Modern Mums International Marketing Plan - Essay Example

?Table of Contents Table of Contents Modern Mums International Marketing Plan 3 Current Business Situation in Germany 3 Organizational Structure 4 Market Access Requirements 5 Value Chain 6 Issues That Can Contribute To Modern Mums International Competitiveness 6 International Competitiveness 6 Market Drivers 7 Government Drivers 7 Cost/Economic Drivers 7 Competitive Drivers 8 Proper Time Management 8 Communication, Vision and Strategy Implementations 8 Framework for Responsible Competitiveness 9 Strategies for Achieving Global Competitiveness 10 Organizational Structure 10 Management Process 10 Culture 11 Marketing Mix for Modern Mums Company 11 Product 12 Price 12 Place 12 Promotion 13 Barriers 13 Recommendations 14 Conclusion 14 References 15 Modern Mums International Marketing Plan Established in 2000 by Mary Polion, Modern Mums is a small company situated in Dublin, specializing in maternity wear. The company has established sales in Ireland through establishment of outlets in department stores and other independent outlets. It hastily won recognition and sales for its modern clothes, which proved particularly popular with working-class women. It has established a good sales base in Ireland and is selling in the UK to such prestigious retailers such as Harrods, John Lewis and Selfridges. Today the company employs 80 people manufacturing and selling maternity wear for the Irish and the export markets. Until now, export activities have been concentrated in the UK market (primarily department stores like Harrods). The firm depends heavily on a personal approach to secure orders. Potential buyers receive a presentation on the range from Mary herself or from Celine Murphy, the firm’s Chief Designer. In recent years, Modern Mums has come under increasing international competitive pressure in both the domestic and UK markets. Chain stores from the UK and mainland Europe have made significant inroads in the Irish market. Several of the European chains use global sourcing and large volumes to keep prices down. Mary has decided to fight back by expanding her business to mainland Europe and has identified three countries including Germany, France and Italy. The most effective market among the three options the company has identified is Germany. This paper discusses the international marketing plan that Modern Mums can adopt to establish competitive advantage in Germany. Current Business Situation in Germany The prominent drivers of the maternity wear markets in Germany include fashion, consumer confidence and the increased income levels. According to Rama Rao, (2008), the maternity wear market grew over 1% in European countries within two years to 2009 to reach 140 million dollars. Germany is the largest clothing and maternity wear market in the European Union with an estimated purchase of 51 billion pounds. The German clothing industry forms the second largest consumer industry being excelled by food and beverage industry. Germany is the largest importer of maternity clothing in the European Union with the imports accounting for 90% of the maternity wear sold in Europe (Hauser, 2010:2). The market has not grown as strongly as the regular women’s wear maternity wear is relatively expensive. Statistics indicate that trousers are the most popular maternity wear item that is purchased in the market followed by tops and jeans. The difference in the popularity of these items is caused by the variation in age. Pregnant women under the age of 25 years would buy more jeans and tops compared to their elder counterparts. The increasing number of mature first time mothers i.e. between 25-35 years of age has widened the market for maternity wears targeting older women in Germany. Most of them are career people who would require an outfit that would enable them carry out their official duties without clothing stress. The increased preference of small families implies that people have more resources for spending during pregnancy than when handling larger families. Additionally, most German women are choosing to conceive at the peak of their careers when they have enough income to spend. This implies that the German market will be minimally affected by the cost of maternity items. Currently, the local German clothing industries offer average price for their clothing and the producers have learnt to cope with the constantly changing fashion trends through innovation and research. The German consumers are price sensitive and are conscious of a fair price-quality ratio. Organizational Structure The company should adopt functional organizational structure that accommodates networking. This involves the employees being divided into task groups and being assigned defined tasks depending on their specialization. For instance, the marketing department should only be staffed with qualified marketers while designers should be exclusively obligated with designing roles. This leads to effectiveness and increased productivity within the functional groups. The management should dedicate more time coordinating and controlling the external relations normally through electronic and personal field visits. They should also ensure that functional groups adopt team work and communication across departments in making sure that the organization functions a single unit. The structure is eminent for the company because penetration in new foreign markets involves supply of quality goods that possess a competitive advantage. The company will also be able to integrate its functions vertically so that they will be distributed quickly and at a low cost. Managing International Product Development The dimensions for international marketing strategy include market participation, product offering, locating the value added activities, market approach and identifying the competitive moves. Market Access