Global Marketing: The US and Korea - Essay Example

Global Marketing: US and Korea BACKGROUND OF THE CLOTHING INDUSTRY There are several macro-environmental factors that significantly affect the clothing industry. These factors emanate from outside the either the companies or the competitors hence the owners of the business have little control if any to these externally generated factors. Moreover, the impact of these companies and their competitors in changing these factors are significantly minimal (Roll, 2005). The companies are compelled to adapt to these macro-environmental factors. The factors include the characteristics of the consumers, influence of the government, technology, and the economy. The techniques and the methods that the companies incorporate to adapt these factors determine not only their ability to distinct or differentiate their products and themselves from their competitor but also their success holistically (Sutltle, 2009). The consumer factors This encompasses the norms, culture, population changes, demographics, and lifestyle. They influence the industry in different ways. For an instant, a clothing company has to create innovatively styles that are appealing to different cultures especially of the groups that are dominant and represent the largest segment of the company’ market. The creation of the different styles of cloths should be within the norms of the society that is perceived to produce the prospective consumers (Sutltle, 2009). Technological factors These include factors such as demand, production, and the availability of resources. For an instant, the scarcity of material for production may compel the companies to engage in substitute products. In addition, a competitor may introduce clothing styles that have the potential of luring the consumers hence shift in the demand for the earlier fashioned cloths (Sutltle, 2009). Political and legal factors The industry has been influenced by issues such as the rights of the workers and laws related to child labour. Union workers have often called for industrial actions such as strike and picketing in aggravating for increases in wages. In turn, it impact negatively on the production of clothing products (Sutltle, 2009). Economic factors The influence of the economy can either be positive or negative. During periods of economic boom, individuals tend to have relatively more disposable income hence they spend a lot on cloths hence increase in companies’ sales. The converse is true during economic crisis. These factors therefore, shape the competitive structure and the intensity of competitive rivalry in the industry (Roll, 2005). The trends of the industry in the US are characterized by the companies operating retails that are physically established in selling the clothing products. The trends of fashion and individual income are the demand drivers for the industry. Approximately 50% of revenue of the industry emanate from sales of women clothing while 20% from men with the remaining percentage including accessories and children wear (IBIS, 2015). One of the major companies is the TJX Companies. The fashion in Korea has been greatly influenced by the West though wealth, culture, the use of social media, and the country’s developing economy have been the contributing factors. Their fashion styles have been unique and have influenced trends worldwide (Doole & Lowe, 2008). INTERNATIONAL MARKET SCREENING AND SELECTION General Electric Matrix for the clothing industry in the US In reference to the attractiveness of the market, the population of the US and diversification of the nation provides a guarantee of market for clothing products. Hence the size of the market is strongly attractive and competitive as well. The growth of the market has been steady in the past decade with the females contributing hugely to the industry. Moreover, the nature of competition has been very intense as companies such as Marshal, TJ Maxx, and gap among others are the competitive rivalry that is striving to gain leverage over each other. The diversification of the population of the US also impact significantly since these companies has to create styles that appeal to the larger segment of the population (IBIS, 2015). The profit margins of the companies have been increasing despite the intense competition in the market. However, the industry has faced a lot of competition from imported clothing products hence establishment of an industry or provision of those products from UK are likely to change the shift in demand. The industries have embraced the use of technology with the sole purpose of optimizing their bottom line. In addition, the laws in the use are favourable for business in that they do not encourage monopoly though the Federal Trade Commission has strict regulations for foreign industries. The commission stresses the need for industries to incorporate the interest of the public (Friesner, 2014). In reference to the market share, the women clothing appears to be more profitable than that of the males. However, it is anticipation that the industry will realize a significant growth in the coming five years. This can be attributed to the increase in household income hence individuals resulting into individuals having income to dispose into the clothing industry (Friesner, 2014). General Electric Matrix