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Assumption University

Semester 2/2014

MKT3620 Global Marketing


Section 409

Final Project: OTOP goes Global Report


12th May 2015

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
_

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.

4. Target Country Analysis


4.1 Geographic Environment
o

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.

o Analysis: Discuss how geographic environment could have impact on


your business operations (e.g. in terms of transportation, logistics,
sourcing, distribution etc.).
According to geographic above, we can see that in France there is no
place and no proper climate for producing silk at all. Silk need warm
and humid place to produce it, so all silk that we will put in the market
must be imported silk from Thailand. So the price of product might be
pretty high comparing to another type of fabric
4.2 Economic Environment (The information provided here must be updated
information which are published in 2012-2014)
Economic Indicators at a glance
Population Size

65,102,719 (2013 est.)

Population Growth

0.549 % (2013 est.)

Age distribution

18.6 percent aged 0-14 years


65 percent aged 15-64 years
16.4 percent aged 65 years and over (2013 est.)

Degree of Urbanization

86.77% (2013 est.)

GDP/ GDP growth

0.3% (2013 est.)

Contribution of GDP

agriculture: 1.9%

growth by manufacturing,
service and agricultural

industry: 18.7%

sector

Services: 79.4% (2013 est.)

Purchasing power/PPP

$2.276 trillion (2013 est.)

Inflation

0.9% (2013 est.)

Economic System

A mixed economy that combines capitalist and


socialist characteristics, French government
exercise great control over the economy.

Major export and import


products

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

Major export and import


tradition partners

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)

Exchange rate in relation

37.64741 Baht per Euro

to Thai Baht

Discuss the following information regarding the economic environment of your


chosen market.
1 http://www.indexmundi.com/france/economy_profile.html
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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.

o Foreign Direct Investment flows

2 http://www.nationsencyclopedia.com/economies/Europe/FranceINFRASTRUCTURE-POWER-AND-COMMUNICATIONS.html
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France has declining in FDI due to international economic issue since


2009.Even if FDI inward flow if European increasing but France still face
a sharp decline of FDI inward flow. But still being considered as the
attractive country for FDI because this country has highly skilled labor,
large industrial base and good location but the country has the highest
taxation rates in the world and also low competitiveness in some industry
because most of them taken to be state owned but the government also
make it freedom for any foreign investment happen in the country with
not much rules. There are some investment aid in terms of subsidies, tax
exemptions, etc. that government provide. Currently, France has signed
bilateral agreement on investment with 91 countries 3
o

(Which economic integration(s) this country belongs to and discuss the


challenges and opportunities of these economic integrations.
France belongs to European integration, a regional union, which
happened in 1951.All trade barriers are removed among members.it has
very high market growth and many connections among other countries
and, so it would have many competitors in this market that have good
price meanwhile countries inside this integration enjoy exporting and
importing product with each other, so it might be chance for our product
to spread in Europe easily not just only in France. Also all members
share the same type of money to the cost of our product wouldnt change
much, so by selling the product in France, it seems like selling product for
other European countries as well.

o Analysis: discuss how economic environment could have impact on your


business operations and country competitiveness and attractiveness in
terms of economic environment.
In France socialism that allow private ownership in the state but
government control all main industry like electricity, water supply and
some major businesses, moreover, there is no many regulations for
3 https://en.santandertrade.com/establish-overseas/france/foreign-investment
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foreigner coming for business. However, the economic environment in


France would make the cost of operations goes high comparing to home
country because of high taxation inside France. However, due to France
doesnt have much regulation on international trade which is going to be
very beneficial for our investment in this country
4.3 Social and Cultural Environment
o Value, belief, and attitude toward product from particular country
French people have very high conscious about dressing. They are likely
to judge other people background and success on the clothes so thats
why even their casual dress would not be as much as relax as other
western countries. So with this perception among their people, it will be
really suitable for our product that can represent luxury and good quality
kind of fabric which they can dress in either business or social event
meanwhile it represent cultural style which very unique comparing to
other kind of fabric.
o Language (verbal and non-verbal), Religion
In term of language, they have French as the official language in their
country and the way they communicate is pretty much similar to English
language. French people have very high power distance, so they are
very conscious about respecting other people and normally talk in formal
way. For example, the way they call other people you there are 2 ways
to do so. Firstly they say tu which is used with familiar people or
friends and they would call vous with people they dont know well,
people with authority position or older than you. Moreover, they also
often address people with titles like Madame, mademoiselle, monsieur
to people they dont know well, mostly people they meet in public. And
whenever you want to ask somebody flavor, you must add please in the
sentence every time, or else it might considered rude. In term of gesture
used, they also share similarity with American culture but some that they
dont share the same would be hand sign meaning of ok , it means
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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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o Openness to foreign culture and products from foreign countries and


