Market Entry Strategy for Unilever Bangladesh
Discuss why and how Unilever Bangladesh should standardize or adapt its product (Rexona) in the Chinese Market.
The battle to balance stewardship and economic growth in the global market environment continues. Over the last decade, China has grown to be an excellent destination for international trade (Philip, et al., 2011, p. 8). New communication strategies have helped most companies go global, and this has increased competition for market internationally. Unilever Bangladesh operates globally in more than 100 countries worldwide. Currently, Unilever delivers more than 400 brands to its markets, China being among them. However, as a consultant of Unilever Bangladesh, there is a need to market the Rexona brand to diversify its market in China given that China has a wider market of consumers (Geppert and Dorrenbacher, 2014, p. 240). Since its inception in 1964, Unilever Bangladesh has attracted a diverse range of customers in the whole globe. International marketing faces numerous challenges, and the company must understand them before launching its newly improved product (Rexona) to the Chinese market (www.unilever.com.bd). There are adverse regulations by the China government, stiff competition from other firms and unpredictable economic downturns just to mention a few (Philip, et al., 2011, p. 400).
This report follows two components to achieve the set aims. Foreign market entry is enabled through joint ventures, exporting, franchising, licensing, and turnkey projects. As a consultant of Unilever Bangladesh, franchising will be the primary market entry strategy for the company. The report will examine the policy decision of standardizing the Rexona product in the company’s franchise in the context of international product management. The study will also review the benefits possible to occur if the standardizing approach is employed about product management models (Khanna and Palepu, 2010, p. 100). Further, the report will evaluate the benefits of the sales force in marketing Unilever Bangladesh Rexona brand to the Chinese market. An evaluation of the benefits of using sales force in communication mix will also get undertaken.
With over 50 years of experience in the market, Unilever Bangladesh (FMCG) connects both directly and indirectly to its consumers. Unilever enjoys a worldwide brand recognition, and this acts as the key driver for success in the Chinese market. In the context of international product development, different policy decisions have been considered by the company’s consultant.
Standardization involves the setting of same attributes for a particular product, in this case, Rexona. Over the past decade, the debate on whether to adapt or standardize a new product has received significant attention in international marketing (Lee and Lieberman, 2010, p. 150). Standardization is used due to various reasons as explained below:
Policy Decision of Standardizing the Rexona Product
Leads to Production economies: The standardization of Rexona brand by Unilever would result to better planning and control, improved economies of scale, and proper utilization of the sales workforce at the company in its global market being exploited.
Reduction of production costs: The entry into the foreign market (Chinese market) by Unilever significantly reduces the company's production costs due to franchising and the use of joint ventures with other firms. Standardization of the Rexona product would help Unilever lower the cost of production hence increasing profitability (De Mooij, 2013, p. 24).
Smooth performance monitoring: Expanding the newly Rexona brand that is standardized regarding quality and price by Unilever to the Chinese market would assist in lowering the unit design expenditures hence gaining a competitive edge over the rivals in the international marketing (Navarro et al., 2010, p. 155).
In this report, the decision of whether to use standardization or adaptation strategy is influenced by the external (China) market environment. Different issues such as political, economic, cultural, and social impacts on different markets, hence the strategy to adopt by Unilever at the Chinese market. The management of Unilever Bangladesh needs to adopt the standardization strategy in selling its Rexona brand in China.
Unilever has established strategies of tackling the potential political and legal issues in the Chinese market. There are legislations by the government that govern business operations in the Chinese market (Yuksel, 2012, p. 52). The company has enhanced prices control land expatriates employment in a manner that complies with China policies.
Unilever’s marketing operations to China depends on China’s economy. The success of the company in the marketing of Rexona will depend on the economic growth and stability in the country. Further, the rise of people’s wages in China presents an excellent opportunity for Unilever to make more sales hence profitability (Yuksel, 2012, p. 52).
Sociocultural trends impact on Unilever’s marketing strategies in the Chinese market. Unilever needs to modify the Rexona before marketing it in the market to ensure that the brand addresses consumer's interests and demands and that it is not against the Chinese culture, beliefs, and norms.
The success of an MNC depends on the type of technology used in marketing their products to the target market. The rising business automation in the world requires Unilever to use e-commerce in doing its business. Marketing Rexona over the company’s website offers the right opportunity for the company to enter the Chinese market (Yuksel, 2012, p. 52).
Benefits of Standardizing the Rexona Product
Ecological trends have an influence on Unilever’s remote environment at China. The effects of the natural environment affect the marketing strategies of the company. The increase in environmental programs complexities in China require Unilever to be socially responsible to attract a wider market.
