Outline

Outline

Amazon enters the Middle East

Your outline should contain details about the information/research already collected and the information you need to collect. Your outline must be in APA 6th edition format. 

Please note, you cannot make decisions regarding the marketing strategy and marketing mix until AFTER you have completed the situation analysis. So, unless you have completed the situation analysis, your outline should not include your recommendations. 

Use the attached document to help you develop your outline. 

3.0 SITUATION ANALYSIS

This section will contain the results of your analysis of the information contained in Appendix 11.1.

4.0 OBJECTIVES

4.1 International Objectives

Why is the company seeking to expand internationally?

· Seeks growth via international business

· Will improve cost position through economies of scale

· Market diversification etc.?

4.2 Market Objectives

The first market objective a company may define for a particular overseas market is which market segment(s) should the firm focus its limited resources on.

This targeting is required because companies usually cannot satisfy the needs

and requirements of each segment equally well. From an examination of these

different needs, it will become apparent which products and services within the

company’s portfolio will be the most attractive to these market segments.

The company can also define its objectives in terms of how its market share after

a given time will compare to its competitors, for example:

· Market leader

· Market follower, etc.

A key consideration is where can the company’s marketing effort yield the

greatest return? In other words, where is Return-On-Investment (ROI) highest?

The company should define its market objectives, in line with the key issues for

international expansion, as identified in section 3.0 Situation Analysis. Often,

objectives will be defined in terms of quantity (volume of units) or value ($) of

goods sold over a given time period.

All of these analyses (quantity/value objectives, profitability objectives) should

have a time frame:

· Short-term (1 – 3 years)

· Long-term (4 – 5 years and longer)

Objectives should be measurable wherever possible.

5.0 RECOMMENDED MARKETING STRATEGY

The recommended marketing strategy is a result of the analysis in Appendix 11.3: Evaluation of Alternative Marketing Strategies.

Target markets and positioning statements should be clearly identified. Often it is useful to clearly define a positioning strategy in a single sentence which summarizes in a general way what the company seeks to achieve and how it will do it. For example:

“We will achieve market leadership by providing quality ergonomic furniture solutions to architects that best meets their needs and requirements.”

An important positioning characteristic of a brand – whether a car, a soft-drink, a bicycle or a computer – is its position on the perceived quality dimension. Is it an economy, value, premium or ultra premium entry? In addition, with regards to a perceived quality category, is the brand the best, or is it merely competitive with other brands in the same class?

“To discerning people who want the best, Mercedes is the car that will give you the benefits of the latest technology combined with safety and power, offering maximum reliability and state-of-the-art quality“.

Entry Strategy

When a company makes the commitment to go international, it must choose an entry strategy. This decision should reflect an analysis of market characteristics (such as potential sales, competition, strategic importance, strengths of local resources, cultural differences, and country restrictions and deregulation. In addition, company capabilities and characteristics, including the degree of near-market knowledge, marketing involvement, and commitment that management is prepared to make must be considered.

Companies most often begin with modest export involvement. A company has four different modes of foreign market entry from which to select: exporting, contractual agreements, strategic alliances, and direct foreign investment. The different modes of entry can be further classified on the basis of the equity or non-equity requirements of each mode. The amount of equity required by the company to use different modes affects the risk, return, and control that it will have in each mode.

11-14

Alternative Market-Entry Strategies

Exhibit 11.2

6.0 MARKETING MIX STRATEGIES AND TACTICS

6.1 Product

Make sure that product strategies support the company’s overall strategy.

· Modify existing product(s) – (what features and benefits will your

· products provide?)

· Develop new product(s)

· Add or drop products from the line

· Determine product positioning

· Develop branding approach

· Register product designs, brand name, trademarks, etc.

· Tailor product packaging and labeling to the market

· Initiate product registration

6.2 Price

A number of issues are important in pricing products for overseas markets:

· How will product price be determined (demand-based or cost-plus, marginal costing or full costing)

· Price level compared to competitors (premium, parity or discount)

· Price variation (geographic margins, discount structure)

· Margins that will be offered to local partners such as agents, distributors, etc.

