Splash Corporations Introducing Innovations, Motivations, Development of Products - Assignment Example

Business 28 March Questions How has culture affected the development of Splash’s products? Pay particular attention to the ways in which cultural changes have impacted the business and how international differences have, and may in the future, impact their products and overall business strategy. Culture is a group of shared values, attitudes, practices and goals that constitute an organization or group. Culture of one country will be different from the other country, e.g. the tastes, values and beliefs of customers of the Philippines will be different from the customers of the Middle East countries. Therefore, the Splash personnel needs to develop the product in such a way that attracts the customers of different cultures. By involving the partners in terms of examining the culture, treating the partners as family members and adopting strategic leadership and management style, the Splash has improved in the business. Developing new technology has created an impact on the business. Splash has set up the Splash Research Institute to constantly expand new products that would persuade the fast rising requirements of the customer care market by utilizing cutting-edge technology. Another change was on the development of a management team who has an immense knowledge of the preferences and needs of the customers of the Asian countries. The business believes that by creating a change in the values and difference in the customers, the business can withstand with the international competitors. The tastes of consumers differ from country to country. With the help of an effective marketing strategy they can satisfy the consumers of different countries. Strengthening the Indonesian markets will help the company to compete in the international market. The creation of an international identity will help the firm to build strong relationship with the foreign customers. The firm needs to use an effective branding strategy. Effective use of branding and distribution strategy will help the firm to find a place in the Indonesian market. A new branding strategy will help to adopt a new market segment. The business can concentrate on the men consumers and develop products for men. 2. Recall the different generic international business strategies and structures. How would you characterize Splash’s strategy and structure prior to 2000? Justify your answer. Strategies of the Splash products are reflected on its advertisement and products strategies. Multinational competitors of the Splash normally carried their products and had attained more mature phase of the product life cycle. So such ads were targeted to appeal to poignant aspect of their particular products.  Their ads featured good-looking and glamorous ladies, whom the men frequently took notice of: the intension was to generate consumers hope to be like the ladies in the advertisements and to be likewise admired.  Advertisement is the one of the key strategies of the Splash products, besides this, one of the other international business strategies of the Splash is the communication. Various innovations are made on the existing products and this new product varies with new features and advantages, or superior efficacy that makes the business seem very fresh and keep the customer excited. These product innovations create competitive advantage of the Splash products.  Splash’s strategy and structure prior to 2000 are different from today’s strategy. “Splash often introduced new product variation under their existing, trusted brands in a bid to renew consumer interest. They used above the line and below the line advertising. Their advertising campaigns in major media were supported by mall tours, school tours and distribution of free samples. Their products were distributed through a variety of retail outlets, ranging from department stores and supermarkets to pharmacies” (Splash Corporation). Splash started as a small venture that specified in supplying remover of cuticle, an acetone, hair spray and cold wave cream to beauty storerooms. Now it has grown into the major Filipino-owned producer of cosmetics & personal care goods. The continuous strategy helps the Splash product reach the present stage. 3. Making the decision about ‘where’ to venture overseas ought to be conditioned by firms’ motivations. What are Splash’s motivations now? How do you think this might influence “where” the company should internationalise? For the years Splash has turned out to be the largest domestically owned business in the Philippine cosmetics product and toiletries business. It positioned the sixth in overall incomes, creating it the industry’s most flourishing domestic business and the only domestic organization in the top 10 list. “The leading companies, in terms of market share for the industry, were the local subsidiaries of multinational giants such as Unilever, Colgate-Palmolive, Procter & Gamble, Johnson & Johnson and Avon” (Splash Corporation (A): Competing with the Big Brands and Global Strategy Advisors. Whereas the domestic market itself provided numerous opportunities for future development, globalization had opened numerous worldwide opportunities as well. Making the decision regarding ‘where’ to venture overseas ought to be conditioned by firms’ motivations. These are the main motivations of the Splash to start business in the overseas market.  The first overseas demand arrived from the legions of abroad. Filipino workers (OFWs) who worked and lived in the various other Middle Eastern and Asian nations, in addition to Europe and the North America. In 2005, there were just about eight million OFWs. The majority of OFWs was ladies, but overseas male workforce was becoming more general. Conventionally, OFWs were household workforce personal caregivers and personal care providers. Hortaleza also felt Indonesia was a mainly attractive marketplace for hair care products and Splash’s skin care. Indonesia was the Earth’s fourth most populous state with 240 million people, almost half of whom was below the age of 25. Even though 27 % of Indonesians lived under the poverty line, the gross domestic product, development rate was expected to attain 5.3% in 2005 and other financial indicators were also reasonably well-built. 