International Marketing Consultancy Report

Sannies is a family-owned, Scottish-based producer of high-quality fashion shoes for women. They have been in business for over 70 years and have a turnover of £30m per year, the bulk of which comes from the UK and Ireland. A small amount of sales are a result of direct enquiries from customers who have moved abroad and are unable to purchase the shoes in their new country.

Their UK sales come from the following sources:

85% directly to independent retailers

15% from their own shops in Edinburgh and Glasgow

• They have a range of 5 different styles of shoes available in standard sizes. The firm utilise different brand names for their markets:

Their lowest price range are sold under the ‘Gallus’ brand name

Their mid-price range are sold under the ‘Jings’ brand name

Their highest price range are sold under the ‘Blether’ name

• Their cheapest range is priced in the shops around £150 with the most expensive priced up to £500.
• Their profit margins vary depending upon the channel being utilised. On average these are as follows: Independent retailers 15%, Direct to customers 30%, own shops 20%.
• They have a budget of £0.5m for marketing communications in the UK which is allocated in the following ways:
• Advertising (Consumer and Trade) 60%
• PR agency 20% (which includes sponsorship of the Loch Ness Highland Games
• Trade Promotions 20%
• They are proud of their Scottish identity which is reflected in the St. Andrew’s cross as part of their brand logo.

Their brand slogan is ‘a guid shoe ye ken’ – which means ‘a good shoe, you know’

Their logo is a Scotsman in a kilt playing the bagpipes against a St. Andrew’s cross, this character is known as ‘Shuggie’.  Every pair of shoes they sell has this image printed on the sole of the shoe.

The Board agree that they need to expand a specific European market but there is a difference of opinion about the best way they should move forward.  

You are an International Marketing consultant who has been approached by the Board to help them with their transition into these markets.

• It is highly competitive market
• None of the directors or managers have an in-depth experience of international marketing
• Theyare divided between focusing on mature markets in countries like Italy, France, Germany or Spain, or in emerging markets such as Belarus, Moldova and Latvia.
• The Directors have been concerned by reports that trading on their Scottish heritage might not be a strong selling point. Many trade experts consider Italian and French brands to be strongly associated with high quality shoes for women.
• Consumers in the quality segment are very demanding.
• Their product range might be too limited.
• The brand name isn’t known by customers in Europe but there is some awareness from experts in the trade.
• Price-wise, the firm is considered to be on the low-mid-range segment of the quality shoe market.
• Their target customer is not price-sensitive but is focused on product quality, style and value-for-money
• New fashions and styles are an important element in developing a strong reputation.
• Marketing communications budgets for other independent shoe brands are higher compared with them
• A combination of the pandemic, the implications of Brexit and volatile political changes is causing uncertainty in financial markets and has led to fluctuations in the exchange rate.
• The firm’s website is limited and used to highlight their PR activities, especially their promotion of the Loch Ness Highland games
• The firm has received a letter from a French fashion retailer, “S’annee?”. They have expressed their concern at the similarity between the respective brand names and have asked the company to amend their name for their European markets.
• The company has agreed to provide funds of up to £500,000 over 12 months to promote the company.

The Marketing Director wants to spend the money on building a sales team to focus on particular countries.

The Managing Director is excited by the fact that the agent of a popular female digital influencer has contacted him to indicate she would like to become the ‘face’ of the company and promote them on her social media accounts. Her fee would account for most of the budget allocated to promotion.

• Some directors have expressed their desire to open a flagship store in a major European capital city as a way of ‘announcing’ their arrival in Europe.

You are required to write a report to the Board of Directors to provide them with information on the following issues.

1. The Board have asked for your advice on a number of international marketing issues and wish the following questions to be addressed

What branding issues will the firm have to deal with before entering any European market? (15)

What elements of the product will need to be adapted for European markets?  Explain your answer. (10)

What increased costs will the company face should they decide to develop their presence in a particular country? (10)

What pricing issues will the firm have to address should they decide to enter a) a mature Western European market b) an emerging Eastern European market? (15)

What logistical issues would the firm have to consider should they decide to enter an emerging market in Eastern Europe? (10)

What are the advantages of developing their online presence compared to opening a flagship store? (15)

Outline your views on the advantages and disadvantages of the three promotional options being discussed –  expanded sales team, digital influencer, sponsorship (15)

Which other promotional method would you recommend to the firm, outline your reasons for this choice. (10)