International Marketing Mix - Tutbury Crystal - Assignment Example

International Marketing Mix – Tutbury Crystal By Devangini Mahapatra Chauhan Lifestyle products have seen many takers from a variety of income and social backgrounds in the recent past. This has triggered various empirical studies into the nature of the market forces that determine the operational realities of these products in terms of brand identities and knowledge. The branding and positioning of a high end lifestyle product like crystal is of utmost importance to give its market value a lift. The crux of our paper is the development of an international strategy for the marketing of the crystal produced by Tutbury – a British manufacturing company. A family owned business that churns out the highest quality of cut glass and allied products that come under the lifestyle category, Tutbury is a name to reckon with. Given its history and the prestige attached with owning pieces produced by this company, it would be a tough job to market this effectively in a region where little would be known about this exclusive brand. In this regard, the paper will present factual based strategies throughout in order to maintain a strong context in terms of the branding and marketing mix that would suit this company the most. This will be done with a strong focus on the operational realities within which the company has been functioning in Europe so as to find a suitable model for application in the country of our choice. In this regard, it is imperative to loosely define international marketing before moving on. International marketing is that sphere of activities that is aimed at introducing a product in a country or group of countries with the aim of creating sales and some amount of awareness regarding the brand (Bennett et al, 2002). Therefore, for a lifestyle product like crystal, what better than a country where lifestyle solutions are becoming a rage and the norm of the day - India. This Asian country is fast moving away from its traditional colonial bearings to discover style and charm in urban living. The new generation in India does not mind doling out that extra amount of cash to spend on good lifestyle products that will make a statement about their homes, lives and times. Welcome to the new Indian – Sassy, stylish and very, very choosy as discussed by Fernandes, 2000. This is the reason for choosing India as the country where a suitable marketing mix for a brand like Tutbury’s will be suggested. Also, in this regard, the paper will carry out a discussion of Tutubury’s current marketing and segmentation strategy in order to arrive on the aspects where the entry mode strategy can be introduced and defined to suit the consumer preference in India. About Tutbury’s: Born and marketed during the 1920s to the 1960s, Tutbury’s was named Thomas, Webb and Corbett to start with until it was known by its present name in 1984, owing to the spot of it factory which was in a 15th century village named Tutbury. 2006 saw a strategic move on Tutbury’s part where its factory chose to be based at Stroke – on – Trent, instead of Tutbury’s. The branding of Tutubry’s has been largely based on norms that revolve around exclusivity and a certain amount of mystery with the nitty gritties of the company. The basic finding that this paper will work on is that Tutbury’s has capitalised on the lifestyles of a certain section of people so as to form a brand identity of its won. As far as the actual product is concerned, it is imperative to identify where its unique features lie. In this regard, Tutbury’s is a product that works on the highest quality of glass which is produced primarily from a high standard of full lead crystal. This crystal has a crystal element that can be estimated at over 30%. In case of the consumer base enjoyed by the company, there is a sharp segmentation in terms of the target group. The basic target group of the company includes people in the upper income group starting from the age of 30 and above. Further, the people who have retired and are in the age group of 50 and above, serve as a major source of profitability. Another important source of income for the product is the Internet. Therefore, the important element in the application of the entry point strategy for Tutbury’s is to recognise the age and income groups that predominantly define the demographics in India, before going on to carry out segmentation and reach suitability in terms of the marketing mix. In this case, the entry point strategy may be used as a preliminary process that will help develop the marketing mix. This entry point strategy has been defined throughout the paper in the various elements of the marketing mix so as to find a suitable base for segmentation and subsequent brand positioning. Entry Point Strategy In terms of the suitable model to be used for the development of a relevant marketing plan and strategy, we have made use of the International Market Entry Mode Strategy for this company. This strategy is ideal for those companies that wish to diversify geographically (Walter et al, 1988). This strategy along with others that have to do with market segmentation and brand positioning for maximum customer satisfaction will be used in order to evolve a strategy that is best suited for the purpose of an entry level product in a market as diverse as that of India. The first element when entering a new market is the risk factor. For Tutbury’s there has been a strategic management of risk through a change of location as well as the launch of personalised and online services. There, is a need to now focus on changing passive international sales into hardcore business. It is important to capitalise on the opportunities by undertaking risks so as to achieve organisational growth. Therefore, once the