International Marketing Strategy - Implementation and Control - Assignment Example

?Contents Table of Figures 2 Introduction 3 Situation Analysis 6 International Marketing Objectives 9 Marketing strategy and Plan 9 Implementation and Control 12 Conclusion 13 List of References 16 Table of Figures Figure 1: Worldwide Luxury Goods Market Trends 5 Figure 2: Luxury Market Value in 2011 6 Figure 3: Luxury Goods and Services Market in India 7 Introduction Handbags are considered as the women’s best friend next to diamonds and shoes in terms of popularity. Women use handbags all day everyday and to have a nice handbag is every woman’s dream. The best way for a woman to portray her unique image and style statement depends on the handbag she uses. Mulberry started providing luxury leather goods items to meet the most desirable fashion for women, satisfy the needs of women and to signify their power and status. Mulberry was established in 1971 specifically to provide fashionable items that would create a formula for its success in the market (Reuters, 2012). Mulberry is a fashionable and luxury brand that people aspire to own. Mulberry is recognized for its wide variety of women leather bags which includes shoulder bags, satchels, totes, clutches, briefcases etc. Due to its classic design and wide variety, it is seen on world’s famous celebrities and models’ arm such as Daisy Lowe, Rosie Huntington-Whiteley and Claudia Schiffer. The company not only provides readymade handbags but also gives its customers a chance to design their own handbags according to their requirements making the English luxury easily accessible. The brand is just not limited for women but also provides handbags and other accessories for men. The collection for men is also eye-catching due to which it is purchased frequently by men. The men’s accessories include wallets, cufflinks, bags, gloves, scarves and belts (Mulberry, 2012). The company core values remains indistinguishable even after 4 decades which is the main reason for the company’s success. “The core values include loyal, highly skilled craftsmen, classic design and steady sense of identity”. The company has done exceptionally well in previous years showing 300% boost in sales (Fletcher, 2011a). The total revenue according to the company for the year 2012 shows an increase of 38 percent compared to 2011 (Fletcher, 2011b). Despite the recessionary period the company remains focused on the long-term success and growth (Wood, 2010a). Even after the economic situation the performance of the company was extra-ordinary in 2010 as more than ?40m worth Mulberry’s brand were sold in Britain alone (Wood, 2010b). Global expansion was company’s key success and provided the company with positive news. The international revenues boosted to 61 percent providing high growth opportunities for the company. With the economy in disastrous situation it was important for the company to look for internationalization rather to face economic downturn due to which the sales were expected to fall. The major reason for Mulberry’s internationalization was based on the sharp decline in 2008 for the first time after 2003 which affected the domestic demand for handbags in US and Europe (PRWeb, 2012). The rising demand for international high quality leather handbags in other regions of the world was another reason for expanding the business into other geographic regions (Business Wire, 2010). Due to such conditions the best way to hedge against risk was to set foot in such market that was growing influx of foreign brand. One such country includes India where the handbag market is estimated at Rs. 20 billion and projected to grow at an increasing rate of 15 percent annually (Technopak Advisors, 2011). The market for luxury product all over the globe is increasing at a surprising rate and Asia is being targeted as the main market for such products after Europe; due to which India would be the best country to cater (Image 1 and 2). Another advantage to expand in this Asian country will be its low cost in terms of labour and raw material. Figure 1: Worldwide Luxury Goods Market Trends Figure 1: (PWC, 2012) Figure 2: Luxury Market Value in 2011 Figure 2: (PWC, 2012) Situation Analysis Although the luxury industry of India is in the starting and growing stage at the moment but it is being expected that it will show huge improvements and growth trends in coming years (Venugopal, 2010). The changing social and economic environment of India is making it highly targeted market for different luxury brands and products (Sharma, 2011). The luxury industry of India will prosper in future, as shown in the figure 3 below: Figure 3: Luxury Goods and Services Market in India Figure 3: (Sharma, 2011) India is the best opportunity for a leather handbag company like Mulberry which offers a variety of handbags with unique style. The Indian handbag industry is in growth stage where the demand for international leather and fashionable handbags is greater than the unbranded handbags available in the market. The worth of the handbag market in India is estimated at Rs. 20 billion which is projected to constantly grow at 15 percent annually (Technopak Advisors, 2011). The company is based on differentiation strategy which would help the company’s leather handbags to be in the spotlight. The majority of the brands in handbag