International Marketing Plan
...re about 600,000 people using network at the end of 1997, about 4 million people using network at the end of 1999 and more than 1,0000 website and 29,000 CN as post-fixed domain registered, within which it is more than 77% web site dedicated for businesses. 3. Consumers In 1980s, Chinese consumers are lack of the costume understanding and follow fashion without further consideration on their personality; but now, they have learned how to pay attention to their personality. In the last 20 years of 20 centuries, the economy system evolution is getting rid of the shopping barriers due to lack of goods, hence they can enjoy their shopping. At the same time, they are becoming more mature and exigent. When they are deciding to make a purchase of clothing, they consider not only what the brand stands for, where it is made, but also how it is wrapped and whether it is worthy or not. 4. Pricing practices including government controls: The commodities such as textile, costume, etc are the traditional exports, which account for 20% of the total expert. After China entering the WTO, textile is one of benefic industries in China. Exports might be increase due to export quota cancellation and decreased discrimination for Chinese products. Hence, there might increase the China local pricing for textile and cause a price increasing on local costume. At the same time, due to the tax decrease, the top clothing from America and Europe are importing more and the prices are decreased as well. So it will be really good news for those who chase for branding clothing. 5. Future prospects In Dec.11 2001, China has become a member of World Trade Organization. When the Chinese marketing is open to foreign costume retailers deeper and deeper, Chinese costume retailing marketing is becoming more and more competitive. It is believable that there might be some retailers to be eliminated through contest, meantime, there might incur merge among the corporations. At the same time, WTO offers a lot of opportunities for Chinese retailers to leverage the management system up to international standard. But it still requires a long period of time to realize the standardizations and internationalization even if China and people who in business spend a lot of efforts. Besides, the latest marketing mode such as licensing business, Internet marketing, brings a lot of opportunities as well. Target market behavior For multinational corporations seeking entry and expansion in China, it is important to recognize that China actually is a conglomeration of fragmented markets China can be divided into eight distinctive regional markets and divided by factors such as level of economic development, industrial priorities and local cultures. This regional market can be grouped into three levels of market development and consumer readiness: growth markets, emerging markets and untapped markets (Table as below). China’s consumers can be grouped into four segments (table as below) In China, all the people need the clothing, but the different marketing mix (product, price, distribution, promotion) of the clothing will have the different target market. For example, the high price of the clothing usually needs the customer who has the high revenue, and these clothing usually sell in the "Growth markets" like Beijing, Shanghai and Guangdong. Goondiwindi Cotton’s clothing are made from 100% Australian grown cotton, many customers who lifestyle that is relaxed, stylish, modern and desirable like this type of clothing, and this type people have the high income level-they have the ability to purchase it. So it is a better choice that Goondiwindi Cotton’s focus its potential target market on the rich people and yuppies, because many of them are the successful people, and live in the big city, have the high-income level. Thus Goondiwindi Cotton’s should build the agency in “Growth markets” such as Beijing, Shanghai, Guangdong. (3) Industry Analysis Advantages: China is not only the biggest export country in textile and clothes, but also the biggest textile industry investment marketing in the world. Chinese abundant human resources and market attract many foreign investors. This year, the costume market makes the good situation in both production and selling, the sales volume is growing steadily, and the market seems activity. Disadvantages: The most serious problem Chinese textile faces is the competitive of brand and lack of innovation. Theses years, Chinese costume market appears the tendency that supply is more than demand. Consumers increase the ability of dickering, and the price of domestic costume price is decreasing for 3 years. The development in high level of costuming in China has large gap with developed countries. The investment in researching the costume industry takes the total revenue less than 0.5%, most industries always depend on the advantages of low cost labor force, and compete with low price strategy. Compared with developed countries, there is no international brand in Chinese costume industry. Opportunity: The Chinese costume market is active by depreciate and sales promotion, the increased consciousness of the brand, fashion trend, flexible management and so on. In addition, costume consumption say high word of personality, the tendency of costume should be more easy, diversification, personality, and fashionable; the consumption in countryside is from traditional and utility to fashionable, and this situation provides wide space to produce and sale in costume industry. Entering WTO, as the decrease of the export quota until cancel, it will bring large business opportunities in Chinese costume industry. Risks: In the following 5 to 10 years, the competition and risks in spinning costume industry are cost, quality and innovative ability. Only if improve the quality and innovative ability, can realize the advantages of Chinese labor force. In addition, the competition in lowing the price of internal costume industry, will also limit the development of costume industry. Tendency forecasting: So far until 2010, the increasing speed of costume industry will about keep 10% every