Requirements In Germany, the marketing requirements are normally set by the legislative government and the trading partner. With regard to maternity wear, the standards are based on the consumer health safety, social concerns an environmental safety. The textile labeling law requires the importing company to indicate the fiber used and its percentage depending on the weight of the product. The law also requires the importing companies to use German language during business transactions. The consumer goods regulations requires that the clothing products being imported in the country should be deviant of certain dyestuff, formaldehyde or other chemicals that may compromise the health of the consumers (Rama Rao, 2008). In addition to the legislative requirements, Modern Mums will be required to satisfy technical requirements such as quality requirements and payment procedures, code of conduct as well as labels and specification. Value Chain According to Gerefi and Memedovic (2003), there are two forms of global clothing chains; buyer-driven and commodity-driven chains. The buyer-driven value chain is characterized by lead firms comprised of large retailers, branded marketers and no-factory manufacturers. The commodity-driven chains are related to the nature and volume of the products being supplied in the market. Due to increased production costs, fragmented markets and increased demand for maternity wears, most producers have relocated their production processes in developing destinations that have low cost of production. Issues That Can Contribute To Modern Mums International Competitiveness International Competitiveness Competitive advantage is a product of the provision of superior buyer value more efficiently compared to the competitors. It also includes engaging in activities at similar rates although in an improved manner which enhances buyer value as compared to the competitors. The concept is eminent for the Modern Mums to consider as the current clothing industry in Germany is extremely competitive. The establishment of new markets in Germany is the first step for Modern Mums to diversity its operations in the Europe. Companies that achieve global competitiveness are open and dynamic, composed of interacting agents and are characterized by complex adaptive systems that portray emergence and self-organization (Freeman, 2004:560). Globalization of clothing industry is regulated by market, government, economic and competitive drivers. Market Drivers The market drivers that the company will face include the convergence of lifestyles and consumers preferences that determines customer choice. Penetration into the German market will also include increased travelling when researching to establish market status and identify new markets. Travelling is also necessary during the establishment of a brand as personal interaction with the customers enables the firm identify the most efficient characteristics that would win the customer loyalty. The enhancement of global as well as regional marketing channels involving maternity wear will also determine the marketing level. This is because customers will choose the most efficient channel for purchasing the products. Other market strategies include shortening the product cycle and development of global advertising. Government Drivers Reduction in tariff barriers is an advantage to the Modern Mum Company as the resulting reduction in cost will enable them to regulate the prices and volume of the exports to Germany. The decrease in non-tariff barriers will also have the same effect on the international business. Other government factors that may affect trade in maternity wears in Germany include imposing regulations on imported commodities, creation of trading blocks and shifting to open markets. Cost/Economic Drivers The drivers include advancement in product development, improvement in transportation, accelerated technological innovation and the recent need for economies of large scale. The economic drivers directly affect the supply and demand for company products; favorable adjustments of these factors will favor market why unfavorable changes will negatively affect the market. Competitive Drivers These drivers are related to the increase in the competition for clothing products that includes changes in the level of global clothing market, increases in the foreign advancement in clothing corporations, rise in strategic alliances at a global scale, the globalization of financial markets and global centralization of companies. Some of the factors that enhance competitive advantage include: Proper Time Management Proper time management promotes the impact of other strategic factor such as productivity, quality and innovation. The company should be conscious on how to manage time and constantly be on the cutting edge. This is because well timed business operations reduce operational costs and offer increased product lines. They also cover increased opportunities and upgrade in technology to enhance sophistication of the resulting products. Therefore, time management should stem from production, product development and marketing. Communication, Vision and Strategy Implementations According to Freeman (2004), the strategic marketing process is more crucial than repositioning the strategy (541-569). This is because a successful repositioning is a product of internal capability of a company that is intrinsically generated. Successful repositioning requires choosing appropriate changes and other human resource strategies. The modes of formulation and implementation of a strategy is determined by future strategies of a company i.e. what the company wants to achieve is dependent on how it operates. Modern Mum should brace itself to compete with international strategies that characterize maternity clothing markets. The company should kick start its journey to competitiveness through