Discuss about the Marketing Contemporary Management Research.
Venturing into new markets is something that every entrepreneur hopes to achieve. However it needs to be approached with a lot of caution. The marketing team of a firm that wishes to venture into foreign market must do several things before the business can be ready to make that launch. Apart from reminding themselves of the objectives, the marketing department needs to embark on a couple of tools to assess the readiness of the firm and the situation of the targeted market. Tools such as the SWOT analysis enable the film to know its internal and external environment. The Porter’s Generic Strategies model provides a framework for the firm to determine the existence or lack thereof of a competitive advantage. The PEST analysis is a tool that the marketing team can use to fully assess the economy of the industry where the firms seek to launch operations. All these are tools that the marketing team and the managerial team at large can apply in the process of determining the feasibility of launching into a new market. Additionally, the Segmentation, Targeting, Positioning and Differentiation model (STPD) is an effective tool for deciding on marketing strategies to be used by the firm. This paper will apply the aforementioned techniques, models and strategies to determine the opportunities that the Japan market portends for Hanks Foods Company.
As it ventures into the Japanese market, what is it that Hank’s Food Company seeks to achieve? Firstly, every business operates to make profits. As such, Hank’s Foods Company anticipates increasing its profitability margin by tapping into the potential of the Japanese market. But even more fundamentally, the firm is driven by the need for the provision of premium quality jams, flavors and spices (low calories and low sugar) in order to propagate the health and wellness agenda. Hank’s Food Company also seeks to increase its market share in Japan especially in the provision of other high calorie jams which is still not established in Japan.
This section devotes itself to evaluating the business environment in Japan. It takes a look at the factors in the external business environment that could facilitate the success of the business or cause the failure of the firm. In evaluating the business environment, the paper will employ a chosen approaches; the PEST analysis.
PEST analysis is a model used in business by marketing departments to evaluate the external environment al factors and the effects they are likely to have on the firm. The results of the PEST analysis can inform the SWOT analysis.
Japan as at right now is going through a period of political stability. The nation has had one prime minister who is now serving the third term. Prime Minister Abe has enjoyed approval ratings beyond 50 % for several years (Pearce 2014 p. 3). In the recent 2017 elections, the ruling coalition was voted overwhelmingly and Prime Minister Abe retained his seat majorly because he offers political stability to Japan. These happenings coupled with the fact that there are no major issues of division in the country now; the political environment is supportive of business and safe for Hank’s Foods to venture in
Japan is the world’s fifth largest economy. According to figures from 2017, Japan’s GDP was expected to grow by 1.7%. The nation’s economy has had a constant growth for 6 consecutive quarters (one of the most impressive in the world). Japanese businesses are generally doing well and there is almost no unemployment (Obe 2015 p. 1). These are good indicators for an economy that is worth venturing into so Hank’s Food can seize the opportunity and launch in the Japanese market.
Japan is a large country with a population of over 127 million. The population growth rate is very low; in fact the country is facing a population decline with a higher death rate than birth rate. The country has a significantly high numbers of people who are aging (Nishiyama et al 2012, p. 3). Despite these facts about Japan is still has a large market for new businesses like Hank’s Food to tap into.
Japan is one of the world’s leading countries when it comes to technology. Japan is home to some of the world’s top electronic companies such as Sony, Canon, Panasonic, Hitachi, and Fujitsu, Japan leads in the area of technological innovation (Martin, e 2016 p. 47). These companies manufacture top of the range electrical and electronic appliances which can be used by firms such as Hank’s Food to make their production processes more efficient in terms of costs and tine.
This paper evaluates the firm’s position in the industry using the Porters Generic Competitive ness Strategy. Relative positioning in an industry is the main factor that determines a firm’s profitability (Gould et al. 2015, p. 316). For a firm to have a profitability margin that is above the market average, it must maintain competitive advantage. Three generic strategies can be pursued by a business to gain competitive advantage in an industry; cost leadership, focus and differentiation.
