Explain International Marketing.
The marketing of goods and services external to a firm’s host country is defined as the international marketing. This form of marketing has two forms:
The report is supported by the international marketing of the activities of Harvey Nichols. The activities of business inside the international market have been elaborated here in the report. Harvey Nichols is a chain of departmental stores which was founded in 1831 in London, dealing with the sale of clothes, cosmetics, shoes, food products and other products. The company deals in the retail business of luxury clothes. There are many stores opened by this company within innumerable countries of Arab region, Ireland and U.K. The company wants to inaugurate its 9th international store. As the marketing consultant of the company, the focus of the researcher is on the analysis of the potentiality of the market inside the three countries on the basis of the international market. Australia, Qatar and India are preferred for analyzing the potency of the market and the framework of the market so as to do an effective business in the international business (A STUDY ON THE RELATIONSHIP OF ELEMENTS OF MARKETING MIX AND BRAND EQUITY, 2014).
2.1 External Analysis
PESTLE Analysis is done to analyze the external market. The following can be drawn from the analysis:
Political factor (P) – The stability of Harvey Nichols at present the political environment is estimated with the aid of the impact of diverse policies of the government and the laws concerning the industries of the departmental stores.
Environmental factor (E) – Harvey’s environment factor is one in which its business cycle and activities are executed. This particular factor in the framework comprises the global environment, geographical and climate which is based on the trading that5 is done by the Harvey Nichols.
Social factor (S) – To run a successful business, social factor is the key factor just as the brand image, consumer choice, requirements, demand and the product image is the key factor for a business. To manage a department store both the customers and employees are crucial , so Harvey tries to build up such policies and strategies that are advantageous for both (Andersen, Denrell and Bettis, 2007).
Technological factor (T) – The customers are always updated by Harvey Nichols regarding the technologies they are adopting to run the business. The international marketing of this company is technology dependent to have an increment in the global communication and international marketing of the new technologies.
Legal factor (L) – This factor of the framework is associated with various regulations and laws that are formulated by the government of the country concerning the diverse businesses. The legal factors encompass employment law, consumer laws and labor laws that are to be followed by Harvey Nichols (Bakó, 2010).
Economic factor (E) – The costs and the business cycles of Harvey Nichols affect the economy is analyzed in this factor. Being an international brand, the effect of Harvey’s international trade and the monetary policies are stated in this factor. It includes FDI rates, inflation rates, interest rates and the growth rates of the company.
The marketing mix strategy of 4 Ps are taken here to analyze the internal factors of Harvey Nichols
Product- The price of each product differs from store to store. The rate of the product is categorized on the basis of the needs and preferences of the customers. The company before introducing any product in the market evaluates the requirement of the customers analyzes the market demand and preferences. It surveys that if any company has launched similar products like that or not before them (Cedrola and Memmo, 2010).
Price- Harvey Nichol’s price of products is based on various factors like geographical area, customer’s condition of finance and all other factors.
Place- The choice of place of Harvey Nichols opening of store is done by analyzing the environmental factors, existence of resources and connection with transport and all others factors.
Promotion- The promotional strategy of Harvey Nichols is done by advertisement through various approaches by television, internet, celebrity advertising and others. The importance of promotion is to escalate the sales volume of the company compared to the competitors.
This analysis is done to identify and evaluate the strengths, weakness, opportunities and threats that the company (Harvey Nichols) in the market. This structured planning approach will evaluate all these four factors that are involved in Harvey Nichols venture. It will specify the objectives of the company’s venture and categorize the internal and external factors which are favorable and unfavorable to attain the objective (Ding, 2014).
The strengths of this company’s business are their sales and distribution network that makes the service of their sales and distribution even better compared to their competitors. The factor that strengthens Harvey Nichols business are monetary support of the company to run the business successfully, domestic market and the tactics implemented to break the barriers to make a new entry in the market. Harvey Nichols has innovative strategies to run their business and their business units also have good business experience to execute their business successfully (Mohammad Arabzad an, 2012).
There are fewer amounts of weaknesses that encompass their business as compared to their competitors. Some weaknesses which may be a part of the list are high investment in the research and development team for their products and also the market, future strategies of competition in the market to sustain its business activities. Harvey Nichols should also focius their strategies to reward and provide benefits to its employees because the dissatisfaction of the employees may prove to be the biggest weakness of the company.
