Professional Documents
Culture Documents
Semester 2/2014
TABLE OF CONTENTS.
1. Table of Contents2
2. Executive Summary...3
3. Introduction. 4
4. Target Country Analysis5-15
4.1 Geographic Environment
4.2 Economic Environment
4.3 Social and Cultural Environment
4.4 Political and Legal Environment
5. SWOT Analysis ... 16
6. Competitive Analysis .. 17 - 18
7. Market Entry Strategies.. 19
8. Marketing Plan..20-27
8.1 Marketing objectives
8.2 STP
8.3 Marketing Strategies
8.3.1 Product strategy
8.3.2 Pricing strategy
8.3.3 Distribution strategy
8.3.4 Communication strategy
9. References.... 28
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Executive Summary
This report provides a country analysis, as well as marketing strategies.
Under the theme of OTOP goes global. In this project, we had chosen one
OTOP product to enter foreign country market. Which is Thai silk and export to
France.
The information that we had gather for the target country analysis has
point out that possibility of cultivate Thai silk is nearly impossible. Follow
by the economic environment is considerable to be exceptional. However,
culture environment are the major difference. Lastly, political and legal
environment of the country France is strict in term of importation in to the
country.
The report provides SWOT analysis and competitor analysis. Three key
players ( China, India) are included in the competitors
analysis consist with direct and indirect competitor. The SWOT analysis
discuss the following points:
-
The benefits and drawbacks of our product. As well as the advantages and
disadvantages of country choice.
- Marketing entry strategies Our company has decided to choose exporting
as a market entry into France. To be more specific, we are choosing to export
indirectly through distributors.
-
Marketing plan for this product, the objectives are to create the consumer
awareness of our brand as will as keeping the long-term positive relation with
the customer. Our target are the fashion lover who lives in France and people
who are willing to try new thing. The price that we had set for our product will be
some how similar or a bit higher to the competitors. The IMC tools and
implementation are consist with public relation, digital marketing etc.
_
3. Introduction
Global marketing is a subject that helps us know how to use the tools of marketing on
a larger scale of the world. Throughout the semester, this project was divided into
small parts and as for our final project it has more impact on really how to market our
product.
Our main objectives for this were for us to deepen our knowledge and develop our
skills in the global market. But other than university terms objectives, our first
purposes about this project is that we want to promote our OTOP product more
specifically the Thai silk internationally.
Our first country we choose is France more precisely Paris as it is one of the capital
city of fashion. France already produces their won type of silk in their other regions
such as Lyon. However it is very different from our so we will bring something unique
to them.
Additionally the product itself is already very popular in Asia since they are the
biggest consumer of silk and the Asian consumer can differentiate the silk from many
parts of Asia such as China, India, Cambodia, Japan etc This leads us to expand
not only our product but our culture on another scale. This explains why France was
the best starting point in expanding our product. If our silk gets popularized in a
capital city of fashion it can lead to other countries in Europe and might as well
expand to the United State.
Secondly, silk is integrated in Thai culture. The idea of exporting our product
internationally is not only to sell it but to also advertise our culture. This will expand
our culture around the world and people will recognize it everywhere they go if we
manage to sell our product and explain the connection with our culture.
All in one, we will explain throughout the report how we will market the product
abroad and the market research we did.
Location
France is located in Western Europe, the second largest country in the
region. France is rounded on the north by the North Sea and Belgium, on the
east by Switzerland and Italy, the south by Mediterranean Sea, on the west by
Bay of Biscay and Atlantic Ocean. Paris, the capital city, is located in the north
central part of country
o Terrain
Mostly Land is flat plains and little rolling hills in north and west.
o Availability of natural resources
France have a limited quantity of natural resources, there are coal, iron,
ores, bauxite and uranium. But all these resources are very hard to
extract to be used profitably. But France has very high quality of soils in
large area of country which is good for agriculture activities.
o Climate
Weather in France is varied by areas; continent, coastal, mountainous,
Mediterranean. Generally, France has mild temperatures throughout the
year, not too hot or cold and also mix of rainfall and sunshine especially
in the coastal area. At the north, there would be cooler and wetter
meanwhile warmer and drier in the Mediterranean.
o Certain cities or geographic areas you want to market your product
We want to market our product in the north central part of country,
especially in Paris, the capital city. Its not it has mild climate,
temperature ranked from -15 to 38 C. The average weather would be 5
C in winter and 20 C in summer.
