International Strategic Marketing: European Perspective - Case Study Example

Case Study Contents Contents 2 Answer 3 Answer 2 4 Answer 3 5 Answer 4 6 Answer 5 6 Reference 8 8 Answer Promotional strategy can be defined as a way or process in which the company communicates with the target market (Harper, 2003, p.108). In the survey conducted on the franchisees it was found that the franchisees were expecting more help from the McFadden. In order to encourage the franchisees to be more active in the local marketing McFadden can provide more support in form of marketing strategies to the franchisees. McFadden can provide some ways in which the franchisees can promote the just cuts outlets. Some of the strategies which McFadden can suggest are mentioned below:- Franchisees can be advised to promote their outlets with the help of word of mouth of publicity. Franchisees can be advised to take part in their community services by sponsoring the events. They could promote their outlets by maintaining healthy relation with their existing clients. Franchisees can be advised to call personally to the clients on the events of their birthday, anniversary etc. Franchisees can be advised to keep and update the data regarding the clients. Franchisees can be advised to hold any contest which. They can use the technique of advertising their outlets by distributing the pamphlets, broachers etc. Apart from advising the franchisees about how to promote the outlets in their respective areas and the local market, McFadden can take other steps to encourage the franchisees to promote their outlets like he can provide additional funds for promotions and also can provide some incentives and rewards for those franchisees who perform better in promoting the outlets in the local market. Answer 2 McFadden should analyse the franchisability properly before making any decision. Determining franchisability means to asses that whether the business is worth franchisable that means the entrepreneur must determine that whether the business is profitable or not, whether the business model can be easily copied by the competitor, does the business model can be easily adopted by the competitors, is the business model has any unique feather which is different from the others etc (Shakespeare, 1995, p.90). As the competitors are able to copy the business model of McFadden therefore it is clear that the franchisability was not properly analysed as a result the competitor can imitate it. To control the situation, first of all Just Cuts should restructure the business model in such a way which will be difficult to copy. In response to the imitators, Just Cuts can bring innovation in its services in terms of enhanced quality and customer satisfaction. Some of these things have already been done by the management of Just Cuts. Apart from this, Just cuts should change their policies regarding the services it offers so that the competitors cannot always imitate the policies. Just Cuts can also go for branding its products so that the customers can distinguish the services from those of the imitators. Good branding will also reduce the anxiety of the franchisees regarding the low cost service providers because branded services always finds its place in the market. Answer 3 Deciding on the franchising fee is an important aspect of franchising. Some franchisees require less funds compared to one who are new in the market. There are a number of methods in which the franchiser can chare fee from the franchisees like fixed percentage on sales, decreasing percentage on sales, increasing percentage on sales etc (Seid, 2011). Just Cuts is presently following the policy of fixed fee as the franchising fees. This is one of the most popular methods practised by many companies. There are several advantages of this method for both the franchisor and the franchisee. From the point of view of the franchisor, this method enables the franchisor to assess the revenue it will earn from the franchisees. Moreover, this method is hassle free as the franchisor does not have to make calculations every time for deciding the fees of the franchisees. This method helps the franchisor to avoid any type of adjustments it has to make in the time of increasing costs of services as the prices of the services will change and so will the franchisees fees. Another advantage is that this will motivate the franchisees to serve more than the benchmark required for fees. This method has also got merits from the point of view of the franchisees. First of all this method is simple to understand and easy to implement. As the fees is directly related to the fixed number of haircuts the franchisee can concentrate more on the operation of the business rather than worrying for the fees because by serving the customer the franchisees will able to acquire the funds required for fees. More over the incremental revenue over and above the fixed expenses will be retained by the franchisees. This method will also help the franchisees to set up a monthly target for their services. But, this method is also not free of flaws. The biggest disadvantage for the franchisor is that the franchisor will only get the revenue of a limited number of haircuts when the franchisee is earning more revenue by using the franchisors intellectual property. More over the franchisor will be satisfied with the limited number fixed revenue and will not able to identify those franchisees that are not performing well as this can in turn affect the franchisors’ goodwill. From the franchisees’ side this method also has got flaws. First of all achieving the fixed revenue may be comfortable for an experienced franchisee but this may not be easy for a new franchisee that is going to operate in an area which is already dominated by any other hair cutting outlet. Answer 4 Traditionally the Just Cuts were located in large malls and shopping centres but now McFadden has started the saloon in the towns and smaller areas naming it Just Lite. The main reason for practising this type of strategy is that McFadden is planning to penetrate in the smaller markets and is targeting the people of town and smaller areas. To package the services especially for the towns and high street people McFadden has branded them by giving them a special name in this way Just Cuts can compete with its competitors by expanding its services in different markets. Answer 5 International expansion is a strategic decision which is mainly done in order to take advantage of the over sea markets. Ansoff’s model is generally used to assess the strategy to be used for global expansion like penetration strategies, diversification strategies, strategies related to product development and market development (Stone and McCall, 2004, p.34). Just Cuts franchise has some unique features which make them suitable for over sea expansion. First of all the franchise fee system of Just Cuts which is based on the fixed number of haircuts enables the franchisor to avoid the exchange rate fluctuations as the fee is fixed on the basis of the revenue earned. Secondly, Just Cuts franchise operates as the managers and owners of the outlets who are responsible for hiring and recruiting the staff of the saloons and promoting the outlets in the local areas. As the local people are more aware of the local needs hence Just Cuts does not have to spend on researching the local needs. The franchisees can manage the outlets in the foreign lands in a better way therefore the strategy of Just Cuts of allowing the franchisees to manage the outlets by themselves make the Just Cuts franchise suitable for diverse international expansion. More over the services of the Just Cuts are branded as well as available at affordable price which makes it suitable for making a diverse expansion. Reference Harper, S. C. (2003). The McGraw-Hill guide to starting your own business: a step-by-step blueprint for the first-time entrepreneur 2nd ed. USA: McGraw-Hill Professional. Shakespeare, T. L. edited by Graves, E. G. (1995). Black Enterprise. USA: Earl G. Graves, Ltd. Seid, M. H. Determining Fees and Other Pricing Issues. [Online]. Available at: http://www.franchise-chat.com/resources/fees_and_pricing_2.htm. [Accessed on: 13 August, 2011]. Stone, M. And McCall, J. B. International strategic marketing: a[n] European perspective. USA: Routledge. Read More