Global marketing strategy
The primary aim of this task is to discuss about the international marketing plan that implemented by Coles to expand and explore the business in Japan. Coles is one of growing retail and Supermarket Company, well known for its outstanding quality of retail products and services. Coles has decided to expand and flourish the business functions in Japan to attain competitive benefits. The assessment 1 has provided the ample of information about the marketing opportunities, pestle analysis, SWOT analysis and organizational analysis. It is the continuation part of assessment 1 that discusses the marketing mix strategies and their impacts on the business activities. Furthermore, the paper also outlines that how Coles uses segmentation, positioning and targeting strategies to capture entire target audience in the Japan. The marketing entry modes such as exporting, licensing, strategic alliance and foreign direct investment also have been discussed in the task. At the end, some recommendations have been given to perform business functions effectively in Japan. More detail of the task has been discussed below.
Summarization of assessment 1
The assessment 1 discussed about the business opportunities of Coles that can be taken while initiating business activities and operations in Japan. The paper also explained that how business factors could affect the growth of the firm adversely and positively as well. Coles is a retail supermarket Company who provides grocery products to the customers across the world. Coles has decided to expand its business functions in Japanese market. Pestle and SWOT analysis also explained in the assessment 1 that helps in identifying risks and threats of the new market. Before entering in the Japanese market, firstly the organization needs to focus on the external challenges, opportunities and competitors. A brief information about segmentation, targeting and positioning also had been discussed in assessment 1.
Screening of marketing selection
Screening is a most of the significant process to identify and measure the issues and challenges of the foreign market. As the same way, Coles will use screening process to enter into the Japanese market. Preliminary screening is done by the company before entering into this country. Along with this, economic growth, marketing opportunities, competitors, and behaviors of the consumers need to be considered while expanding business in Japan. Aside this, Coles would use various marketing tools such as SWOT, Pestle, porter diamond model and STP strategies.
Stages of overseas market selection process
There are five stages that can be used by Coles for entering into the Japanese market which have been discussed below.
Country identification: In this stage, Coles decides to explore its business functions in Japan for earning more revenue and returns. Effective and unique resources, technology and manpower can be used by the company in Japan. Along with this, communication is effective and unique in such country therefore, the company can take lot of benefits by expanding business (Marketingteacher, 2018).
Preliminary screening: It is the second stage in which general screening done by Coles. Various factors like current stability, macro environment factors, level of domestic consumption, and exchange rates need to be considered in this stage.
In-depth screening: It is feasible and unique stage to capture the entire target market in foreign country. The firm uses segmentation, targeting and positioning strategies are initiated by Coles to analyze and identify the behavior and needs of the customers (Marketingteacher, 2018).
Final selection: In this stage, managers decide strategic goals and objectives for Coles to increase profit and outcomes. The company also focuses on the domestic and close competitors to stay in the Japanese market.
Direct experience: In this stage, personal experience is significant ad effective. The managers directly visit to the country to experience and understand the culture, regulations and business practices (Marketingteacher, 2018).
The marketing and financial objectives for Coles have been discussed below.
- To improve and enhance the quality of grocery products.
- To recognize and focus largest target group in Japan.
- To increase profitability by 20%
- To provide better quality of products and services at reasonable prices.
SMART includes specific, measurable, achievable, result oriented and time. SMART objectives set by Coles to boost profitability in Japanese market. The firm uses advertisement and promotional approaches to raise revenue in foreign market. The SMART objectives for Coles have been detailed below.
- To maximize sale and revenue through advertisement and promotional campaigns.
- To expand business in the foreign market with reduction in the prices.
- To promote core brands in Japanese market.
- To maximize sale percentage by increasing the producing rate of the important brands.
Marketing opportunities and reasons to select the market
After conducting SWOT analysis and pestle analysis in assessment 1, it is noted that Coles can take various benefits while expanding business in Japan. The Japanese market is one of the most significant and profitable markets for many organizations (Venturejapan, 2018). Entry into the Japanese market can be one of the effective and profitable decisions in the future time (Venturejapan, 2018). If Coles expand and explore the business in Japan then it can take ample of opportunities while operating business. It has been found that Japan is second biggest consumer market with a US$1,124 billion turnover in last year (Startupoverseas, 2018). The Japanese market is suitable because this market will help to provide ample of competitive benefits to the customers across the world. The economy of the country is steady thus, Coles can retain maximum consumer globally. Apart from this, culture is also favorable in the country to attract maximum workforce for conducting business successfully and effectively.