4. Splash is engaged in a Joint Venture in Indonesia. What are the potential advantages and disadvantages of this strategy? Dr. Hortaleza, the CEO of Splash Corporations found that for Splash’s skin care products Indonesia will be an attractive market, because the population size of the country. About half of the nation’s populations constitute youth below the age of 25, and with the fast growth of urban areas more number of women was earning income. These factors will contribute more for the growth of the personal care products of the Splash Corporation. “The potential vast domestic market has not only attracted major foreign companies to invest in Indonesia, also domestic manufacturers have expanded into international markets beside established substantial domestic market share” (Yunus par. 2). With the help of joint venture strategy company will be free from the matters of regulatory requirements and others. These matters will be taken care by the co-venturer. The other advantage is that they can make use of the opportunity to gain new technologies and new capacities. Joint venture strategy will help the Splash Corporation in sharing the risk with their joint venture partner by gaining more market knowledge of the market to which the product is newly introduced. Being the domestic country of the co-venturer, they can easily identify the opportunities and threat available in the market. The company has to face more competition from international as well as local players. When the competition increases, company has to be more careful and they have to periodically review their strategies. Difference in management and culture styles will lead to poor co-operation and integration among the partner’s and business. 5. Splash has identified Indonesia as a potential target for international expansion. Are there other countries in the Asia-Pacific region that they may also want to consider for expansion? What are the advantages and disadvantages associated with expansion into Indonesia versus another country in the region? “Strengthening the Indonesian market and intensifying the relationship with third parties to sell products to other Asian counties is a good opportunity to slowly establish itself in the international scene. Strengthening the Indonesian market and intensifying the relationship with third parties to sell products to other Asian counties would help in giving the firm its own identity in the international market” (International Marketing – Splash Corporation Case Study). The other countries that Splash needs to give considerations are Vietnam, Malaysia and Thailand. This is because in Vietnam the skin tone and other dermatological concerns of the consumers are almost similar, so that the Splash’s skin care products, especially exfoliants will have a good demand there. While considering the case of Malaysians, they have dark skin tone when compared to Vietnamese and they consider lighter skin tones as more attractive. So there will be more demand for skin whitening products. In Thailand, comparing with Malaysia and Vietnam, the market demand indicators were too weak. The expansion of market of the Splash Corporation in China was dismissed fast because of the company’s non-credibility there. Compared to other countries, China is difficult market to enter. Being the fourth largest country in the world, Indonesia has a large domestic market for personal care products. The company has joint venture relationship with Indonesian company. This will help them in promoting and distributing their products more easily. But in other countries, they have to seek the help of third party for the distribution of their products. 6. How has Splash used innovation to succeed in the marketplace? What types of activities will Splash need to undertake in order to continue to successfully introduce innovations in the future? Splash often introduces new and innovative products and brands and its matured brand often offers new product variants. “The couple’s flair for innovation started in 1987 when they repackaged hairspray to eliminate the use of expensive aerosol cans used in imported hairsprays.  Out of this simple but innovative idea, they started selling hairspray formulations in amber bottles which consumers could then transfer into cheap reusable plastic squeeze-spray containers” (Part 1: General Overview Items (A) – (F) 249). Splash Corporation’s another innovation includes the introduction of new facial cleanser made of cucumber and avocado variants under the brand name Extract™.  Company always communicates its innovations including its brand names through advertisements. The ongoing process on introducing innovative products with unique features and benefits helped the company to maintain the customers excited and company always seems to be fresh in the product variants. Innovation helped the company to gain competitive advantage as a brand leader, by continuously addressing the varying needs of its customers more effectively than its rivals. To meet the competition, Splash has introduced innovations for the product, Skin White. Splash’s market researchers found out that the typical Filipino uses underarm deodorant to oppose the tropical weather. The deodorant products always leave dark stains on the skin of under-arm. Filipinos used to wear sleeveless shirts and tube tops, but the dark skin keeps them away from wearing these dresses. Therefore, Splash introduced an underarm whitening cream that acts against the chemical effects of the deodorants. In order to maintain the success in the market, company has to continue their innovations. The variety of products has to be introduced in the market that would satisfy the specific customer’s needs. Company has to develop an efficient Rand D system in order to meet the stiff competition prevailing in the market. Works Cited International Marketing – Splash Corporation Case Study. Research Work. 2012. Web. 28 March 2012. Part 1: General Overview Items (A) – (F). n.d. Print. Splash Corporation (A): Competing with the Big Brands. Ivey Management Services. 2006. Print. Splash Corporation. Coursework.info. 2003. Web. 28 March 2012.  Yunus, Zumrowi. Cosmetics and Personal Care Market in Indonesia. Indotrade.biz. 2006. Web. 28 March 2012. Read More