Manufacturing Subsidiary
In this growing stage of the company, manufacturing subsidiary is not a good decision as it needs investment which is not possible to make at this stage. Setting up sales branch overseas, distribution, warehousing and promotion all need a big investment and involve risk factor. Quality Craft Carpet is small organization with some financial crisis and manufacturing the subsidiary would not be a good decision. After successfully establishing in US market manufacturing subsidiary would be beneficial because transportation and travel cost will be avoided.
Strategic Issues
For a marketing plan to be successful it is essential that all elements of the marketing mix should support each other. Marketing mixes will change between products, services and market situations and indeed this is what makes marketing dynamic; it is the skill of the individual marketing person in manipulating the individual mixes that can make a product or service a success or a failure. Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. To become successful in US market product need to be design according to the customers need, culture and requirements of the market. To overcome this situation, company can hire designers from foreign market to design product according to the required market trend, quality and needs. Quality Craft Carpet has already got a strong brand name in UK market, so providing the customer with there desire requirement should be the first priority to get the maximum market share. To capture the market company can provide there customers with after sales service, return policies and warranties. In future more customize rang of variety offer to the customers would be highly appreciated.
Price is the key factor in any product success in emerging new market. Price is the means whereby an organization covers the costs of its research, manufacturing, marketing and other activities and in a profit making organization, the surplus is profit. Price is also important in ‘not for profit’ organizations where services or products are sold or dispensed. As an element of the marketing mix price is, of course, the source of revenue for the organization, whereas the other elements incur costs. Its importance will vary according to market conditions and the type or product or service being marketed, but only in rare cases is price the only criterion when purchases are made. Other elements like the brand name, service and warranty considerations, the sales routine and sales promotion all have their part to play, but the final consideration usually rests upon price. Pricing decisions should be made in the context of overall marketing objectives and strategy. Organizational goals and objectives are determined through market conditions, so price is a function of such conditions. These organizational objectives are sometimes compromised by the realization that certain levels of profit cannot be achieved the pricing strategy needs to design so that they can archived there target customers. Short term credit policies with lower interest would attract wholesalers and customers. However, it should be realized that price is the only factor to get profit. Offering discounts, allowances and easy credit term will help in capturing good market share.
Place or distribution channel, is the method for making your product available to the consumer. There are eight main functions for distribution channels: Information: gathering and distributing marketing research , Promotion: developing and communicating offers Contact: communicating with prospective buyers ,Matching: fitting the offer to the buyer's needs , Negotiation: reaching agreement on price and terms , Physical distribution: transporting and storing the goods, Financing: getting and using funds to cover the costs of channel work, Risk taking: assuming the risks the channel work. Foreign companies might have problems to enter local market. For Quality Craft Carpet it would be better to have indirect distribution channel rather than sell product directly which involves low risk, loss investment.
Promotion is the specific mix of advertising, personal selling, sales promotion, and public relations a company uses to pursue its advertising and marketing objectives. If you are an entrepreneur, you most likely have limited resources and you are still learning about the market. Information gather is extremely important at this stage of the game. The trick is the start the revenue stream without spending too much money. The objectives that are met by promoting are to move the target market through the following phases:
Unawareness -> Awareness -> Beliefs/Knowledge -> Attitude -> Purchase Intention -> Purchase
It is believed that consumers cannot skip over a phase, but they need to move through them. Promotion is used to move the target market from one phase to another to finally purchase. Quality Craft Carpet needs to offer some promotion to get into the market.
Middle East
After establishing successful business in USA, Quality Craft Carpet Ltd have a opportunity to further expand there business to Middle east which has the potential buyers. The Middle East is very established and fast growing market and they have showed promise in medium term. Middle East market had already got big sellers with there high quality product. The organization has now experience of trading overseas and trading in international marker. They are already manufacturing a high quality product with successful results in USA market, these all are added advantages to the firm and can help them to enter easily to Middle East market.
Japan
Japan is also a potential market for Quality Craft Carpet Ltd and it is world second largest market. Japans culture and tradition had a influence of carpet and it is easy to enter in the market.
Marketing Communication Issue
Effective communication means effective marketing. Buyers’ perceptions of market offerings are influenced by the amount and type of information they receive as well as their reaction to that information. There must be a good flow of information between seller and buyer to assist decision-making that precedes a purchase. An effective marketing communications system also allows feedback from the consumer to the seller. Some people have a psychological predisposition to buy products and services that are ‘new’ to the market. This predisposition can be modeled with the use of a normal distribution. Certain people derive a great deal of pleasure from acquiring new products and being first in the market. Such people have a low level of perceived risk and in fact they positively like the risk and excitement associated with the purchase of new, innovative products. A key question for the marketing communicator is: Are the innovators and early adopters also opinion leaders? The majority of potential customers are too risk adverse or too disinterested to be ‘first in the market’ for an innovation. They are largely unaffected by the media communication about the innovation. Instead, they are influenced by people that they know who they regard as opinion leaders. Although some individuals my be innovators for many products and services, it is more likely that they will be classified as such for a limited range of products.