year. As forecasted that, the amount export of spinning costume this year will much larger than last year, and it maybe reach 60 billion USD. In the following years, the costume market in China is still purchasing market, the style will be more, and the export will increase as well. (4) Competitor analysis Domestic brand In 2002, the sales of business suit for man are more than 5.63 million, which increases 13.5% than that in 2001. Over the last several years, Chinese male costume has gotten a rapid development. A lot of China local, famous brands such as Youngor, Romon, Shanshan, etc, dominate most of the costume market in china with their solid capital, technology, marketing network, adviser, etc. Their competition is even more drastic, and the transition of contest is moving from product to brand. International brand The brands such as GIRDANO, BALENO and U2, which come from Hong Kong and Esprit, Ports, which come from US, are active in the market these years. Esprit, in this year, has raised another new fashion styles. In this quarter, Esprit male sportswear brings enchantment to teeny-popper with its complex cloth and frock style. For Ports in this year, the cortex overcoat, that is comfortable and warm, has become the man’s favor in winter. The style created as gentle and treasure but simple has consciousness upfront and does not curry with fashionables. It is well accepted by “rich but concise” style, which made by the top cloth and fancy techniques. Marketing mode The most effective marketing mode is the marketing brand on affiliated monopolistic among a lot of sales shop. For example, Jeans west and U2 has a really good performance on the sportswear sales. The Marketing major focus youths aged from 16 to 25. The major products are jeans and knitting etc. With monopolistic store, it does not only widen their brand influence but also increase their sales. Currently, this style is the major method for costume brand marketing. Market analysis (price- visualize chart) The chart as below is the price – visualize chart about the many men-clothing brand in China market. From the chart we can find there is unbalance in the market. International brand always the high-lever brand, these brands are more stabilization, mature, but the market share is less than others; many of the domestic brands always the lower-lever brand in the market and the space of the market share in this area is nearly saturation. Clearly, the space of the middle-high-lever brand in the area is much more, and the men-clothing brand in this area is much less. Much more customer like the middle-high-lever brand recently, so this is the good space to develop. (5) Company Analysis Marketing skills Goondiwindi’s in southwest Queensland on the Macintyre River, and marks the border with New South Wales. This commercial hub is home to 5,000 people and is a service town to just as many who are involved in agriculture in surrounding areas. The Goondiwindi Cotton Company is a venture, value-adding to a successful family owned cotton growing business, and nearly every stage of it’s manufacturing operation happens in Goondiwindi. Market research capabilities Much of the research requited for developing its export program will come from external assistance. Technical capabilities and resources The garments are made from 100% Australian grown cotton. They are recognized for their quality, durability and, in particular, their comfort. In using a 100% Australian-grown cotton, Goondiwindi Cotton produces a superior product, which enables the garments to hold their shape. Quality control checks are regular throughout manufacturing, ensuring compliance with Australian and International standards. “We have to generate something from the raw product we grow and if we’re growing the best product in the world it gives the best foundation for a good start. All we have to do is to change peoples thinking that we can do a job, “ Sam Coulton of the Goondiwindi Cotton Company said. Relationships with suppliers Today, Goondiwindi Cotton supplies 200 selected stockists throughout Australia, and increasingly in many other countries around the world. Relationships with distributors Women swear agents are in the New South Wales, Victoria, Tasmania and Queensland. Men swear agents are in the Queensland, New South Wales, Victoria, South Australia, Tasmania and New Zealand. Relationships with key customers “People see garments all around and in other towns and they’ll say ‘Goondiwindi’ you’re from Goondiwindi or you’ve been to Goondiwindi– it really helps advertise the town,” Joe Hannah of Cooreys said. Market share When it first started the business produced just t-shirts and polo shirts. Now they make over 50 different products…. All up about 300,000 garments a year – Sam hopes to bring that up to around 500,000 to 600,000 in a few years. Human resources “I do all the training for the students to gain employment and I do all the pattern making, designing and grading for Goondiwindi cotton and organise their production schedule”. Sam Coulton of the Goondiwindi Cotton Company said. About 25 TAFE students have gone on to work at Goondiwindi Cotton. Relationships with trade unions Goodniwindi Cotton uses about 100 bales or 22 tones of cotton a year and that’s almost a container full. Around 95% of Australia’s raw cotton is exported. (6) Implications of situation analysis The situation analysis is very important for the organization’s corporate and marketing objectives and international marketing strategies. From the situation in China, we can find many differences from Austria. If the Goondiwindi Cotton wants to develop China market, it should modify an existing product to satisfy the needs in China. 