International Marketing - Essay Example

International Marketing Task2 Executive Summary This report presents a comprehensive marketing plan for Samsung Galaxy to enter into the Indian consumer technology industry. The report therefore focuses on defining the objectives underlying the plan, taking into account the strengths as well as the weaknesses of the company along with the opportunities and the threats present in the targeted market context. The discussion in this report further emphasizes on precisely describing the strategies which can be adopted when penetrating the internal market of India. Furthermore, in order to specify the intended operations of the brand in the targeted market, this report emphasizes on detailing the organizational functions and the proposed supply chain system to be initiated in the Indian market. Along with these strategies, the report also presents a comprehensive description of the human resource strategies along with the suggested mode of entry for the brand. Various macro-environmental and micro-environmental factors have also been addressed in this report, which were identified as relevant to the proposed international marketing plan. Concerning the challenges likely to be witnessed when implementing this plan along with the opportunities and the benefits to be obtained, it can be affirmed that high growth prospects persists within the Indian consumer technology industry owing to the flexible Foreign Direct Investment (FDI) policies and lesser competition. Furthermore, the analyses presented through this report also reveal that an increasing consumer demand is also identifiable within the Indian market which further strengthens the marketing proposal. Table of Contents 1.Executive Summary 2 2.Introduction 4 3.Company Overview 4 4.Objectives of the Company 5 5.SWOT Analysis 5 6.Strategies to be adopted by Samsung 8 7.Company’s Operations and Supply Chain management Strategies 9 8.Human Resource Management Strategies 9 9.Mode of Entry 11 10.Dealing with the Macro-Environmental Factors 11 11.The 4P’s of Marketing for Samsung Galaxy 13 12.Funding Sources in Indian Market 15 13.Adaptation of the Product 17 14.Challenges 18 15.Steps to be taken after the Product Launch 18 16.Conclusion 19 Works Cited 20 2. Introduction Owing to the increasing demands of mobile phones in the global consumer market, various large and small brands have emerged, which has in turn substantially augmented the competition within the global technology industry. One of the most prominent brands of mobile phones in today’s market is Samsung. In the past few years it has become a reputed brand all over the world. The company is now intending to move a step further and introduce itself in the Indian market. It is in this context that the Indian market has emerged as one of largest and most potential consumer markets in the world. It is also regarded as the 9th largest economy in the current day context constituting a wider section of middle class people (Wigder and Bahl, “Trends in India’s Ecommerce Merket”). Emphasizing on these facts, the report intends to offer a precise, reliable and realistic planning to launch Samsung products, i.e. Samsung Galaxy Series in India taking into account various factors related to the macro-environment and the micro-environment of Samsung. 3. Company Overview For more than 70 years, Samsung Group has been keen towards making a better world through its various businesses. Through continuous innovation along with offering reliable products and/or services, Samsung has been taking the world in an inventive new direction. Samsung started as a small export-oriented business enterprise from Taegu, Korea. It has now grown to become one of the biggest electronics company in the world (Samsung, “About Samsung”). Towards the end of the 20th century, the company came up with smart phones and phones combined with mp3 player systems. Thus far, Samsung has entered in the 3G industry as well. It has also made variety of camera phones to meet the customer demand. In today’s market, Samsung is considered as the 2nd biggest mobile company operating all around the world (Samsung-Mobiles “Samsung History”). 4. Objectives of the Company The objectives of Samsung to penetrate the Indian telecom market can be identified as follows. • To obtain the benefits of developing economy in terms of increasing demand for technology products, favorable macro-economic conditions and easily available cheap labor which can accumulatively render greater scope for sustainable growth • To acquire a leading position in the global industry through increased market share and brand recognition • To diversify in the global market and thereby ensure long-run sustainability as well as competencies 5. SWOT Analysis Strengths One of most significant strengths of the Samsung Galaxy series phones is its brand value and its unmatched popularity all over the world. The quality of product provided by Samsung so far in the global market has been commendable which can further prove to be its prime strength when penetrating the Indian market. Moreover, Samsung has the reputation of introducing innovative