· Penetration pricing, market skimming etc.

· Terms of sale (CIF, FOB etc.)

· Terms of payment (cash in advance, letter of credit, etc.)

6.3 Distribution

A number of distribution options are likely to be available to your company. You

will need to assess the distribution (and production) options in accordance with

the opportunities available and the resources of the company. These may

include:

· Direct export of branded products

· Indirect export of branded products

· Joint venture with a local partner with a shared market development responsibility, and possibly a shared manufacturing responsibility

· License technology to a company already established in the market (Manufacturing Under License, or MUL)

· Establish market franchises

· Purchase or establish your own means of distribution in the targeted country

You must decide whether you are going to use single or multiple channels.

Identify potential partners for the company (distributors, agents, joint venture partners, etc.) based on the chosen production/distribution option and profile according to Important selection criteria such as:

· Established company with proven track record of business success

· Sales and marketing expertise and extent of geographical distribution/network coverage

· Access to funds to support and sustain market entry for the company’s products

· Personal contact in each of the targeted end-user segments

· High profile/integrity/good reputation, as perceived by end-users

· Complementary products manufactured/distributed

· Technical competence/ability to communicate to end-users

· Geographical extent of market coverage

· Other criteria which end-users may consider to be important

Having decided on one or more local partners, you must decide whether to

negotiate exclusive or non-exclusive distribution arrangements with them.

6.4 Promotion

In order to promote your products and your company you must consider a

number of major issues:

· Overall communication message that is suited to the local culture

· “Pull” or “Push” approach

· Type of promotion (personal selling, point-of-sale promotions, direct mail, etc.)

· Media to be used (radio, television, print, etc.)

· Use of Social Media platforms such as Facebook, Youtube, Twitter, etc.

· Branding (family versus individual)

· Dealer incentives

· Trade shows, conferences, etc., in which you will participate

· Communication Extension vs. Adaptation

· Must the specific advertising message and media strategy be changed from region to region or country to country? What are the arguments for each?

· Global Choices with respect to advertising messages:

· Prepare new copy for foreign markets in host country’s language

· Translate the original copy into target language

· Leave some or all copy elements in home country language

8.0 IMPLEMENTATION AND CONTROL

This section pulls together all the tactics and actions required for the successful implementation of the market entry/expansion program.

Control activities are directed towards programs initiated by the marketing process.

As the market process is based on implementation, it is necessary to state the way in which the marketing activities will be monitored and their outcomes measured. This will indicate whether the marketing objectives are being achieved.

You will need to:

· Establish standards

· Measure performances against standards

· Correct deviations from standards

Typically, control measures will be based on sales volume, sales value, or marketing contribution over a period of time. Measures may also be based on the number of distribution points obtained, quantity of floor stock placed, level of consumer awareness, change in consumer attitudes, amount of brand switching, or other measures that are appropriate and relevant.

You must also establish where decision making control will lie. Considerations of where decisions will be made, by whom, and by which method, constitute a major element of organizational strategy. Management policy must be explicit about which decisions are to be made at corporate headquarters, which at international headquarters, which at regional levels, and which at national or even local levels. Most companies also limit the amount of money to be spent at each level. Decision levels for determination of policy, strategy, and tactical decisions must be established. Tactical decisions normally should be made at the lowest possible level, without country-by-country duplication.

You should also develop contingency programs in case things do not go according to your plan.

8.1 Formal Project Plan for Implementation of Recommendations

Often a planning chart is used with a time span of about one year. This chart is a guide to the implementation of the marketing plan and includes:

-Activity or action

· Key people/groups responsible for each activity

· Estimated commencement and completion dates

· Estimated costs

8.2 Monitoring of Action Plan

A review process should be formulated and presented and incorporated into the project.

8.3 Formal Contingency Plans

Contingency Plans should be included, clearly identifying contingency events and actions required to respond to these events. These plans may be in discussion form or in the same form as the Action Plan.