industry are local or unbranded but the customers are more attracted to foreign brands than domestic brands. This would provide an opportunity for Mulberry to quickly accomplish its sales objectives and to attract new customers as the number of working women and their consciousness regarding fashion is increasing. Being a developing country fashionable lifestyle is appreciated and accepted in the Indian culture. An advantage to establish in India would be the cost, being a developing country the cost of labour and raw material are less expensive as compared to other developed countries. The rapidly growing handbag industry in India will provide challenges from fairly established brands such as Hidesign and Holii. These brands will be tough competition for Mulberry’s leather handbags as both the brands are already firmly established but being different and unique would provide a competitive edge over both the brands. The stand-out design of Mulberry’s handbags would also face competition from some local and foreign brands which includes VIP; a luggage maker industry that is targeting youth by hiring Bollywood actor John Abraham for skybags as brand ambassador, Samsonite, Guess and Kipling etc (Chatterjee, 2012). Mulberry has a viable option to set its production plant in India to enter the market. This would provide an opportunity to gain from low raw-material and labour cost and the company would also be able to provide its customers with customized leather handbags. By doing so the company would have easy access to suppliers and distributors. The company would have an opportunity to respond according to the situation and would have the upper hand in selection of location as well as the employees. Another option available to enter the market in India would be through franchising and licensing which would mark another beginning of success of Mulberry, as the retail and franchising industry of India is growing at rapid pace (PWC, 2011). By doing so the company would have an advantage that the people would be already aware of the needs of the customers which would reduce the risk of failure of business in India. Knowledge of the trends and purchasing pattern would also act as an advantage. International Marketing Objectives The international marketing objectives of Mulberry operating in India would be as follows: To create awareness regarding Mulberry’s fashionable leather handbags in the market affordable price. To gain attention of working class women by providing customized handbags that could portray their power and status in the society. To gain attention of men that is interested in leather items. To provide variety of leather handbags with different colours and styles to capture the market as quickly as possible to increase sales. To enhance the variety of handbags according to the Indian culture and tradition. To increase the growth of the company by 10 percent annually in the market so that it is continuously able to expand and penetrate in the market. Marketing strategy and Plan To enter a market such as India for the first time would not be that much difficult as Mulberry’s stores are already located in other parts of Asia such as China, Hong Kong, Japan, Malaysia, Taiwan and Thailand (Mulberry, 2012). But still Mulberry would have to spend some time to understand the cultures and traditions in India as the culture and values differ from country to country and to understand the needs of its potential customers. Mulberry’s leather handbags are already known for its classic design and fashionable accessories for women and men around the globe. Mulberry is known for its differentiated and unique handbags which sets it apart from other competitors due to the company’s differentiation strategy the handbags are even sold at minimum price of ?800 in United Kingdom and USA. The company has a wide range of handbags available for its customers and to encourage customers, the company provides even customized handbags. This allows the customers to choose patterns according to their requirements, even the material of the product could be chosen by the customer (Mulberry, 2012). The handbag’s market in India is flooded with other companies providing handbags and other accessories to attract working women and men to increase their sales. This industry not only includes local and domestics businesses but also some foreign brands that are popular around the globe. Mulberry will be facing much competition from these foreign brands as the market is more attracted towards foreign brands than local and domestic unbranded handbags. This market is essential for Mulberry’s success and growth as the worth of Indian handbag market is estimated at Rs. 20 billion which is just in growth stage. The market is estimated to flourish at 15 percent annually from which the company could achieve its long term goals and objectives (Technopak Advisors, 2011). The company will face fierce competition from Hidesign, Da Milano, Calonge, Blue & Blues and Crew Republica which are firmly established in the country. Other local brand includes VIP, Samsonite and Holii. These all brands are targeting the same audience; working women in India. Mulberry’s target market in India would be the working women as the ratio of working women is increasing rapidly as compared to men. With the rapid increase in working women’s ratio