Marketing Consumer Product in an Emerging Economy - Research Proposal Example

Marketing Consumer Product in an Emerging Economy Introduction The product that we will be concentrating on is baby food which is widely consumed by most families worldwide. To add on, Sweet Baby Care and Food Company (the company in focus) should understand that the profit potential here is achievable through the use of the effective product mix in their marketing strategy. Through effective marketing, Sweet Baby Care and Food Company will be able to determine their target group, product pricing levels and product information, in this case, a country with an emerging economy. Thus, in the process of marketing new consumer products, firms or marketing agencies ought to consider various factors such as product prices, method of marketing, market share, demographics and market size among others. Baby food is one main product that can be marketed in emerging economies around the world by marketing firms for realization of profit potentials. Sweet Baby Care and Food Company has a top to down management structure that is headed by top a level Director. The company has a wide experience in the sales and marketing Baby foods across the world. Formed as a private organization, the company provides services to various countries that are either developed, developing and under developed. Being a private organization, Sweet Baby Care and Food Company strives to provide quality services to its customers internationally. Therefore, the main objective of this paper is to produce a marketing plan for a consumer product that should be marketed in a growing or emerging economy. While in production process, baby food should be considered in terms of health before it is sold to any country or organization. According to world health standards, babies should be given food when they are six months of age, meaning babies should be breastfed till they reach this age. Here, we will seek to give an analysis of the business environment based on the product to be marketed, in this case baby food. It will also look at the potential size of the market in which the consumer product is to be promoted and an overview of the data collection methods to be used. The target segment of promoting this product will be children from age zero to about five in both rural and urban areas. Mongolia as a Preferred Target Country Despite remarkable improvements over the past years, this country has economically grown with presence of reforms. There has been an enhancement of economic freedom and there has been a gradual introduction of free market and political reforms within the country. Mongolia can be considered the best country to invest in business wise due to various reasons. According to Anderson et al (1), Mongolia has a population of more than three million with children between zeros to fourteen years standing at twenty seven percent. In comparison to a country like Liberia that has a Gross Domestic product per capita of 414 million dollars; Mongolia can be a viable business venture because it has a GDP per capita of three thousand six hundred and seventy three. Other factors such as literacy levels also make Mongolia a potential target because most businesses today are technologically driven. Liberia has a literacy level of about 61 percent, while Mongolia has about 97 percent literacy levels. Therefore, Mongolia is a potential business target despite Liberia having more population than it. Mongolia having a higher percentage of children and a higher GDP than Liberia, it remains a potential market to sell baby care products. Fig.1: A graph showing the current economic growth for Mongolia Therefore, when deciding the countries to market consumer products, demographics play a major role in marketing products such as baby foods. Moreover, necessity and market share are also important factors when deciding on the target market for consumer goods. Mongolia can be a preferred target country due to the various business aspects it holds that are good for business purposes. There are various business aspects that need to be considered when choosing a target market to sell consumer products. Technological, social, economic, political and cultural aspects are some of the business features that should be considered when looking for a potential market for baby food products. Therefore, these are some of the aspects that make the marketing of consumer products smooth and healthy in business terms. When compared to Liberia, Mongolia has a higher percentage of infants within the range of zero to fourteen years (Anderson et al. 1). Therefore, a higher number of infants would attract more sales suitable for potential profit making in the business world. Moreover,in order to draw conclusions about the market potential for baby food consumer products, it is necessary to analyze the various business features mentioned above. To begin with, it is important to think about the possible economic impacts that can affect the sale of baby food products. Economical factors include a lot of factors in relation to the marketing and sale of products in the business world. Exchange rates, interest rates, inflation rates and economic growth rate are some of the economically related factors that should be considered when marketing consumer products. Country 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Mongolia 21.53 21.8 21.8 21.39 21.44 21.52 21.59 21.07 21.09 21.05 21.03 20.93 20.7 Fig.2: A table showing the birth rate for Mongolia. Several actors must be considered when venturing into a new market, these factors include: Exchange rate-: as an economical factor in business is one major consideration that must be put in mind when marketing products in developing or emerging economies such as Mongolia. It is important for marketing firms to know the rate at which their currencies are going to exchange for. For example, Baby Care and Food Company should be able to determine and ascertain the value for which they will exchange their currencies. When such exchange rate values are determined, marketing firms are capable of determining the exact amount of profits they can realize from the sale of various consumer products (Bae et al. 358). For example, Sweet Baby Care and Food Company can determine the correct amount of returns they can achieve by selling fruits to Mongolia when they know their exchange rates. Interest Rate-: Moreover, the interest rate is also another economically related factor that should be considered when marketing consumer products. Interest rate is another factor to consider. This is usually calculated in terms of the amount borrowed and the period taken to pay this amount. In the process of marketing a consumer