9.0 APPENDICES

The Appendices allow you to include useful information without disrupting the development of your argument in the body of the report with copious data.

APPENDIX 11.1 SITUATION ANALYSIS

11.1.1 Company Analysis

Briefly detail how the company is structured:

· Publicly or privately owned

· Main shareholders

· Associated organizations

· Key departments and their relationships

· Number of employees

When was the company established?

What is the core business activity of the company? What industry are you in and what are the major industry trends in Local country and overseas? What is your target market segment(s) in Local country? Who are your important customers?

What are the company’s operating revenues for the past three years?

Fully describe the company’s products/services in terms of:

· Breadth of product range (i.e. wide or narrow)

· Product features

· Product benefits

· Product applications

· Approximate contribution to venue of major product lines

Who are the key managers? What are their skills and experiences and how does this relate to the success of the venture?

What R & D activities does the company conduct? What percentage of revenue is spent on R & D?

What is the status of the company’s current technology (ideas, prototypes, etc.)?

What patents/copyright or trademarks does it hold?

What competing companies have technologies that are superior or equal to yours?

Describe the company’s domestic market position:

· Market leader

· Market follower etc.

Who are its main local country competitors? Are the major competitive products manufactured locally or overseas? What is the company’s and its competitor’s respective market share?

Does the company have access capacity for export (if relevant)? How might this be expanded? What are the critical product components and will there be problems in sourcing supplies?

What are the financial resources of the company?

· Does it have the funds available to support an effective market entry/expansion programme overseas?

· Where are the funds coming from and when will they be available?

· How accessible are the funds and would they be available for an export initiative?

· What are the company’s limits on funding overseas initiatives?

11.1.2 Organization’s Assets and Skills

What competitive strategy has brought the company to its present market position? What key competitive advantages underpin this strategy?

What are its ‘Distinctive competences’, ‘unique selling proposition’ or ‘competitive edge’? What are the chief factors that will account for its international success? Are these strengths likely to be sustainable in international markets?

What is it about your products/services that would encourage a potential customer to switch from their existing supplier to your firm?

How are your products differentiated? What strengths/advantages do they have? What is the company’s cost position (is it a low cost producer)?

Do you offer superior service/support to end-users and channel intermediaries?

What is the company’s image/reputation in the marketplace?

· Winner

· Good copier

· Market innovator?

What production or operating advantages does the company have?

What is the state of production facilities?

Are the equipment/manufacturing methods used state-of-the-art?

Does the company have a competitive advantage in terms of its personnel – key executives, managers, sales personnel, etc.?

· Marketing skills (specific human marketing resources, corporate culture oriented toward marketing, ability to attract good marketers).

· Market research capabilities (and databank of information)

· Information technology and telecommunications capability

· Relationships with suppliers

· Relationships with distributors

· Relationships with media

· Relationships with key customers

· etc.

11.1.3 Market Analysis

A successful international market strategy requires identification of an attractive overseas market and establishment of a competitive position within that market.

Accurate market analysis is essential for these tasks.

Before analyzing the market, you should provide some rationale as to why you have chosen a particular country for investigation. Also describe what selection criteria was used.

11.1.3.1 Business Environmental Analysis

What are the main environmental factors influencing market demand for the relevant product category, and therefore the company’s operation in the country.

11.1.3.1.1 Political/Legal/Institutional Factors

List factors relevant to your company’s activities/products within that country.

Include:

· What is the country’s geographical, political and legal proximity to local country?

· What is the level of political stability in the country?

· How will the various elements of environmental climate be likely to impact on the demand for the company’s products?

Are there any expected legislative changes that will impact on your market entry?

11.1.3.1.2 Regulatory Environmental Factors (Present and Anticipated)

Are there are specific relevant regulations related to your product with respect to product testing, safety standards, advertising restrictions, zoning or bylaw restrictions? Are any of the current regulations likely to change?

What tariff and non-tariff barriers exist for imported products?

· Duty rates?

· Quotas

Do these barriers differ for local and non-local manufactured products?

