Markting strategy - Essay Example

Marketing Strategy Contents Business Challenges and Difficulties 3 Entering Australian Industry 4 Legal Cost and Requirements 5 Market Research and Target Customer Issue 6 Privacy Issues 8 Reference List 9 Business Challenges and Difficulties Since, the emergence of globalization and trade liberalization in 1990, the extent of business complicacy has substantially increased across all the economies. Over time, the discretionary spending powers of the individuals have increased with rise in their disposable income thresholds (Abeles 2001, 2 – 4).

This has ultimately enhanced the aggregate demand for comfort goods and services. The extent of competition across all the major industrial segments has augmented due to increased demand across the marketplaces. At this juncture, a company can gain core competences in business only with the help of business internationalization. However, while expanding business across foreign countries; multinational companies are exposed to several challenges and difficulties. The companies need to abide the political as well as legal norms established in each country (Olson and Sharma 2008, 22 – 28).

As explained in the case study, if a Chinese company (Orabo Tech Limited) desires to export its electronic goods in Australia, it needs to pay special taxes according to the Australian import laws and regulations. Moreover, the quality standards of its products would require certification form Australian technical products Quality & Standard detection centre, located in Melbourne. Companies need to sustain threats of intense rivalry across both foreign and domestic markets. As stated in the case study, if Orabo Tech Limited conducts business of Smart Home System (SHS) in Australia, then it needs to compete with some giant electronics companies in the country such as Clipsal and Legrand (Song and Lee 2012, 574 – 588).

The revenue and profit margins of multinational companies are subjected to currency and exchange rate fluctuations. Acquiring productive resources and fluid capital in business have also become challenging for companies conducting business in the current epoch (Hooper and Vos 2009, 343 – 361). Moreover, the taste and preference patterns of the consumers across different economies are dissimilar. Thus companies operating across several economies implement adaptive strategies of business, thorough which they try to enhance the extent of its intellectual capital.

Differentiation but not standardization should be the ideal marketing strategy for firm in the modern world (Volkman 2006, 145 – 154). Entering Australian Industry Orabo Tech Limited is a Chinese electronics company that possess superior technological knowhow and production capacities to electronic gadgets with SHS components. Some popular products of the company are Wifi socket, IP Camera, Wifi Switch, electronic curtain motor, infrared transmitter and SHS control centre. The Wifi SHS electronic gadget of the company possesses special Zigbee technologies.

However, the company lacks adequate marketing skills through which it can trade its product in the Australian market. Moreover, Clipsal and Legrand are native Australian electronic companies trading on electronic products. Clipsal owns a long learning curve for conducting business in Australia, since 1960’s. It is a multinational company that already owns 25 research and development centres around the world and acquires highly trained skilled workforce. It produces audio, energy efficiency, air heating and various other types of electronic products.

Legrand, on the other hand, is well known in the Australian market for manufacturing digital electronic equipments for infrastructure buildings. Thus, considering such tuff competition, Orabo Tech Limited decided to conduct business in Australia through a cooperative foreign trading contract. The company entered into a contract with HY International Pty Ltd, a contract Australian market solutions providing and marketing company. The SHS products of Orabo Tech Limited would be marketed in the Australian market through with HY International Pty Ltd.

Thus, for entering in the market of Australia, Orabo Tech Limited adopted the method indirect export. Under the regime of this process, the exporting activities are not directly undertaken by the manufacturer, but takes place through an exporting agent in the foreign market (Hooper and Vos 2009, 343 – 361). Legal Cost and Requirements The decision undertaken by Orabo Tech Limited, to trade its SHS products in the Australian market is a rational decision. Australia is considered to be a developed nation and the rate of urbanization is above 90% in the country.

Most of the individuals are employed and experiences high per capita income levels. Thus, over time it is estimated that the aggregate demand created by Australian households for Smart electronic products are increasing with time. Moreover, the commercial infrastructural facilities of the country also require electric wifi enabled SHS gadgets. However, if Orabo Tech decides to export its products in Australia, the company needs to bear the cost of acquiring the quality standards certification form Quality & Standard detection and Authentication Centre of Australia, in Melbourne.

Moreover, the company needs to pay certain export taxes to the Australian government, according to the regulations of Australian import law. All such legal regulations would enhance the selling costs of Orabo Tech Limited’s products in the Australian market by almost $250,000. Higher cost would enhance the operational cost of Orabo Tech Limited in Australia compared to that of its indirect competitors as Clipsal and Legrand. In addition to that the contracting merchant of the company, HY International would need payments for its service on behalf of the company in Australia.

