International Market Entry - Essay Example

International Market Entry Student Name Institution of Affiliation Introduction Companies are looking for new areas that they can get into and sell their products. There is competition of control of market when it comes to situations companies are dealing with the same product or they are in the same industry. When making entry to a given market, there are some of the things that are considered before a given any company decides to get into a given market segment. Getting into an international market is not an easy hence a company needs to do a thorough analysis on how the industry that it is going to get into in a given country is performing and some of the restrictions that particular country will put in place. The operation in given market requires specific understanding that will make those who are players in that country to get into the country to carry out different activities that will see progress in the country. In these case I will try to look into electronic companies that I will want to work for. Samsung Company and Nokia Company are some of the best electronic company that I could wish to work for. However, the kind of business approach that I could wish them is using the vending machine business in different cities of United Kingdom and United States of America. The two countries are some of the major economies in the world hence getting into them then the model of business that I will intend to employ in two markets. My passion in electronics gives me an upper hand in undertaking the business. Therefore, it is important if the two countries want to increase their sells in the international market to come up with other methods of selling their products (Mole, Hart, Roper & Saal, 2008). The vending machine model will be new and it will reach more people and reduction of the cost of business operation. This paper we are going to look on how to get into international and some of the market analysis steps needed for a company to succeed. Market Analysis Vending operators are increasingly investing in technology. There was for example a growing trend for telemetry capability in vending machines, enabling the monitoring and analysis of stock and vending figures from network machines nationwide. Cashless and contactless payments are also a strong feature of new machine designs introduced towards the end of the review period, with 2015 seeing launches from leading developers Nayax, Counter Solutions and Crane Payment Solutions. Touch screens also feature on a growing number of machine. The scenario will see vending business be on its rise. However, there are no operators who have invested in the vending machines that are dealing with electronics. Samsung and Nokia began as an electronic device manufacturing companies without any main competitor dealing with vending machines that deal directly with electronics. The founders began with a business idea that they could use vending machines in selling iphones, earphones and covers. The vending machines only existed in other business products in the world and since being purchase by the customers without the presence of the , with all of Facebook's’ resources at hand, it has transitioned into having a brick and mortar area for designing, but sales still take place online, there is no store to purchase physically at. The vending does have competition in this niche virtual reality trend. However, the amount of competition is low to only allow the consumer to choose from a few substitutes. The disadvantage is that all products offered are of similar quality and none provide a heightened experience or variable use. They all essentially complete the same need at a similar price. Finally, the buying power is in the hands of the consumers, because there are no ‘switching costs’ for the consumer when purchasing the substitute products and each product offers similar experiences of quality (Tornikoski & Newbert, 2007). Demographic-There is a huge global population of electronic needs, software and hardware developers hence they need smart phones and there covers. The need for the vending machines increases due to this large market. The Vending machines can be used for multipurpose or cross platform capabilities while remaining attractive to virtual reality enthusiasts and remain competitive against other technologies that require the same kind of services. The increasing number of individuals who prefer efficiency instead of using the traditional methods is one of the motivation that will see the business perform better in the future and even expand more. Economic analysis The United Kingdom and world economy will be the focus of this section, given it’s the targeted geographic market of the Vending machines both in the short term and the long term goals. The United Kingdom economy is a well-developed, efficient economy that allows many individuals to operate in business and work. The income levels of this market allows for the consumers to be eligible to purchase a product like those that the vending ltd is targeting to deal with. Its price range and need defines it as a luxury item, but it is attainable at the consumer income levels and can be purchased through their ‘discretionary income.’ Also, the innovators will still purchase the latest innovative products despite any economic period that is currently in effect. Economic state pertains more to the individuals with a lower ratio of discretionary income, it is these individuals that will need to save ore for the cost of the Vending machines. With the fact that labor costs and other operations costs being eliminated completely, it means that in the long run. The economy is currently doing well something that will see the businesses perform better. For example in the year 2016, the GDP is said to have grown by 5%. 