The steady rise in the income and the increase in the level of profit are the opportunities of Harvey Nichols. There are also some significant new achievements in the business. These opportunities are a support for the increment in the process of business (Formby and Dave, 2013).
A company cannot flourish without having threats in their business because threats give the company the zeal to compete more in the market. But also too much threats will harm the business. The escalating price of the raw materials, variation in price, changes in the international market, changes in the host economy and the risks from other business entities are some of the threats that the company is facing and should take steps to avert it.
A company always wants to open its business in the international market so as to ensure that they attain the varied types of factors of the business. Escalated market growth, diversification, joint venture, international production and the economies of scale are some of the factors which have an influence on the international market. Furthermore the company always wants to augment their activities of the business by promotion of the brand in the international market. Besides it is seen that to execute an effective business is a very hard mission. Multiple differences crop up within the domestic and the international market. Harvey Nichols needs to analyze its international market to effectively pursue in its business in multiple countries because the stakeholders, culture, environment, political and economical factors, behavior of the customers differ from one country to another (Guan and Kezunovic, 2013).
The 12C framework is taken into consideration to choose a country for Harvey Nichols business activity. This framework contains the following C’s:
Harvey Nichols is aiming at China to launch their 9th departmental store in the Chinese market and for this it has to analyze the potency of the market. The framework is discussed elaborately below:
Country: China has a flexible economic, legal and political system. The legal issues are comparatively low considering other countries like in Middle East. All companies effectively run their businesses here.
Currency: In recent studies it has been found that the currency of China is the top performing currency of the year. As dollar has increased adjacent to many other currencies in the world, the currency of China has also hitched a ride. So due to this the new businesses will gain its competitiveness.
Culture: The culture of China is very versatile and the people can adapt to any company products there. Thus advertising should be done on a rigorous basis stating the importance of the store in their market.
Consumption: The result of increased population has raised the consumption standards of China. The dependence on the domestic demand may prove risky for the consumers of China which will show up in the government finance. So opening of Harvey Nichols in China will increase its consumer base so that the consumption rate of the country increases.
Concentration of markets: China is known for its business and products. China has given rise to many famous companies. The markets and the population of China will give Harvey Nichols zeal to do business.
Commitment: As China will be the host country for Harvey Nichols, the company should focus on the long term planning and the strategic financial investment of the company so that it can ensure effective business.
Communication: Language of China is easy to adapt and the company should ensure that the employees adapt to the language skills of the country to execute an effective business. The company can also take the aid e-mail and other medium of communication in the initial stage of business operations within the country (Lin, 2010).
Choice: Harvey Nichols has to look into the choices of the customers because the customers in China have diverse tastes and preferences which will take time for a retail chain to build up.
Channels of distribution: The channels of distribution in China are a bit complicated but the company has to choose proper networks of distribution so ensure smooth delivery of its products. The local suppliers should be utilized for the distribution.
Contractual obligations: The Company should understand the economic laws and the foreign provisions to trade in this country. Violation of law may give rise to improper business venture for the company.
Capacity to pay: As the currency of China is flexible the customers have an open hand to pay for the products. But the company has to put reasonable prices to ensure that they get hold of the customer base initially.
Caveats: The law and order should be followed by the country to ensure that they execute their business process smoothly.
The table shown below in the growth analysis of Harvey Nichols business in China to ensure the risks of different growth options for Harvey Nichols
Figure 1: Ansoff Matrix
Harvey Nichols can start a loyalty scheme in the China market so that it can ensure low risk as an existing product is placed in the existing market. There is an involvement of high risk in the online sale of grocery in the existing product in a new market like China. They can alsio create a branding of the Chinese products with the Harvey Nichols value label in which the creation of a new product is done in the existing market (Moussetis, 2011). The risk lies in the fourth quadrant where the launch of intercity express stores of Harvey Nichols which involves the movement into a new market with a new product. The movement from one quadrant to another is increasing the level of risk. Harvey Nichols should explore the Chinese market by undertaking the risk options to keep up with the competitors (Holopainen and Toivonen, 2012).
This theory helps to analyze the competitive position of markets compared to the other business entities. Harvey Nichols first has to analyze the competitor, identify the process, selecting and assessing the major competitors (Zhang, 2008). Secondly the company has to develop 6he competitive advantage of the e-marketing strategies which position the company strongly against the competitors and give it the best probable competitive advantage (NEUMANN, 2008). There are eight such positions which in the clock which will help analyzing the competition in the market for Harvey Nichols:
Position 1: Low Price/Low Value: This is the “bargain basement” where the firm doesn’t choose to compete basically. Here the products of HN may find differentiated value. Here the company has to sell inferior products in a price that will be attractive for the consumers.