Along with this, Japanese market is well known for its profile and affects some other markets too. There are ample of avenues to expand and flourish the business in the Japanese market. It is noted that Japanese is a society based on the consumption, utilization and production of retail products. The company can increase and enhance its profitability and revenue because innovative and new technology and resources are used by the country. High consumer preferences and taste can become another good opportunity for Coles in Japan. All these opportunities can be taken by the company while exploring the business activities and operations globally (Mororintelligence, 2018).
Elements of the global marketplace and its impacts
Coles is one of the growing and leading names in the Australia. Now the firm has decided to enter in the Japanese market. Therefore, the company needs to focus on the marketing strategies to attain competitive benefits in the Japanese market. The elements of marketing mix for Coles have been discussed below.
Product: Coles renders fresh food, fuel, liquor, groceries and financial services to the customers. Along with this, the business segments of the company include Coles online, Spirit hotels and Coles express. It has been found that Coles manages and operates wide range of products and services in the international market. Therefore, the firm can attract maximum number of customers in Japanese market. Aside this, Coles needs to work with suppliers to render ample of retail and grocery products to its customers in Japanese market. There are ample of products such as bread rolls, cakes and ice-creams that have won the recognition and rewards for their delicious taste and quality. The firm should focus on the best food retailers in Japan to compete with them successfully and effectively. The product strategy put great impact on the growth and targets of Coles in Japanese market. If the company focuses on the product strategy then it can take ample of benefits in this market. Coles should introduce new and innovative products for the customers in foreign market to distinguish its products from the rivalries (Coles, 2014).
Price: It has been analyzed from the various studies that Coles is a cost leader in the market. The organization renders high quality of products at lower prices. Price is one of the vital elements to be nailed if the company is trying to be a player in the retail sector. It is analyzed that the company will need to use lower pricing strategy to make a good image in the eyes of the customers. Along with this, Coles needs to invest in training and development, simplifying processes and store network to set low price and offer a good customer experience in Japanese market. Apart from this, the firm should be dedicated for delivering good quality of products at lower prices. If the firm is entering into the Japanese market it further needs to provide some discounts and offers to Japanese. There are various loyalty programs, sessions, discounts and promotions that can be used by the company to get various benefits in Japan. Flybus is one of the significant loyalty programs that could be used by the company in foreign market. A marketing research shall be done by the firm to analyze and identify the prices of the competitors in Japan. It needs to focus on the prices of the rivalries to compete with them in the international market. Price puts various impacts on the sale and profitability of the firm in Japan. Price also affects the preferences and desires of the customers. The buying behavior of the consumers can also be affected by pricing strategy (Armstrong, Adam, Denize & Kotler, 2014).
Place: This strategy is essential to expand the business functions in Japan. Before analyzing the location or place, the company would fail to explore the business internationally. This strategy is essential to make a dynamic and effective reputation or image in the foreign market. Place strategy is significant for Coles in Japan to strive with competitors globally. Coles further needs to open new stores to improve the range of convenience and food. An effective and unique marketing research is done by the company to find out an attractive and unique place or location in Japan (Kono, 2016).
Promotion: Coles will have to use promotional strategy to maximize the sale and outcomes in the Japanese market. Along with this, online advertising and promotion shall be done by the company to promote the products and services in the foreign market (Hebden, King, Kelly, Chapman & Innes-Hughes, 2011). Online promotions and traditional channels must be used by Coles to increase and enhance the demand of the products in Japan. It should print the prices on the each and every product. Its twitter and facebook account also provides ample of information related to the items to the wide range of customers in the global market (Coles, Themessl-Huber, & Freeman, 2012). Coles must use its facebook account to resolve and handle the queries and complaints of the customers in foreign market. It should use promotional schemes and offers during the various festivals such as new year and Christmas (Bailey, 2016).
Physical evidence: Coles needs to focus on the physical evidence while selling the products to the customers in Japanese market. The firm needs to work towards better stores and buildings. The stores should design in such a way that it can improve and enhance the customer experience. In this way, the organization can enhance and flourish the business in Japan.
People: The success and growth of each and every firm depend on the management and workforce. No company can survive and grow its business without using a dynamic and effective management. Coles should hire train and skilled workers to perform tasks and duties in foreign country. Top management should provide training and development coaching to the employees for increasing sale in the competitive market. The first steps programs and retail leaders programs shall be used by Coles in the country to uplift profitability. Strong and dynamic management puts various impact on the long term goals and objectives positively.
Process: Coles should find various ways to improve and enhance its procedure in the strong supply chain for delivering excellent customer experience in the market. Streamlining of processes shall be used to reduce costs that add value to its consumers. Without unique and effective process, the company will not able to compete and cope up with rivalries in the international market (Gordon, 2012).