Thailand in particular.
French people have very low interest on other countries product if that
particular product cant reach enough perceived value in their mind
because they have very high uncertainty avoidance. In term of food,
French people always seek for Made in France label on. But in term of
other product, they are likely to find the most trusted or high quality
product from foreigner. For Thailand, we still are not famous much in
French because people there still barely have exposure with our product
so they still dont have much trust of product in Thailand.

o Analysis: Discuss how social and cultural environments could have


impact on your business operations and marketing strategies.
Basically French people are high power distance, so in order to make
business with them, we must lean proper manner that French are
conscious about, both verbal and nonverbal language and dress
properly is needed because they are likely to judge people from what
they look like at first. Moreover, they are high uncertainty avoidance and
very nationalistic, in doing business with them, we must make them feel
trust in doing business with us and it might take time to build that trust.
So we have to be very patient, careful and consistent in making
relationship with them, and also we might have to use French as the
main language in negotiation or marketing, so they would feel more
open to us and also use local distribution or local firm, in order to
promote the product because they can shape perspective of the
customer toward to our product better. Moreover, French society have
high context culture, So they will concern about background reputation,
status. However, according to their personality and life style, there is
high possibility that they would love our product if we can ensure them
trust and build up our reputation well because our product can covey
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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

allowed (any restrictions on


any sector)
Corporate Income Tax

33.31 % on profit foreign firm gains in 2014

Incentives provided for

Subsidies, loan at preferential interest rates, Tax

certain sectors

concessions

Labor Cost

EUR 24.60 in 2014

Special Economic Zones

Free Zones : Verdon, Guiana


Non Tariff Barriers :
At the European level, agricultural products are
protected within the Common Agricultural Policy
and textile products from China, Belarus, North
Korea, Montenegro, Kosovo and Uzbekistan are
subject to particular formalities and import
licenses or control procedures (export document,
monitoring document).
At the national level, trade in plants and seeds,
aircraft, and others has to be declared; they have
to be certified respectively by the GNIS (the
national inter professional organization for seeds
and plants), the Ministry of Defense and the
Ministry of Agriculture. Among the non-tariff
barriers are France's regulations and bureaucratic
procedures, its complex safety standards, and the
testing and certification requirements. 6

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o Bribery and Corruption


Due to France has very least restrictive law on international
investment. So Corruption is likely to happen widely in the country
o Legal restrictions (antitrust laws, anti-dumping laws, countervailing duties,
intellectual property protection)
No data
o Analysis: Analysis: Discuss how political and legal environments could
have impact on your business operations and marketing strategies.
the political and legal environment in France will be very
beneficial for our business operations and marketing strategies
because government tries to encourage foreign investment in
the countries thought many wide range of incentives and also let
free trade to happen easily with least restrictive law. Moreover,
with this good condition of environment, it mostly likely to make
foreign product more interesting for local people than local brand
which are less likely to get support from government.

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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7. Market Entry Strategies


The marketing strategy that we will use for our product would be Direct Exporting.
Direct export will allow us to create an opportunity to establish a closer relationship
with the overseas market and buyer. Also, we will have a better control over
distribution. By choosing export as our market entry strategy we figured that it
requires low involvement and also lower cost compare to the other strategies. Our
business is new therefore, this would be a better choice. There are several
advantages an disadvantages for choosing direct exporting:
Advantages:
We have full control of pricing
We have full control of our own brand
We will get a direct understanding of buyers or end users needs and an ability
to customize accordingly
We can maintain close relationship with the customers
If the customers prefer dealing directly with the producer, we are able to
conduct that easily
Better protection of trademarks, patents, goodwill, and other intangible
property
We are able to receive feedback directly from the customers
Disadvantages:
Requires higher start up costs, time, energy, staff resources and higher risks
as opposed to indirect exporting
Might require staff training, since our store will be located in France. However,
if we hire local staffs they would need to have clear understanding about Thai
silk and a little bit about our culture in order for them to be able to present and
sell to the customers.
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Growth will be slower, since we need to conduct many steps of market


research and promoting
Our product is very unique and prestigious. Like other luxury clothing brands, we
have our specific target market. The price for our product would be quite high.
Choosing to narrow our focus to specific target market since our market in France is
not big because we are nt focusing on the huge market as a whole.
We figured that this is the most realistic way to start our business, because we are
very new to the market in France. Extra work must be given in order successfully
open a new market for Thai silk there. Realistically, this might be very challenging.
However, it is most likely that choosing this strategy will benefit our business.