Population Growth
Age distribution
Degree of Urbanization
Contribution of GDP
agriculture: 1.9%
growth by manufacturing,
service and agricultural
industry: 18.7%
sector
Purchasing power/PPP
Inflation
Economic System
Exports commodities
machinery and transportation equipment,
aircraft, plastics, chemicals, pharmaceutical
products, iron and steel, beverages
Imports commodities
machinery and equipment, vehicles, crude oil,
aircraft, plastics, chemicals
Exports partners
Germany 16.7%, Belgium 7.5%, Italy 7.5%,
Spain 6.9%, UK 6.9%, US 5.6%, Netherlands
4.3% (2012)
Imports partners
Germany 19.5%, Belgium 11.3%, Italy 7.6%,
Netherlands 7.4%, Spain 6.6%, UK 5.1%, China
4.9% (2012)
Balance of Payment
$35,648,527,244 (2012)
to Thai Baht
o Infrastructure development
France is developed country and has the most sophisticated
infrastructures in the world with advanced technology and high developed
and various transportation system. They have the fastest trains in the
world and its owned by state. There are 31,939 kilometers of rail lines,
828,000 kilometers of paved roads. Waterway is used about 47 percent
of it to support good transferring and there are 474 airports in France and
most of it is used for international commutation.2
o Per capita consumption level of your product if applicable
In France, it has $35,784 per capita which is considered as high income
country. So people have pretty high standard of living there meanwhile
our premium product with the weaker currency even we set skimming
price that can urge us expected profit. The price still would be reasonable
for them.
o Country development level (may include GDP and GDP growth, inflation
Purchasing power and PPP in the last 3-5 years)
Economic growth in France have been stable since 2011 when it was economic
recession throughout European .The budget deficit is decreased from 4.2% of GDP
in 2013 to 4% of GDP in 2014.Between 2008 and 2012 disposable income declined
by 4.4% enforcing consumers to cut spending. Over the past five years, Frances
economic freedom has waned as the size and reach of government have expanded.
A stagnating domestic economic environment has made high unemployment,
especially among young people, and structural deficiencies have suppressed
dynamic private-sector expansion.
2 http://www.nationsencyclopedia.com/economies/Europe/FranceINFRASTRUCTURE-POWER-AND-COMMUNICATIONS.html
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nothing in France and they count the number on hand with number one
on thumb, not on the index as usual.4 In France, Majority of people
share the same religion which is Roman Catholic following by tiny group
of protestant, Jewish and Muslim respectively, Even if Christianity have a
long story in France since the history, but nowadays many of people
more than half start to claim themselves as a no religion because in
France, they are not strict much and there are just only 5% of total
population that still go to church weekly.5
o Dietary preference
Beside fashion, food is also high concern of people in the country. They
focus on fine food which must be done with well preparation and fresh
ingredient. They are always proud with their exclusive cuisine. Wine and
cheese are what they are famous for and common for all level of people.
Normally, French people eat three meals per day. Breakfast is the
lightest meal and follow up with larger meal for lunch and dinner.
o Preferences and Lifestyle
French people normally have very high pride about their own nation.
They always prefer stick their life with traditional and cultural style. They
always enjoy life with their own fashion, food, art and music meanwhile
they also seek for modern life and world trends. People enjoy healthy
lifestyle, they always wake up early in the morning and be on time with
their schedule throughout the day in term of eating habit and work.
People in France doesnt work much as other country does, they
normally start working from 8am until 18pm and enjoy sport or travelling
during weekend.
4 http://www.ehow.com/info_7956365_french-nonverbal-verbal-communicationstyles.html
5 http://about-france.com/religion.htm
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high value for customer and very unique meanwhile elegant and luxury.
So it will be attractive product among their society.
4.4 Political and Legal Environment
o Political system and Legal system
Politic system in France is democratic constitutional republic
that have the head of the state as the president. And he will be on
position for 5 years before reelection happens. He is also the person
who appoint Prime minister and government who will set the amount of
states expenses and revenue. They control country with socialism
which most of key industry is owned by state and also give freedom to
private owner ship for some industry.