Are there any restrictions on remitting licensing and royalty fees overseas?

What standards and regulations are applicable to these products?

What are the certification requirements?

To what extent do the regulatory standards govern manufacturing, promotion, labeling, packaging, distribution and pricing?

Who are the major regulatory authorities? Provide details of who should be approached for product registration.

Outline the registration/certification process. What are the typical registration delays and costs for this product category?

11.1.3.1.3 Economic Conditions

Provide a brief economic overview with an assessment of the following economic indicators:

· Population size

· GDP

· Current and forecasted economic growth

· Inflation rate

· Unemployment

· Interest rates (base lending rates)

· Disposable incomes

· Other relevant indicators

11.1.3.1.4 Social and Cultural Factors

Provide information on any social and culture factors that will impact on your firm’s activities/products within that country.

Include:

· What is the country’s cultural and language affinity with local country?

· Level of entrepreneurial spirit

· Attitudes (e.g. health, environmental consciousness, etc.)

· Leisure interests

· Any social trends that you may be able to take advantage of?

11.1.3.1.5 Demographic Trends

List all relevant demographic trends in the target overseas market (age distribution, per capita income, level of education, socio-economic groupings, etc.)

11.1.3.1.6 Technological Environment and Trends

List all relevant technological factors that aid or inhibit product or service delivery or relationships with buyers or suppliers. Technological factors may also have implications for the type of promotional media used. For example, does your target market have access to television, internet, mobile phones, etc. Are there any trends in accessibility and how might they affect your company.

· Recent technological developments

· Technology’s impact on product offering

· Impact on cost structure

· Impact on value chain structure

· Rate of technological diffusion

· Government research spending

· Industry focus on technological effort

· New inventions and development

· Rate of technology transfer

· Life cycle and speed of technological obsolescence

· Energy use and costs

· Changes in information technology

· Internet

· Mobile technology

11.1.3.1.7 Natural Environment (Effect of Seasonal or Climatic Factors)

Only include details that impact on your company’s activities in the target country, in terms of supply, storage, distribution, demand, etc.

11.1.3.1.8 Physical Environment (Infrastructure Indicators)

· Number of airports (including freight facilities at airports)

· Number of ports and types of facilities

· Length/quality and facilities of the rail network

· Quality of road network

· Description of telecommunications, media and information technology environment

· Degree/percentage of urbanization

· Level of literacy

· Number of telephones/radios/televisions/cars/computers/daily newspaper circulation

11.1.4 Nature of Demand

Can the market be meaningfully segmented or broken into homogeneous groups of buyers? Identify these major end use segments. Criteria for segmentation may include:

· Age

· Geographic location

· Psychographic characteristics

· etc.

For each of the key market segments (consumer and industrial) you identify, provide information on buyer characteristics such as:

· Key participants

· Degree of concentration/geographic dispersion of target consumers

· Level of overt information seeking

· Degree of brand awareness and loyalty

· Location of product category decision (i.e. home or point of sale)

· Sources of product information and current awareness/knowledge levels

· Duration of the decision process (repeat, infrequent, new purchase)

· Level of buyer interest and involvement in the purchase decision

· Risk of uncertainty of negative purchase outcome

· Time and location of consumption

What is the major method of procurement in each segment?

· Public tender

· Purchase in retail outlets

· etc.

Who specifies, initiates and influences the purchasing decision in each market segment?

Identify and rank in order of importance the key considerations affecting the purchase decision in each segment and provide a brief explanation of each criterion. These may include:

· Product features/benefits

· Uniqueness of design

· Price

· After-sales support

· Ease of use/training required

· Reliability

· Brand/corporate reputation of supplier

· Speed of supply/availability

· Level of customization

· Payment terms

· Preference for locally manufactured goods

· Personal relationships between buyer and seller

· Other

How are customers likely to respond to the company’s product/service offerings?

