International Marketing Proposal for Piconizer in the US - Business Plan Example

International Marketing Proposal for Piconizer in U.S.

1.0 Introduction

In a bid to increase revenues and subsequent profits, companies often decide to expand to other countries. Prior to this decision, there is a crucial stage that entails the investigation of the target market. Typically, companies will investigate the state of the targeted country. Usually, this is an imperative as it prepares the company in understanding the competition, political environment and its potential for growth that awaits it. The essence of conducting this analysis is to ensure a company does not encounter unforeseen forces that would threaten its objectives. While the study will not necessarily eliminate the threats or obstacles a business is likely to face in the new country, it helps a business owner mitigate the impact. In this market proposal, the product to be sold is the ‘Piconizer’ and the target market is the United States. Herein is a detailed marketing proposal for the mentioned product in the US.

1.1 Product description

Piconizer is a pocket-friendly device that enables users to securely and easily transfer photos and videos from their iPhone, iPad or their camera within seconds. It is currently produced in Taiwan but can be sold to any part of the world. The device has a Universal Serial Bus (USB) port that makes it easy for users to transfers files onto their computers as well. To have optimal benefits, users download the Piconizer App onto their devices after which one can easily download and arrange their files- photos included. Another important feature of this device is the privacy feature that makes it impossible for other users to view content directly on one’s computer. As the technology evolves, the issue of privacy seems to be ignored by most designers. However, the designers of Piconizer ensured that even upon connecting Piconizer onto a computer a user would still need software.

2.0 Market potential

As stated earlier, companies carry out a market analysis with an aim of grasping its trends. When it comes to the market potential it is a critical stage. Usually, the essence of analyzing a market potential is “to determine its attractiveness, both not and in the future” (Kampamba p.222). This analysis is conducted using various techniques but the primary is to understand how opportunities and threats evolve while correlating the same with an organization’s own strengths and weaknesses. Also, a market potential analysis helps in the effective deployment of resources, forecasts opportunities and estimates one’s market share, and subsequent profitability.

In the case of Piconizer, there are many users with an iPhone, iPad, and Camera in the US. Supporting infrastructure is about the supporting device or need. For instance, in the case Piconizer, its support infrastructure includes the iPhone, Camera, and iPads. In other words, people will not buy Piconizer unless they have either of the mentioned devices. As it becomes apparent that more and more people will keep buying these devices, it is evident that Piconizer’s market potential is lucrative. Also, the market potential for this product remains high because of the demography. There is evidence that more young people have continued to own devices that would require Piconizer (Rich p.33).

2.1 Target Market

Piconizer will first target everyone who uses Apple products such as iPhones, iPads and iPods. As of 2015, there were 44.53 million iPhone users. Piconizer will be targeting this market particularly those people who love taking photos and videos with their Apple devices. Out of this market, there are young people, families and other demography (Rich p.33). The rest of devices Piconizer could utilize are shown in the table below.

Figure 2.1: Apple devices users in USA.

Source (Author). Data derived from Richer (p.39).

In the above graph, the number of apple devices users remains pretty high in the US. Considering the uniqueness of Piconizer, this number presents the product with almost a ready market. Even more interesting, the number of these devices is expected to rise in the near future (Richer, p.39), meaning Piconizer’s target market is stable both presently and in the future

2.2 Market potential for Piconizer in the US

In light of the explanation above, it is imperative to analyze the US using the lens provided above. Concerning the market size, the statistics seem to be in Piconizer’s favor. As of 2014, there were over 52 million American resides that owned a camera. Similarly, the number iPhone users between 2012 and 2013 hit the 44.53 million mark and the 2015 forecast was 75 million. Better still, the number of iPad users in the US is expanding; there are currently 78 million users with 2018 forecasting set at 81 million (Rich p.33).