Legal system in French is formed the basis of civil law for much
of Europe, complex and hard for foreigner to understand their law. Most
of foreign firm will have a contract that based on international laws
which is going to be more beneficial for them.
o Political stability and Political risks (possibility of nationalization,
confiscation and expropriation)
French government currently has unstable situation and they are very
weak in term of politic practice but they try to enhance their
performance by urging economy in country.
o Trade and investment laws (trade barriers for your product, product
category or industry, Foreign direct investment laws and regulations
including investment incentives, supporting policies)
French is very reliable and safe for doing business according to
the report, France has very least restrictive investment climate.
Government try to attract investment from around the world and
devotes a amount of resources to foreign firm. France has policy
incentives, marketing, overseas trade promotion offices and
investor support mechanisms, so this country is considered as
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the largest source of FDI and have free trade on with many
countries around the world
Investment Climates
% of Foreign Ownership
21.03% in 2014
certain sectors
concessions
Labor Cost
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6 http://www.alphainternationaltrade.com/en/choose-your-markets/countryprofiles/france/trade-profile
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5. SWOT Analysis
SWOT analysis is a very useful tool for understanding and decision-making for
businesses. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A
scan of the internal and external environment is an important part of the strategic
planning process. We've discovered points for each SWOT that may have affect on
our Silk business that we plan to launch them in France.
Strengths
We are the only Thai silk market in
France (first entry)
Thai silk is well known
Weaknesses
Lack of knowledge in market
research
Might require a huge expense in
promoting the product and marketing
Since the product is new, the
customers might not be open to it
Opportunities
Most likely for us to reach the
customers' mind faster
Expand Thai culture to the
westerners
Threats
Customers might confuse our silk
with our competitors silk (chinese
silk)
China is our main competitor
The fashion market in France
Strengths: The possible internal strongest points in our business. Silk is the product
that reflect the eastern culture. There are many countries in the east that produce
and export silk to countries in the western. However, focusing to France we can
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rarely find Thai silk in their market, therefore, if we launch our product there the
possibility is that we can be the only company that opens the market for Thai silk in
France. Thai silk is well known with their uniqueness. The quality of Thai silk can
surely compete with those of our competitors from other countries that also produce
and export silk to France.
Weaknesses: There are pros and cons in opening a business espectially when trying
to introduce such unique product (Thai Silk) to the market in France. We would need
to conduct multiple research ways before finally launching our product to France.
Since our company is base in Thailand, our knowledge about the market in France is
very low. In order to gain more knowledge about the market in France we might need
to invest a huge amount of money to do market research there. Even though Thai silk
is very unique and beautiful it is still very new to the market in France. Customers
might not be open to it.
Opportunities: Our product will be very new to the market. If we promote it in the right
way it is most likely that the our product will reach to the customer minds faster. They
might pay attention and wanting to know what the new product is. Thai silk is a
traditional product, even the name itself represents Thailand. We also have the
opportunity to promote our culture to the westerners.
Threats: There are many other countries in the East that also produce and export silk
to France. China is one of our biggest competitors. Chinese silk and Thai silk are
different in texture therefore, customers might not be able to separate which one is
which. This might bring confusion to the customers. As we all know that France is a
country of fashion. Our silk will also be in that category. It might be hard for us to
compete with the other clothing brands.
6. Competitor Analysis
China
China has already a long history of exporting silk around the world. It all started with
the silk route in 1877 which led to international trade route. They were the first one to
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produce silk. They started to export in Europe on the Mediterranean side with the
Roman Empire. They introduced them to silkworm breeding and silk spinning. This is
already an advantage for them to have strong ties with Europe. And it also explains
why they already have a large market in Europe or any around the world.
This explains also why they are one of the biggest exporters of silk in the world. As
we shown during the presentation, China exported 130000 silk in 2013 comparing to
country such as Thailand (680) or India (26538), they exported the most. They export
the finished product but also the raw silk, it represents already 85 % of the world
export and 40% for its silk.
China is not only the only the biggest exporters of silk but they also the largest
producers about 1 million of the population works in the silk industry.
This can be explained by the long history they had with their silk trade.
India
India is also very well known for their silk. They are the second largest producer of
silk after China they contribute about 18% of the world production but they mostly
produce raw silk where it represents 97% of their production in India in five states
combine. Silk industry is one of the oldest industries in India, thus most of the
employments, approximately 7.6 million are in this industry. They export most of their
goods to the United States and UAE.
Silk in India has a long history too; it is part of their culture. They call it Saree which
synonymous to silk. Silk or saree is part of the traditional women costume where
there whole body is draped in silk. They are usually worn now during ceremonies
such as weddings.