Using this strategy, the firm adopts strategies that cut down on its cost of production. The firm can do so through sourcing for raw material at a lower cost, use of efficient technologies or doing away with some processes completely. The firm can make more profits by selling at the average market price or at a price that is slightly above the average market price (Bayraktart al. 2017, p 42). This way if suppliers of raw materials raise the cost the firm can transfer the extra cost to the final consumer. Firms that sustain high cost of production cannot compete against a business that is employing the cost leadership strategy.
In this strategy the firm pursues avenues of being unique in the market. This works by the business identifying processes tailored to come up with products that are unique and superior to competing brands in the view of the customers (Song et al 2017, p. 282). The business can rely on the fact that their products are unique to charge higher prices for their commodities hence increasing their profit margins. These premium prices charged help the business to regain the resources spent towards meeting higher costs of production.
Here, the strategy is to choose one narrow area of competitive advantage within the market sector. The firm identifies a specific segment of the market and concentrates on meeting their needs almost to the exclusion of other market segments. The firm unpicks the peculiar tastes and preferences of the select market segment and tailors its production and methods of delivery in a manner that satisfies the specific market segment (Song et al 2017, p. 282). This way, a firm can charge premium prices for its products and maintain high profitability margins and consequently, a competitive advantage over its competitors.
Aohata Corporation is one of the major jam processing companies in Japan. It is located in the Seto Inland Sea area which has plentiful supply of citrus fruits. The company has a total of 55 jam brands in production. It has a variety of low sugar jams and continues to develop other varieties of high calorie jams. It also focuses on production of vegetable jams. Its production processes are equipped with vacuum concentrators alongside supper heated pasteurizing mechanisms. In order for Hank’s Foods to succeed in this market, it must adopt more efficient technologies that will reduce its cost of production and hence give it competitive advantage over Aohata as a major competitor. Aohata’s brands are respected in the Japanese market. Its market share for low sugar jams is about 70% while it stands at 45% for other types of (Fujikawa 2017, p. 1). This means that the customer preferences in Japan are inclined towards low sugar jams. Hank’s Foods should leverage on this to come up with even more superior, low sugar jams in order to tap into the large market segment that has specific taste and preference for this. Hank’s Foods can tap into the market segment that prefers other types of jams (apart from low-sugar jams). Aohata anticipates that its market share for low sugar jams is going to shoot up. This is indicative of a general consumer preference inclined towards low sugar jams. That means there is still a huge market potential for Hank’s Foods in this area.
SWOT analysis is a tool for strategic planning. It is a framework for evaluating the Strengths, Weaknesses, Opportunities and Threats to the firm. It is a critical tool in decision making and a vital way to determine the competitive advantage of a firm before entering a new market.
This describes the attributes of the firm that make it excel, those that make it different from the competitors (Ojala et al. p. 60). In this segment the question to be answered is; what is it that Hank’s Food Company does differently that will make it thrive over competitors in the Japanese market? It may be the modern technology is uses in the processing of its products or its strong marketing strategy. The firm should build on these to establish a niche for itself against competitors. One of the most identifiable strengths of the Hank’s Food Company is the long standing dominance in the jam processing industry in Australia. Having been founded in 1993, the company has in the last 25 years built a customer base boosted by the high levels of confidence built in its products over the years. The business can build on this to gain competitive advantage in the new market.
These are internal aspects or attributes of the firm that make it not to perform at optimum levels. They are areas that need to be improved on for the business to gain competitive advantage in the industry (Ahmadi et al. p. 2). Launching into a new market requires a lot of capital; Hank’s Food Company must have this because lack of the same becomes weakness that will make the firm uncompetitive. Starting off in a new market may also be hampered by an inadequate supply chain especially at the start. The two are key weaknesses that any firm seeking new markets must address. For Hanks Food Company one of its major weaknesses is in the size of its human resources. As seen from its website source, the company has just about 60 employees. Competing firms that are more established such as Aohata has 548 employees. When a company has a small size of workforce competition from with larger workforce has an advantage in the market. This is because the size of workforce limits the number of tasks which can be handled at a time to ( Songa & Russo 2018, p. 215).
