International Marketing Fa

March 23, 2018 | Author: Sarvesh Kumar | Category: Brazil, Brand, Marketing, Economies, Retail


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INTERNATIONAL MARKETING PROJECTBrazil – an opportunity for M& S expansion Lara Bunston BA Hons Fashion Business Management December 2008 ......................................................... 12 ...................................2 COSTS INVOLVED ........................................................................................................................... 6 6. IMPLEMENTATIONS OF STRATEGY ............................................................................................................. 6 5.......... 10 10......................................................................................................................... ENVIRONMENT – BRAZIL ....................CONFIDENTIAL .. 10 9.1 PEOPLE – PEN PORTRAIT ............CONFIDENTIAL ....... INTRODUCTION ........................................................... TACTICAL PLANNING .......................................................... 3 4.......................................................................................1 POLITICAL .................................... 7 6..................................... 9 8....2 ECONOMIC.............. BUDGETS ..................... 8 6....................................................................................................................................................................................................................................... 7 6..................................... 9 9................................................................................................ 8 7................................................................................. 5 5............... 10 9.........................................4 TECHNICAL .............................................. 10 MONITORING ...... 3 2................ 3 SWOT ANALYSIS ...............................................3 SOCIOLOGICAL ............. 3 3............................................................................................................................... 9 8................... M&S MARKETING MIX................................................................................1 THE MARKETING MIX .................................................................................. 7 6..........................................................................................1 SALES FORECAST .................................................................................................................... BRAZIL – SWOT ANALYSIS .............................2 COMPETITORS .................................. 6 5.................. COMPANY IMAGE ................. 11 REFERENCES ................................................. EXECUTIVE SUMMARY .....................1.................... SITUATION ANALYSIS ........................................................... recycling of their products and waste and the health of their customers through the removal of hydrogenated fats. Introduction There are many opportunities for brands to go global and capitalising on this can lead to great improvements for a company – both financially and by raising brand awareness. the company made history in 1998 to become the first UK retailer to make a pre-tax profit of over £1 billion. For example. . There are still. Named as the worlds 43rd largest retailer (Deloitte Global Retailer Survey). and an operating profit of £87. artificial colours and flavouring from their products. Executive Summary Marks and Spencer currently owns 240 stores outside of the UK (both wholly-owned and franchised) with revenue of over £610 million.1. Marks and Spencer is undoubtedly one of the UK‟s leading retailers – with an average of 21million customers visiting one of their 600 stores nationwide each week. which shows to an extent the infancy of the roll-out but also the potential to expand and increase their international takings and market share. beauty and financial services. Last year. a woman may enter the store to buy clothing for herself but leave with additional food for the family and a garment or two for her husband and children. the Middle East. however. women and children as well as food.5 million. 3. However. some markets they have not entered and I feel that this could potentially be a great opportunity for them. This wide variety of products and services attracts a wide range of customers. This gives the company a good advantage over competitors specialising in just one area. despite being a much loved British brand – standing for quality and service. which can increase add-on purchases. The international success of M&S is undeniable. The re-appointment of Sir Stuart Rose as CEO lead to a period of excellent growth and increasing profit – only decreasing in the latter quarter of this year as share prices plummeted and a 34% decrease in net profit was announced as a direct result of the „credit crunch‟. Plan A is the environmentally conscious campaign run by M&S to try and reduce the ecological footprint of themselves and their consumers. environmentally aware consumers as well as strengthening their brand image as being focused on the needs of their customers. M&S announced plans to grow “International business to between 15% and 20% of total Group revenues within the next five years” (Marks and Spencer Annual Report. 2. the energy used by their stores and production. Situation analysis SWOT Analysis Strengths Marks and Spencer specialises in apparel for men. home ware. which is a clear indication that foreign markets not only accept but understand the brand. 