Their history of silk which started a bit after China and the amount of silk they
produce, it explained the integration of silk into their culture and people recognized
their saree everywhere.
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8. Marketing Plan
8.1 Marketing Objectives
- To successfully create brand awareness in France market within the first year
85%
- To maintain a premium image of product in customers mind.
- To build a good customer relation and brand loyalty to have a strong customer
database
8.2 STP
Segmentation variables
Since silk is premium product and it is not quite suitable for teenagers. We are
targeting customers who have enough ability to afford our products; moreover,
they should be fashionable person, who like to shopping, and their fashion style
are matured. According to our product features, our target customer will be
classified base on psychographic and demographic factors.
-
materialists.
Demographic segmentation:
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Females
Total
Total population
32 126 316
34 191 678
66 317 994
Under 20 years
8 370 464
8 002 082
16 372 546
20-64 years
18 573 511
19 186 844
37 760 355
5 182 341
7 002 752
12 185 093
Quality and price: our product have higher cost yet better quality.
Nevertheless, our target customers is those have at least middle income
range. Therefore, our communication message would rather emphasis on
quality and the producing processes. A campaign named the royal silk would
be run in order to capture markets attention, the campaign will be focus on our
history, the customers satisfaction in home country and bring it to France, as
well as the production process.
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Labelling: According to the report Cant Read, Wont Buy from leading
market research group Common Sense Advisory. There is 72.4% of people
are more likely to buy products that written information in their native
Strategic Alternatives:
Communication
Strategy 2:
Strategy 4:
product extension
dual adaptation
communication
adaptation
Strategy 3:
Strategy 1:
product adaptation
dual extension
communication
extension
Product
We utilize strategy 4 dual adaption, since French people are very
ethnocentric7, they are proud of their own culture. Hence, we should adapt our
physical feature of silk in order to meet their favor. Likewise, advertising and
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Source: http://knoema.com/pznbvwc/france-inflation-forecast-2013-2015-andup-to-2060-data-and-charts
As shown in the chart, Frances inflation rate is predicted to remain quite
stable around 1.1. This will be one of the important consideration to set our
price for the future operating profit margin since the cost will increase
gradually. Moreover, currency fluctuation is also a factor, the graph below
indicated that Thai baht has been appreciating recently 8; however, we will not
raise our price to keep a healthy profit margin, but price stable will help us to
gain more market share against other competitors.
Competitors: it is compulsory to have an eye on competitors behavior.
However, we will not adjust our price follow the competitors price
management, since it violate our objective in the first place, we do marketing
about premium product quality with reasonable price instead of low/economy
product.
8 http://www.tradingeconomics.com/thailand/currency
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We will use Yusen Company to help us ship the product to France. Then we will hire
one logistics and transportation company in France to bring the product in to our
warehouse and responsible for distribution from warehouse to other retail store.
One difference of distribution strategy is online ordering. We do not offer online
ordering in France market. Since we have adapted our product to be premium
product, therefore, we would like to let our customer to come to our store and actually
feel the product quality with advice from staff.
8.3.3 Communication strategy
Global advertising content: localization.
We have mentioned about cultural and value differences above, therefore; it is
inappropriate to use the same strategy from home country. We will use advertising
agency to help us on developing the new message and advertising technique with
new commercials. One of the consideration would be Publicis Groupe Company.
IMC tools:
-
Public Relation:
o Image advertising: this will help us faster to tape the customers
attention. Moreover, this match with our product image premium and
luxurious.
o Advocacy advertising: we focus on the producing process
brain awareness.
Digital and TV advertising: as shown below, digital and TV marketing
accounted for a big portion in Western Europe, therefore, we should capture
this opportunity. Moreover, the cost for digital marketing is lower than compare
to other channel. To implement, we will establish our official website in France
and push it up. However, we still stick with the restriction to online purchasing
due to the reason mentioned above.
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9. Reference
http://www.travelchinaguide.com/silk-road/
http://www.chinasilk.com/enproducts.html
http://en.wikipedia.org/wiki/Silk
http://www.indianmirror.com/indian-industries/silk.html
http://www.ibef.org/exports/indian-silk-industry.aspx.
http://www.tradingeconomics.com/thailand/currency
http://www.ehow.com/info_7956365_french-nonverbal-verbal-communicationstyles.html
http://about-france.com/religion.htm
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