Running Head: MARKET ANALYSIS1
Assessment 3
Market Analysis
Teacher:Sir John Boyd
Subject: MKT550-Global Marketing
Table of Contents
1.0 Introduction
2.0 Summaries from Assignment 2
3.0 Screening of Market Selection
3.1. The Five Stages of Overseas Market Selection Process
3.1.1. Reason to select France country
3.2. Objective
4.0 Alternative Market Entry Strategies
4.1. Alternative Target Market Selection
4.2. Market Selection Process
4.2.1. Segmentation and Targeting Selection Process
4.3 Positioning Process
4.4. Alternative Generic Strategies
5. Recommendations for Preferred Strategy for Country
5.1. Market entry mode
5.2. Target market
5.3. Positioning strategy
5.4. Generic Strategy
6.0 Conclusion
References
1.0 Introduction
Woolworths is the biggest retail chain in Australia has decided to enter into France market to grab opportunity exist in the market. This section considers the market analysis, organizational analysis, environment and SWOT analysis that performed in the earlier section to recommend market entry mode (strategy) for Woolworths to enter into France market. In this context, this paper explains the alternative market strategies and then selects best suitable market entry strategy for Woolworths to establish business in France. After this, this paper describes target market selection, positioning strategy, marketing mix options and generic strategic options for targeted segments of Woolworths. This paper describes segmentation and targeting through alternative entry modes for the Woolworths in France.
2.0 Summaries from Assignment 2
High potentiality of the France retail and ecommerce sector indicates the opportunity exist for Woolworths in France market. Moreover, e-commerce and online selling trend in France also provides opportunities of Woolworths to easily make customer based in the new market. Low competitor, global brand image, offer quality products at affordable price, and online selling options would be helped for Woolworths to attract the customers in the new market (Cateora, et al., 2017). Strong financial position in the Australian market would also financial support for Woolworths to enter and expand business in France market.
3.0 Screening of Market Selection
The screening of the market selection is most essential to evaluate the potentiality of the new country market for Woolworths. The five stage screening approach uses to select best suitable market for Woolworths.
3.1. The Five Stages of Overseas Market Selection Process
The below picture indicates the five stages of overseas market entry evaluation process. In this paper, conduct market research and country identified that is France as potential retail market could be included e-commerce and online buying reasons. Moreover, after undergoing preliminary screening, identifying France country macro-economic factors such as currency or government stability, good infrastructure, government support, technology availability, use of e-commerce option, high level of domestic consumption, and others that supportive for retail firm. On the basis of two stages findings investigate other three stages to study feasible for market entry mode. In-depth screening step use to identify the way of segmentation, targeting and positioning (STP) and marketing mix of Woolworths to enter in France (Musso & Francioni, 2012). Final selection and direct experience step utilizes to select STP and entry mode of the new country in selected overseas market.
(Source: Musso & Francioni, 2012)
3.1.1. Reason to select France country
As per the report of a research, more than 46% (30 million) of total population of France currently used e-commerce services that will reach more than 50% population (32 million) by 2018. France e-commerce business was $42 billion in 2015 that will exceed $53 billion in 2018 that indicates high growth of online product selling that indicates potentiality for Woolworths in France market (Frederick, 2017). Online buying culture, strong distribution network, infrastructure, technology, government support and financial structure are the main reasons to select France as a new target market for Woolworths.
3.2. Objective
Mission
The main mission statement of Woolworths in the new market entry is “to become the most popular retail brand in between the online buyers through providing different kinds of affordable retail products”.
Goals/objectives:
This marketing plan main aim is to specially target online buyers and develop Woolworths’ customer base or improve market share in the France market. These marketing plan main objectives are:
To target the France online buyers, those preferred purchase retail products by use of e-commerce option rather purchase from shop/store
To develop brand value of Woolworths’s as produces best, affordable or fashionable apparel for retail products for men, women, and child.
Woolworths’s will be reached at $100 million sales or revenue within three years and achieved 20-25% market share in retail sector in France
4.0 Alternative Market Entry Strategies
In this section, evaluates all realistic market entry options with covering their advantages and disadvantages in the context of Woolworths’ new entry into the France market. The below comparative table indicates the three alternative strategies of enter in France market for Woolworths these are manufacturing based, franchise based, and merger/acquisition or partnership based (Kotabe, et al., 2014).