Sales Message
A sales message is very importing and key issue in promoting the sales. Sales message reflect the product quality, durability and care for the customers. It is the first thing that made the customer to attract toward the product and make him to get more information about it. Quality Craft Carpet Ltd has good market reputation in UK, which can help them in making there sales promotional strategies.
Quality Craft Carpets Ltd can put there sales message as
High quality long life durable carpets on cheap price
Media Type
In the fast growing globalize market advertising is the basis for the success of the product in market. A good advertising and selecting of best media according to product is guarantee to the success of product. There are many types of media available for advertising include Newspapers, television, direct mail, radio, Magazines, outdoor and internet. While selecting a media for advertising budget is need to be considered for advertising.
Internet
Internet is one of the biggest media for advertising now a days with capability of advertising the product with full multimedia technology. Electronic communication via internet is extending the reach of companies, particularly small ones like Quality Craft Carpet. It is relatively low cost, interactive capabilities and famous in USA. Through internet Quality Craft Carpet Ltd can advertise there product in USA in low cost.
Newspapers and Magazines
It’s another cheaper way for advertising with flexibility, good local market coverage, broad acceptability and high believability. This media is also suitable for Quality Craft carpet Ltd.
Television
Television has good mass market coverage with low cost per exposure. Initially it would be expensive to go on television for advertising but it can be used for a short period of time to put some essence in the market.
Trade Shows
On of the best way to initiate export activities is to exhibit at an overseas trade show. Where only potential buyers come to see the products and they can see samples which can help then to make decision on the spot.
Further Research
Formal marketing research may provide a large proportion of the information requirements for a firm, but not their total requirements. There are other valuable sources of marketing information beside formal marketing research.
Kotler (1999) defines marketing research as ‘systematic problem analysis, model-building and fact-finding for the purpose of improved decision-making and control in the marketing of goods and services’. Quality Craft Carpet Ltd need to do further market research before entering in USA market. Following market research could be carried out before entering to the international market.
Secondary Research
Collecting a primary data is an expensive exercise. So using the primary data available could be helpful Quality Craft Carpet Ltd to go for secondary research. The major sources of secondary data are :
Internal sources which include accounting records, sales force report, reports from previous marketing research studies and customer complaints records.
External sources, these data are generated by sources outside the organization including data produced by the government and publishers of the directories, newspapers, periodicals and research reports.
Focus Group Interview
Focus group interview is the major marketing research tool for gaining insight into customer thoughts and feelings. The moderate encourages free and easy discussions hoping that group interactions will bring out actual feelings and thoughts. The main purpose of focus group research is to draw upon respondents’ attitudes, feelings, beliefs, experiences and reactions in a way in which would not be feasible using other methods, for example observation, one-to-one interviewing, or questionnaire surveys. These attitudes, feelings and beliefs may be partially independent of a group or its social setting, but are more likely to be revealed via the social gathering and the interaction which being in a focus group entails. Compared to individual interviews, which aim to obtain individual attitudes, beliefs and feelings, focus groups elicit a multiplicity of views and emotional processes within a group context. The individual interview is easier for the researcher to control than a focus group in which participants may take the initiative. Compared to observation, a focus group enables the researcher to gain a larger amount of information in a shorter period of time. Observational methods tend to depend on waiting for things to happen, whereas the researcher follows an interview guide in a focus group. In this sense focus groups are not natural but organised events. Focus groups are particularly useful when there are power differences between the participants and decision-makers or professionals, when the everyday use of language and culture of particular groups is of interest, and when one wants to explore the degree of consensus on a given topic. This method will help Quality Craft Carpet to collect and analyze proceed relatively quick for further marketing decision. Through focus group results are not representative of the total general population opinion but it gives us a rough estimation of market opinion.
Survey
Survey research is the most widely used method for data collection. It is the best approach suited to gathered descriptive information. A company wants to know about peoples knowledge, attitudes, preferences or buying behavior can often find out by asking them directly. Quality Craft Carpet Ltd can conduct survey via Internet, email or asking peoples directly to gather required data.
Depth Interview
Quality Craft Carpet Ltd can conduct depth interview to get the expert opinions before trading overseas. Depth interview is the method to get the information’s from the market experts and there is chance to critically analyze and share ideas of all the peoples.
Conclusion and Recommendations
Quality Craft Carpet Ltd has all positive opportunity to establish his overseas business and get into new international market. Company has all the potential to grow in new market with success. There focus should be on potential buyers in US market and must be able to offer customized products to there contracted customers. In future, manufacturing subsidiary would be an added advantage to the company with further improves in quality and getting knowledge of overseas trade. Overcoming there weaknesses would be a great success for the future.
References and Bibliography
Geoff Lancaster, Lester Massingham
Essential of Marketing, 3rd Edition (1999)
Kotler Armstrong
Principles of Marketing, 10th Edition (2004)
Geoff Lancaster, Lester Massingham
Marketing Management, 3rd Edition (2001)
Phillip Katler
Marketing Management, 11th Edition (2003)
William G Zmkmund
Essential and Marketing research
Dalymplc, Parsons
Marketing Management, Text and cases
Chris Fill
Marketing Communications 3rd Edition