5% current value growth from 2015 to reach GBP448 million in 2016. Vending saw a considerably stronger current value performance in the last three years of the review period, with 2016 seeing the strongest annual growth yet at over 5%. This means that the investment of the business will see a stronger growth of the business. With the fact the vending machines that deal with electronics have not been undertaken, it will be a good business that will have a good value return. The United States vending industry is said to be having a turnover of $150 billion in the year 2016. The vending business has seen the growth rate of 7% average over the last 5 years. Something that indicates that the business will do well upon establishment. The international vending business in general has been slowly growing making it a good target in these markets (Timmons & Spinelli, 2004). The main target for the business are students who have an increased appetite of consuming electronics. Targeting students will be a sure way of ensuring that this products are moving in the market. When the economy is doing well generally, it will be possible that they will have an increased ability to purchase the goods and services. It is important to note that the economy will see the students take part time jobs, and receive more money for upkeep. This means that they will have a lot of money at their disposal. The scenario will see them purchase the goods from the vending machines that are strategically placed close to them. Market Structure To ensure that the market is well penetrated, it is important that it is segmented into different sections which will enable the penetration be easy. In the business the major target has been identified as students. However, the younger population generally has an appetite of purchasing the electronics as they tend to provide them with convenience. On top of that, the fact that most of the activities nowadays are undertaken online this means that most of the people in the world will be requiring smartphones that will enable them to purchase and receive information to them. To ensure this penetration reaches all the individuals it will require segmentation on how various population and those with different lifestyle (Zaheer & Bell, 2005). The segmentation will be based on the age and places where they are found. Therefore the market segments will be of two kinds geographical and a demographic which will be based on age. Samsung and Nokia are companies dealing with luxurious commodities therefore it is important that a proper segmentation to be undertaken to ensure that the market structure is well established. Segmentation will play a great role in ensuring that all the operations of the business will touch at least every demographic targeted in the market and none is left (Zahra, Sapienza, & Davidsson, 2006). Geographical segmentation This will be based on how strategic the vending machines will be placed. It will be used to ensure that different people are reached easily in regard to the places where they are commonly found. An example is where the vending machines will be place in schools to target students and also those in the busy stations like bus stops with a target of the general population. This will ensure that all the populations can easily access our services. The countries are going to be divided into different regions where the vending machines are going to be placed. All the areas will be comprehensively be considered to ensure that none is left out (Sharma & Erramilli, 2004). Demographic Segmentation This will determine which products will be placed in different vending machines depending on where it is being placed. It is common knowledge that the younger population will not require the products that are similar to those of the old age. An example is where the earphones will be purchased more by the younger population compared with those of the old age. Therefore, those vending machines that strategically are laced targeting students will have more of these product compared to others (Sharma & Erramilli, 2004). Market size The United Kingdom and United States market is a large market when you consider the current growth rate. Though many of vending machines have been used in dealing with other products, the electronics have not been dealt with accordingly. Therefore, there is a great potential for the business expansion. Currently most of the population in UK are looking for convenience when purchasing goods. The already existing competitors are shop dealers and online websites. They have not been able to completely cover all the market. When looking on the dealers of vending machines but on different products, they have been growing over the last years. However still the vending machines have not been established in these nations (Maude, 2016). Vending business is one of the areas that has made the electronic selling field to prosper. Though many retail businesses have been adopted the vending business and have been made it in a manner that it is a necessity of those businesses that require this model. The food and beverages industry is the one that industry has fully adopted the vending model in its business. This channel is notably likely to see strong growth for premium and healthier options, including high-quality coffee and healthy snacks. More interactive machines using smart screen and touch screen technology will also be utilized, while there is also likely to be a growing focus on convenience store locations. There this is an indication that in the long run the vending of electronics will also see significant rise on it selling when basing the forecast on the current trend. Vending will also increasingly be used for product launches and marketing in the forecast period, with this often tied into social media. Socialvend will notably be launching a number of vending machines in the UK in 2017, focusing on travel locations and bars, with these being "socially activated." The same way the companies in US have adopted the vending machine in other industries. This an indication that still the market size is good enough for the business. The increased number of individuals who are ready to use the vending machines is an indication that the business will capitalize and expand even more (Maude, 2016). To ensure that the market is effectively managed then it will be prudent that the four Ps of marketing be taken into considering when introducing this kind of business. The following is the procedure that will be undertaken; Product/Brand Strategy The two companies Samsung and Nokia are going to adopt service business that will retail iphones, smartphones, Chargers and earphones. Therefore there will be need to ensure that the services provided is going to be of higher quality compared to the physical stores. The services is going mainly to capitalize on time taken to deliver the quality. The products that are going to be placed in the vending machines are going to be of the highest quality. This is going to create a very strong brand and also the packaging is going to be tagged with the name of the company. This will ensure that the competitors like the online websites and shops are outdone (Philip, 1999). Pricing Strategy To ensure that the businesses in this nations will excel then it will be necessary that the pricing is going to consider the costs that are going to be incurred in learning the business. With the fact that the business will be reducing most of the costs compared to other physical stores, then it means that it is going to be very competitive. Instead of adding a high amount of marked up prices from that of the manufacturer, it will be low. This will give a good start for competition as it will lead to better prices in the market than other retailers in the market (Philip, 1999). Placement The way the supplies of the company products are going to be undertaken is going to be one of the best. It will be undertaken in a manner that the products that are most bought in the market are delivered faster (Philip, 1999). There will be continuous monitoring of the stock levels to ensure that nothing runs out of stock. Stores are going to be put in those areas that are close to the vending machines for easy filling of the vending machines. The vending machine will be set in Oxford Brookes University and Oxford city center. Oxford Brookes University has three campuses (Wheatley Campus Headington campus and Harcourt Hill Campus) and Headington campus sport center. Other machines will be placed focusing on travel locations and bars, with these being "socially activated. While in the US major cities will be target and places that are busy and the jam of people is higher is going to be mostly used. Universities of all the 52 states of the United States will be the major target when undertaking the placement activities. Promotion/Communication Strategy Promotions are going to be carried out so that the customers are attracted to the company products. Some of the methods that are going to be used are going to make the customers understand why the services provided by the company are superior to the rest of the companies selling the same products. This channels and methods of promotion are going to play an important role in attracting more customers to the company. Some advertisements through different social media platforms is going to take place something that will encourage them to visit our vending machines. After which the will be allowed to pay for any payment such as card, cash and contactless. This are some of the unique features that are going to be brought up in these countries making the companies have a unique market identity (Philip, 1999). Conclusion Getting into a new market is not an easy thing and it requires thorough preparation and understanding the new territory. However, for both Samsung and Nokia, they are well established brands in the world and the new model of business that they will introduce to the markets and be able to reach more people. Having different competitors in these markets the vending machines will act as a new product that will motivate more people to be attracted to their products. By the fact that the companies are dealing with products are luxurious in nature, it is important that they should carry out a thorough analysis. They should carry out the market analysis of the two countries that they could wish to get into, the economic situations that is prevailing in these two countries. Finally, they should consider some of the marketing tips that they should consider in the process. They will assist in a great deal in ensuring that penetration in these markets will be high. Both the United Kingdom and the United States are developed nations therefore they will do well when it comes to selling of their products using the vending machines. Most of the individuals in these countries will be capable of purchasing products from the two companies. References Philip, P. 1999. Marketing Management, Millennium Edition. 10th ed. Boston: Pearson Custom Publishing Bernard, W., Roberta. S. 2011. Operations Management. 7th ed. Asia: John Wiley & Sns Pte Ltd Norman, M. 2010. Essentials of Entrepreneurship and Small Business Management. 6th Ed. New Jersey: Prentice Hall Mole K., Hart, M., Roper, S. and Saal, D. 2008. ‘Differential Gains from Business Link Support and Advice: A Treatment Effects Approach’, Environment and Planning C: Government and Policy, 26 (Forthcoming). Sarasvathy, S., 2001. ‘Causation and effectuation: towards a theoretical shift from economic inevitability to entrepreneurial contingency’. Academy of Management Review, 26, 2, 243–88. 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Benefiting from network position: Firm capabilities, structural holes, and performance. Strategic Management Journal, 26: 809-825. Read More