Developing countries have become important destination markets for goods manufactured in the developed countries, including the United States of America, Germany, and Britain. Majority of the products marketed in these countries, including heavy machinery and other finished products. This is caused mainly by lack of adequate technology in these countries, as well as adequate capital to set up factories that would assemble machinery or manufacture other goods. Since attaining their independence, most of these countries, especially in Africa, have had difficulty stabilizing their economies. The frequent civil wars, corruption, and drought have become the major bottlenecks in the process of achieving substantial growth.
Our company wants to expand its scale by branching out its operations into the Kenyan market. Kenya is a political leader and an economic leader in East Africa. Kenya’s foreign policy reflects multilateralism, peaceful dispute settlement, and non-intervention in the affairs of other countries. In general, Kenya has a huge potential for our products. The present paper seeks to devise appropriate marketing strategies that can be implemented by our company, in order to get a market share for its products in the Kenyan market.
1. Briefly describe the country that you have selected using the facts from the Country Commercial Guide. Explain why you decided to export to that country. Support your decision to export to that country with facts from the Country Commercial Guide.
Kenya, whose capital city is Nairobi, is an African country located in East Africa. For the last few years, Nairobi has become a commercial hub. Many multinational corporations, including the Coca Cola Company, Tullow Oil plc, Toyota, LG, Barclays, Nokia among others, have set their offices in the capital, some of them serve as regional headquarters. The economy of Kenya is the largest in East and Central Africa. Agriculture is the backbone of this country. In the recent past, Kenya became one of the world’s largest exporters of horticulture products. For instance, it is the leading exporter of fresh cut flowers to Europe. Politically, Kenya has enjoyed a rather stable state of affairs compared to other African countries that have been marred by civil wars and ethnic clashes (US Commercial Service, 2013).
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Firstly, the reason why Kenya has been chosen as an ideal market for the product is its strong economy compared to other African countries in the region. Secondly, a lot of multinationals have opened up offices in Nairobi, which is an indicator that the economy of the country is headed in the right direction. Investors tend to focus on a country that has a stable environment for conducting business. The customs department has been credited for being efficient in clearing goods coming into the country. As a result, it has been decided that Kenya would be the ideal country to export the products.
2. Determine aspects of your business’ product that you may have to change in order to accommodate the selected foreign country’s needs.
In order to accommodate the needs of the Kenyans, it is envisaged that the company will embark on numerous advertising campaigns in different media platforms. This will help promote the brand awareness in the country. According to Hill and Jones (2009), advertisement is one of the tools used by business people to inform customers of new product in the market. Hill & Jones (2009), points out that through advertisement, the seller has to demonstrate to the client why the new product is unique and superior to those already present in the market. Although advertisement does not guarantee sales, most of the fast moving products in the market today have done so through vigorous advertising campaigns. According to him, clients will always be willing to sample the new product in the market before deciding whether to purchase it or not.
Packaging will also be highly considered so that the product can get an upper hand on other products. Hill and Jones (2009) observed that for the majority of clients it is important how well a product is packaged. He says that the design given to the package may attract or chase away clients. In order to design the right packaging for the product, it will be given a unique package that bear Kenya’s landmarks such as Mount Kenya and the Maasai Mara. This will create a strong bond between the Kenyans and the company, as they perceive it as indicator of keen interest in the country.
In addition, the product will be availed to other authorized dealers. This will help increase the product’s penetration in the country. The dealers will be given the products and allowed to sell them at a recommended sale price. This will prevent business people from increasing the price without the consent of the company.
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3. Create a plan that identifies emerging markets that you would like for your business to enter into over time
As the objectives have been identified, the next stage will be applying the promotion process on practice. The plan will be implemented in three steps. The duration of first step will be one year. It will elaborate product branding, devising of a company name, a motto and a logo that will be used during the whole marketing process. The next stage will focus on the product launch.
The company will promote the product in different areas in Kenya. The campaign will aim at entering the market and establishing sales merchandizing in a various places in order to test market suitability. Furthermore, the company will determine the most suitable communication channels and techniques in order to adjust product levels and capacities, as well as wholesale and retail price rates. This stage will also determine the best practices, required level of quality, and measures aimed at providing safety for health and environment during the manufacturing practices.
The company estimated the duration of the second stage also to be one year. It will focus on promoting the brand to the target audience of the product. The objectives of this stage include increasing consumer awareness and building competitive advantage of the brand. Furthermore, during this phase, the company will attempt to intensify the collaboration among all elements of the supply chain in order to improve efficiency by lowering the barriers, enhancing time management, increasing quality and adding product value.
The objectives of the third stage will include raising a quality of collaboration and interaction between all the elements of the supply chain. The company will also continue to promote the brand, rebrand and use other approaches to improve market position of the product. Additionally, this stage will deal with the sales growth approaches, manufacture and cost-effectiveness in agreement with the company’s objectives.
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4. Determine the services that you will need to have in place to keep your business’ international customers satisfied.
