International Marketing - Mulberry Handbags - Essay Example

? International Marketing Introduction Mulberry is a fashion based organisation that is founded in England in the year 1971. The company is known forits leather products with specialisation in women handbags. Roger Saul is the founder of the company who opened up a firm in Chilcompton in England. Mulberry depicts a British lifestyle brand that produces pilferer bags made of leather, binocular bags and dispatch bags. It provides products of a variety of range including women’s wear, menswear and footwear. The company has got it name in the London Stock Exchange by the name of MUL. It provides the facility of discounts at Mulberry shops to its shareholders who own the 500 shares with the company (Morley 2011). The company operates on a large scale, having stores throughout the UK and across the world including Europe, Australia, and Asia. It aims at expanding its base by increasing the production of leather bags in the UK. Mulberry Handbags represent the symbol of England’s distinctiveness and style along with the lifestyle of the people of Britain. This brand is mostly preferred by ladies and is one of their best choices. The uniqueness lies in the provision of exclusively designed handbags that are available at reasonable prices. This brand provides products that represent ideal price, design, style and quality all provided at a single point. Mulberry has produced some top class products like Bayswater handbags and Roxanna handbags with the new unique designs styles. Therefore, Mulberry provides stylish and durable handbags at reasonable prices. The company also operates through various online stores that provide handbags of all models and styles to the various consumers in the market (Morley 2011). The company aims to go for internationalisation in India in order to reach new market and expand its customer base. The reason lies in increasing the sales and earns increasing profits by providing uniquely designed and luxury leather goods to the potential customers. India has the second largest population in the world and this will provide the brand a large market space to grow and expand. Situational Analysis The situational analysis has been done in order to analyse the environmental conditions of the Indian market which will help to develop the marketing plan and enforce the expansion strategy in the Indian market. Socio-Cultural Environment Social cultural environment has an important role to play in when a company takes decision to enter international market. This environment includes all the factors that are not included in economical or political aspects. The social cultural environment on broader parameter consists of complete range of behaviours patterns and relationships of the individuals in their personal lives. The basic factors that are included in the social cultural analysis of the market include characteristics of population of the market, values and attitudes and lifestyles and relationships (Hollensen 2008). Mulberry is a company of British origin which is well known for its luxury leather goods. The company is willing to engage itself in international trade by expanding and entering the Indian market (Morley 2011). The company needs to give emphasis on understanding the Social cultural environment of India before taking the final decision to enter the market. Along with this the company needs to understand this to design its products in such a manner that it is able to align its working with the requirements of the country like India it is initiating to enter (Wilson and Gilligan 1997). Competitive Analysis For the purpose of competitive analysis of the PEST and porter’s analysis of the market is conducted in order to identify the environment which is to be faced by the company willing to perform its functions in India (Fill 2006). The major factors are discussed in detail as under. PEST Analysis Political Factors: This factor indicates the degree of intervention of the government in the functioning of the economy. India is the biggest democracy of the world and type of government in the country is federal public. The political system, of India is more or less stable in nature. The major political factors which are to be faced by the companies that are willing to establish their business in the country include the taxation policy; deregulation polices etc. (Ghauri and Cateora 2010). Economical Factors: The major incorporates of these factors include interest rates, taxation, economic growth, inflation, etc. The economic factors of the country have seen an improvement on a continuous basis. The GDP level of India in the year 2009 was estimated about 3.96 trillion US dollar. The growth rate in terms of GDP is 6% and along with this the country has also shown an increase in the level of FDI (Ghauri and Cateora 2010). The economic culture of India is strong and the impact of economic slowdown, i.e. recession was very less in comparison to western countries. Social Factors: Changes in the social trends of the India also make an impact on the demand of the products of the company. India is the second most populous country of the world with people of different age groups. The social factors of the country witness a positive change since there has been a shift in the values in order to comply with the values of the international level (Bennett and Blythe 2002). The social factors of the country though are still in the favour of domestic products and companies there has been a gradual shift in the need to upgrade the society as a result of which the market has been showing positive trends for the international companies. The major components of the socio cultural environment include social institution and social systems of the country and social values and attitudes. The social aspects of India are very different from that are followed in the world. Majority of the population is living in the rural areas. The population that is living in the urban area is also in the stage of low per capita income. This is very important criteria as the company needs to estimate the level of demand it will have to cater if it enters the market (Johnson Scholes and Whittington 2004). This is important as since its estimation in will help in effective production of the required