first perfecting what it is distinctively perfect at, and be adaptive as well as opportunistic in exploitation of internal strengths. For instance, its capability to produce high quality products that are popular with working women should be enhanced to attract as many working women as possible. The strategy can then be used to attract housewives and young jobless women after establishing loyalty from working women. More focus on the initial distinctive capability will assist the company management in future planning and strategy development. The distinctive capability will become a competitive advantage in time once applied in the clothing industry. When effectively applied in the target markets, the distinctive capability will enable the Modern Mum to build a reputation that will promote market expansion and winning customer. Framework for Responsible Competitiveness To establish herself in the competitive German market, Modern Mums needs to add flavor to its competitive strategies through adoption of responsible competiveness. Some of the measures the company can employ include valuing productivity through emphasis on achievement of societal expectations, and meeting demand when determining productivity. They should be able to identify the institutional, cultural and personal motivational factors that guide the consumer behavior. Another element for the framework is structural productivity that emphasizes on the relevance of competitiveness at personal, community or regional levels. Structural productivity includes the analysis of the three-tier approach i.e. the company level, corporate responsibility clusters and the role of the corporate responsibility (Czinkota and Ronkainen, 2009:251). This will assist in driving both company and market level flexibility and innovation. Responsible competiveness will also require the company to pay close attention to civil learning that dictates the dynamic ways of exemplary behavior. This will expand the role of the company in delivering the maternity products and achieving the value requirements of the target market. Strategies for Achieving Global Competitiveness If globally competitive, the company would retain the capability for flexibility and responsiveness. The organization of the company will offer the mechanism through which the marketing strategy will be designed and implemented. The factors that should be closely analyzed for the business to achieve competitive advantage include: Organizational Structure The structure relates to the internal cooperation characteristics of the company systems. The company structure should be effective to align position itself for global competitiveness i.e. should be composed of functional structure that allows international networking. All the departments and workforce should realize that each individual is accountable for the company performance. The responsibilities of each department should be well defined and every individual’s role well stated to make sure that role conflict does not arise. Management Process The management should be comprised of intelligent and hardworking characters ready to offer their services to the company without discrimination or prejudice. Activities, for example, planning and budgeting should be professionally handled to enable the company formulate internal effectiveness that would promote their performance in the international markets. People People comprise the general work force of the company. Employees should be well motivated through provision of fair remuneration and proper working conditions. Motivated employees increase the output and leads to production of quality products that satisfy the customer preference. Culture Culture entails those unwritten rules as well as values and that steer workforce behavior in an organization. Most business cultures are dependent on the marketing environment and the industry in which the business institution is operating. The Modern Mums’ culture is a product of the culture that governs the clothing industry. The values and rules should be performance-oriented and favorable to all the work force. Proper company culture will enhance the company’s global competitive advantage. Marketing Mix for Modern Mums Company There is wide range of essential information required by Modern Mum to set clothing markets in the identified European markets. A successful marketing mix for the company requires the management to be fully aware of the stipulated requirements and impacts on the target market. The most appropriate marketing mix for Modern Mum is 4Ps; price, place, promotion and product (Luan and Sudhir, 2010:450). The company will need to create a successful marketing mix of the right product, selling at the right price and at the right place and application of the most suitable promotion strategies. Application of the 4P model will determine crucial aspects of the product such as the appearance, in line with the customer requirements. Product The product should be the central point for the company’s marketing strategy. The maternity wear items must possess the right features such as attractive colors to make it presentable and fashionable across all age group. Designing and manufacturing the product, setting up the production line and provision of the finance should be the responsibilities of the responsible functions namely designers, line producers and finance department respectively. Otherwise, the marketing strategy will be compromised. Price Contrary to other aspects of the marketing mix that generate costs, price is the function that creates revenue. The price of any commodity is the determinant of the value of sales made. Therefore, the price of the Modern Mum’s products will be determined by the discovery of what the customers perceive as the value of the wears in the target markets. Researching on the customers’ opinions related to pricing will be