To achieve customer satisfaction, there are numerous issues that need to be addressed. One of them is giving warranties on the goods sold. Warranty acts as an assurance that the product sold to a client is genuine. Therefore, guarantee that the defective or spoiled product can be repaired and even replaced for free, helps win clients’ trust. Moreover, the company will look at having a hotline number where customers can call and ask questions regarding the company’s products. In addition, the company will allow customers to raise their concerns about the products they have bought. This will also be extended to members of staff who are required to make a follow up with clients to establish how the products they bought perform. This will help the clients understand how much the company values them. In case a client has bought a product and is not sure how to put it together to work, the company will send one of its technical employees to the client’s house to help. This will be treated as an after sales service that plays a critical role in maintaining good relationships between the clients and the firm. Furthermore, the company will set a benchmark of a certain amount of money for delivering orders to their clients’ premises.
5. Determine where you will have the locus of decision making for the service centre.
The locus of decision making for the service centre will be located in Nairobi City. The company will commit greater resources and therefore, a higher level of control will be required. The company will need managers to be in control of operations and, also, encourage the employees to think in terms of a globally integrated business organization.
6. Assess all forms of foreign investment and determine the best option for long-term growth.
Decision-making process depends on a range of factors that determine the choice of the market to penetrate, the marketing strategy, and approaches to scalability. Lambin et al, (2007) states that companies mainly base their decision on various factors such as incidental expenses, social-economic environment, political and legal peculiarities, obstacles for trade barriers, and the company’s strategy. Eventually, by investing in the global market the company expects to increase market diversification and achieve long-term profits. While expanding to the Kenyan market, the company will take into account the following options: export, licensing, and a completely owned affiliated company.
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The organization will set up its exporting in Nairobi City. From this location, it will coordinate marketing, contracting, supply, exporting and pricing strategies throughout the whole country. Exporting strategy will focus on achieving a set of benefits. First, it will monitor data feedback on the quality of its operation and address problematic spheres. Second, it will increase the share of direct export, and thus increase sales, especially those made by local managers. Furthermore, it will improve the intangible assets management, such as protecting trademarks.
Managing the short-term expenses associated with direct exporting tend is associated with high risks. The company will perform a detailed research on all aspects of strategy adoption, choice of distributing agents, pricing techniques and recruiting a reliable personnel to supervise the entire process. In addition, the company should consider the possible problems with insurance, logistics, transportation expenses, and licenses.
The company will collaborate with a local organization (licensee) and provide it with a license and technological expertise about the manufacture process. The licensee will produce the merchandize either for a specified period and distribute it in agreed location.
Consequently, the company will be able to enter the market in Kenya without establishing its operations in the country. Kenyan companies favor this method as it empowers the licensee and provides it with sufficient technological means.
Licensing is associated with relatively low expenses. The company can target a much wider audience in the country by using the already established infrastructure. Moreover, licensing can allow the company to penetrate new markets at lower costs as compared to full-scale expansion. In addition, licensing can eliminate some of the possible political, legal, and social obstacles in Kenya.
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On the other hand, the company will expect to receive lower profits from a licensee as compared to other options of penetrating the new market in Kenya. License agreement may also result in a lack of control over product manufacture and distribution, which may impede the quality of the merchandize. Consequently, low-quality products marketed by a licensee may compromise the company’s reputation in Kenya.
Completely Owned Affiliated Company
Establishing an affiliated company is the third option of market penetration. According to this decision, the company will launch its operations in the country. This approach requires broad market researches in order to determine whether this option will be efficient. Potentially, such strategy will be costly in the short-run, but payable in the long-run as it would allow controlling the quality of operations (Daniels, Radebaugh, & Sullivan, 2004).
The suggested strategies of penetrating the new market include direct export, licensing, and establishing an affiliated company. The thorough assessment of flaws and benefits of each option, the report identified that licensing will be most fit for the company with regards to its current objectives. This approach is more advantageous, as compared to the other two options. The significant benefits include lower expenses, ease of penetrating the market in the country by embracing the existing infrastructure and reducing the political and legal barriers. In addition, this approach is associated with more cost-effective logistics and operation expenses.
7. Determine the current brands exporting to the chosen country and explain your rationale behind the brand name.
According to the United States of America Department of Commerce (2013), the following are some of the products that the U.S. exports to Kenya: construction equipment, aircraft, telecommunications equipment, medical equipment, electrical power systems, and agricultural chemicals. With regards to computers, the following are the main brands that are exported to Kenya from the U.S.” Dell, HP, and Apple. In order to create a niche in the Kenyan market, our company shall brand its products. Branding will enable the consumers to easily identify the company’s products among others. The company will use ‘Millennium Ltd’ as the brand name. This name is easy to associate with and will, therefore, prompt impulse to buy the products. Differentiating Millennium Ltd from other products will give customers a reason to purchase the newest brand in the market as opposed to rival products that have already established a market share. The new name, Millennium Ltd, represents what we are about as an organization. The brand name is future oriented and also not common in the market. This explains the rationale behind the brand name.