Manufacturing based entry mode: It application means the company’s would establish their production units in the target market to easily reach the customers. This strategy would require the company’s establish distribution network to target the customers in the market. The retail company would manufacture food and other households’ products as well as require partnership with local farmers or suppliers to sell fruits, vegetables and other food items (Fletcher & Crawford, 2017). This entry mode is required huge capital and huge resources to set-up production units and to establish distribution networks. This entry mode is required more time to establish business and create position in the new market that means more financial risks for the company’s to recover their investment. The main advantages of this entry mode is full control on business process, step-by-step business process, and ensure the company’s deliver quality products or services of the customers in new market (Ang,Benischke & Doh, 2015).
Franchise based retail chain entry mode: In this entry mode, the company given right or authorized others to sell their goods or services with use of its brand name in a specific marketplace. The main benefits of this entry mode are required less finance and less effort than other alternatives to enter in other country market. This entry mode only beneficial for the large organizations those have global brand image, so that franchisers would able to attract customers by use brand name (Baena & Cerviño, 2015). This entry strategy disadvantages are profit sharing, difficulty to maintain taste or quality of food, and less control on ownership that why it would less attractive for retail firm that enter in new country market.
Merger/acquisition or partnership with local firm: This entry mode is mostly used by large firms to enter in other countries market through merger or acquisition of local firm otherwise partnership with local firm. It is easy way to enter in the new market to use local company brand name, distribution network and customer trust to share their products in the market (Sinkovics, Sinkovics, Lew, Jedin & Zagelmeyer, 2015). The main disadvantages of this entry strategy are huge capital need to acquire or merge with local firm and due to financial restriction foreign firms only able to acquire or merge small local firm.
Table 1: Alternative Market Entry Strategies
Market Entry Strategy / Examples / Advantage / Disadvantage / JustificationManufacturing based entry mode / General Motors, Samsung, PepsiCo, Coca-Cola / Full control on ownership, no profit sharing, step-by-step process, maintain product or service quality / Required more resources or efforts to set-up manufacturing units and distribution networks, need huge investment, not familiar with market, and cross-cultural issues / High financial risks exists in this entry mode that why use only if high potentiality to survive new company in the new market
Franchise/Licensing based retail chain / McDonald, Burger King, KFC, Subway / Cost-effective way to enter in new market, use global brand value, less efforts need / Less control on ownership, collective decision making, profit sharing, copyright or patents issues, low quality / Easy way to grab global brand value that why not suitable for start-up business/new company
Merger, acquisition or partnership based entry mode / AT&T, Wal-Mart, Virgin Group, Microsoft, Vodafone / Easy to grab position or market share in new market, familiar with market and customer buying behavior, / Required huge investment, change of management effects morale or performance of employees, workplace conflicts / Way of only target specify product or sector/industry that why not suitable for retail firm
(Source: Fletcher & Crawford, 2017)
4.1. Alternative Target Market Selection
This section examines the above defined three alternative market entry strategies to find out potential target market segments in France market. The below table indicates potential target market segments and possible positioning strategies for link marketing mix with each of the alternative market entry strategies.
Table 2: Alternative Target Market Strategy
Option / Target Market / Positioning Strategy / Marketing Mix1 / B2B & B2C / Product differentiate strategy and cost leadership / Product: Food items and other household items
Price: Low price of products due to high production quantity
Place: All major cities of the country
Promotion: Online and social media channels use
2 / B2C / Only focused on different food items / Product: Food items only
Price: Profit sharing enhance products price
Place: All major rural and urban places in the country
Promotion: Online, print and broadcasting channels utilize
3 / B2C / Grab old brand position in the market and focus only one sector / Product: Specific product only
Price: Affordable price of products
Place: Already established stores in major cities
Promotion: Print media and social media channels employed
Preferred Strategy: Option first would be best suitable for the new company (Woolworths) to enter in France market.
(Source: Cateora, Gilly & Graham, 2011)
4.2. Market Selection Process
STP of all three entry mode strategies describes in this section in the context of France market.
4.2.1. Segmentation and Targeting Selection Process
Most of the organizations targeting customers in the market through consider the demographic, behavioral, geographic and psychographic factors. Organizations have segment the markets or target the consumer on the basis of different factors including gender, age different, education, income class, individual/family, occupation, urban or rural living areas, culture/language follow, religion followers, living standards, personality, beliefs, motives, and social class. The above table indicates that the company would target the B2B (business-to-business) and B2C (business-to-customer) market and targeting all income class and online/e-commerce prefer customers for manufacturing entry mode in France (Keegan & Green, 2013). B2C would target market and Youth and food lovers are target customers for franchise chain entry mode, while B2C target market and different age group store buyers are target customers for merger/acquisition entry mode in France.