Unilever Bangladesh's food and personal care product success in the global market is substantially associated with the standardization strategy used by the management when selling a new product internationally (Philip, et al., 2011, p. 166). Given that consumers in the market demand adjusted and high quality products, Unilever should ensure a sustained standardization of its Rexona brand that is getting marketed to the China market to suit the consumer culture.
The adaptation strategy refers to the marketing strategy where a company modifies new products. Most multinational corporations (MNCs) adapt their marketing strategies when going global, even at the international arena where diverse brands of goods are universally prevalent (Moore et al., 2010, p. 161). For example, Unilever markets home care products, fast foods, water purifiers, and personal care products. However, this report focuses on Unilever’s marketing strategy to win the Chinese market for its newly modified Rexona. Unilever's adaptation decisions when entering the Chinese market would influence its competitive position and performance over its rivals.
Some researchers postulate that adaptation approach is more efficient since consumers vary across cultural differences. For instance, China is a country whose cultural diversity is vast. In the choice of export market variables by the management of the company, the market similarity between Bangladesh and China needs priority. The proper planning and firm Rexona adaptation in the Chinese market add strength to its export performance.
Unilever faces stiff competition from Procter & Gamble and McDonald’s among other players in the industry. In marketing Rexona at China, Unilever should use aggressive price cuts and marketing campaigns to attract more customers.
As an MNC, Unilever has various suppliers for its raw materials that manufacture Rexona. The company needs to understand market demand in China and choose that supplier who can offer the right quality. Choosing the right supplier helps in delivering the preferred brand quality in the market (Porter, 2008, p. 33).
Maintaining the Rexona quality is the key determinant of customer attraction and retention by Unilever in China. The company should target reliable and loyal customers whose purchasing power is unquestionable. Unilever's ability to supply Rexona in the market depends on the number of buyers (Porter, 2008, p. 40).
Using the Salesforce in Marketing Unilever Bangladesh Rexona Brand
Threat of substitution
The likelihood of customers finding an alternative company or product would determine the rate of success for Unilever in marketing Rexona to China. However, the marketing of unique and favorable offers by the company automates success, and this hinders people from outsourcing or finding another dealer.
Threat of new entry
Unilever’s position in the Chinese market depends on other MNCs ability to enter the market. Entry of new companies in the market is a threat to Unilever’s Rexona brand, hence the company needs to improve and standardize its product feautures in a manner that attracts the target market (Porter, 2008, p. 28).
Entering the Chinese market with new marketing strategies will help Unilever maximize its profitability. The decision to standardize the Rexona brand by Unilever will offer the company benefits which could not arise given the adaptation approach is preferred. The potential benefits include:
- Standardization of the Rexona brand would provide Unilever significant cost advantages such as reduced production costs and increased economies of production.
- The standardization approach allows for the consistent presentation of brand image worldwide hence attracting choice from many customers in the targetted country as compared to the adaptation approach.
- Unlike adaptation strategy, using standardization strategy to enter global market enables a firm employ similar advertisement techniques, packages, and presentations hence reducing operations costs.
- The adoption of standardization approach would help Unilever Bangladesh develop unique global marketing strategies that suit the Chinese market.
- The Rexona Unilever brand image is associated with diversity, dynamism, and active global lifestyle. The decision by Unilever to use adaptation approach in marketing this product might negatively compromise its identity in the Chinese market.
- High speed is guaranteed in the implementation of standardization strategy by Unilever since the marketing mix is already known to the marketing sales force of the company.
Examination of the standardizing and adapting approach
Product standardization across different markets has become a significant issue for managers going global to consider. In 2015, Unilever secured a partnership agreement with the Chinese government that enhanced its collaborative marketing strategies of its new products in the market (Schilke et al., 2009, p. 30). This gives Unilever an edge to thrive in the Chinese market given that the Chinese consumers know its products. The knowing of the quality and the price of Rexona products by consumers necessitates the standardization of the newly modified Rexona in an approach to international marketing.
On the other hand, product adaptation approach is increasingly becoming an important factor that marketing managers of global companies consider. Perhaps, product adaptation significantly influences multinational corporations foreign market entry marketing programs. Unilever is an MNC, and international marketing is required in an endeavor to aid market penetration of the newly modified Rexona in the Chinese market. While past research argues that standardization enhances performance in the market, today's research recommends a combination of the two strategies. However, the combination of the two options will be costly to Unilever and hence impossible.
Therefore, Unilever Bangladesh needs to consider using standardization approach other than adaptation strategy. This is because standardization is a cheaper plan whose marketing fits all cultures in the market. Further, standardization will offer the company large economies of scale in the market. Standardizing the company’s marketing mix and strategy would also help the company save marketing costs in promoting the product to the global arena. Further, the firm would have more competitive prices and high quality product brands that suit both the local and worldwide consumer demands.