Segmentation, targeting and positioning are essential for entering in new market. STP strategies further help Coles to fulfill the needs, requirements and wants of the customers. The STP strategies for Coles in Japan have been discussed below.
Segmentation strategy: Market segmentation includes grouping ample of customers into various segments that have common wants, requirements and needs. Each segment plays a major role in identify and analyzing the profit and growth opportunities. The primary market segment of the company is departmental and retail stores (Sultan, Wong & Sigala, 2018). They buy the products and services of Coles to uplift profitability and outcomes. Coles can divide the Japanese market into different segment that include following:
Demographic: The demographic strategy monitors on the aspects and needs of the customer in the country. Before entering into the foreign market, a situational analysis is done by the firm to analyze the risks and challenges of the market. The organization focuses on the income bracket, job and cultural background, age, and gender. The Japanese consumers are very alert in buying the retail products and services.
Psychographic: This strategy refers to the customer group lifestyle. The psychographic factors include lifestyle, opinions, aspects and social class. These factors may affect the sales volume and revenue of Coles in Japanese market. It is portrayed that Japanese consumers value include packaging, service, delivery, brand information and advertising. Retail shopping is seen as a leisure activity in Japan. Japanese buy the products either for their own personal use or for their social status and lifestyle. The Japanese do not comfortable with only conspicuous consumption. If the company is able to know and analyze the psychographic factors in Japan then it can take ample of benefits by selling the products (Taken Smith, 2012).
Behavioral: This strategy is based on the customer behavior. For example, brand preferences, needs, desires, online shoppers and prior purchases. Coles needs to focus on the behavioral and attributes of the customers while conducting business in Japan. The behavior and aspects of Japanese consumers are shifting dramatically which can provide ample of opportunities for Coles to earn maximum level of output (Baker & Hart, 2008).
Geographical: The geographical location is essential to meet the long term requirements and needs of the customers in the Japanese market. Effective and attractive location shall be chosen by Coles while expanding business in Japan.
Targeting: After dividing the market based on the various groups and status, Coles will need to choose strong and unique target market because no one strategy would suit all type of consumers, so being able to build and improve specific approaches and strategies for the target market is significant and vital. It has been noted that Coles will target premium and middle class people who have different cooking habits and are completely satisfied with the products and services rendered by Coles. Value based positioning is effective to measure the wants and requirements of middle and upper class people in Japanese market. Before initiating business in Japan, it shall be kept in mind that customer’s preferences, choices and requirements play a significant role to boost profit and output. Furthermore, the company must target youth and kids by offering products and services of their convenience, desires and needs. Along with this, Coles should provide some special offers and discounts to maximize sale and revenue in the Japanese market. Coles needs to focus on the women preferences and choices to attract maximum number of female customers in the Japanese market (Strauss & Frost, 2016). Need based positioning strategies shall be used by Coles to analyze and measure the choices of women in the international market.
Positioning: It is an effective approach to create an attractive and unique brand image in the minds of the customers in Japan. By using positioning strategy, Coles will able to know and understand the perception and choices of the customers related to retail products and services. The firm will have to initiate its marketing campaigns and programs in such as manner that encourages and promotes its retail products in the Japanese market. Loyalty schemes and rewards shall be used to attract maximum customers in the new market. Aside this, the firm can take benefits by initiating the big data analytics and artificial intelligence programs to better understand and analyze the behavior and nature of the consumers.
Market Entry modes
There are various entry modes that can be used to enter in the Japanese market. Some of the entry modes have been discussed below.
It is a well established and traditional tool or method of reaching foreign markets. There are three types of exporting such as cooperative exporting, indirect exporting and direct exporting. Exporting is significant method of entering into the foreign market. If Coles uses this entry mode then it can take ample of benefits in the Japanese market (Pehrsson, 2008).
This method is useful and effective because there is extra cost in this entry mode.
· This entry mode is not expensive and there is no trade barrier in exporting.
· By using exporting mode, the firm can reduce investment and risks and maximizes the current facilities (Eriksson, Johanson, Majkgård, & Sharma, 2015).
· Lack of knowledge in the foreign market like Japan.
· Unable to gain international experience.
One of the vital method can be used by Coles is licensing. Licensing mode can allow Coles in the Japan to use the various resources and property. Such property is intangible like patents, production methods and trademarks. Little investment is required in licensing method but it provides ROI in high amount. Thus, this entry mode can be used by Coles for entering into the Japanese market (Ojala, 2009). It is significant mode to enter into the Japanese market because there is low financial risk in this mode.
· Low entry costs
· Lower financial risk.
· Low income and revenue as compared to the other forms of internationalization.