entry level mode is applied to this situation, there will be a concerted effort towards arriving at decisions that have to do with control, risk and commitment as demonstrated in the diagram below: To deal with the risk factor at an entry level, this diagram shows that the commitment level needs to be high so as to start by catering to consumer satisfaction. With effective segmentation, it will be easy to find out the areas of investment so as to find an appropriate positioning on the scale where exports start (Walter et al, 1988). Therefore, a good entry level strategy would involve introducing the fact that Tutbury’s has an international face as its products go and can be modified to cater to any kind of culture or country. In this regard, there will be long term growth through the management of the immediate and other short term risks. In this case, the main risk comes from losing its exclusivity which can be tackled through the direct investment strategy. Even though, its priority list speaks of countries like America and Australia as strategic places for expansion, internationalisation in today’s world would mean a westward as well as an eastward growth owing to the fact that the East is booming and almost at par with the West as far as politics and economies are concerned. As an entry point mode, a company dealing with high end products needs to make a more individualistic statement. This calls for a mix of passive as well as consumer centric activities at the location as well as around it. For this, it is important to touch the pulse of the target consumers by being accessible to them distance wise. Therefore, it will be found that for an entry level product in an international market, exploring the retail market is the best option. The direct investment strategy is the best one for the entry mode strategy. In this regard, the entry level mode can be applied to find the areas where there is competitive advantage so as to find variations in the large consumer base that this product can enjoy in India. This will assist the company in finding an appropriate contractual or intermediate strategy that may be customised to fit into the Indian market in terms of segmentation. With franchising, licensing and other activities that will promote an environment of direct exports will also be a definite draw for most retailers (Walter et al, 1988). According to the entry level mode strategy, it is important for the product to take the characteristics of its target market into account apart from the investment plan it will follow in the course of going international. This will serve the purpose of revealing the share holders ready to invest within India apart from the niche market that must be targeted. This brand must retain a more or less similar price in order to retain exclusivity. For this, it is also important to determine the dominance as far as risk and returns are concerned so as to command a fitting price accordingly. The level and degree of this dominance can be studied through an application of the entry level mode strategy. Marketing Mix – The Indian Connection A marketing mix is an amalgamation of the four Ps called Product, Price, Promotion and Place. It is a strategic process of planning and implementing the various elements in a certain combination so as to achieve the organisational goals. In this regard, it is imperative to reach a combination of the said elements along the lines of prevailing market forces and other such factors. In this section, there will be a discussion regarding Tutbury’s existing elements in order to study how these may be applied to formulate an apt marketing mix for the Indian market for lifestyle and other such products (Bennett et al, 2002). The reason for my focus on customer satisfaction as well as market segmentation lies in the fact that for a product like Tutbury’s, a market like India is vast and diverse with a wide base of consumer and market types. Therefore, these strategies will be implemented in terms of the four Ps – product, price, promotion and place (Walter et al, 1988). Product As far as its branding process and make up goes, it would be imperative to first discuss the fact that Tutbury’s is a composite of two brands. In this case, the actual Tutbury’s Crystal is segregated from Montrose Crystal, which produces items for corporate use and gifting purposes. While Tutbury’s is more consumer oriented, it has a different branding strategy to create a different kind of presence from that enjoyed by Montrose. Apart from this, with only 10% of Tutbury’s Crystal sales reaching actual retailers, there has been an impetus to explore new markets. These new markets can be studied and interpreted in terms of consumer behaviour theories based on market segmentation. Considering the fact that Tutbury’s is not easily accessible to many segments, it is important to tap the segments that have maximum potential. In this regard, it may be seen that India has a huge growing market of corporate services and add ons in the form of furnishing, training and other arenas. Not only is Montrose the perfect solution for providing these kind of products, it will also be one of its kind in this country when launched in tandem with Tutbury’s Crystal (Bennett et al, 2002). For this, the product must depend on extensive promotion with regards to the fact that its finishing is done in Poland, Italy and Slovakia. This will lend credibility for investors and other potential retailers who need to have basic information about what is unique about this product. In case of creating a demand, Tutbury’s will also be able to tap into the maximum consumer base and build a wide range of consumer variation through the transmission of such information which will in turn add to its brand worth and identity. Also, this product