and their rising incomes the company is more attracted to fulfil women’s demand as well as men. Healthy and fashionable lifestyle is a part of these working women and to show their power and status in society these women choose brands that are popular, unique and comfortable. Foreign brand consciousness is the strongest opportunity for Mulberry as these women are more interested in foreign brands than unbranded local products even though 70 percent of the market belongs to unbranded product. Mulberry has positioned itself for professionals that could afford the luxury brand that provides classical and fashionable designs at high-end prices with finest leather. Along with the leather handbags, the company provides women accessories at high-end prices. Mulberry’s core advantage over other competitors is their craftsmanship that creates stand-out design leather handbags that enhances customer’s satisfaction and loyalty. The brand is positioned for professionals as their income is increasing and the consciousness regarding foreign brand is higher than others. To match the requirements of the customers, the company also provides them with an opportunity to choose the pattern, design, colour and the material to be used in the product (Mulberry, 2012). The consumer behaviour is in favour of international brand but there are some issues that the company would face. Such issue includes low-price of unbranded products and the majority of the market that belongs to unbranded products. Mulberry being a UK based company, manufactures leather handbags according to the needs of customers based in UK. This could be an issue as the customers in India might not adapt to the products that are not based on their demands. The preference of customers in UK and India are not similar due to which the company would have to identify the needs of the customers in India and would have to manufacture products according to their need. The positive point for Mulberry to operate in India would be the shifting lifestyle of the people. The professionals are more interested in living a luxury life rather than saving for their future. Even the middle class is more focused on fashionable lifestyle and are shifting from traditional living pattern to fashionable pattern. Similarly, the teenagers are financially independent to purchase according to their need and frequently purchases foreign brands. The consciousness regarding the brand over product is high in India which increases the success factor for Mulberry in the Indian market. Implementation and Control For a marketing strategy to be successful it must be backed by strong financial budget. The company must allocate high financial budget (i.e. $1,000,000) for eye-catching advertisement and promotions to introduce the Mulberry’s variety of leather handbags in India. The reason for high financing for advertisement and promotion would be to introduce the brand successfully in the market which is flooded with both local and foreign handbag companies. The company will have to open outlets in commercial areas so that it could gain the attention of its target customers; professionals. The cost per each outlet would be approx. cost $100,000 and at least 3 outlets would be required to grab the attention of the customers. A budget of approximately $1 million would be required to successfully introduce the fashionable Mulberry’s leather handbags and other accessories into the Indian market. This budget would include the advertisement on media and fashion shows. Entering the Indian market for the first time means to invest more. The company can either allocated budget based on the competitors or could just invest based on the affordability factor. But it is essential to invest annually for marketing otherwise the chances for success could decrease to great extent. The success of the company highly depends on the performance and could be identified by the sales of the company’s products. The success could be monitored by the sales volumes. The sales volume should be more than 2000 products annually otherwise it should be considered that more advertisement budget would be required. The measurement and control of marketing budget focuses on detecting the problems and to make corrective actions for the problems. The financial control of the marketing budget would focus on the importance of sales or profitability. If Mulberry focuses on sales, it would have to decrease the price of its products in the market and if the company decides to focus on profitability, the company would have to increase the prices. Since the company targets only professionals that could afford to purchase expensive brands, the company would not have to set lower prices but alternatively the company has a chance to increase the price. On the other hand, the non-financial control consists of loyalty, satisfaction and change in attitudes. This type of control could provide a glimpse to the company regarding the customer’s loyalty and satisfaction level. Conclusion For Mulberry to enter a new market in India for catering the needs of the customers associated with high quality leather handbags it is essential to understand the culture and the issues related to it. Mulberry is a brand associated with luxury and fashionable accessories around the globe. Due to its popular leather handbags, it is desired almost in