3. SWOT Analysis (1) Strengths analysis These years many people in China like cotton and the garments in Goondiwindi Cotton are made from 100% Australian grown cotton. The garments in Goondiwindi Cotton are recognized for their quality, durability and, in particular, their comfort. Quality control checks in Goondiwindi Cotton are regular throughout manufacturing, ensuring compliance with Australian and International standards. The brand of Goondiwindi Cotton is the international brand; it is more popular than domestic brand in China. The price of the garments in Goondiwindi Cotton is lower than other international brand. (2) Weaknesses analysis The reputation of the Goondiwindi Cotton is not well known in the China market. The price of the domestic brand is lower then the Goondiwindi Cotton. The other international brands are famous and have the larger market shares. The cost of the clothing is higher then domestic. (3) Opportunity analysis As part of the campaign to joint the World Trade Organization (WTO), China has reduced tariffs and the number of products requiring import licenses, revised customs laws, and strengthened intellectual property protection. As long as the development of the China, the revenue of the customer is higher. More and more customer needs high-lever products. The customer in China prefers international brand then domestic brand. The customer in China like higher quality. (4) Threats analysis In Dec.11 2001; China has become a member of World Trade Organization. When the Chinese marketing is open to foreign garniture retailing deeper and deeper, Chinese garniture retailing marketing are becoming more and more competitive. Recent years, sportswear become the leader, the uniform becomes easy also can be seen obviously. In the past, many foreign investors believes that they encounter difficulties when seek for the certain products such as raw material, combinations, finish goods, etc. When they are deciding to make a deal for clothing, they consider only what the brand stands for, where it is made, but also how it is wrapped and whether it is worthy or not. (5) Implications of SWOT Analysis According to the SWOT Analysis, Goondiwindi Cotton should hold the opportunities, keeping strengths in China. To the weaknesses and threats, Goodiwindi Cotton should modify existing products to satisfy the needs of the China market. For example, product sportswear; ensure the middle-high price; advertising in China and so on. 4. Objectives (1) Mission Statement Goondiwindi Cotton will provide high quality ceramic products, at competitive prices, to both domestic and international customers’ satisfaction, while providing our staff with a safe and healthy working environment by flowing all relevant regulatory requirements. (2) Corporate Objectives The major objectives to be achieved by Goodiwindi Cotton in the next five years include: Successful development of export markets, from 2004 to 2008, the main task is developing Chinese market. Sale $9,200,000 during 2004 and 2005. Sale $3,700,000 RMB in 2004. Complete the designing of the clothing by the beginning of the 2004 Compete the employee’s training by the beginning of the 2004 Compete the store setting and start the autumn-winter clothing in Sep. 2004. (3) Marketing Objectives Achieve brand awareness in target markets of 5% at end of year1. 10% at end of year2, 12% at end of year3, and 15% at end of year4 and year5. Achieve market share of relevant product markets of 1% at end of year1, 1.5% at end of year2, 1.8% at end of year3, 2.0% at end of year4 and year5. 5. Marketing Strategies (1) Target Market Selection From the situation and SWOT analysis, we can find there are some target markets is fit to the product of the Goodiwindi Cotton. These target market usually in the “growth area” such as Beijing, Shanghai, Guangdong and so on. The customer in Beijing It is the geo-political center of the nation, Beijing leads the region in attracting foreign investment and growth in large state enterprises and strategic industries such as information technology. Representing the traditional Chinese culture, consumers are relatively conservative; emphasize intrinsic satisfaction yet open to new product ideas. The customer in Shanghai It is the industrial powerhouse and financial center of the country. Shanghai leads the region in both industrial and agricultural output. Shanghai ness is the main dialect. People have tremendous pride in local products and amenities. Consumers are cosmopolitan and innovative, setting trends in fashion and lifestyles. The customer in Guangdong Outward-oriented, fast growing and freewheeling, the regional economy is transforming from labor-intensive operations to high tech manicuring. Cantonese and funkiness are the main dialects. Close to Hong Kong and Taiwan, its wealthy consumers emphasize materialism and conspicuous consumption. (2) Market entry mode To Goondiwindi Cotton, the decision to select a particular entry strategy reflects what it wants to achieve, how it wants to achieve it, and above all, what role it expects to play within Chinese market. Thus for Goondiwindi Cotton, it is important to know the level of involvement associated with each entry strategy, and its advantages and disadvantages. This knowledge will be helpful in selecting an appropriate entry strategy for its products and achieve a competitive edge in Chinese marketplace. Foreign direct investment (FDI) To a firm, if the home country’s market has some limitation to its development, and the target market has a large size and potential, incentive policy and low labor cost, the firm would adopt a direct mode to enter the target market to gain more profit. Increasingly, firms are using foreign investment to establish marketing presence in host countries. FDI is one method of investment. FDI means a firm invests the money or the equipment to foreign firm directly. Mostly the firm’s technology, management structure and goods will transfer into the new firm follows the investment. Usually, FDI has two patterns that common to see, one is joint venture, the other is wholly owned subsidiary. Joint venture: Joint venture is means of a firm with a local partner or several local partners in foreign market to invest and set up a new company. Joint venture reduces the capital and other resource commitment that is required than ownership. To joint venture, the firm owns a part of ownership of the new company, operates and manages the new company with its partners together, share the profit with its partners, has a lower risk than wholly-owned subsidiary, and