materials. Also the company will also be able to estimate the profit it is able to generate by its operations in the country. Technological Factors: The technological development of the country is in its growing stages. The company has been highly responsive towards the requirements. The technological factors are very important and since they are in growing phase in India they are able to attract foreign investors from all over the country to invest in the country (Ghauri and Cateora 2010). Porter’s Analysis Power of the Buyer: Power of buyer is very important. The major factors in this context include lack of differentiation, customer is price sensitive, low switching costs, number portability to have negative impact, rivalry among existing competitors, high exit barriers, 6-7 big players in the market, gain advantage by an innovation and also price wars (Bradley 2002). Threat of Substitutes: In the current scenario there is no major threat of substitute in market for the company in Indian market (Ghauri and Cateora 2010). Along with this the other issues faced by the company in issues of mobility and penetration with the substitutes since there are existing player in the market. Supplier Bargaining Power: There are large numbers of buyer in the market and there is limited pool of skilled managers and engineers especially those well versed with the use of latest technologies (Jeannet and Hennessey 2003). The overall influence of the market is at medium level. Threat from New Entrants: In the context of this factor, it is important to highlight there is uneven access of distribution channel and high capital requirements. Competitive rivalry: The Company might not have to face high level of competitive rivalry since there are limited players in the market. The level of competitive rivalry is low and the company can undertake joint venture as a result of which it will be able to gain string hold in the market. Market Entry method After analyzing the situation of the country, it is clear that for successful establishment in the India the company should make use of joint venture strategy in which it joins and aligns its production ventures with the other existing company of the region. It will be helpful in gaining the market share. This strategy is best advisable since the company will have lesser chances of failure and it will be playing on a safer side since the company is able to operate with an existing well known brand of the country (Cateora and Graham 2007). Internationalisation Marketing Objectives Internationally marketing objectives of the company need to comply with the corporate strategy of the company. The major international marketing objective of the company includes expanding and developing strong base in the international market, i.e. India. The company mainly aims getting larger market share and also gaining a larger market share. The objectives of the company need to be developed taking into consideration the SMART strategy which stands for specific, measurable, achievable, and realistic, and time (Piercy 2002). The objectives of the company are simple at the initial stage since it is aiming at developing a strong base for itself in India. The company should made use of clear objectives sinking with its corporate strategy which will be helpful in meeting its business objectives and also adapt easily to the international market. The SMART strategy is very helpful as the company is developing specific and straight objectives which should be easily measureable in terms of results and profit level. Along with this the objectives of the company should also be achievable so that the company and its objectives are able to achieve what they are setting. Further the companies’ goals should be realistic which can easily be completed on time. Thus the objectives of the company needs to be clear exact which at the present situation aim at entering the market for establishing a strong base in the market (Doyle 2000). Market Strategy and Plan A product market analysis would be done in order to identify and examine the opportunities in the new country. This analysis takes into consideration various aspects that Mulberry would require to examine before it enters the new market. Segmentation, Targeting and Marketing Strategy would be adopted as the company would decide which segment to enter, who will be its target audience and how will it position its product in the new market. The company would segment its market on the basis on the basis of the age group, the income level and lifestyle of the people (Hollensen 2008). The people who belong to middle age group would be the one who will prefer Mulberry leather handbags as they would be the people who would be using handbags for when they go out. On the basis of income level, the consumers who belong to middle and high level income group would be the one who will be able to purchase leather handbags as their purchasing power would be high because of their high disposable income. The lifestyle segment determines those consumers who prefer a high standard lifestyle and want to carry a classy and standard lifestyle. These consumers would have the knowledge and taste of using leather accessories and would have high demand for Mulberry products. Then the company will go for positioning its products in the new market and among the new mass customers. It will position its product as the one depicting high class and standards product that is preferred by people who have a high living standard and a decent lifestyle. The product would be positioned as something that present the class and is owned by the people who belong to high income group. Another important step that should be taken into consideration by Mulberry in going international is whether to enter the new market with standardised product or modify the product according to the tastes and preferences of the consumers of the new market of the country. It would be beneficial for the company to follow a standardised strategy for its product. This would maintain a global image of Mulberry as the one with specialisation in leather products (Jeannet and Hennessey 2003). This would create an effective and positive brand image if the company in the minds of the people and build a sense of trust towards the brand. Further, by establishing itself