designs and features in its product line at frequent intervals, which would help the brand to establish a strong foothold in the Indian market, where the taste and the preferences of the targeted customers are observed to change rapidly (Scribd, “SWOT Analysis of Samsung”). Weaknesses In its global operations, it has often been witnessed that Samsung faces criticism on the basis of its lacuna to introduce new models in the market when compared with its major competitors. This particular aspect can be affirmed as a major weakness for the company when targeting the worldwide market. Apart from this, the products offered by Samsung lack differentiation which further increases substitution threats. Additionally, the price of the offered products tends to be higher which can certainly create a negative impact on the price sensitive customers of India (Scribd, “SWOT Analysis of Samsung”). Opportunities The Indian market is among the largest and the fastest growing telecom markets in the world. According to a survey, currently, the Indian telecom industry comprises around 900 million mobile users. The Indian customers, especially the young generation, can be observed as becoming increasingly inclined towards technology products owing to their greater demand for global exposure. Additionally, the increased purchasing power of the Indian customers would allow the company to concentrate on the quality aspects by shifting the customers’ buying behavior from being price-sensitive towards quality-sensitive (Scribd, “SWOT Analysis of Samsung”). Threats The Indian market has already been occupied by well known brands including Nokia, Apple, Motorola and Blackberry among others. In the Indian market, owing to the availability of substitute products, the company would face a tough challenge from other companies. Additionally, the increasing bargaining power of the Indian customers can also be regarded as a critical point of concern for the company (Scribd, “SWOT Analysis of Samsung”). 6. Strategies to be adopted by Samsung The company would have to stick to its strengths when it enters the Indian market. Samsung would also have to avoid direct competition with the leading international brands operating in the first place by marketing the product in segregated regions where those brands decipher a weaker hold on the consumer buying behavior. Considering these aspects, Samsung would target the young generation customers from Indian telecom industry taking into account the various influencing factors persisting in both its macro-environmental and micro-environmental contexts. The supply chain operations of the company will be based on a traditional supply chain process whereby the local distributors will be engaged in marketing the products to the ultimate customers. The company will further emphasize on operating with adequate transparency in the Indian market to ensure sustainable growth in its long-run. Contextually, the strategies devised by the company will be largely customer-centric rendering due significance towards the establishment of a strong foothold in the Indian market for the initial year. This will certainly facilitate its brand reputation and generate better growth prospects in its targeted market. 7. Company’s Operations and Supply Chain management Strategies Samsung has to determine a strong supply chain network so that the product can obtain a better reachability to the maximum number of people in the Indian market. Samsung, in the Indian market, will make use of both traditional and contemporary supply chain systems. Traditional supply chain systems comprise of the producers, the distributors and the retailers; while on the other hand, the contemporary supply chain system would comprise of the producers, the customers and the distributors (Lee and Lee. 142-151). In its traditional supply chain system, Samsung will engage the local distributors and retailers from the Indian telecom industry to reach the targeted consumers. Simultaneously, the company will also focus on obtaining the orders directly from customers through online retailers. 8. Human Resource Management Strategies Currently, foreign companies often have to face three main challenges in the Indian market with regard to their Human Resources Management (HRM) operations. These challenges can be identified in terms of recruitment, retention and development policies. It is worth mentioning in this context that the resources, which a company chooses must be valuable to the company in the long run. Moreover, it is also essential that the resources are unique so that that the competitors will be unable to emulate it. Hence, Samsung should also emphasize on creating a unique workforce from that of its contemporaries in the Indian market focusing primarily on highly skilled professionals. It is in this context that the Indian labor market is offering professionals at a comparatively cheaper rate. However, in the current scenario, the labor market can be observed to become increasingly expensive in accordance with its rapid growth in terms of technologically skilled manpower (Friedmann, Holtbrugge and Puck, “HRM in foreign Firms in