in the sells channel, joint venture can use the channel, which the partners already have to sell its products. Wholly owned subsidiary: wholly owned subsidiary is a firm purchases another firm or set up a new firm in foreign market. It need invest more capital and other resource commitment that is required. In addition, require the firm has high powerful& technology. To ownership, the firm owns the ownership completely, manages & controls the new company itself, takes all the profit itself, has a high risk, especially in political risk, and in the sells channel, ownership need set up a new channel to sell its products. Exporting Historically, exporting has been the most popular entry mode for establishing marketing presence within a host country. Firm can select from major exporting option: direct and indirect. When a company engages in direct exporting, it performs all the necessary activities to sell its products within a host country. These activities including determining market potential, finding a buyer, locating channel members, and dealing with the administrative functions of exporting such as preparing documents, arranging transportation, and insuring the merchandise. When affirm engages in indirect exporting, it delegates these tasks to an intermediary, such as an export management corporation that is willing to work for a fee or commission or both. Advantages 1. It is usually the preferred mode of entry for a firm new to global marketing because it minimizes political risk. 2. It is an effective entry strategy when market potential in a host country can’t be accurately determined. 3. Either it allows a concern to sell its products in host countries through independent intermediaries or though its own distribution channel when it wants to exercise greater control over marketing activities. 4. It prepares a company to increase business involvement by manufacturing in a country if market conditions become attractive. 5. It lets a firm terminate its business relationship without incurring significant costs when political or economic conditions within the host country deteriorate. Disadvantages 1. Fluctuating exchange can adversely affect the earning of an exporter. 2. Governmental interventions can hurt the exporting company. 3. To exporters, it is difficult to respond quickly to market changes and maintain control over marketing activities unless they have a physical presence in the country. Licensing Licensing involves payment of a fee or royalty by a licensee in exchange for the use of a patent, trademark, product formula, company name, or anything of value. The core of a licensing agreement is the transfer of intangible property rights from a licensor to a licensee. The majority licensing takes place among developed economies. Advantages 1. Licensing is a cost-effective way for a firm to expand and establish marketing presence in host countries when exporting is no longer feasible because additional tariffs result in loss of price competitiveness. 2. Licensing also gives a firm the opportunity to enter countries where it can’t engage in production because of resource and organizational constraints or because of economic or political risk. 3. From a country’s perspective, licensing agreement is beneficial because they can increase the inflow of sophisticated technology and managerial expertise. Disadvantages 1. Licensing agreement can restrict the ability of a firm to tale full advantage of market potential within a host country. 2. Licensing can make a firm lose control over the use of its technology and the quality of its products. 3. Licensing can result in conflict if the licensee is responsible not only for the manufacturing of the product but also for its marketing. 4. if there is something hurt its image in the licensing, the licensor can’t regain the right to its own brand because of the licensing agreement. Franchising As a mode of entry, franchising is similar to licensing. In a franchise agreement, the franchisor grants the franchisee permission to use a patent, trademark, product formula, company name, or anything of value. In addition, the franchisor provides operational and managerial help such as raw material, equipment, training and financing to the franchisee. In return, the franchisor receives an initial franchising fee and regular payment of a percentage of sales. Advantages and disadvantages The advantage and disadvantage of franchising are similar to those of licensing. Contract manufacturing Under a contract manufacturing arrangement, two major options are available: a firm can either supply a manufacturer with parts and have the manufacturer assemble them, or it can have the manufacturer fabricate the whole product according to specifications. The business, however, retains marketing responsibilities. Advantages By engaging in contract manufacturing, a firm capitalizes on its expertise in marketing products, while delegating manufacturing tasks and responsibilities to a contractual partner. Contract manufacturing is an economical way to expand business activities. Disadvantages 1. Contract manufacturing will make the contractual partner a potential competitor. 2. Contract manufacturing result in loss of control over the manufacturing of the product. 3. Contract manufacturing can create scheduling problems whereby the company may not be able to get the products on time. Management contracting In management contracting, a firm provides management expertise and technical know- how to another concern to a government. Although the management team basically acts as consultants, it may also get involved in operational activities. Advantages 1. A firm can use excess managerial talent, which for political or economic reasons it doesn’t wish to dismiss. 2. It can establish contracts with business and government officials in host countries and explore opportunities for future business involvement. 3. It can easily remit fees for managerial services. 4. It can use its involvement with a plant or company to provide resources to one of its nearby operations Disadvantage An important disadvantage of management contracting is its limit...