HY International would distribute the SHS products across local retailing firms in Australia, as a wholesaler. Due to all such reasons, the cost of operations faced by Orabo Tech Limited would rise in Australia and lower its trading competency within its electronics industry. However, HY International Ltd used its marketing strategies and claimed that if Orabo Tech Limited increased the price of its product by 5%, the gross legal cost faced by the organization, worth $250,000 can be recovered.

Even so, in that case the selling price of the products of Orabo Tech Limited would be higher than that of many of its indirect rivals (Stryker 1998, 1 – 49). Market Research and Target Customer Issue Market research is an indispensable task of business internationalization process. Orabo Tech Limited produces SHS products in China. This system is primarily used by the household customers. It uses network communication, comprehensive wiring, video and audio, security design and automatic controlling technologies to link up all the electronic equipments used in houses.

Figure 1: SHS Technology (Source: Case Study) The above picture shows an SHS controlling gadget that helps households control all electrical appliances through their Smartphone’s or internet, with the help of Wifi. Thirty years back the technology was used by Bill Gates but due to cost and signal compatibility issues, the system became less popular in the market. However, through proper market research Orabo Tech Limited have found that the state of technology has improved and the costs involved in producing SHS products have declined.

Furthermore, individuals of the contemporary era prefer to use Smart electronic gadgets, as they have become comfortable to use internet. All such aspects have enhanced the demand for SHS products among common household customers (Chiang 2001, 26 – 30). Growing requirements for home security alarming systems, video intercom and fingerprint regulating systems have indirectly augmented the demand for SHS products. Through adequate market research in China, Orabo Tech Limited had found that SHS industry is China is growing at a rate of 19.

8% and by 2015 the industry will generate output value worth 124 billion Yuan. Considering such factors the company had undertaken a rational decision to expand its business in the Australian market. It is true that in Australia, the electronics industry is dominated by giant multinational companies like Clipsal and Legrand but SHS enabled gadgets are not the core products of these firms. Clipsal’s primary SHS component, C-Bus Wireless and Legrand SHS products Arteor are not perfect substitute of the SHS products traded by Orabo Tech Limited.

This is because; the SHS products manufactured by Clipsal and Legrand are used on commercial buildings and hotels. Thus, there lie great opportunities for Orabo Tech Limited to grow its business in Australia, because its target customers are different from that of the other potential market rivals. Without selecting an appropriate target customer base, a company cannot frame its product, price, promotional and distributional strategies in business. The target customers of Orabo Tech in Australia are the common households.

Such relevant international trading data could not be procured by the company without a proper marker research (Shunk, Carter, Hovis and Talwar 2007, 248 – 261). Privacy Issues Orabo Tech Limited would need to protect its business from numerous privacy issues in the Australian market. Special location based information’s must be secured by the firm. If the Personal Identifiable Information (PII) about the company’s stakeholders is leaked in the market, then the potential market rivals might counterfeit its marketing or innovation strategies.

The data used by the firm for forecasting purposes might be faulty. If the company maintains its own authentic internet site, it might be threatened by new forms of cyber crimes. The core competency of an electronic firm exists within its technological knowhow. If the company does not protect its unique innovations through patents and trademarks, then it would not be able to protect its core resources and proficiency in business. Orabo Tech Limited’s business in Australia would become successful only if such privacy related issues are rectified.

Reference List Abeles, Tom P. "The Impact of Globalization." On the Horizon 9 (2001): 2 – 4. Chiang, Shiuh-Kao. "Asia: the growth engine for the world electronics industry over the next 20 years." Circuit World 27 (2001): 26 – 30. Hooper, Tony and Marta Vos. "Establishing business integrity in an online environment: An examination of New Zealand web site privacy notices." Online Information Review 33 (2009): 343 – 361. Olson, Eric G. and Deepak Sharma. "Beating the commoditization trend: a framework from the electronics industry.

" Journal of Business Strategy 29 (2008): 22 – 28. Shunk, Dan L., Joseph R. Carter, John Hovis, Aditya Talwar. "Electronics industry drivers of intermediation and disintermediation." International Journal of Physical Distribution & Logistics Management 37 (2007): 248 – 261. Song, Yoo-Seong and Jong-Moon Lee. "Mobile device ownership among international business students: a road to the ubiquitous library." Reference Services Review 40 (2012): 574 – 588. Stryker, Robin. "Globalization and the welfare state.

" International Journal of Sociology and Social Policy 18 (1998): 1 – 49. Volkman, Richard."Dynamic traditions: why globalization does not mean homogenization." Journal of Information, Communication and Ethics in Society 4 (2006): 145 – 154.