The attempts to take the local dollhouse production into the international markets is one that has required strategic input and insights from various stakeholders. In a slowing global economy, with lacklustre consumer spending and retailers across the global market struggling to make profits, it is important to focus on increasing sales revenues hence the attempt to go beyond Europe.
Choice Of Markets
The pressure to raise sales couples with few opportunities for growth in the local markets, provide one condition to explore foreign markets. The American and European markets have become saturated with various toy houses, exemplary and large manufacturer names playing a major role. The increase in completion has caused the opportunities for increased sales in these regions to decrease. As a result, the possibility of exploring Asian markets and especially china has arisen as a simple step and strategic move to increase sales in the country.
Marketing and promoting the dollhouses in this region is a step towards promoting portfolio balance. According to (Czinkota and Ronkainen 1998) at one time the USA, China and other individual European countries will be enjoying varying growth rates. By marketing in selected countries, the problems of the recession that have curbed the USA and European markets can be balanced by opportunities for growth in the Chinese markets.
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Factors Considered In Selecting The Destination Market
Macro-environmental factors: Economic influences:
china’s per capita income, stage of economic development that is fast shuttling towards a first world and increased infrastructure are some of the factors that make it an ideal market. China enjoys a high per capita income which currently stands at (Geetanjali 2010). While other markets are being crumpled by low domestic income, china enjoys a good level of disposable income in each household. This means that for each household, there are greater and higher chances of investment in luxury goods such as dollhouses. (Walsh 1993) in his research found that when considering the decision to enter into a particular market, companies were often heavily influenced by the economic development of the said country. China’s continues strong centrally planned economy, has enabled the country to maintain a rise in employment in the annual economic year, this has increased and maintained a high level of purchasing power.
Another economic consideration is a country’s infrastructure, which includes transport systems, communication systems and energy supplies. China is one of the most advanced countries when it comes to technology. The country has been at the forefront of affordable yet highly efficient innovations in infrastructure. The country is linked through interconnected channels which make the marketing as well as the supply of the products much easier.
Finally, the company also took into consideration the stability of the exchange rate in China. China has enjoyed a stable yen for decades now even with the global economy facing a downturn. The conversion of the same into dollars and Euros is quite simple to calculate and in the majority of the scenarios has yielded awesome profits.
Socio-cultural influences
These are barriers created by cultural disparities between the home country, in this case, USA and the host country. As (Kapoor 2007) shows companies often expand first by considering markets which are culturally linked to theirs. However, in this case, there is a failure to consider some of the advantages and opportunities that distant countries could bring. China, for example, is completely different in terms of culture, however, the richness of the social-cultural environment itself presents several exciting marketing opportunities. For example, china’s one-child policy has been heavily critiqued in the international markets. While the one-child policy may severely limit the target population, it also means that there is increased disposable income in each household. Parents are more willing to spend on their one child because there are no other children to consider when it comes to expenditure. Dollhouses which may be considered a luxury in the local markets and sometimes too costly when other children are in the picture, suddenly become a necessity for the benefit of the one child.
Political-legal influences
Eagerness to promote imports has not always has not always been a feature of Chinese attitudes. Until recently, import of major items including toys was greatly hampered by the fact that government officials had to inspect each singular product. By the time, the good entered the markets; consumers had already opted for local alternatives thereby decreasing the predicted sales volumes. Also, their patent laws demanded that patents could be granted and made public in less than a year, however, the actual process of granting the patents could take at least four to six years at which time competitors have developed similar locally produced products. However, in the past five years, much has changed within this market, with the regulations for important and patenting of products being much laxer. Today, entering the Chinese market is almost as simple as selling in your local market. Since many companies are yet taking advantage of these opportunities, the dollhouses will be among the first in China from an export market. The potential for growth and sales revenue is much higher than has been imagined.
Micro-environmental issues: market attractiveness
Market size and growth rate: china has a population f more than one billion people according to the last census. The estimate for future demand for the dollhouses is much higher in this market than in all other international markets. China’s enormous market size and growth rate is attracting UK’s Tesco, France’s Carrefour and Lois Vuitton and Germany’s metro and Tengelmann. The potential for increased growth cannot be ignored and continues to be the most important factor in the consideration for international markets. This coupled with the disposable income is a ripe opportunity to expand the potential of dollhouses.
Competition: the local market has already been served by strong, well-entrenched competitors which have dampened any opportunity for growth. However, in the case of China, a competitive weakness has been identified providing an opportunity for entry. Local producers do not have the strength and advantage of the dollhouses, that is they are not only fashioned in designer labels they are also quite affordable. Average parents in china can afford luxury items for their children and even as collectable items.