Position 2: Low Price: Here the company will be a low cost leader. HN can persuade the suppliers to enter the arena of low price.
Position 3: Hybrid: Here the companies give products at a lower cost but the products here have high perceived value than the products of other competitors which are lower in cost.
Position 4: Differentiation: Here the company offers the consumers products of high perceived value. Here HN can either do an increment in the price of the products and maintain themselves in the high margins or keep the prices low and fetch greater market share.
Position 5: Focused Differentiation: Here HN can offer their products with high perceived value and high prices.
Position 6: Increased Price/Standard Product: Here HN can gamble and increase the price of the products, if the price is accepted in the Chinese market then the company will enjoy high margin of profit.
Position 7: High Price/Low Value: Here HN have competition from the company which has monopoly in the market and it is a classic monopoly pricing. So HN can only sell its product if they keep them at a low price level (Sivakumar, 2007).
Position 8: Low Value/Standard Price: Here the companies loss market shares. If any company has allowed priced product it can only sell by the price of the product (Makandar, 2014).
The positioning of the brand has become a different in the present scenario. The brand image in the mind of the consumers is no more fixed (Yakhlef, 2015). It is now highly dynamic and it varies often across the cultures and the countries as per the specificity of the experiences of the consumer. Chinese consumers are expected to form deeper attachment with the brands which they favor. So HN can position its product in the Chinese market when the consumer here reach a maturity level and feels the wish to change (Liu and Wu, 2013).
With the appropriate marketing mix Harvey Nichols can position their products in the minds of the consumer. The company can diversify in the products made by China and give it their brand label (VanÄ›k, Mikoláš and Žváková, 2012). This way they will capture the market and win the concentration of the consumers. They should put hoardings, vehicle advertisements, newspaper advertisements, etc. Price should not be escalated in the initial period to get hold of the customer base. The place to open up the new store is easily accessible by the people so that they do notr have any problem to visit the store (Macer, 2012).
References
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Andersen, T., Denrell, J. and Bettis, R. (2007). Strategic responsiveness and Bowman’s risk–return paradox. Strat. Mgmt. J., 28(4), pp.407-429.
Bakó, B. (2010). The Role of Price Floor in a Differentiated Product Retail Market. Economic Analysis and Policy, 40(3), pp.363-368.
Cedrola, E. and Memmo, S. (2010). Loyalty marketing and loyalty cards: a study of the Italian market. International Journal of Retail & Distribution Management, 38(3), pp.205-225.
Ding, S. (2014). Option Game Analysis on Financial Resource Supply in RMB Retail Market. International Business Research, 7(5).
Formby, S. and Dave, D. (2013). Internal marketing for Six Sigma success: a conceptual framework. IJPQM, 12(1), p.77.
Guan, Y. and Kezunovic, M. (2013). Contingency-Based Nodal Market Operation Using Intelligent Economic Alarm Processor. IEEE Trans. Smart Grid, 4(1), pp.540-548.
Holopainen, M. and Toivonen, M. (2012). Weak signals: Ansoff today. Futures, 44(3), pp.198-205.
Lin, X. (2010). State versus private MNCs from China: initial conceptualizations. International Marketing Review, 27(3), pp.366-380.
Liu, Q. and Wu, X. (2013). Research on Chengdu Vegetables Marketing Based on STP Model. ASS, 9(4).
Macer, T. (2012). Developments and the impact of smart technology. International Journal of Market Research, 54(4), p.567.
Makandar, N. (2014). A STUDY ON REFERRAL MARKETING. ELK Asia Pacific Journal of Marketing and Retail Management.
Mohammad Arabzad an, S. (2012). Improving Project Management Process in Municipality Based on SWOT Analysis. International Journal of Engineering and Technology, 4(5), pp.607-612.
Moussetis, R. (2011). Ansoff revisited. Journal of Management History, 17(1), pp.102-125.
NEUMANN, T. (2008). Automobiles, the Mass Market, and the Retail Revolution of the Early Twentieth Century: A Structural Analysis of Changes in American Retail Institutions, Market Power, and Labor Demand. JEH, 68(02).
Sivakumar, A. (2007). Retail marketing. New Delhi: Excel Books.
Sivakumar, A. (2007). Retail marketing. New Delhi: Excel Books.
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