This segment of the analysis looks at the factors that are external to the business but have favorable impacts on the business. Opportunities confer a competitive advantage to a business only if they take advantage of it (Ojala et al. p. 61). For instance the low tariffs charged on businesses in Japan are an opportunity because it allows businesses seeking to venture into the market to set up. Also the market share of the jam processing industry in Japan is an opportunity that new firms like Hank’s Food company can exploit. On September 22nd 2014, the Food Company received a letter from the Australian Prime minister commending it on its 21st birthday. This is a sign of political goodwill from the national authorities. When government action is favorable for a firm it can thrive in the industry especially when competing firms are not presented with similar opportunities (Raju et al. 2018, p. 1). The company should take advantage of this recognition from the head of state to boost its reputation in order to gain competitive advantage over other firms in the industry.
These are factors in the external business environment that have the potential to hurt the position of the firm in the industry. They are occurrences that destroy the competitiveness of the firm (Ahmadi et al. p. 2). Competition is a major source of threat for businesses venturing in new markets. For instance, Aohata Corporation is an established jam processing company with a significant market share in Japan. Hank’s Food Company must develop a strategy to gain a position of advantage over it in the new market. One of the major threats for Hanks Food Company in Japan is the Aohata Corporation. As an established firm with 548 employees, the company has a larger workforce compared to just about 60 at Hanks. Also Aohata commands about 68% of the market share in terms of low calorie jams in Japan. Breaking into this market segment will take a lot of strategy from Hank’s team. Aohata’s production processes are equipped with vacuum concentrators alongside supper heated pasteurizing mechanisms. This kind of superior production technology puts the firm in a favorable position in the industry (Fujikawa 2017, p. 1). Its production processes are equipped with vacuum concentrators alongside supper heated pasteurizing mechanisms. In order for Hank’s Foods to succeed in this market, it must adopt more efficient technologies that will reduce its cost of production and hence give it competitive advantage over Aohata as a major competitor In order for Hank’s Foods to succeed in this market, it must adopt more efficient technologies that will reduce its cost of production and hence give it competitive advantage over Aohata as a major competitor.
This is an approach where the company that wishes to enter a new market joins with another in a cooperative deal where they contribute assets, have equity and agree on how to manage the joint entity (Dar et al. 2016 p. 711). It can be an excellent way for Hank’s Food Company to enter the Japanese market. The new entity can become a limited liability company, a partnership or a corporation. For example Hank’s Food Company can get into a joint venture with Aohata Corporation. The benefit of a joint venture with a company that is already established in a market is that the entrant benefits from the established firm’s understanding of the local market’s needs and the policies and laws of the country. The two firms can then agree on how to split the profits. The other major advantage of joint ventures is that both firms share the risks that come with venturing in the new market (Guo et al. 2018 p. 55). The joint venture will also benefit from the already established market dynamics set in place by the Aohata Corp. In some countries like China; the state requires that foreign firms partner with Chinese companies for them to sell to their citizens. It can be challenging to launch new product into a new market especially where competing brands are already being sold. For this reason Hank’s Food Company may choose a joint venture as a mode of entry.
Connecting with a large customer base especially in new and foreign markets can be very challenging for a business. This is why it is vital to know the customers in order to know how to approach them. The STPD strategy provides a framework for the business to achieve its marketing objectives in new markets.