You may also use the 6W model of The Customer Environment

1. Who are the current and potential customers?

2. What do customers do with our products?

3. Where do customers purchase our products?

4. When do customers purchase our products?

5. Why (and how) do customers select our products?

6. Why do potential customers not purchase our products?

11.1.5 Size and Extent of Demand

What is the size of the market? What are the total sales figures for the relevant product category over the past three years, and projected sales:

· By volume (i.e. units)

· By value (i.e. $)

What are the major factors influencing any changes in product sales? What is driving these sales trends in this market?

Provide a breakdown of the above historical and forecasted sales figures for each of the major end-user segments (best estimates will suffice if statistical data is not available).

Is the proportion of sales to each of these segments changing? If so, what are the likely reasons for these changes?

What is the size of the import market? Provide import statistics for the past three years, and projected imports:

· By volume (i.e. units)
· By value (i.e. $)

Is the import market growing/declining/static as a proportion of the total market? Why?

What is the stage of the product life cycle? What are your reasons for your assessment? Are there apparent changes over time in the types of products demanded? How long has the technology/product been established?

What is the extent and duration of acceptance by end-users?

What is the state of the buyer’s knowledge of the product category?

11.1.7 Cost Structure of the Industry

What are the cost factors in production, marketing and distribution in terms of the cost of?

· Raw materials or components

· Tariffs and other barriers

· Land or factory space

· Labor

· Electrical power

· Insurance

· Meeting local quality standards and regulations

· Packaging

· Transport

· Warehousing

How do these costs compare to those of foreign suppliers, particularly local suppliers? Are local manufacturers/suppliers at a cost advantage or disadvantage?

What are the average margins and price levels through the distribution channels (i.e. from manufacturer, wholesaler, retailers, etc.)?

11.1.3 Competitor Analysis

What percentage of the market is supplied by:

1. Locally manufactured products

2. Imported products?

Is the country a net importer or a net exporter of this product group? Which countries are the major foreign suppliers to the market? What is their market share?

Who are the major competitive manufacturers/suppliers (overseas and locally based) of these products?

Is the competitive environment fragmented or concentrated? What is the number of competitors (5 versus 500)?

Identify and rank in terms of market share the major local and overseas manufacturers/suppliers and provide the following information:

· Ownership

· Other businesses they are active in

· Location of production

· Products manufactured (type, strengths/weaknesses, patented features, etc.)

· Comparative size (turnover figures)

· Market segments they are most active in. Why?

· Business strategies employed (basis of differentiation or low cost strategy)

· Method of distribution/type and identity of local representatives (agents, distributors direct to end-users, etc.)

· Pricing structure (retail, wholesale, distributor margins offered, etc.)

· Financial, production and marketing resources and skills

· Reputation amongst customers

Assess the relative threat that your company represents to these competitors.

What will be their likely retaliatory reaction to your market entry?

Can they neutralize different marketing programs you might develop?

What substitute products are in use and which companies supply them?

11.1.3.1 Competition Analysis

We can categorize four basic types of competition:

· Brand competitors

· Product competitors

· Generic competitors

· Total budget competitors

APPENDIX 11.3: EVALUATION OF ALTERNATIVE MARKETING STRATEGIES

A thorough examination of all marketing strategies that should be considered by the organization is included in this section. Each of these strategies needs to be evaluated in terms of advantages and disadvantages, leading to a recommendation of either accepting or rejecting the strategy. The main focus in the main body of the report will, of course, be on the recommended strategy(ies).

Many companies attempt to extend their domestic (i.e. Local country) strategy to international markets. This may or may not be successful, depending on the similarities of customers at home and abroad, as well as similarities in competitive offerings.

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11-14
Alternative Market-Entry Strategies
Exhibit 11.2

14
As sales revenues grow, the firms often proceed down through the series of steps listed in Exhibit 11.2.
Successful smaller firms are often particularly adept at exploiting networks of personal and commercial relationships to mitigate the financial risks of initial entry.
Also, experience in larger numbers of foreign markets can increase the number of entry strategies used. In fact, a company in several country markets may employ a variety of entry modes because each country market poses a different set of conditions.
.