India: A Resource based view”). Taking into account all these aspects, Samsung can recruit employees both internally and externally which will render cost effectiveness in the long-run. Personal development also plays a major role in strengthening the potentials of a HRM strategic planning. In order to imbibe the professionals from India in its working culture, Samsung should focus on rendering adequate training to the new recruits, both in formal and informal ways. The training might include team–oriented training, in-house training and firm-specific training. These measures would certainly enhance the overall productivity of the employees in the Indian market. In relation to employee retention, recent studies have depicted that employee turnover depends largely on numerous aspects which can be identified as calculative and alternative forces. Contextually, appraisal for performance, career uniqueness and job tasks would reduce attrition, thereby rendering greater cost-efficiency and sustainability to the firm’s operations. It is worth mentioning in this context that taking into account all these aspects, Samsung will intend to endorse a competitive appraisal system in its HRM strategies offering the benefits of global exposure to the employees. Moreover, the company will also emphasize on offering competitive remuneration packages to the potential candidates from India which can further help in retaining the employees (Friedmann, Holtbrugge & Puck, “HRM in foreign Firms in India: A Resource based view”). 9. Mode of Entry The best mode of entry for Samsung mobile company to enter the Indian market is by taking a collaborative venture or strategic alliance with the local market players. Joint venture and strategic alliances not only serves with the benefit of the locally reputed partner’s brand image, market knowledge and readily established distribution channels, but also assists with an already existing association with the governmental organizations and financial institutions. This particular strategy may also facilitate the company with better diversification of its probable risks among the local partners (Levi, 194-195). 10. Dealing with the Macro-Environmental Factors Political Factors The political system of India is identified to be strictly based on a democratic structure whereby consumers in the market obtain greater power to drive the success of any foreign company with the aid of the government. However, in the current day phenomenon, the political system of the economy can be observed as quite encouraging towards the inclusion of foreign companies offering with relaxed taxation policies and flexible fiscal regimes to allow Foreign Direct Investments (FDIs) within its borders. Although, the government focuses on practicing strict regimes towards organizations which are identified to decipher unethical conducts or engage in conflict situations (U.S. & Foreign Commercial Service and U.S. Department of State, “Doing Business in India: 2012 Country Commercial Guide for U.S. Companies”). Taking into account these factors, Samsung will concentrate largely upon conducting its marketing as well as HRM operations in an ethical and customer-centric manner. Economic Factors The economic climate in India can be observed as encouraging towards foreign companies. For instance, the FDI regimes as well as the cross-border trade related policies enacted by the Indian Government are currently observed to be flexible enough to allow technology based companies within the nation, which can act as a major advantage for Samsung. Again, majority of the population in India is identified to belong to the middle-income group, which can create a significant influence on the pricing strategies of the company. However, it is worth mentioning in this regard that the income level of Indian population is increasing steadily shifting their focus from price to quality aspects. A major constraint for Samsung in the Indian market can be further identified as the fluctuating currency exchange rate which can substantially affect the company operations within its target market (The International Bank for Reconstruction and Development, “Economy Profile: India”). Social Factors Effects of globalization and modernization can be apparently observed in the current day context of Indian society. It is fundamentally owing to this aspect that the consumers in the Indian market have been driven towards technology which can be considered as a major advantage for Samsung. This has resulted in substantially increased demand for technology products within the Indian market. The trend can also be regarded as a consequence of increasing purchase capacity among the middle-income group populaces of the nation (The International Bank for Reconstruction and Development, “Economy Profile: India”). Technological Factors Technology sector within the Indian market can be witnessed to grow with immense rapidity in the recent years. Not only national brands, but also a considerable number of international players have been penetrating the market to obtain the benefits offered by the socio-economic environment of India. This has resulted in augmented customer awareness and significant competition within the nation which further gives rise to the importance of innovation (U.S. & Foreign Commercial Service and U.S. Department of State, “Doing Business in India: 2012 Country Commercial Guide for U.S. Companies”). Hence, it is vital for Samsung to consider competitive strategies in its operations when targeting the Indian consumers. 