Different customer groups respond differently in terms of their buying behavior. This makes it possible for the customers to be divided into groups. The process of categorizing customers into classes is called segmentation and customer groups possessing similar traits are called market segments. Market segmentation helps firms to better utilize scarce resources on the right type of customers (Breed et al. 2017 p. 52). The firm then should develop unique marketing mix for every market segment. Here are 2 possible market segments;
This takes into account aspects of the customers such as age, gender, income and ethnicity. Hank’s Food Company can segment the market in terms of the level of income of the customers and target the high end income customers because they have a preference for expensive things. Following identification of the demographics, the firm can then come up with a marketing mix that targets the high end consumers in the market (Kieu et al. 2018 p. 101).
This categorization is done by assessing personality traits, motives and lifestyles. Lifestyles and personality traits are major determinants of the tastes and preferences of the customers (Breed et al. 2017 p. 51). The young people who live a sedentary lifestyle for instance have a preference for foods that are high in calories and sugar. This class of customers would make a good segment for the sale of high sugar jams produced by Hank’s Food Company.
Targeting is the phase where the firm decides which part of the market it will focus on. Targeting comes after conducting market segmentation. Targeting must be decided on the basis of the potential profitability of the chosen market segment (Biddle 2017 p 12). In selecting a promising market segment Hank’s Food Company should look out if the segment possesses the following attributes; it should have potential for future growth, should exhibit low entry barriers and exit barriers, should be competitive and have unsatisfied needs that the firm can meet. According to (Suh et al. 2011, p. 86), targeting as a market strategy is dependent on the interaction of the market segments and the enabling factors in the industry. Structural attractiveness of the targeted segment is very vital; this is determined by the number and size of competitors in the market, the existence and availability of substitutes to the firm’s products as well as buyer/supplier influence. The potential for growth of the segment dictates the profitability that the firm can derive from targeting the said segment. The challenge of this method as compared to mass marketing is that the firm is more likely to achieve higher sales but which comes at a higher price. To beat this constraint, the firm should target a large proportion in a few segments and then refine the marketing mix to objectify higher sales in the selected market segment (Terech 2018, p. 1)
This entails the development of a proposal for selling that is unique in the view of customers (Chukurna 2017 p. 138). This strategy helps the firm or its brands to claim a unique place in the minds of its customers. Position relies on the ability of the firm to communicate what their products represent. To successfully position itself, Hank’s Food Company needs to approach the market segment from outside; marketers must adopt an approach that is ‘they’ oriented. In other definitions this is called developing the positioning statement. This is very vital so that the firm avoids the risk of under positioning, over-positioning or wrong positioning (Suh et al. 2011, p. 86). In so doing the company must develop differentiation informed positioning strategies that are communicable. Importantly, they should also possess the quality of being superior, distinct from competing firm’s positioning strategies and preemptive (not possible to be copied by competing firms). Positioning strategies that could work for a company venturing into a new market would include; unique product characteristics, product classification, advantages conferred by usage occasions and contra-competitor strategies. A comprehensive positioning strategy that offers a complete mix of advantages is what is referred to as value proposition (Wang, Lee & McLee 2011, p 69). Value proposition is one of the most successful approaches to positioning in a market.
This forms a crucial component of marketing. In order for the firm to make the customer appreciate value for the purchase they make, its products should offer a unique attribute that makes it different from competing brands (Breed et al. 2017 p. 51). Hank’s Food Company should develop jams that offer attributes that are different from that of its competitors like Aohata. If differentiation of product is aligned with the customer preferences, the firm can charge premium prices and increase their profit margin as well as competitive advantage. In order that a firm successfully uses the differentiation strategy, it must unpick a couple of differentiating competitive advantages which becomes the informing basis for positioning (Wu et al. 2011, p. 7). The choice of the differentiating competitive advantage is dependent on the one that delivers higher value to the customers, give a higher profit margin at lower costs and generally has more benefit. Scholars opine that product differentiation tends to score highly when applied to the above mentioned criteria although the every company should develop its own set of differentiating competitive advantages as dictated by the existing market dynamics. Ultimately unique market structures require unique marketing strategies that are tailored to the existing circumstances.
