For multiple reasons, companies adopt modes to enter reign markets and find new channels of distribution. Choosing the right and appropriate market entry strategy has a growing importance. As a matter of fact, companies should align their strategy to their objectives and adapt them to the foreign markets environment. There are numerous different entry strategies which are all linked to different entry modes, different amounts of risks or costs.From the least costly mode to the most expensive one we distinguish Three main strategies: Export It is characterized by the transportation of finished goods from one country to another.
The distribution on site is done by an intermediary or by foreign based distributors or agents. Exporting is the most traditional and well established form of operating in foreign markets. Exporting can be defined as the marketing of goods produced in one country into another. Whilst no direct manufacturing is required in an overseas country, significant investments in marketing are required.The tendency may be not to obtain as much detailed marketing information as compared to manufacturing in marketing country; however, this does not negate the need for a detailed marketing strategy. The advantages of exporting are: manufacturing is home based thus, it is less risky than overseas based * gives an opportunity to "learn" overseas markets before investing in bricks and mortar * reduces the potential risks of operating overseas.
The disadvantage is mainly that one can be at the "mercy" of overseas agents and so the lack of control has to be weighed against the advantages.A distinction has to be drawn between passive and aggressive exporting. A passive exporter awaits orders or comes across them by chance; an aggressive exporter develops marketing strategies which provide a broad and clear picture of what the firm intends to do in the foreign market. Parlor and Bogart (1975) found significant differences with regard to the severity of exporting problems in motivating pressures between seekers and non-seekers of export opportunities.
They distinguished between firms whose marketing efforts were characterized by no activity, minor activity and aggressive activity. Those firms who are aggressive have clearly defined plans and strategy, including product, price, promotion, and distribution and research elements. Passiveness versus aggressiveness depends on the motivation to export. If the firm achieves initial success at exporting quickly all to the good, but the risks of allure in the early stages are high.
The "learning effect" in exporting is usually very quick.The key is to learn how to minimize risks associated with the initial stages of market entry and commitment - this process of incremental involvement is called "creeping commitment" Joint Venturing It includes different characteristics of various Joint contracts with firms to produce or promote services or products. Joint ventures can be defined as "an enterprise in which two or more investors share ownership and control over property rights and operation". Joint ventures are a more extensive form of participation than either exporting or licensing.
Joint ventures give the following advantages: * Sharing of risk and ability to combine the local in-depth knowledge with a foreign partner with know-how in technology or process * Joint financial strength * May be only means of entry and * May be the source of supply for a third country. They also have disadvantages: * Partners do not have full control of management * May be impossible to recover capital if need be * Disagreement on third party markets to serve and * Partners may have different views on expected benefits.If the partners carefully AP out in advance what they expect to achieve and how, then many problems can be overcome. Direct investment It is when a company decides to invest directly into a foreign country by an established assembly operation, a wholly-owned operation as well as a merge or an acquisition. This involves the greatest commitment in capital and managerial effort.
The ability to communicate and control 100% may outweigh any of the disadvantages of Joint ventures and licensing. However, as mentioned earlier, repatriation of earnings and capital has to be carefully monitored.The more unstable the environment the less likely is the ownership pathway an option. These forms of participation: exporting, licensing, Joint ventures or ownership, are on a continuum rather than discrete and can take many formats. Anderson and Coagulant 2 (1987) summaries the entry mode as a choice between company owned or controlled methods - "integrated" channels - or "independent" channels. Integrated channels offer the advantages of planning and control of resources, flow of information, and faster market penetration, and are a visible sign of commitment.
The disadvantages are that they incur many costs (especially marketing), the risks are high, some may be ore effective than others (due to culture) and in some cases their credibility amongst locals may be lower than that of controlled independents. Independent channels offer lower performance costs, risks, less capital, high local knowledge and credibility. Disadvantages include less market information flow, greater coordinating and control difficulties and motivational difficulties.In addition they may not be willing to spend money on market development and selection of good intermediaries may be difficult as good ones are usually taken up anyway. Each of the market entry strategy has both, advantages and disadvantages.
The less costly the strategy is, the less control the company has over the distribution channel. Consequently, the company depends more or less on foreign institutions or foreign partners. All in all a company has to figure out for itself which strategy to choose, according to its particular situation, financial as well as economic and environmental.Therefore, before entering a market, a comprehensive research and analysis of the target market along with its economic environment is necessary to achieve a successful launch into an unknown market.