Benefits of Using Salesforce in Communication Mix
International product management model
Unilever Bangladesh's success in marketing the Rexona brand depends on the skills and innovativeness of the product manager. The advanced technology has made international marketing challenging, complex, and competitive. Unilever should adopt an excellent product management model to enhance competitiveness and sustainability in its Chinese market entry plan. The international product management model to get used by Unilever is:
Blackblot product management team model
Unilever should train its sales force on strategies of implementing marketing plans. The company should focus on the technological challenges that affect their operations and hinder their success in marketing their product to other foreign markets. Blackblot’s model will help in transforming product modification and enhance Rexona acceptance in China.
International product management principals
The marketing of Rexona by Unilever in China will be based on the following product management principals:
Understanding the target market: The marketing managers of Unilever must understand the market demands and needs before delivering the Rexona brand in the market.
Educate consumers on the product use: Through company websites, it is the responsibility of a product manager of Unilever to inform customers on how to use the product. Making it easy for consumers to use the product grants customers loyalty.
Sales Force within Marketing Communication Mix
Marketing personnel plays a critical role in the marketing communication mix of a company. While international marketing is a significant trend in the modern business world, the right sales force determines the rate of success that a company would have in its foreign market entry strategies.
MNCs rely on the sales force in their endeavor to go global (Terpstra et al., 2012, p. 45). There is need to support the sales force by giving them sufficient and appropriate resources to market the company’s Rexona in the Chinese market. The different sales force has different talents, skills, and abilities to persuade new markets. For example, the introduction of finger-licking good fare by KFC to China was facilitated by its sales force, and this slogan excited the Chinese consumers. In this regard, there are potential underlying benefits of valuing sales force within the marketing mix of Unilever as discussed below:
The global marketplace requires highly innovative and creative sales force to explore. Realizing the marketing success by Unilever Bangladesh is determined by the ability and quality of its sales personnel. The sales force needs to understand different cultures and language for the Chinese customers to persuade them easily to buy Unilever’s Rexona product (Chung et al., 2012, p. 80). The potential benefits for Unilever from its sales force in entering the Chinese market include:
Challenges Facing Unilever in the Chinese Market
Sales force lead conversions in the foreign markets: The use of Salesforce by Unilever when selling its modified Rexona brand to China would help in bridging the gap between the consumer demands and the quality of product that meets customer needs. Salesforce would help Unilever advertise the Rexona product to the Chinese market and assist in building on the current awareness that the customers have on the product in the market.
Potential business growth: Sales force would assist the company to build customers loyalty to the product getting marketed in the market (Rexona). Consumer loyalty and trust on the company’s product would help in increasing sales hence strengthening its position in the Chinese market. There is a potential for the trustworthy customers to recommend Unilever to their colleagues through the online webs and business cards offered to them by the sales force.
Customer attraction and retention: Personal selling by the sales force of the company plays a critical role in building a brand reputation to the market. Excellent sales personnel of Unilever creates a long lasting impression on the consumer and hence attracting new customers in the Chinese market (Klug, 2006, p. 10). Provided the sales force of the firm offer after sales services to their consumers when they purchase the Rexona brand, this has a potential impact on customer retention and reduces consumer complaints.
Product development and features improvement: Sales force, directly and indirectly, impacts on the development of the product (Rexona) features. The interaction of salespeople with the Chinese customers gives them a chance to collect information regarding the modified product. As a result, the sales personnel take these recommendations to the marketing manager of the company which in turn helps Unilever understand the market demand and offer the right standardized product as required by the consumer (Johnston and Marshall, 2016, p. 88).
The marketing communication mix involves the product, price, promotion, and the place combination. When entering international markets, most companies use the components of marketing and communication mix (promotional mix). Unilever's attempt to enter the Chinese market in the commercialization of its Rexona brand requires the use of advertising, public relations, personal selling, and sales promotions. Brand positioning in the international marketing requires proper understanding of the target audience by the company (Jackson and Sorensen, 2015, p. 99). Unilever must involve the 4P's i.e. product, price, place, and promotion when marketing the Rexona product in the Chinese market. However, the last P of the marketing mix- Promotion requires proper coordination and right sales force to connect to the targeted market effectively (Hutt and Speh, 2005, p. 68). The use of the marketing and communication mix when marketing its Rexona products in the global market gives Unilever potential benefits of growth as discussed in every mix below:
Overcoming the Challenges
Sales promotion: The primary role of the sales force in a company is sales promotion. The sales people of Unilever should make the use of premiums, contests, and coupons in the China market and this offers the company potential to attract attention, dramatize offers, stimulate consumer response, provide excellent buying incentives, and boost sagging sales (Ernst et al., 2010, p. 90). The use of sales people in sales promotion is relevant to Unilever when entering the market. With licensing to operate in China, the company has a potential to enhance Rexona brand preferences in the market hence gain a competitive edge.