Marketing can be understood to mean placing the right product at the right place and time. The international marketing mix is a tool that provides a framework for doing this. It constitutes 4 Ps, namely product, price, promotion and place.
The product of a business can be in the form of a tangible commodity or n intangible service that is designed to meet a specific customer need (Matei 2014 p. 451). For the sake of Hank’s Food Company it will include both commodities (jams, spices and flavors) and services. All goods and services go through what is called a Product Life Cycle in business. Every stage the product goes through in the products life cycle presents unique challenges.
At the introduction stage, the initial stage, the cost implications are significant. When launching a new product like Hanks Food’s will be doing in Japan, the size of the market tends to be small at the start; this translates to low sales. If the firm is to beat this fact a significant amount of money must be invested towards research concerning the market trends (Epuran et al 2015 p. 80). Finances must be set aside to support consumer testing and marketing the product massively especially because it will be a competitive market.
At the growth stage of the product life cycle significant growth in the sales are realized, sometimes exponential rates are recorded. This growth is attributable to factors such as economies of scale, expanded market size and the results of the marketing (Pistol et al. 2014, p. 505). At this stage, the profit margins are bigger and the company can invest back more money in its promotional activities in order to reap maximum benefits of the growth stage.
At the maturity stage the product will be very well established. The aim of hanks Food Company will now be to significantly enhance its market share. However this can be the most competitive part of product promotion (Epuran et al 2015 p. 81). This is the stage when the firm must be careful about the marketing strategies they pursue. Product improvements or modification that might confer competitive advantage are worth pursuing in this stage.
At the decline the market for the product begins to shrink. Shrinkages can result from a saturation of the market (Terech 2018, p. 1). At this point usually, all potential customers have made their purchase. Sometimes this can result from a switch where consumers turn to a different product-a substitute. At this stage of the life cycle, the firm can still make profits by turning to low cost production methods.
At every stage of the product life cycle, it is important for the firm to have an understanding of the needs that the product was intended to meet.
The price of a commodity is a compensation for the firm’s production processes inclusive or the profit (Pistol et al. 2014. P. 505). It is the amount that the end user of the commodity is expected to pay. The price of a product in itself is a marketing strategy. The price of a commodity determines how it is perceived in the minds of customers and potential customers and as such pays a role in determining how it sells (Terech 2018, p. 1). If the price of a commodity is set at a point that looks higher for the utility value it possesses, low sales will be recorded. This is because customers make purchases on the basis of the perceived value of the product and not the objective costing. This underlines the centrality of having an understanding of how customers perceive the product before setting the price. Also, if the value attached to the product by the customer is high, then the firm can take advantage of this to fix higher prices. Firms can fix prices higher than the monetary value of the product if the commodity has a positive customer value (Suh 2011 p. 91). In such a scenario the product will still sell. A commodity that has a lower utility value in the perspective of the consumers may have to be priced accordingly lower. The price may also be affected by several other factors. These may include the cost of distribution, the price set by competing firms, markups, value chain prices. Setting prices relatively lower than a competing brand prices can be a good marketing strategy (Pistol et al. 2014. P. 506). The risk involved is in the view of some customers a commodity that is priced lower than competing brands appears to be of a lower quality or to have lower utility value. Distribution plans can also drive up the prices if they are complex and expensive e.g a distribution chain that involves several intermediaries increase’s the price of the commodity when it finally reaches the consumer.