II. Choice of Company: Victorians Secret Choice of Product: Lingerie Lingerie has been an intimate part of a woman's life since long. The lingerie of yore was home or tailor made. It was uncomfortable and sometimes painful to wear. Over time, things have changed and lingerie has become not only comfortable and sensuous, but also a brand in itself.
Miscall Purl, MD, Brands India in his interview with Sahib's Saccade- Sir. Sub Editor of Interrelated. Com, states that "Apart from being a bare necessity, lingerie has quietly slipped into the luxury bracket,". Cultural Implications and the Transformation of the Industry Growing number of working omen, changing fashion trends, the increased awareness about better fits, quality, brands, colors, styling, increasing per capita disposable income, rising level of information and media exposure and the entry of a large number of foreign brands have given the industry a new dimension.Indian women have become choosy and give importance to lingerie, as discernible from the increased spend on it.
This changed attitude is also because of changing dress codes and the transformations in social mindset. The modern woman is boldly going where no woman has gone before, and her lingerie naturally follows. The Lingerie market in India The lingerie market in India can be classified into super-premium, premium, mid- market and economy and mass market segments. A major share of the lingerie market is held by the mid-market and economy segments, in terms of both value and volume.The super-premium and premium segments are relatively smaller, but fast- growing segments. In the present scenario, the premium and super premium segments of the lingerie industry are advancing following a consumer shift from economy and mid-market segment to the premium segment.
International influence: The influx of large international brands in the Indian market, the growth of organized detail and more choices for the Indian women have helped the Indian economy in witnessing a phenomenal growth.The advent of international brands in the Indian market place has brought about some realignment in the fragmented lingerie market. The brands have started advertising boldly through advertisements, fashion shows, etc, and are trying to understand the consumer's preference. This, perhaps, is the reason why the premium and super-premium segments of the lingerie industry, with brassieres priced above RSI 200 and mostly characterized by the presence of international brands, are witnessing higher growth as compared to mid-market and owe/economy segments.Ill. Competitors: Jockey I Enamored I Adair I Switch I Lovable I Meant I Sole I 'V.
SOOT Analysts Strength I Weakness I * Has been growing at a healthy rate of 15% CARR Leader among retail products Matured Market * The industry is to grow at a CARR of 18% till 2015 and would be soaring to new heights. * Indian Lingerie industry currently pegged at USED 1. 5 billion in 2011 will Jump to reach USED 3 Billion by 2015. * Indian Market is price sensitive * Strongly co-related with Micro/Macro economic conditions * Conservative Indian Society I Opportunity I Threat I Increasing Awareness is shaping the Consumer Demand * Changing trends/ shifting towards organized market * Significant growth in middle class society, more disposable Income * Shift in focus to the mid and upper segment can prove as an opportunity as it the fastest growing sector at a CARR of * More nuclear families, women have more reasons to spend I * Local vs. Global Players VS.
International vs. Domestic retailers * Threats from established inner wear players to move to stylish lingerie I V.Promotional Plan The Company- Victorians Secret needs to build awareness of its brand by positioning itself as a customer-Centric provided within the Lingerie Industry. Clients should be sought in the Online as well as retail and Wholesale segments.
The industry is a tight knit- One major contact can lead to multiple additional contacts. Networking Strategies and Media Ambassadors and Celebrity Endorsements in this industry are becoming very popular and are a must and they should target some big Celebrity preferably from the Plywood Industry to be their Brand Ambassador.Advertising on a small scale in Bill Boards and commercials should be considered. Advertising can also be done online, deals for people who visit blobs, Company Website or arches goods Online can be offered with discounted price, along with Offers like, first 100 Customers into the store would get one product free along with additional booklet of discount coupons for the next purchase of the next couple of months to use. The Company should also plan a grand opening event in all metros and Major Cities as well as quarterly events as well as routine Fashion shows give a ways.
Innovative products and Services can be introduced within the market to attract new customers. Other activities should include being seen participating in industry vents, and gaining recognition in India, this should not be a hard task as they are already one of the Major Players in the International Market. By Completing these objectives penetration into the market should be possible. Target Markets BIB (Business to Business market) - Focus on very narrow segment which is use for product. It offers products or services direct to other Business.
Characteristics * Long sales cycle * Large purchases * Many decision makers * Looking for ROI BBC (Business to Consumer market) - Focus on entire sales of market of consumer. * Characteristics * Short sales cycle * Small purchases * One or few decision makers Looking for satisfaction VI. Distribution Channel: The distribution channel is how our customers will get access to the products and this will also affect how they will view our brand. Wholesale Not many Lingerie stores sell their clothing by wholesale.