in the new market it can bring in creation modifications in terms of the prices, and design, promotional strategies and distribution channels that would be suitable to be preferred by the customers. The price would be determined in accordance with the level of income of the mass consumers and the design would be decided on the basis of the lifestyle and cultures of the new country. Implementation and Control mechanisms After the marketing plan is developed it is important to have a control system for monitoring the performance of the plan in the achievement of predetermined objectives. With the help of a control mechanism Mulberry would be able to identify that the marketing objectives undertaken by the company are in accordance with the internal and external factors that affect the performance of the marketing plan. It would develop a marketing budget on the basis of task and objective approach, in which budget would be allocated on the basis of expected tasks and output (Doole and Lowe 2004). In this context, Mulberry may develop a control plan in which different departments would be allocated the responsibility of implementing control at different stages of the marketing plan. Four types of control measures would be set up that would be handled by the authorities at different level of the company. First and foremost measure is Annual plan control that is required to be monitored by Top and middle management people (McDonald 2002). Their role is to identify whether the results predetermined are being achieved. The second control measure is Profitability Control that is handled by Marketing Controller who is responsible for identifying the opportunities for the company in making profits in the new region. The third control measure is related to Efficiency Control that is undertaken by Line and staff management and marketing controller. They are responsible for measuring the efficiency and impact of expenditure incurred by the company in marketing its products among the customer (Muhlbacher, Leihs and Dahringer 2006). The final level of control is the strategic control, which is under the control of top management and the marketing auditor. They are responsible for analysing, if the company is pursuing the right strategy to cater to the needs of new markets, and channels. Performance standards can be set in order to define certain measures, in accordance to which the performance will be monitored. These measures can be in terms of quality, production and sales. The third step of implementing and controlling the marketing plan involves evaluation of the performance by observing the performance indicators and identifying that the actual performance is in accordance with the predetermined indicators. And finally corrective action required in the case of any deviation and fault in the implementation of plan and performance in meeting the set standards (Bradley 2002). One of the effective methods of control is the setting of marketing budget within which the plan has to be implemented. With the help of a predetermined budgeted plan Mulberry would be able to keep an eye over the revenue generated and expenses incurred in implementing the marketing plan for expansion into new market. Budget helps in identifying the standard level of performance in terms of the level of sale, degree of market penetration and effectiveness of the advertising techniques adopted by the organisation (Usunier 2000). Budget can help the company in analysing gross sales of previous year, sales per unit and the projected cash flow from the marketing program. Competitor Analysis Competitor analysis is one of the important steps that would be taken by Mulberry in expanding its operations in an international scale. With the help of this analysis it would identify the existing and potential competitors in the new country. This analysis would help Mulberry to develop strategies accordingly, in order to gain competitive advantage in the long run. It can also analyse the returns that would be generated from the investment that the company would made in the future. Sales forecasts Sales forecasts can be used as another control mechanism that can be used by Mulberry for implementing its marketing plan. Sales forecasts should be compared with actual sales so the percent of sales revenue spent on marketing is kept within acceptable limits (Wall, Minocha and Rees 2010). One way to determine the percent of sales that should be devoted to marketing is to research industry statistics to find out what other companies in the same industry are doing. Conclusion The main focus of the paper is to devise a plan which will used by mulberry company to set up its business unit in India with an intention of international expansion. The paper has focused on highlighting the situational analysis which has covered an analysis of the socio cultural environment. Along with this the paper has also included the competitive analysis for which PEST and porter analysis has been conducted in order to understand the situation of the market the political environment, socio cultural environment, power of buyer and supplier, etc. Overall it is clear that these two analyses will be helpful in understanding the complete market situation of the country in order to plan accordingly to enter the market. Along with this paper has also highlighted the marketing objectives of the company with the aid of SMART strategy. Further it also incorporates a marketing plan which includes the segmentation, targeting and planning analysis. The paper has also discussed standardisation and adaption of the technologies. Lastly the paper has also devised an implementation and control strategy in order to effectively implement the formulated strategy. Thus the paper has provided a deep insight in the marketing plan for mulberry which will play an important role in designing its marketing strategy while handling its operation in an international market. References Bennett, R. and Blythe , J. 2002. International Marketing: Strategy, Planning, Market Entry & Implementation. London: Kogan Page. Bradley, F. 2002. International Marketing Strategy. London: Prentice Hall. Cateora, P.R. and Graham, J.L. 2007. International Marketing. US: McGraw Hill. Doole, I. and Lowe, R. 2004. 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