Public relations: The exporting and foreign direct investment (FDI) foreign market entry strategies require public relations back up for a company to thrive in the Chinese market. Sales persons ability to relate well with the target audience will offer the business highly credible and believable sales for its brand. Using sales force would assist Unilever to reach many prospects via other promotional forms at a cheaper expense (De Mooij, 2010, p. 80). Further, public relations offers the sales people many ways of exploiting the newly identified China market through the review of new product features, global news stories on the brand, and sponsorship events.
Direct marketing: The use of highly skilled and talented sales force by the company will help Unilever undertake online marketing of Rexona, direct emailing to the acquired clients, and in conducting telephone marketing. Sales forces have the ability to understand customers mood through their interactions experienced in other global markets. Whenever this is a challenge to the company, there is an opportunity to consider sending messages to retailers with special orders (Buckley and Casson, 2010, p. 150). Online and print surveys undertaken by the sales force helps the company in understanding market trends.
Foreign market entry requires proper sales force management by the company. The sales force is the most important asset in an organization in its attempt to sell a new product in a foreign market. Sales personnel research and innovate new marketing techniques that help a company enter and thrive in the international market (Terpstra et al., 2012, p. 44). In particular, Unilever's success in entering the Chinese market depends on the firm's ability to manage its sales people.
Unilever is focused on managing the talents, culture, skills, and behaviors of its sales force. The first stage of foreign market entry is marketing the product, and this is the key role for sales force in the firm (Craig and Douglas, 2005, p. 100). There is a potential return on investment from the efforts employed by the sales personnel in marketing the Rexona brand to the Chinese market. This necessitates the company to offer a conducive environment and adequate resources to the sales people to enable them to win more markets.
The proper sales force management by the company improves their morale and commitment to market the Rexona product in the market. Sales people have a direct relationship with the target audience, and this offers them a perfect opportunity to understand what the market demands before embarking on the venture (Blocker et al., 2012, p. 20). Sales people play a critical role in setting the price for the product since they are the ones distributing samples to the consumers. Unilever must understand that sales people help in optimizing product distribution to the Chinese market and that valuing their input ideas contributes directly to the diversified market and product acceptance in the market.
For the sales force to be effective, a well detailted plan of how it will be implemented should be provided. The first step should be planning the integration. This will be possible by definining the objectives that need to be achieved. Recruiting the best person to lead this task force and outlining the tasks tp be performed by the sales force will help in having effective sales force (Mantrala , & Raman, 2013). Educating the team will be next step. In this step, the manager should dedicate his/her time on educating the team on what need to be done so as to perform their duties well. The vision and objectives of the team should also be well communicated. The manager also needs to train the sales force so that they can gain all the skills needed for perforance of their tasks.
The third step of the implementaion plan should be preparing the data. The manager should clean the data and ensure it is up to date to avoid facing obstacles that related to data that may hinder them from fulfilling their tasks. Determine which data to be to be given to the task force so as to ensure delicate and confidential data is not given to the wrong personell (Johnston, & Marshall, 2016). The fourth step will involve transfering data. In this case data will be transferd from the previous marketing platform to the new marketing platform which is sales force. This will involve preparing reports of the movement of the data. It will also involve evaluating the setting to ensure that the data is well configured so as to ensure its security.
Tracking the progress of the plan will be the fifth step. In this step, the manager wants to ensure that every activity is happening according to the plan. This stage requires alot of feedback from the involved stakeholders. The sixth and last step will be to update and communicate to the to the task force( Buttle, Ang, & Iriana, 2010). From the feedback provided in the previous step, the sales force team should be updated on what changes need to be done. This will help to correct the deviations encountered so that the plan can work well and achieve the desired goals and objectives.
The main aim of this report was investigating the extent over which multinational corporations (MNCs) standardize or adapt a product brand when going global. The study selected Unilever Bangladesh’s (FMCG) Rexona product to advise the company on why and how to market the modified brand to the Chinese market. In order to fulfill the objectives of the report, the extent of which Unilever can adapt or standardize its Rexona brand, and the importance of sales force in the marketing of the product at the global market has been discussed. The study concludes that Unilever should standardize its product when marketing it internationally, in particular to China given its immense benefits, unlike the adaption strategy. Further, the report concludes that Unilever should value the input of its sales force when marketing the new product in the international market since this plays a critical role in product success and sales growth in the global market.
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