· Lack of control various difficulties can be faced by Coles in Japan.
Foreign direct investment
It is a fundamental entry mode because it provides a strong and high degree of control in the functions and operations. However, this method needs high degree of commitment and high level of resources. By using this mode, Coles can transfer the ample of resources such as technology, personnel and capital (Quickmba, 2018).
· Easy international trade and stimulate economic development.
· Employment boosts and develops.
· Risk and issue from political change.
· Higher costs.
Wholly owned subsidiary
It is primary and important entry mode to expand and explore the business in the foreign market. Therefore, Coles can use this entry mode for international expansion and development (Johanson & Mattsson, 2015). In this mode, there are two options to enter into the foreign market like Greenfield operations and acquisition.
· There is minimum risk in this market entry mode to explore and expand the business in the foreign market (Managementstudyguide, 2018).
· Highest profitability.
· High risk and entry cost.
It is term that explains a whole series of various relationships between organizations that market globally. It is a non-equity based agreements between the different companies in the global market. It is one of the suitable methods for Coles to enter into the Japanese market effectively and successfully (Ojala, 2009). It has been analyzed from the various analysis that strategic alliance is significant mode to explore business in Japan because Coles can use innovative capabilities and skills under this mode.
· Each partner concentrates on capabilities and skills.
· Partnerships facilities access to the international market.
· The business depends on the partners.
· It is very expensive entry mode.
Generic business strategy could be used to attain competitive benefits in the global market. Most of generic strategies have been discussed below.
Cost leadership strategy: This is significant and unique method to become the lowest cost producer in the industry. This strategy is generally associated with the large scale businesses rendering standard products with relatively little differentiation that are really acceptable to the majority of customers in the market. This strategy helps in setting the lower prices of grocery products and services in the global market. Furthermore, effective use of technology can be done with the help of cost leadership strategy. A low cost manufacturer should find and exploit all sources of cost benefit. If a company can attain and sustain overall cost leadership then it would be an above average performer in its industry and can take rivalries benefits globally.
Differentiation strategy: It is a most fundamental strategy that helps to distinguish its products from the rivalries in the market. This strategy makes products unique and effective to beat the rivalries globally. It has been found that differentiation strategy makes products and services unique and attractive than competitors. Coles can pursue this strategy to stay agile with their new products and services. This strategy focuses on the quality and features of the products to attract maximum number of customers globally.
Focus strategy: It is stated that focus strategy concentrates on the specific niche market to meet the long term requirements of the business in Japan. This strategy helps in understanding and analyzing the needs, choices, requirements and preferences of the customers. With the help of this strategy, the firm has been able to develop a brand loyalty among their customers in Japanese market. This makes their particular market segments more attractive and unique than competitors. There are two types of focus strategy such as cost focus and differentiation strategy.
Some of the recommendations for Coles to enter into the foreign market have been discussed below.
- It is recommended that Coles should analyze and identify the right and effective entry mode to carry out business activities in Japanese market. The organization must use strategic alliance method to flourish the business in Japan.
- Coles should target the women and youth who want grocery and retail products at appropriate prices. The company should use unique promotional and advertisement strategies and social media channels to target maximum target audience in Japan.
- Along with this, Coles should use fair pricing strategy to attract and retain maximum number of customers internationally.
- The company should appoint skilled and talented workforce to conduct business activities and operations in Japan.
- Business level and corporate level strategies should be used by the company to compete with rivalries in the competitive market. Cost leadership is vital strategy that shall be used by Coles in Japan to minimize prices of the retail and grocery products.
- Coles must use promotional and advertisement strategies to promote the products and services in the Japanese market.
- It is noted that the firm should focus on the business level and corporate level strategies to beat the competitors globally. Especially, the firm must focus on the differentiation strategy to differentiate its grocery items from the rivalries in Japan.
On the above mentioned limelight event it is concluded that Coles is one of biggest brands in retail sector that provides retail and consumer products and services to the customers. The above analysis indicates that how Coles select effective and dynamic strategies to enter into the international market. The five stages of overseas selection market selection process also have been explained in the task. It is the second part of the assignment which explains the STP strategies, entry modes and marketing mix strategies. The first part explained the business factors, competitive analysis, SWOT analysis, organizational analysis, and marketing opportunities. On the other hand, the above analysis shows that how Coles can get ample of opportunities in the Japanese market with maintaining control over the rivalries. Marketing mix is one of the important strategies that used by Coles while entering in the foreign market. Furthermore, Target market is also analyzed by the firm to uplift profitability and outputs in Japan. Along with this, it the paper explains the various entry modes that help the company to enter into the foreign market.
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