Cost of serving the market: (Kleindl 2007) states that distribution and control are top among the considerations when it comes to the cost of service. Once the goods are imported are there any existing channels through which they can reach the consumer? For the dollhouses, it has been found that foreign direct investment in China would be too costly and would cut severely on the expected profits. However, there are highly structured and existing channels of distribution through local toy sellers which can be used to make access for the consumer much easier. In this case, the company does not have to invest in labour and skilled professionals for the distribution of the dollhouses. Rather, the idea to partner with local manufacturers and distributors to reach the consumer provides an ideal ground. As partners come to their trusted toy supplier, they also come face to face with strategically placed ad attractively packaged dollhouses. It is estimated that within months the products will have successfully entered the china market through the use of already structured and highly sort after toy houses.
The Marketing Mix
The core element of the marketing mix is based on the product because the dollhouses provide functional requirements for the consumer. Without getting the product right, it is obvious that survival in china will be lowered. It is important to note that the Chinese market in itself is one that enjoys high –tech goods which are fairly priced. Internationally they are renowned for their export of highly standardized goods which are cheap. They are also renowned for expecting the best from all products entering the country. However, even while putting effort into the product itself, it is important to note that a product mix to succeed, it must be based on a brand. The brand name of the dollhouses is still less renowned in the international market with china being the first entry. (Sandhusen 1997) indicates that a product mix can be summed up in the number or variety of product lines which is bringing into the market. Brands within the company that are renowned for offering different and a variety of products from which consumers can select. With this in mind, and having structured dollhouses that are acceptable and considering that price in this economy may not be much of an issue, the company then settled for a promotion mix.
Promotion Mix
(Kotler and Armstrong 2006) have shown that the success of a promotion mix, which entails using all available and viable channels to communicate to the consumer about the company and the product, is highly dependent on a stimulate trial. For dollhouses, once children have encountered the product and tried it, they are more likely to be persistent towards its purchase. In a certain group when one child has the dollhouse, all other markets will likely want one just like it. Advertising and promotion that focuses therefore on trials will be the basis of the promotion mix. Advertising copy and visuals have a major role in positioning the dollhouses in the minds of the consumers. Creative positioning of the dollhouses involves the development or reinforcement of an image or a set of associations for the consumer. This will be achieved using the following objectives:
Create awareness: it is important to note that this is the first attempt to enter the Chinese market. Sales can therefore not be made if consumers are unaware of the existence of the product. They need to know about the products and the advantages that it offers in the dollhouse market. (Berkowitz 1997) says that creating company awareness helps to legitimize a company, its products and representatives to its consumers. In this way, promotion may improve the acceptance of the dollhouses and the company itself. Without promotion, the price and quality of the product do not matter. Because however well priced or however high the quality of the dollhouse, the consumer will often state, who are they? However, with promotion, the statement turns into; they are well known and recognized in the production of dollhouses. In this case, other factors can now follow in the consumer decision making and this includes the price and quality of the product. Awareness allows the consumer to position the product within a particular class and with particular symbols. They become aware of the product existence first, the move on to classify the product s either the best for their own needs or otherwise.
Associating dollhouse characteristics and consumer benefits: a powerful attribute of advertising in china is being numbered one. Consumers in this country tend to desire the best for their one and only child. Commonly products in china have often claimed the number one position to attract consumers who are often highly competitive in getting the number one product first. A good example would be the introduction and entry of Phone 6 into the Chinese markets. People slept in queues for days looking to purchase the number one phone in the Asian as well as global market. The dollhouses have to link the number one position with a trending need among the Chinese population. For example, the ultimate playhouse for you, dollhouses; connecting families across the globe and finally, be the best you can be with our ultimate play partner.
Product user: according to (Sandhusen 2000) when communicating to a market such as China, it is vital to link the product to the particular user since consumers are more inclined to believe your claims of being the best if they can link the same product to someone specific. Celebrity endorsements go a long way, but in particular markets such as this one, it may be wiser to focus on local celebrities as well as international. The idea is that when people are a thing of a dollhouse, they will automatically draw their minds to this particular one rather than rely on the advice of others with their purchase. The loyalty in the Chinese market makes sure that the local market relates better with the local rather than international celebrities. However, since it is an imported product, the importance of the international endorsements cannot be ignored. A balance, therefore, needs to be created to ensure higher chances of success.