a requirement before pricing to establish how they value the items they want to purchase, and the amount they want to pay. Modern Mum is constantly developing new maternity wear; therefore, determining the right price involves examining the customer views on the rival products and taking into consideration the manufacturing costs. The price should be reasonable and right. This encourages customers to buy in bulk. It should also be competitive compared to other industry competitors. Place Place is concerned with the various methods involved in the transportation and storage of the products in a bid to make them available in the market. The company will be required to formulate an efficient distribution system that is suitable for distributing goods in the foreign markets with time and place utility. Place will involve the use of the most efficient supply chains such as suppliers and boutiques. Due to the small size of the company, the company will be required to sell directly to the consumers or retailers as the output is relatively low. Establishment of customer loyalty and reputation will force the company efficient organize supply chains to ensure that the maternity wear products arrive at their destinations in the right form and quantity. Promotion Promotion is the strategy of communicating to the customers and providing them with necessary information required to make a choice. The pace and creativity of the nature of promotional activities used should not be alien to the clothing industry. The cost involved in promotion activities is part of the production costs required by the company. Promotion in Modern Mum case will involve engaging in a range of promotional activities such as advertisements and offering discounts depending on the amount purchased. The target group will also require to be informed on the availability of the product through promotion. The company should run ads and advertise through media while enhancing direct sales. The promotions should be designed to attract the target market i.e. pregnant women. Successful promotion will help the company spread costs over a large output (Ghemawat, 2003:138-152). Although promotional activities are normally responses to a problem such as competitive activity, it will enable the company develop and build a succession of messages that can be cost-effective. Barriers The key barriers that that Modern Mums Company should be prepared to overcome in establishment of a competitive advantage are operation expenses, government policy and changes in styling fashions. As soon as loyalty has been established with the customers, the target market normally changes as once women give birth, they resume back to their normal clothing modes. Additionally, most women prefer having fewer children thus reducing the opportunities to recapture the customer in the subsequent pregnancies. Styling and fit also requires expert designers who are committed and thoughtful, failure to which competitive advantage will not be established (Norda?s, 2004). Recommendations The company should adopt functional organizational structure that accommodates networking. The company should also be conscious on how to manage time and their operations have time utility. Time management should stem from production, product development and marketing. The company should kick start its journey to competitiveness through first perfecting what it is distinctively perfect at, and be adaptive as well as opportunistic in exploitation of internal strengths. To establish herself in the competitive German market, Modern Mums needs to add flavor to its competitive strategies through adoption of responsible competiveness. Responsible competiveness will also require the company to pay close attention to civil learning that dictates the dynamic ways of exemplary behavior. The pace and creativity of the nature of promotional activities used should not be alien to the clothing industry. The company should run ads and advertise through media while enhancing direct sales. Conclusion The paper has addressed the international marketing plan and strategies that Modern Mums can adopt to establish competitive advantage in Germany. Some of the market drivers that the company should be prepared to encounter when establishing global competitiveness include market, cost/economic, competitive and government drivers. Companies that achieve global competitiveness are open and dynamic, composed of interacting agents and are characterized by complex adaptive systems that portray emergence and self-organization. The stipulated plan can also be applied in establishing a competitive edge in other European markets. References Czinkota, M. & Ronkainen, I. (2009) Trends and Indications in International Business, Management International Review, vol. 49, no. 2, pp. 249-265. Freeman, C. (2004) Technological infrastructure and international competitiveness, Industrial and Corporate Change, vol. 13, no. 3, pp. 541-569. Gereffi, G. & Memedovic, O. (2003) The Global Apparel value chain: what prospects for upgrading by developing countries? Sector studies series, Geneva, United National Industrial Development Organization. Ghemawat, P. (2003). Semiglobalization and International Business Strategy, Journal of International Business Studies, vol. 34, no. 2, pp. 138-152. Hauser, J. (2010) Export marketing survey: German market fro textile and clothing, The European’s Tacis Program for Monrovia, viewed 31 August 2012 . Luan, J. & Sudhir, K. (2010) Forecasting Marketing-Mix Responsiveness for New Products, Journal of Marketing Research, vol. 47, no. 3, pp. 444-457. Norda?s, H.K. (2004) The global textile and clothing industry post the agreement on textiles and clothing, Gene?va, Switzerland, World Trade Organization. Rama Rao, V.S. (2008) European clothing market, global online corporate community knowledge-base, viewed 31 August 2012 . Read More