11. The 4P’s of Marketing for Samsung Galaxy Product The product, Samsung wishes to launch in the Indian market is the Galaxy Series mobile phones, i.e. Galaxy S II and Galaxy Y Duos. The Galaxy S II model comes with various attractive fresh features. It has dual core processor in built in it which makes it faster in comparison to other similar mobile phones. It is also constituted with 1650mAh battery and an Android platform 2.3 operating system. Moreover, it is attributed with a large display and 8 mp auto focus camera which can easily persuade the increasingly aware customers of the Indian market. On the other hand, Y duos model comes with a dual SIM setting which makes it a very useful phone for the customers in India owing to their growing need for communication and technology advancements (Samsung, “Smartphone”). Price Concentrating upon the currently prevailing consumer market of the economy, it can be observed that majority of the customers tend to be price-sensitive owing to the increasing inflation rates and the availability of a large variety of substitute products. Hence, the price of the products must be decided with due significance towards the customers’ buying behavior and the prices charged by the competitors for a similar product. In this context, Samsung will be emphasized on practicing competitive pricing strategies. Promotion Samsung should target the youth in the Indian market, owing to the fact that the features of its Galaxy S II and Galaxy Y Duos would largely attract the young generation who are currently observed to be quite enthusiastic regarding global communication and technology advancement being strongly influenced by the effects of globalization and modernization. Taking these factors into concern, Samsung will advertise its products by endorsing famous celebrities from the young generation along with taking the virtues of print media and internet. It is worth mentioning in this context that Indian young generation is witnessed to be highly persuaded by the lifestyle choices of the celebrities whereby endorsing famous personalities would render greater competitive advantage through wider exposure to Samsung in the Indian consumer market (Scribd, “Merketing Mix”). Customers will also be facilitated with attractive deals and discounting offers to persuade them towards their ultimate purchase. Place Samsung would mostly try to sell its products on line as well as through distributors in various metropolitan areas of India which encompass consumers with comparatively higher purchasing capacity to afford the product. It is worth mentioning in this context that Indian consumers are becoming increasingly inclined towards contemporary supply chain systems, however, the traditional retail chain system can be witnessed to have comparatively greater exposure in the markets (Scribd, “Merketing Mix”). Hence, in order to persuade the targeted metropolitan consumers from India, belonging to the young generation, Samsung would utilize both contemporary and traditional distribution channels. 12. Funding Sources in Indian Market Funding for any company is regarded as quite vital when attempting to expand in overseas market. Notably, there are various funding sources which can be used by a reputed company such as Samsung. For instance, the most beneficial funding sources for Samsung can be the reserves and surplus earned by the company over its past performances. It is worth mentioning in this regard that obtaining funds from financial institutions would result in greater financial risk exposure for the company; whereas, allocating working capital from its reserves and surplus account would render enhanced financial flexibility and internal strength to the company (Manian. 150-151). Budget: Forecasted Annual Cash Flow Based on the above presented budget, i.e. the forecasted cash flow statement, a break even analysis can be conducted. As can be witnessed from the budget, the company is likely to obtain its break-even point by the mid of the second year with an investment of total 150,000 USD and a annual turnover of approximately 156,300 USD. However, to depict the Break Even Point of Samsung in India in terms of units, the below calculation has been undertaken. Hence, the company needs to sell at least 2,865 units of its products in Indian telecom consumer market, in order to obtain the break-even point. 