product, the interest rate is an important factor to consider due to various reasons (Bae et al. 365-367). Baby Care Food Company can decide to sell their products by offering certain interest rates when they sell their consumer products in debts. For example, when selling baby foods such as protein foods, the marketing firm can decide to calculate interest rates based on the bulk of food to be sold and the repayment agreed upon by the debtor. Therefore, interest is considered an important in the business environment because it deals with variables such as inflation and investments. Moreover, marketing firms can maximize on their profit potentials by offering reasonable and attractive interest rates. This means interest rates are a determinant factor when marketing consumer products. Political factors-: Politics also constitute business features that should be considered when planning to market consumer products in a potential target country with emerging economies (Cai and Yang 135). This factor refers to the process by which consumer product features such as pricing are controlled by the government policies. Tax policy, trade restrictions, political instability and labor laws are some of the political-regulatory factors that affect marketing of consumer products in emerging economies. Before marketing consumer products in potential target areas, marketing firms such as Baby Care and Food Company should consider trade restrictions of that country. This means that a country does not enter into any business dealings without following the set trade regulations. Additionally, political stability is also another very important factor in determining marketing plan of consumer products. Marketing firms should consider promoting their products in countries that are politically stable. This means that such countries should be free from war or any other external attacks in order to allow smooth flow of business. Technological factors-: Technology also constitute business features that should be considered when planning to market consumer products in emerging economies (Royle and Laing 67). This factor involves the ability of people to use technology when conducting businesses and keep abreast with the everyday technological advancements. Marketing firms can use technology to promote their consumer products. For example, these firms can advertise their products online for public view through avenues such as websites and social sites. Considering the fact that a wider population of Mongolia’s citizens is literate, promotion of products online can help marketing firms achieve the target market and profit potential. Competition-: Furthermore, competition is also another factor that should be considered when promoting consumer products to emerging countries. Marketing firms should consider whether they face competitions from other firms when identifying a target market (Royle and Laing 67). Competition is healthy in the business environment because encourages competing firms to provide quality products and services. Social- cultural aspects-: These are also business features that should be considered when planning to promote products in emerging economies. These aspects deal with health concerns age distribution and growth rate of the target country. Therefore, when planning to promote consumer products such as baby foods, marketing firms must ensure these foods meet the required health standards.Baby Care and Food Company should ensure that before meat is sold to the target market, it meets health regulations. The main purpose of this is to avoid selling of unhealthy food to the market. It also helps marketing firms to maintain their reputation, achieve their target market and potential profits (Bae et al. 365). Thus, social factors play roles in determining target markets.Therefore, based on the calculations, baby care products can thrive well in Mongolia. For example, assuming baby foods worth ten million are sold to the target country after all expenses at a profit of ten percent every month, Baby Care and Food Company will gain one million in return every month. When this amount is projected for five years, the company would be able to gain sixty million in profit. Therefore, based on the literacy levels, business facets and child percentage discussed above, Mongolia can be a potential target market than Liberia. Market Entry Modes In the process of getting to know the best entry method, baby food distribution can be considered an important factor. An experienced distributor can be used to market the products since they understand the various marketing restrictions, customers and market regulations. Therefore, the means through which a business penetrates the foreign market can result in significant impacts (QuickMBA1). Various methods can be used to expand business opportunities in foreign markets. Licensing, exporting, direct investment and joint venture are some of the means Baby Care and Food Company can enter the foreign markets. Exporting Exporting involves marketing and sale of baby care products directly to the target market and involves. This is an established form of marketing since foreign production facilities investment is not needed to export the baby foods. With the coordination between the importer, exporter, government and transport provider, baby care products will penetrate the foreign market. On the other hand, government regulations and tax burdens in Mongolia can make exportation difficult due to the increase in tariffs and export duties. Licensing This mode allows the entry of Baby Care and Food Company with legal and distinctive protected assets. It might include product design, operating processes and brand names of baby care products. It also allows the control of licensor property such as patent rights and trademarks. Factors such as lack of control for asset use and license period must be considered during market entry (QuickMBA1). Therefore, licensing provides a large return on investments and minimizes risk investments with a speedy entry into the market. The company’s licensing business helps it to venture into new markets and take advantage of the local expertise with low investments in fixed assets The use of social media avenues such as youtube can be used to licence the Baby food products considering the fact that a large population is literate. The company can take advantage of baby care programs in various health institutions in Mongolia to market the products Short/Long term Plans Other strategic decisions that should be considered in the target country include: short/long term plans, degree of standardization and mode of entry among others. Short/long term plans refer to the plans that a marketing firm can have on the target