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.
-

Psychographic segmentation: fashion lovers, successful idealists and Affluent

materialists.
Demographic segmentation:
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o Income: middle upper range


o Age: 25 and above
o Gender: woman.
Total population by sex and age on 1st January 2015 (age group)
Males

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

65 years and over

5 182 341

7 002 752

12 185 093

Field: France including Mayotte.


Source: INSEE, population estimates (provisional data at the end of 2014).

Target market strategies: differentiate global marketing


By implementing differentiate global marketing, it enable us to have a wider market
coverage. Since silk can be used for many purpose, from clothes to tower therefore,
we have many product line that can match with different purpose. We are not only
sell silk to individual customer according to our segmentation, we also aim to target
institution such as restaurant and hotel or even being supplier for Fashion Company.
Positioning
-

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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Silk is high-touch product, Global consumer culture positioning would be


appropriate here.
We aim to build the feeling of privileged for customer while shopping with us.
The store design would be the theme of royal and luxury; moreover, we offer
staff who will have enough training before in order to provide the best advice
to our customers.

8.3 Marketing Strategies


8.3.1 Product strategy
France is a Europe country, hence, the culture, belief and value of French
would be pretty much different compare to Thailand.

Source: Hofstedes cultural dimension, http://geert-hofstede.com/france.html


Its obviously shown in the score of Hofstede that France is much different
from Thailand in some factors. Therefore, we decided to localize our product in
order to be successfully enter the market and meet the demand of French.
Now is time for us to apply the Think globally, act locally time, since it is
impossible to be success if our product cannot satisfy Frenchs demand.
Moreover, it is necessary to have a clear research about French peoples
favors before we make adjustment to our product.
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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

Language; therefore, all the information booklet will be translated to French.


Product warranties: in order to gain trust from customer, we promises that our
product is 100% real silk according to the product information provided, for

example: 2 Ply silk, 4 Ply silk, Madmee Silk etc.


Packaging: for our product, we ensure to offer the container which will qualify
minimum 2 conditions which are elegant and luxurious enough to reinforce
product quality, but at the same time, can function the basic usage of container

such as water proof, anti-mold.


Aesthetic:
Logo: we will modified the word font in order to make it more high-class. Since
research show that appearance play an important role in purchasing decision
in French.

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

7
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commercials also need to be renewed due to some legal, cultural and


environmental reasons.
8.3.2 Pricing Strategy
Price is one P in the 4Ps of marketing. It is important to carefully examine and
set the appropriate price at which customers are willing and able to pay. In
order to achieve that, there are several environmental factors that need to be
considered while setting price.
Frances overall economy: since the country is part in the Euro zone.

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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Government control and regulations: a big influence factor that cannot be


ignored is related to the government rules, we need to know the price ceiling
and price floor that set by the government and adjust out price according to it
-

yet still profitable.


Pricing strategy: Geocentric pricing.
Since the local cost in France is higher than in Thailand due to the higher
basic salary range and the training cost for our staff. However, in the short-run,
we will set the price a bit less than the cost-plus return in order to achieve the

sale volume goal.


Inco term: D-terms Delivery Duty Paid (DDP). Since we will do direct export,
we not really have partner. We are going to contact logistics directly. So we
have more control along the shipment. However, it also our duty in case of any
damage or loss according to the agreement with logistics company.

8.2.3 Distribution strategy


- Indirect involvement would be used here. Since we would like to establish our own
retail store and we are not going intensive but exclusive. However, we also deal with
some intermediary such as agents and brokers for the other line of product for
tourism industry like hotel and restaurants.
- Geographic areas for initial distribution: Paris, France because Paris is the heart
of fashion and it also the sumptuous city in France. Moreover, Paris citizen do enjoy
shopping and care about fashion. We aim not to have many store but few big one.
- Logistics activities:

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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

environmental friendly, and recycle materials.


Big idea: our success is measure by the image royal and luxury in
customers mind whenever they hear about our product or in other world, the

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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Source: Strategy Analytics Advertising forecast 2015

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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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