13. Adaptation of the Product The process of adaption involves certain aspects of variation in products, policies, & repositioning to satisfy the customer needs with greater efficiency. It is in this context that Samsung should decipher its capability of variation in the offered products, in terms of innovation. For instance, it can be observed that the consumer preferences in the telecom industry of India, differs significantly from the foreign markets. Therefore, a probable market risks exist in terms of gap between the features of the products offered and the customers’ expectations (Ghemawat, “Adaptation Strategies”). Therefore, to grow its adaptability in the Indian telecom consumer market, Samsung will be continuously evaluating and assessing its applied strategies which have been suggested in this planning. This will certainly facilitate the company to take greater advantage of the opportunities persisting within the target market by assisting it in the identification of challenges and threats within a timely period. In accordance, the company can enact strategies to mitigate the obstacles by reframing, altering and implementing the required changes in its market planning which will further enhance its competitiveness within the Indian telecom market. 14. Challenges From an overall perspective, three fundamental challenges can be witnessed when considering the global consumer technology market trends and the weaknesses of Samsung. These challenges are fierce competition, continuously increasing customer awareness, and substitution effects. It is worth mentioning in this context that Samsung is likely to face similar obstacles in its course of penetrating in India. Hence, with due consideration to these aspects, the company will emphasize significantly over its competitive pricing and differentiation policies with due consideration to the continuously altering customer preferences. The current industry trend in the Indian telecom market also depicts that target consumers, i.e. the young generation buyers are becoming increasingly aware of the product features and technology specification which give them a better bargaining power. Hence, the company will attempt to ensure greater visibility of innovativeness in differentiating its product in comparison to the already existing brands which will not only assist in persuading a greater number of targeted customers but also mitigate the effects created by substitute products by a substantial extent. 15. Steps to be taken after the Product Launch It will certainly be unrealistic to presume that once implemented the strategies will be as effective as planned. In other words, with the identification of the altering market trends, or any other macro-environmental element, the strategies implemented needs to be reframed. Considering these factors, after the launch of the product, the strategies implemented will continuously be evaluated. The company will also focus on identifying the consumer preferences by obtaining their feedbacks at continuous frequencies. Accordingly, the macro-environmental factors will be evaluated within periodic intervals to identify and subsequently rectify the implemented strategies. 16. Conclusion With reference to the above discussion, it can be apparently observed that the proposed marketing plan can be effective subjected to certain aspects. The most crucial aspect which needs to be taken into concern when applying the proposed marketing plan is the uncertainty witnessed currently in the technology consumer market in India as well as that in the global industrial context. In this regard, it becomes quite vital for the company to make continuous evaluation and projection of its operations as well as strategic implications in order to ensure long-run profitability and sustainability in the targeted market. Additionally, it is also worth mentioning that the company should decipher an ethically sound attitude towards the community and the stakeholders it intends to engage in the Indian market to obtain its prime objective of sustainable growth within the target market. In this context, cultural divergences, environmental concerns, protection of human rights and conducting a transparent business process can be regarded as a few of the necessary steps which the company needs to consider when launching its products n the Indian market. Works Cited Friedmann, Carina B., Holtburgge, Dirk. & Puck, Jonas F. HRM in foreign Firms in India. A Resource based view, Lazer, 2008. Web. 22 Jan. 2013. Ghemawat, Pankaj. Adaptation Strategies. Pankaj Ghemawat, 2011. Web. 22 Jan. 2013. Lee, Hau Leung. & Lee, Chung-Yee. Building Supply Chain Excellence in Emerging Economies. U.S: Springer, 2007. Print. Levi, Kiruba Jeyaseeli Benjamin. Market Entry Strategies of Foreign Telecom Companies in India. U.S: Springer, 2006. Print. Manian, Ranjini. Doing Business in India for Dummies. New Jersey: John Wiley & Sons, 2007. Print. Samsung-Mobiles, Samsung history. n.d. Web. 22 Jan. 2013. Samsung, About Samsung, 2013. Web. 23 Jan. 2013. Samsung, Smartphone, 2013. Web. 23 Jan. 2013. Scribd, SWOT Analysis of Samsung, 2013. Web. 23 Jan. 2013. The International Bank for Reconstruction and Development, Economy Profile: India, 2012. Web. 24 Jan. 2013. U.S. & Foreign Commercial Service and U.S. Department of State, Doing Business in India: 2012 Country Commercial Guide for U.S. Companies, 2012. Web. 24 Jan. 2013. Wigder, Zia Daniell & Bahl, Manish. Trends in India’s Ecommerce Market. Forrester, 2012. Web. 24 Jan. 2013. Read More