for the clothing industry in the Korea Just like the US market, the attractiveness of the Korean clothing is also influenced by the size of the industry. This market is segmented into men, women, and children thought the greatest contributors of the market are women though the major consumers are young. However, the population of the nation is not as diversified as that of the US. This market has been growing steadily despite the influence of the internal economy of the country the global economy. Competition among the companies has also been intensified with each frequently creating new styles to appeal to various market segments of clothing fashions (Kim, 2012). Since the economy of the industry has been growing due to increase in household income, the industry still remains attractive and competitive (Mintel, 2014). Moreover, the companies in the Korean market continue to annex huge profit margins from the market hence making the market lucrative and attractive. One the competitive basis of the industry, the market share is so competitive especially in reference to the female clothing products (Mintel, 2014). The consumers are easily lured by the cost and quality of products that a company produces as well as the branding and promotional techniques. Due to the competitive nature of the market, the companies place their products into the market competitively in an attempt to gain leverage (Kim, 2012). INTERNATIONAL MARKETING STRATEGY RECOMMENDATIONS Entry into the US and Korea market in reference to the clothing industry requires a well crafted plan. All the internal factors influencing the industry should be adequately weighed in before the introduction of products into the two countries. Moreover, these countries are quite different in terms of culture and norms that the clothing styles should not be homogeneous. The main marketing mix should entail product support, price support, promotional or selling support, distribution support, financial support, and service support. The product support entails the packaging, knowledge of information about the market, and testing of the product. On the other hand, the prices need to be established into these markets in a manner that commensurate with those of the targeted consumers. The promotional techniques should consist of advertisement among others. The distribution of the products should be effectively done to the satisfaction of the consumers (Doole & Lowe, 2008). STRATEGIC MARKETING POLICIES The marketing strategy is vital for the companies in the clothing industry in that it aids in optimization of sales and the sustainability of competitive leverage. To effectively infiltrate into the markets of both the US and Korea, the company will have to focus on product differentiation where its products should not only be distinct to those already in the market but also conform to the cultures and norms of the individuals in the market segment. Moreover, the company can either select the targeted segment of these markets or select a particular segment and provide products that meet the expectations of the consumers (Doole & Lowe, 2008). Reference List: Friesner, T (2014). The general Electronic Business Screening. Retrieved on 9th May 2015 from: http://www.marketingteacher.com/the-general-electric-business-screen/ Sutltle, R (2009). The macro-Environmental Factors affecting the Clothing Industry. Retrieved on 9th May 2015 from: http://smallbusiness.chron.com/macroenvironmental-factors-affecting-clothing-industry-37254.html Kim, S (2012). Global sourcing of South Korean apparel industry: sourcing trend and supplier selection. Journal of the Textile Institute, 103 (12): 1-17 IBIS (2015). Women Clothing Stores in the US: Marketing Research Report. Retrieved on 9th May 2015 from: http://www.ibisworld.com/industry/default.aspx?indid=1067 Mintel (2014). Clothing in Soutn Korea (2014)-Market Size. Retrieved on 9th May 2015 from: http://store.mintel.com/clothing-in-south-korea-2014-market-sizes?cookie_test=true Roll, M. (2005). Asian Brand Strategy: How Asia Builds Strong Brands. Basingstoke: Palgrave Macmillan. Doole, I., & Lowe, R. (2008). International marketing strategy: Analysis, development and implementation. London: Cengage Learning. APPENDIX Questionnaire 1. What is your opinion concerning the impact of the country’s economy in the clothing industry? 2. Besides the macro-factors that influence the industry, what are some of the internal factors that have significantly impacted on the industry? 3. Would you kindly explain your perception of the role of culture in the industry and how and a clothing industry can adjust to conform to these culture? 4. What are some of the recent fashion trends that the consumers of clothing product have holistically embraced? Please elaborate on the past trends as well. 5. Suppose a new company wants to infiltrate the market segment of the nation in terms of clothing product, what are some of the unique challenges that the company is likely to encounter? 6. From question five, if they encounter these challenges, what do you think are the possible solutions to the challenges? 7. In your own opinion, what is the future of clothing industry in the country? 8. Any other comments in regard to clothing industry in the country? Read More

 

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