Therefore, Piconizer’s market size is favorable in the US, and this could mean well for the company’s ambitions. By the same token, its utility remains high since most people in America use these devices. Millions of Americans spend time in various world tourist destinations during vacation during which cameras are used to take photos (Rich p.35). This means that the value of Piconizer in the US is pretty high. Concerning its supporting infrastructure, the cameras, iPhones and iPads are the ones that will determine the consumers’ trends. As noted, statistics show more Americans will continue at least more iPhones and iPads hence guaranteeing Piconizer an exponential future growth. Piconizer will be targeting this market particularly those people who love taking photos and videos with their Apple devices

Through demographic segmentation, the company will be dividing the market into different segments using different demographic variables such as age, gender, income, education, race and ethnicity. Using the age variable, Piconizer will have a ‘Generation Y’ segment which is made up of the highest number of iPhone users. When formulating its marketing strategy, it should target this market segment. Another lucrative market segment would be the women who are always taking photographs and videos. By appealing to and targeting these two segments, Piconizer will be able to market its products in the United States market. However, it must position itself in the market to be in a position to beat other competitors providing photography devices such as DxO One and Snapjet.

DxO one is a compressed high quality digital camera that is connected to an iPhone. It allows people to take marvelous pictures and videos at any place. DxO One has complex mechanical features that complements every picture taken. Snapjet is a wireless photo and video printer that converts the iPhone into a Polaroid movie printer. They all provide products that appeal to the same market and at very competitive prices.

Figure 2.2. A graph showing the forecast of US GDP

Source (Rich p.35).

In this graph whose data is derived from Rich (p.35) and its original source being the World Bank, the US GDP will not drop lower than 1.96%. in fact, in the next three years the country’s GDP will be stable, and this will be an important fact for Piconizer’s success.

3.0 Piconizer sales forecasts for five years

In light of the statistics provided in the preceding section, it is not hard to conduct a sale forecast for the product. In crafting a forecast, one ought to analyze a number of factors one of which is the market trends. This step calls for analyzing how consumers and competitors are faring. When it is evident that the competitors are profitable, the forecast is likely to be positive. Also, getting to know how future trends are predicted to be will paramount in reaching a sales forecast. With this information, below is a sales forecast for the Piconizer product for the next five years.

Fig. 3.1: Projected sales for five years

Source (author)

The above forecast has been informed by a number of factors including analyzing the sales trends in the US in the recent years. In the last quarter of 2015, Apple Inc. sold iPhones worth $48 million, and 2 million units of iPads were sold the same year. Other competitors also sold similar products whose sum was over $100 million (Rich p.45). Also, the forecast shows Piconizer will do well in the US because statistics show that there is still a significant number of American residents without these devices. In fact, the demand for the same is expected to rise exponentially in the coming years.

Also, the forecast above was reached after critical analysis of Piconizer’s past sales. Incredibly, seven days after its launching Piconizer had received over 8,000 pre-orders totaling to US$65,000 in Taiwan (“Taiwan Today”, 2015). Using these figures and other statistics, the projections can only go exponentially. In year 2016, the company might not witness high sales because it will be an introduction. However, as the company engages in marketing and publicity initiatives, its sales will increase in 2017. In the third year, Piconizer will have stamped its authority in the market, meaning sales will inevitably increase. Incredibly, by the fifth year, Piconizer achieve household status whereby it will be easy to identify with, and its demand will hit a new peak.

4.0 Product sourcing

Another component of marketing whose importance cannot be overlooked is product sourcing. There are many approaches used in this regard with some preferring transactional, relational or investment approaches. Each of these three has various models such Basic provider and approved provider models that fall in the transactional category. Preferred provider, performance-based, and vested business models fall in the relational category. The investment category has shared services and equity partnerships models. For Piconizer, the sourcing strategy will relational, specifically preferred provider model. This approach solidifies relations and promotes long-term engagements as business is conducted efficiently. Parties using this model relate more than just through the sale of one product for a short time. Instead, the connection opens other opportunities for more business engagement (Sharma and Loh p.149). For this product, Maktar will be the sole supplier.

5.0 Competition

Grasping the state of competition in a market is paramount as it prepares a company to devise strategies to remain competitive. In the case of Piconizer, there are other players in the market that cannot be ignored. However, the current competition in the US is somewhat weak. It is a fact replicated elsewhere in the world. With regard to the US, there are only two other competitors. While there is no way to rule out more competitors in the future, the current number is, again, favorable to Piconizer.