The strategies that are employed by the firm as well as the communication techniques are categorized as promotional activities. Promotion activities vary from advertising, sales, special offers, promotions and public relations. The promotion strategy that a firm selects should be suitable to the needs of the customer and the product too. Marketing should not be confused with promotion. Promotion is the component of marketing that deals with the communication of the products to the potential customers (Matei 2014 p. 451). Marketing is a larger area. In promotion, marketer must come up with a working a message strategy. This is the message that is intended for the promotion to pass over to the customers. The marketers must also evaluate the impact that the message will have on the firm. A good promotion message for Hank’s Food Company should tell the customers the benefits of their products in order to help the firm to gain a positioning in the industry e.g. the massage strategy of Mac Donald is to covey the convenience guaranteed by their products. Alongside a message strategy, a media strategy is also required. The media strategy is the vehicle that delivers the message to the target audience (Terech 2018, p. 1). The firm should also at this point decide which components of the marketing mix they will apply in the implementation of the media strategy. At this point, the firm must take into consideration the behavioral pattern of the market targeted. The questions of interest would be the kind of TV programs they watch, whether or not they read newspapers while at the same time assessing the financial ability of the company to roll out promotional activities.
As already mentioned earlier product goes through a complete product life cycle. At every stage of the product life cycle, the strategies employed in product promotion are different as shown in the table below
At the introduction stage the promotion activities will be tailored towards informing the customers about the product. Popular, mainstream media outlets such as TV, radio and newspaper are good avenues of promotion (Wang et al. 2011 p. 72). Other scholars describe the strategies use in this stage as push and pull. At the growth stage of the product life cycle the message should be targeted at enhancing the brand awareness. The message at this stage should also pursue establishing customer loyalty. At the maturity stage the firm begins to experience more competition. Marketing at the maturity stage of product life cycle involves effective communication of differential advantages of the firm’s products over those of competitors. The firm tries to give their customers more reason to choose their products ever those of their competing firms. At the decline stage not much can be done; although the firm may try to remind its customers of its products, the inevitable usually occurs.
Placement regards the mechanism that the firm will use to reach the customers with the products. It speaks to how the firm will distribute its goods. In order to maximize on profits, the firm should distribute its commodities to the customer in a manner that is efficient and to a place that is convenient for the end user (the right place at the right time). In the marketing mix, the distribution strategy has potential to attract or send away customers (Wu et al. 2018 p. 80). Distribution channels that are effective and efficient are instrumental the meeting the firms marketing strategy objectives. In the process of distribution, if a firm underestimates the demand of its product it will lead to reduced profits.
Hank’s Food Company can choose to use either of these tow distribution channels always available in the marketing mix;
Indirect distribution is where the firm opts to sell their products to the wholesalers who sell to retailers who ultimately sell to the end user; the consumer. The downside of this approach is that it ends up making the commodity expensive by the time it gets to the consumer. The direct method of distribution on the other hand involves selling directly to the end user; the consumer. This method gives control over the price of the product to the manufacturer (Irina 2014 p. 10).
The following distribution strategies can be used by the firm;
Intensive distribution-this strategy of distribution is suitable for goods that are low priced and/ or generally associated with impulse purchase e.g. creams chocolate and ice creams.
In this approach, distribution is limited to a single outlet. In this method the product usually tends to have a high price and the intermediary transfers the cost to the end user (Suh 2011 p. 91). For instance most car manufacturers choose to sell their cars through selected dealers.
In this distribution strategy, instead of one a few distribution dealers are selected to distribute the products. This is possible if the company wishes to reach bigger a geographical area and its customers do not mind shopping around.
Conclusion
This paper has applied a variety of strategies, models and theories in the process of assessing the possibility of Hanks Food Company launching into the Japanese s market. The SWOT analysis has helped the firm to appreciate its strengths, and weaknesses and the factors in the external business environment that present opportunities or impose threats. The PESTEL analysis has aided the paper to critically assess the macroeconomic environment in japan with regard to the industry sought by Hanks Foods. Going by the SWOT analysis and the PESTEL analysis, there is huge potential for the firm in the new market of Japan. The firm is doing fairly well in Australia and the business environment is enabling in Japan. The paper has also provided the STPD strategy which has highlighted the marketing strategies that the firm can employ in the new market in order to position itself as a competitive industry player. Going by all the above metrics, the stage is set for Hank’s Foods Company to enter the Japanese market.
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First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download