is available in standard, personalised or bespoke forms. There is now a niche market in India for all these three forms (Fernandes, 2000). Owing to its personalised packaging services for various target bases, the online option is a good one considering the online shopping and E commerce boom. In this case, the product dimension of the marketing mix may be defined as one that will cater to personalised forms of the products for buyers willing to pay the price involved. Place As discussed earlier, Tutbury’s has recently moved from the remote village of Tutbury’s to a new home in Stroke – on – Trent. This has been called a strategic move owing to the fact that, being on the regular tourist beat, Stroke – on – Trent enjoyed more customers which translates to enhanced market visibility. Visibility has also been fuelled by the fact that the physical positioning of the factory is near Wedgwood’s many factory outlets and one of Portmeirion’s. In fact, there also exists a fully operational retail outlet to promote Tutbury’s as one of the prime attractions in the area, thus adding to Stroke – on – Trent’s prime attraction as a site for pottery factory outlets. In this regard, Tutbury’s must explore the strategic places in India where it may set up its factory along with an outlet, as well as strategic spots for the retail outlets so as to retain some amount of exclusivity. To start with, the Vineyards in the West of India are settled in a place near Bombay, called Shola (Fernandes, 2000). This place is exclusive and a regular party and socializing hub with the jet set. Since wine and crystal are complementary for each other, a factory and a factory outlet in this area would be the best. Also, another spot is in South India where there is a major project by Dee Mandala to produce and sell wine. Mandala valley is situated near Bangalore and the owner, Mr. Mahadev Gowda owns over 5000 acres of land, out of which he is selling plots for commercial and residential purposes (Dee Mandala – Offical Website, 2008). These 5000 acres are being developed to emerge as the finest and most exclusive township in the country. It is also perfect for the Tutbury’s factory and factory outlet (Fernandes, 2000). As far as retail outlets are concerned, one must keep in mind that with the advent of the mall culture in India, there has been a trend of accessibility to these malls as far as retailers are concerned. This is owing to the fact that the mall owners want to recover their investments in a hurry which cannot be supported by sudden surges of visitors towards these malls (Fernandes, 2000). Therefore, they are busy selling their space to any retailer. Therefore, it is imperative for Tutbury’s to stay away from malls and focus on independent outlets in posh areas in the five metropolitan cities in India – Delhi, Bangalore, Bombay, Calcutta and Chennai. This will help maintain a certain degree of exclusivity (Bennett et al, 2002). Promotion Tutbury’s has followed a very systemised an exclusive form of promotion. In this context, it is imperative that it do the same in case of India. Market segmentation in the entry level anaylsis, as discussed above is the best method to follow in order to gain useful insights into consumer behaviour. This will also help determine the exact segments within the country which needs to targeted. In turn, this process will provide a platform for effective brand positioning. This level of brand positioning will be in tandem with the policies and goals of the company in general. Brand positioning of this product in the Indian market depends largely on the skill and resource base according to the entry level mode. This will help decide on the perfect promotion strategy for a high value product like Tutbury’s. In this case, according to the entry level mode, it is imperative for a high value product that can be bulky as well, to test the waters by creating a brand identity for starters (Walter et al, 1988). Brand identity is built on the basis of various elements that surround the final perception surrounding a brand. This has a strong nexus with brand positioning in the market. Brand positioning is an activity that Tutbury’s needs to place special emphasis on before its formal launch in order to study the operational aspects of the potential investors and to assess the actual promotional tools that will need to be applied with a focus on spreading awareness. Retaining exclusivity is of utmost importance in a country like India where the level of disposable income even with the most average person has increased by leaps and bounds. This will have a two fold effect for the brand. The first is that it will not be selling itself short and the second is that it will maintain a certain standard as far as its reach is concerned (Bennett et al, 2002). While personalised packaging is a huge draw and a signature service provided by Tutbury’s in personalised selling as well as online sales, it has been observed that its international sales are not all that high as can be seen from the Middle Eastern example which is marked by passive sales that take place at exhibition. This translates to the fact that there is no initiative towards creating an awareness regarding the product through hard core promotion on foreign shores. This might explain why internationally famous companies like Waterford. At the same time, it may be asserted that Waterford does not have the kind of presence that Tutbury’s boasts of as the latter is not easily available unlike the former. Therefore, Tutbury’s Unique Selling Point of USP is its exclusivity. This must be used in its favour to create an awe inspiring brand of visibility – an almost there kind of awareness shrouded in a mystery of its own. This sense of mystery is its entry point strategy as far as promotion