exit into a particular market for a company. It can be assumed in this case, that the multilayered ceramic conductors being a product of industrial nature requires extensive amount of capital for entering new markets. Also, since the product type will find mostly derived demand in relation to the electronics market in China, so the number of buyers will also be few. So, these factors automatically build up a barrier to entry for new players and to some extent acts a deterrent to the factor of increase in inter industry rivalry. In the case of Chinese market, as discussed in the case study, there are around 20 players that are currently trying to cater to the huge demand that has been generated as a result of the strong demand for electronic devices worldwide. But with the demand outstripping supply in this case, and the possibility of a rising demand for the multilayered ceramic capacitor in the market, it presents a strong opportunity for entering the market of China from the point of demand factors. Also, in this case, there is a strong demand for the product produced by the company by various companies manufacturing electronic devices. So as a result, there is also, the presence of several complementary companies who will be demanding the products for the production of their end products. And finally, for the factor conditions, it can be said that the company is well known for its product line all over the world, and has the required expertise in technology to build quality products that will cater to the needs of the clients in an efficient manner. Marketing Communication Mix Product The product in focus is the Bullers Process Control Discs, which is under the pyrometrics division. The speciality of the product is that it is designed to check the amount of heat produced within the kilns, which is extensively used in the electronics sector. The product is developed under strict quality control parameters in an effort to maintain consistency and accuracy of the Bullers Process Control Discs. Place As per the case study, Bullers Process Control Discs are purchased by CRT, a Taiwan based client which provides protective clothing for manufacturing companies. As of the current situation, the discs are delivered to the client mostly by transporting through sea cargo in an effort to keep the cost of transportation of the goods low. But, by entering the Chinese electronic market for multilayer ceramic conductors, the demand for Bullers Process Control Discs is going to be increased drastically. Since the demand for this products are mostly of B2B nature, it is very essential for the company to go for proper demand forecasting on the basis of the demand stream for the product from the clients. In an effort to maintain a level of equilibrium between the supply and demand for the products of the company, it will be advisable for Mantec Technical Ceramics to own a warehouse in China for serving the storage purpose of the Bullers Process Control Discs after importing them into China by means of sea cargo during the initial days. Then, at a later point of time, when there will be an increase in demand for the production and supply of the control discs from a stream of local clients located mostly in and around China, it will be effective for the company to set up their own plant and manufacture the process control discs within China itself. Obviously, in order to facilitate the process, the company will have to opt for local sourcing of the raw materials. Opening and setting up a production plant in China, at a later point, as a measure of responding to the high demand, which is generated mostly within the country, will help Mantec Technical Ceramics to reduce the costs, which is incurred as a result of transporting the process discs from the foreign production sites. Also, by opening up a production plant in China, will help the company to optimize the production capacity of the discs to a more optimum level and thus reduce the stock inventory as well as the storage cost required to store the excess inventory. Promotion The Bullers Process Control Discs are mostly targeted towards the multi layer ceramic capacitor markets of China, where the products are used for the production of electronic technology based modern devices. As a matter of fact, the demand for the Bullers Process Control Discs is mostly in the B2B market scenario, where the products face a derived demand. So, on a factual note, it can be said that this product needs to be promoted to the manufacturers of various electronic based products. In order to tap that particular segment, and promote the product in an effective manner, it is very essential to opt for Mantec Technical Ceramics to participate in various trade fairs, happening in and around China and in the South East Asia. This will help the company to find potential buyers for this range of product line, as the purchasing procedure for this range of products falls under the purview of industrial buying. Industrial buyers mostly visit the trade fairs, to find out potentials suppliers and vendors for supply of raw materials, which is considered vital for the production of their end products. Another effective way to promote the products is to maintain an effective sales force, which will be dedicated for the promotion of the Bullers Process Control Discs to various companies in China, who are manufacturing various kinds of devices related to electronic technology. The maintenance of the sales force, with a technical background will help the company to bag contracts from various manufacturers and vendors, who are dealing with the production of electronic devices of diverse nature. Mantec Technical Ceramics, besides promoting the products, in the above mentioned manner, can also look forward for promoting the Bullers Process Control Discs by advertising in major trade journals, like the ones that they are currently providing for promotion in Ceramic Forum International and Asian Ceramics. . Highlighting the product line of Bullers Process Control Discs in various trade journals, circulated in China, will help the company to promote its product line to a wide range of electronic manufacturers, and there by getting facilitating the process of getting a stream of orders by negotiating with the clients in terms of big contracts. Mantec Technical Ceramics can also look forward to the promotion of its product line as well as its presence in the Chinese markets, by sponsoring and organizing various conferences, and seminars in relation to the growth and development of the multilayer ceramic capacitors in the Chinese market. Price Since the Bullers Process Control Discs are mostly trying to tap the derived demand for the electronic industry prevalent in China, the price factor does not really matter much. Since, it has already been discussed above and focused as a B2B product and is mostly catering to industrial marketing, in this case, quality assurance for the related product gets more preference over price. Also, since this is a B2B product, the price factor cannot be fixed and has to be negotiated by the sales team in order to negotiate orders of large scale from various small and medium sized manufacturers of electronic products. Conclusion So, finally, it can be concluded that on the basis of the justification provided above, it can be assumed that it will be an effective strategy on the part of Mantec Technical Ceramics to enter Chinese market for multilayer ceramic capacitors by following the above mentioned marketing mix. References Asian Ceramics, 2011. Asian Ceramics. UK: Bowhead Media Ltd. Mantec Technical Ceramics, 2012. About Us. [Online] Available at: [Accessed 7 May 2012] National Tour Association, 2002. Current Assessment Report (CAR) for the Baby Boomer Market. [Online] Available at: [Accessed 8 May 2012] Rajan, D. S., 2010. China Vs India in the Global Market- An Indian Perspective. [Online] Available at: [Accessed 8 May 2012] Tamer, C. Knight, G. and Riesenberger, J, R., 2009. International Business: Strategy, Management, and the New Realities. India: Pearson Education, Inc. Bibliography Atkinson, J. and Wilson, I., 1996. Strategic Marketing Cases, Concepts and Challenges. Harper Collins. Clarke, G. and Wilson, I., 2009. International Marketing. McGraw-Hill De Burca, S. Fletcher, R. and Brown, L., 2004. International Marketing: An SME Perspective. New York: Financial Times Press. Ghauri, P. and Cateora, P., 2006. International Marketing. 2nd Edition. Berkshire: McGraw-Hill Education. Hollensen, S., 2007. Global Marketing : a decision-oriented approach. 4th Edition. Pearson Education Ltd. Read More