4.3 Positioning Process
Manufacturing different range of quality food and households items would use by the company to positioning self or differentiate it in France retail sector through manufacturing base entry mode. Quality and different flavor food items would offer by the company to make position in France by franchise chain entry mode, while utilize old brand market position to attract customers through merger/acquisition entry strategy in France (Czinkota,Ronkainen, Sutton-Brady,Beal & Stegemann, 2014).
4.4. Alternative Generic Strategies
(Source: Salavou, 2015)
Michael Porter describes the most effective generic strategies (cost, focus, differentiation see in the above image) that used by company to target customers in the market. Manufacturing base first option of entry mode should apply by the company to cost leadership generic strategy through manufacturing products in large quantity that reduce cost of the products. Franchise base second entry strategy should link with differentiation generic strategy of the company through offers different flavor food items by use unique ingredients (Salavou, 2015). Merger/acquisition third entry mode should associate with focus generic strategy as the company only target specific sector by acquired/merged with local firm.
5. Recommendations for Preferred Strategy for Country
On the basis of the above discussion, recommends the best alternative entry mode, STP and generic strategy for Woolworths to enter in France region.
5.1. Market entry mode
It can be recommended that the company’s should use first option of manufacturing base entry mode to enter in the France market. Franchise/licensing base and merger/acquisition alternatives of market entry would not beneficial for retail firm due to limitation of target specific sectors or product. Manufacturing
5.2. Target market
It recommends that the company’s should target the France market through utilize of B2B and B2C strategies to grab position in the new market.
5.3. Positioning strategy
The company should offer wide range of products by manufacturing these in the country market. Wide range of quality products at low cost strategy would help the company to easily make position in France market.
5.4. Generic Strategy
Product differentiation generic strategy should use by the company’s to differentiate itself from already established retail players in France market.
6.0 Conclusion
It can be concluded that wide range of different products should be offered by Woolworths through utilize manufacturing entry mode with link cost leadership positing that help it to the target businesses and customers and make position in France market.
References
Ang, S. H., Benischke, M. H., & Doh, J. P. (2015). The interactions of institutions on foreign market entry mode. Strategic Management Journal, 36(10), 1536-1553.
Baena, V., & Cerviño, J. (2015). New criteria to select foreign entry mode choice of global franchise chains into emerging markets. Procedia-Social and Behavioral Sciences, 175, 260-267.
Cateora, P. R., Gilly, M. C., & Graham, J. L. (2011). International marketing (15th ed.). New York: McGraw-Hill Higher Education.
Cateora, P. R., Sullivan-Mort, G., D'Souza, C., Taghian, M., Weerawadena, J., & Graham, J. L. (2012). International Marketing (2nd ed.). North Ryde, NSW: McGraw-Hill.
Czinkota, M.R., Ronkainen, I.A., Sutton-Brady, C., Beal, T. & Stegemann, N. (2014). International Marketing: 3rd Asia Pacific ed. South Melbourne, Victoria: Cengage Learning.
Fletcher, R., & Crawford, H. (2017). International Marketing: An Asia-Pacific Perspective (7th ed.). Frenchs Forest, Australia: Pearson Education.
Frederick, J. (2017). 2016 France eCommerce Market. Retrieved from
Keegan, W. J., & Green, M. C. (2013). Global Marketing (7th ed.). Upper Saddle River, NJ: Prentice Hall.
Kotabe, M., Marshall, A., Ang, S.H., Griffiths, K., Roberts, R., Voola, R., & Helsen, K. (2014). International marketing (4th Asia-Pacific edition.). Milton, Qld.: John Wiley and Sons Australia.
Musso, F., & Francioni, B. (2012). How do smaller firms select foreign markets?. International Journal of Marketing Studies, 4(6), 44-53.
Salavou, H. E. (2015). Competitive strategies and their shift to the future. European Business Review, 27(1), 80-99.
Sinkovics, R. R., Sinkovics, N., Lew, Y. K., Jedin, M. H., & Zagelmeyer, S. (2015). Antecedents of marketing integration in cross-border mergers and acquisitions: Evidence from Malaysia and Indonesia. International Marketing Review, 32(1), 2-28.