every corner of the world. The company has excelled in meeting the demands of customers by providing the most popular fashionable item after diamonds and shoes; handbags. The company has a wide variety of handbags for both male and female with variety of colour patterns and designs. Mulberry’s reason to set foot in India is to expand the market to increase the profit. The company wants to enhance the opportunities for growth to meet the long-term objectives of the company. The most important objective of the company would be to create awareness regarding the variety of handbags available and to increase the sales. To do so the company would have to face challenges from the local brands that cover up nearly 70 percent of the market that includes brands such as VIP, Samsonite and Holii. The remaining 30 percent is covered up by foreign brands such as Hidesign, Da Milano, Calonge, Blue & Blues, and Crew Republica. There are lots of opportunities available in the market for Mulberry. The company is based on differentiation strategy due to which the company has positioned itself as luxury brand for professionals that could afford to purchase expensive brands. Some of the opportunities that are present in Indian market are the increase in working women, increasing incomes, influence of foreign brands over local brands, high growth prospects and high trend of fashionable lifestyle. Due to these opportunities Mulberry must take into consideration to open its outlet in India rather than any other country. For the success of Mulberry’s product, the company must allocate high international marketing budget to reach the customers effectively. The estimated marketing budget should be at least $1million. The reason for high marketing budget is the entry into new market. The market is already flooded with foreign and local brands. To change the perception and behavior of the customers, the company must start advertisement campaigns that would increase the awareness level of customers. Events such as fashion shows should also be encouraged so that other accessories offered by the company other than leather handbags could also gain popularity. India has more inclined towards fashionable lifestyle over the last decade and the ratio of working women has also increased. This would be the best opportunity to enter the market and to capture it as soon as possible before any other competitor could take advantage of the situation. List of References Business Wire. (2010). Research and Markets: Handbags Market Report: 2010 Edition. Available from http://www.businesswire.com/news/home/20101217005572/en/Research-Markets-Handbags-Market-Report-2010-Edition [Accessed 3 December 2012] Chatterjee, P. (2012). VIP sets its sights on handbag category. Business Line. Available from http://www.thehindubusinessline.com/industry-and-economy/marketing/article2363034.ece [Accessed 1 December 2012] Fletcher, N. (2011a). Leather goods group Mulberry triples profits as international sales soar. The Guardian. Available from http://www.guardian.co.uk/business/marketforceslive/2011/dec/08/mulberry-triples-profits [Accessed 1 December 2012] Fletcher, N. (2011b). Mulberry jumps 13% as the wealthy continue to buy its posh handbags. The Guardian. Available from http://www.guardian.co.uk/business/marketforceslive/2011/mar/11/mulberry-bags-in-demand [Accessed 1 December 2012] Mulberry. (2012). Annual Report and Accounts 2012. Available from http://www.mulberry.com/about/PDF/Investor/MulberryGroupPLC_AnnualReport_2012.pdf [Accessed 1 December 2012] PRWeb. (2012). US Handbags market to reach US $9.0 Billion by 2015. Available from http://www.prweb.com/releases/handbags/leather_handbags/prweb4264634.htm [Accessed 2 December 2012] PWC. (2011). Wining in India’s retail sector: factor for success. Available from http://www.pwc.com/in/en/assets/pdfs/rc-publications/WinningSector.pdf [Accessed 3 December 2012] PWC. (2012). Market vision luxury: challenges and opportunities in the new luxury world: winners and strategic drivers. Available from http://www.pwc.com/it/it/publications/assets/docs/marketvision-luxury-2012.pdf [Accessed 3 December 2012] Reuters. (2012). Profile: Mulberry Group plc. Available from http://uk.reuters.com/business/quotes/companyProfile?symbol=MUL.L [Accessed 1 December 2012] Sharma, R. (2011). Indian luxury market – a snapshot (Part II). Available from http://www.indiabiznews.com/?q=node/1704 [Accessed 2 December 2012] Technopak Advisors. (2011). KIT: women’s handbags market in India. Business Standards. Available from http://www.business-standard.com/india/news/kit-women%5Cs-handbags-market-in-india/446513/ [Accessed 1 December 2012] Venugopal, V. (2010). For luxury brands, India is a tiny market right now. Live mint and The wall street journal. Available from http://www.livemint.com/Companies/0fibNwwi6MUU8qHIm8XvGK/For-luxury-brands-India-is-a-tiny-market-right-now.html [Accessed 3 December 2012] Wood, Z. (2010a). How Mulberry bagged success in the battle for affordable luxury. The Guardian. Available from http://www.guardian.co.uk/business/2010/apr/15/friday-interview-godfrey-davis-mulberry [Accessed 2 December 2012] Wood, Z. (2010b). Mulberry bags reports sales rise of 80%. The Guardian. Available from http://www.guardian.co.uk/lifeandstyle/2010/oct/07/mulberry-bags-reports-sales-rise [Accessed 2 December 2012] Read More