market (Pike and Page 205). For example, Baby Care and Food Company can have long term plans of opening branches in the target country. On the other hand, short term plans could mean a short term investment on the target market. The use of foreign distributors can be considered a short term plan of marketing the baby products to the target country. The distributors can purchase goods from the exporters and sell them at a profit. This can be considered a short term cost effective strategy for realization of profits. Standardization can be applied by the use of tangible or intangible products that conform to the country’s set health standards. A higher standardization degree would attract more revenue because consumers would be confident with products being used. Moreover, Short term plans could include the sale of baby care products to the country upon request by the country. This means the Company would sell the products according to the amount requested by the target country. Furthermore, the degree of standardization refers to the levels of standards set by both the marketing firm and target country. A joint venture could be a long term plan to be used by the Sweet Baby Care and Food Company. The baby care products must consider the various objectives such as product development, technology and government regulations in order to enter the target market. This mode involves the market combination of resources between the company and another baby food company in Mongolia. Through such ventures, little investment is required by the company and ownership restrictions are overcome though it is difficult to manage. Implementing Market Mix (4 Ps) Market mix is a business tool that determines how well a product can be sold and is normally associated with: Product, price, promotion and place (Helm and Gritsch 418). It is involved with how marketers are their goods and services in the market in order to survive in the business environment. Generally, with marketing mix, a marketer can adjust these variables to marketing functions and objectives. Therefore, in order to implement the 4 Ps of the marketing mix, it is important to understand the meaning of each aspect that constitutes the marketing mix. Firstly, products refer to the tangible and intangible goods and services that are provided by a business entity for the purposes of sale in a target market. In the process of developing products, various factors should be considered. Quality, packaging, design, after-sales services and features are some of the factors that should be considered when developing products (Helm and Gritsch 422-424). Therefore, in order to implement the sale of products within the target market, appearance and function are the main factors to be considered. For example, what are the customer needs or how will they perceive the product. Therefore, Baby Care and Food Company can implement their products by packaging their products in a persuasive manner. They can also print the various uses of baby food on the package. Price is the second variable of market mix. This is the actual amount that a product is paid for by the customer. This is a very important aspect since it determines an organization’s potential of surviving from the profits realized (Helm and Gritsch 423). In the process of setting prices for products, marketers are supposed to cognizant of the perceived customer value for the goods or services being sold. Thus, marketers should take any step to increase the perceived value of goods by customers even if it means rebranding the whole business. Furthermore, marketers can offer discounts and credits for products in order to increase sales. Thirdly, place is also a market mix variable that determines how well a product can be sold in the target market. It entails the exact location where the business will take place and logistics. Therefore, marketers can use the internet as a means of marketing their products to the target market. For example, baby foods can be marketed online, where customers can access information about these products. Finally, promotion is another market mix variable important in marketing products to the target market. This marketing variable is concerned with every kind of information that a marketer can provide about the product (Helm and Gritsch 424-427). Public relations, advertising and sales promotion are some of the elements contained in the promotion. Advertising could include the use of billboards, televisions, radio, print material and commercials for the purposes of product promotion. Therefore, in the process of advertising for products, marketers always look for the best and appropriate way to reach a wider customer base. For example, Baby Care and Food Company could decide to combine all the advertising modes to reach more customers. Data collection In order to collect data using primary sources, the company has to gather information concerning the demographics of Mongolia. The company should major on the child birth information. From the secondary data collection method which is information received from the internet and the above discussions, the marketing firm can realize the potential profit by selling baby food to a country with an emerging economy like Mongolia. Additionally, the use of online questionnaires can be a good source of primary data collection. The questionnaires can be filled by sample population of Mongolia from demographic information obtained. Once the questionnaires are filled, marketers can decide on the best way to improve their products based on the feedback they get. Conclusion The sale of baby food to a country with emerging economies such as Mongolia can be a very potential profit making venture because various reasons. Firstly, Collection of data from both secondary and primary sources will give the project a forecast and an estimate of the total target market potential. Secondly, application of the business venture aspects to the project will make it a success. Finally, the use of market mix as a marketing strategy would make the project viable and potentially profitable. Thus, the project can be a success when the above issues are considered and applied. Works Cited: Anderson, Elizabeth., Haslett Emma., and Savage, Rachel. Management Today. 27 February 2014. Web. 4 May 2014. Bae, Hyerim., Lee, Sangyup., and Moon, Llkyeong. “Planning of business process execution and Business Process Management environments.” Information Sciences 268. 1(2014): 357-369. Cai, Shaohan., and Yang Zhilin. “On the relationship between business environment and competitive priorities: The role performance frontiers.” International Journal of Production Economics 151.2014(2014): 131-145. 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