Remind and reinforce: once the dollhouses have established a clear position within the Chinese market, it is important to continuously remind consumers of the existence of the brand and to reinforce the image. The objective, in this case, is to maintain top of mind awareness and favourable associations thus maintaining high sales, a good market share and profits. This provides a valuable support system for the sales forecasts by identifying possible prospects in the local markets. The salesforce will, therefore, be able to use its time more efficiently by attempting to call upon potential interested partners and distributors rather than spend time cold calling potential distributors and customers who may have no interest in the dollhouses.
Given the size and complexity of many distributor channels, the salesperson cannot be expected to call on every member in the organizational decision-making structure. Promotion can be sued to reach many of them so that they are aware and softened for the sales pitch. These way partnerships will be created quicker and in some cases immediately as consumers will be demanding products and the potential partners will be aware of the advantages offered by the dollhouses in comparison to others.
For the above objectives to be met, market research has been conducted with an effort to understand the target consumer. The buyer methodology of choice and motives behind each purchase have been analyzed to create an advantage and identify the potential opportunities for marketing the dollhouses. For example, a common misconception is that price is often the first consideration when it comes to purchasing of luxury products and toys such as dollhouses. However, the Chinese market has little to do with the price even though it is also a consideration. However, consumers are more concerned with the uniqueness of the product and how it stands out from other products in the market.
Alternate Foreign Market Entry Strategies
There are two alternate market entry strategies and these are standardization and adaptation. Pure standardization is the process through which the marketing mix employed for the dollhouses in the local market are employed similarly in all countries including china, the newest market. Globalization of markets fueled by travel, common lifestyles and developments in technology has allowed people to develop “universal tastes”. The truth, however, is that few if any brands are standardized. Often marketing strategies have to adapt to the culture and nature of the country. (Lymbersky 2010) has shown that in china; even high tech electronic products have to conform to national technical standards and have to be positioned differently to attract customers.
Standardization is often considered an attractive option especially for goods such as dollhouses where costs of production often do not enjoy any economies of scale. For example, lower manufacturing, advertising and packaging costs can be realized. Also, the dollhouse company could enjoy the logistical benefit f being able to move stock from one country to another to meet low stock high demand scenarios. However, the need to look for similarities rather than differences in the local and abroad markets may prove disadvantageous. Managers may fail to focus on what is unique about the Chinese market, a situation which could, in turn, lead to loss of opportunities which can be explored for sales. It is essential to recognize consumer preferences and buyer behaviour in the market and to invest heavily over a long period to achieve brand penetration in the international market. Market positioning should be used to identify the required positioning in each global market segment.
Social Media Tools
The extension of the use of the internet, mobile and wireless technologies has created an opportunity for the organist ion to expand even further in the international market. (Bhuyan 2013) states that the internet as well as mobile solutions utilizing wireless devices can create freedom and flexibility that might eventually change the way organizations interact with customers, partners and employees. The company intends to create a social presence using sites such as Face book and twitter where active accounts will be maintained. Such accounts will be sued to promote new ideas for dollhouses as well as highlight customer experiences with the products. Social media platforms provide the following advantages:
- Convenience: consumers and customers are able to access information on dollhouses and services such as maintenance and repair 24 hours a day. Opening the company doors for 365 days throughout can become a reality.
- Access to information: the internet as available through computers and mobile phones and a range of other device enable users to acquire detailed and real-time information about dollhouses.
- Enhanced functionality: using the latest digital technology, customers can better understand products and services by examining multi-media content, viewing 3D displays of dollhouse interiors and other advantages.
- Customized products and other services: with the internet, it is possible to gauge customer preferences and produce customized products which are most likely to attract the high-end customer for higher income.
However, even with all the above advantages, the internet and social media platforms including Facebook are not foolproof, there exist some limitations to the internet:
- Information overload: the amount of information that can be accessed via digital platforms by an end-user can be overwhelming.
- Access to technology: the greater the capacity to incorporate multimedia content, the higher the required specification of the equipment required to receive and download such content. However, some consumers across the globe do not have access to even the basic means of access.
References
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Bhuyan, M. I. (2013). Business Across Borders A Study Of Foreign Market Entry Strategies To Bangladesh. SaarbrüCken, Lap Lambert Academic Publishing.
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Kleindl, B. A. (2007). International Marketing. Australia, Thomson Southwestern.
Kotler, P., & Armstrong, G. (2006). Principles Of Marketing. Upper Saddle River, N.J., Pearson Prentice Hall.
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Sandhusen, R. (2000). Marketing. Hauppauge, N.Y., Barron’s.
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