6.0 Barriers to entry

Often, stringent entry barriers might hinder a company from expanding to regions in spite of such markets being lucrative. Some of the barriers include high Research and Development (R&D) costs, economies of scale, high set-up costs including sunk costs, limit pricing, switching costs, and predatory pricing (Herrendorf and Teixeira p.573). Concerning Piconizer’s ambitions to enter the US market, it has to encounter two of these barriers. These include high-set up costs especially the sunk costs, and the economies of scale. Sunk costs are the expenses a business encounters, and ones that will not be recovered if a company closes down its business, and includes marketing and advertising.

Apparently, the US media is one of the most expensive to advertise given the state of the country, politically and economically. In addition, government policies can limit Piconizer’s entry into the United States through licensing requirements. The company operates in a highly regulated industry and it will be hard to fine tune its business according to the regulations. Piconizer will also face challenges in accessing the channels of distribution. There are some well-established companies that control the logical channels of distribution. It will have to provide incentives in form price cuts, promotions and advertising to persuade the distribution channels (Kraidy and Goeddertz p.147).

7.0 Political environment

Judging the US from the outward appearance, one might be tempted to conclude its political environment is friendly to any business. While this is factual with respect to the present political atmosphere, it does not guarantee the absence of political risks. According to Jha (p.201), political risks are those political events, conditions, and decisions that significantly affect an investor’s profitability. In the case of decisions, governments can enact laws that make it hard for foreigners to do business. Also, the government might involve itself in expropriation whereby privately-owned companies are seized by governments and converted for public use. Hence, it is possible to have a politically calm environment whose political risks are high.

In the case of the US, it is accurate to concede that its current political environment is suitable for any legal business. Moreover, the country is not synonymous with political turmoil that characterizes other countries. Thus, Piconizer can proceed to enter the US market. However, it is important to understand there is no telling if there are future decisions that could impact a business negatively. Despite this possibility, there is a strong likelihood that the US will not enact laws that will affect business owners. This prediction is informed by history as the evidence suggests that the country does not legislate to suppress the business community.

8.0 Favorable attributes of the US

First, while setting in the US, Picnozer will not be subjected to any rigorous or tedious process. Foreigners intending to do business in the US undergo almost a similar process as residents (Department of State par. 5). Secondly, the country has a significant population that increases Piconizer’s chances of success as it can sell in volumes. Thirdly, many companies in the US are open for partnerships, especially for distribution purposes. That means Piconizer can easily partner with many companies to ensure its products reach a wide market without spending much of its resources. Another important attribute is a large number of Americans in the middle-class section as this means they can afford the product. According to a 2015 study, over 120 million Americans were in the middle-class (Fry par. 4).

9.0 Problems anticipated

One problem likely to occur once the proposal is implemented is saturation. With the US being a country that tends to set trends, the success of this product can attract new entrants that can threaten its long-term success. Additionally, the fluctuations of sales as per the sales of the accompanying devices will have a similar effect on the product. As mentioned, Piconizer is meant primarily for iPhone and iPad users, meaning the sales performance of these devices will determine how Piconizer performs in the market. Also, patent issues might arise if Piconizer does not proceed to patent its products and logos. Because of the competitiveness of innovation in the US, patents help in avoiding unnecessary legal tussles. Therefore, before Piconizer is sold in the US it is vital to be aware of these problems and strategize their mitigating steps.

Piconizer has amazing products but it will an effective strategy to market the products in the United States. Piconizer will require effective promotion to enter into the market and attract potential customers. It can start by using its social media platforms to inform consumers about its products. It can carry out a marketing campaign online, through print media and television where it will introduce its product to the consumers. To attract the attention of the market, it can devise competition where lucky winners can have the products. Because Piconizer works with Apple products, it can attend its exhibitions and ask to present its product to the consumers and demonstrate how it works with their devices.

Conclusion

In conclusion, Piconizer’s entry into the US market will have a positive impact on the company’s sales. First, the product is evidently unique, and the competition is somewhat low. Secondly, Piconizer is entering a market whose demography favors the product. As the statistics indicated here, there are more people using smartphones, tablets, laptops, and cameras. As indicated, the sales projections for Piconizer in the first five years will propel the company’s market share and dominance. Besides the market, Piconizer is entering a country known for its stable political environment. Notwithstanding these positive benefits and environment, the anticipated problems will include high overhead costs especially in advertising. Also, needs to patent its products to mitigate any infringement.