is concerned. Therefore, there must be advertisement only in specific business class and travel magazines of national airlines. In this regard, with glossy print ads that focus specifically on the quality of the crystal, there needs to be an attractive spread that must make an impact in a simple way. This is owing to the fact that in order for a product like crystal ware, which is so intricate and delicate in its designs, there must be focus on simplicity. This can be followed by exclusive exhibitions in 5 star and 7 star hotels like Taj, Oberio, and many more (Fernandes, 2000). Further, Tutbury’s must choose an Indian face as its ambassador so as to reach out to the people on a personal note. Instead of a regular actor or actress, this brand ambassador must be a stately icon from business, media or even politics, so that people will take the brand more seriously. To build a more strategic brand identity, Tutbury’s must follow the process of getting to know a jet set clientele over pre launch parties as well as post launch parties of wine, cheese and steak. In this regard, Tutbury’s must create brand knowledge through presentations on the company and its history as well as reputation. Also, there must be media coverage by a maximum of two channels. For this, Zoom TV (a social page channel) and NDTV (a News channel of great reputation in India) must be chosen instead of the regular CNN IBN as NDTV is more Indian in its image. Further, there must also be international coverage of the launch details on BBC for its Non resident Indians, as these people have now taken to shopping on the great Indian shores where there is a lot more variety with retailers of all shapes and sizes flocking towards it (Fernandes, 2000). Price Exclusivity is a major feature of the company which depends not only on promotion but also on related factors. This depends on the stock value also. In this regard, it has been mentioned earlier in the assignment that only 10% of the sales made by the manufacturer are to retailers. Therefore, in keeping with promotional strategy that Tutbury’s itself must have its own outlets, where most of them should be factory outlets near vineyards, there is a strong focus on the exclusivity approach in the price (Fernandes, 2000). Owing to the fact that this paper has pointed out that Montrose and Tutbury’s must have outlets side by side so as to promote it as a brand and cater to a larger market. Therefore, the pricing must be such that these products must be affordable yet out of reach for those below the average standard. This will help the company maintain a certain image and standing of its own. In this case, it will also command a greater market share if its price matches the exclusivity of its promotion and reach (Bennett et al, 2002). Further, as a niche market, Tutbury’s must retain a high price where personalisation of items is concerned such as bowls or vases as this has contributed to 75% of its sales where 95% sales have been on standard prices. This is a very close ratio and must be sued in the pricing to make sure that personalisation also catches up in India. As far as the pricing is concerned, it is also imperative for Tutubury’s to resort to an assessment of the risk and return factor in the Indian market through variance and dominance analysis, which will reveal the future that the product has in the long term. This will help decide on the price in lieu of potential risks and an estimation of returns (Walter et al, 1988). Financial Projections: The financial projections of the above described marketing plan for the Tutbury’s Group is as follows: Capital Requirement: Marketing Cost of Marketing (Year One to year Two): $250,000 Cost of Marketing (Year Two to Year Five): $250,000 Cost of Marketing (Year Five to Year Eight): $300,000 Cost of Marketing (Year Eight to Year Ten): $350,000 The costs laid down above depend on factors like scale of operations. In the first two to five years, the scale of operations will be low, which will lead to less intensive marketing. Also, in a bid to retain exclusivity, there will be a focus on only certain areas for the promotional activities. The marketing activities will intensify during the fifth and tenth years, where there will be an all time high during the last two years so as to maintain and achieve a certain quality of marketing activities. The total budget for marketing is $1,150,000 Conclusion According to the analysis done above, it is important for the company to employ a direct investment strategy with licensing and export so as to convert passive pastures for sales into active and more action oriented strategies for marketing. In this regard, the direct investment strategy is the best one for the entry mode strategy as far as maintaining exclusivity is concerned. In closing, it would be imperative for Tutbury’s to follow exclusivity as a strategic plan of action for a country like where there is now a large amount of disposable income available even with the most average person due to the advent of the BPO industry. In this regard, there is a focus on how India is in dire need of a brand like Tutbury’s to fulfil its urban and modern population’s basic desires as far as lifestyle statements are concerned. References: 1. Bennett, R; Blythe, J (2002) International Marketing: Strategy Planning, Market Entry and Implementation. Kogan Page. 2. Dee Mandala Estates. Available at: www.deemandala.com (Accessed during: August, 2008) 3. Fernandes, Leela (2000) “Nationalizing `the global': media images, cultural politics and the middle class in India.” Media, Culture and Society, Vol 22. 4. Tutbury’s Crystal. Available at: www.tutburycrystal.co.uk (Accessed during: August, 2008) 5. Walter, I; Murray, T (1988). Handbook of International Management. John Wiley and Sons. Read More