2007) Brazil is a county who‟s fashion and retail market is far from saturated and with an ever increasing percentage of the population falling into the middle-class category. Marks and Spencer suffered a tough few years following this. India and Asia at present – taking advantage of 3 of 4 BRIC nation markets. Currently international revenues only make up 8% of the companies turnover. This initiative has given then a recognised status of being an eco-retailer and has both encouraged new. Marks and Spencer could definitely take advantage of this. The project focuses on areas such as carbon emission (through their distribution methods). The global influence of the company stretches from Europe to Russia. is an illustration of their turnover for the last 5 years to highlight changes and possible issues. Opportunities With a thoroughly successful domestic market and an increasingly profitable international expansion into Asia and Europe. This means once this demographic is no longer consuming. Threats M&S will undoubtedly be hit by the current economic crisis due to its stores being on prime sites in the high street (imposing large overheads on the company). there is a fear that a new. If these countries respond as well to the brand as their previous international ventures. it will open the company up to a new market. demographic and global brand awareness.Weaknesses One weakness that could be identified is the age of the main target customer. This may give them a high gearing ratio and leave them susceptible to fluctuating interest rates on loans and overdrafts. younger market will not be. . M&S has a wide range of international territories still to penetrate. as the largest percentage of customers visiting the store are aged 55+. The recent departure of George Davies (a valuable member of the board) could impact the company negatively if action is not taken quickly To illustrate Marks and Spencer‟s current share of the market better – both in terms of volume and number of outlets. Included also. below are a set of graphs showing their relation to their competitors in terms of these aspects. as well as ability to invest more in advertising and product ranges. At the forefront of M&S‟s past few years of undisturbed success has been the huge emphasis on advertising – most memorably . their clothes in terms of price per unit would bring more profitability to the company through higher mark up possibilities. but continue to promote their clothes as being to an equally high standard. It offers its customers a 90 day returns policy – a policy that differentiates itself greatly from its competitors.As visible above. This shift in production has enabled costs to be lowered and increase company turnover and profit. the turnover for M&S has been continually rising at a rapid rate between 2002 and 2007. M&S has a strong heritage and trusted reputation. opened in Leeds Kirkgate Market by Michael Marks in 1884. M&S has offset production over seas. Although their food sales account for 50% of their overall turnover. and instils an even greater belief in the quality if the products. Company Image A true British brand. Originally recognised as a distributor of solely British made garments. 4. good quality fashionable clothes that meet the demands of busy lifestyles. She has 2 grown up children with young families and regularly goes into the city centre to pick up food and general shopping. Their additional ranges of womens wear provide the option of a more fashion forward and boutique style of clothing. magazines and on large boards around cities. she can spend several hours there browsing and buying with ease. Marks and Spencer is accessible to the masses. Product – M&S attracts loyal customers due to consistency of design. Found in most large towns and cities. Erin O‟Conner and Noemie Lenoir. accessories and footwear. John Lewis. Bridal and Long & Tall – all of which are available online only 5. Twiggy. menswear and homewear therefore. in a 4 bedroom detached house in the suburbs. product range and key demographic I have identified the following stores as its main competitors in the UK:  John Lewis  Next PLC . Laura Bailey and Erin O‟Connor. Furthermore. and relax with a coffee at the in-store café before she leaves. These are marketed as the following:  Autograph  Autograph Weekend  Plus Collection  Petite Collection  Limited Collection  Limited Collection Maternity  Per Una  Classic Collection  Per Una Petite. Jane likes having the ability to pick up clothing for her husband and grandchildren as well as items for the home and garden all in one go. they offer childrenswear. M&S Marketing Mix Price – Marks and Spencer fit comfortably into the mid-price high street sector – with competitors being Next. She frequents Marks and Spencer because of its good quality.2 Competitors Because of the companies price positioning and its store location. which has attracted a younger and more fashion forward demographic. globally recognised models such as Twiggy. Place – With 600 stores in the UK. they are in a good position to attract a varied range of consumer. As her local store incorporates all of M&S‟s current ranges. smart clothing which she knows fits her shape. they can reach more segments of the market and can cater for the lifestyle of their core demographic. The also operate a fully transactional website – allowing access to collections available only in larger stores and online. 5.1 People – Pen Portrait Jane is a 56 year old housewife from Bath who lives with her husband. M&S have increased their advertising budget (and campaign) to include appearances from Take That – to promote its menswear division.the use of famous. style and budget perfectly but also enjoys shopping at John Lewis and Next. Promotion – The large scale advertising campaigns can be found on TV. She tends to shop alone here unless accompanied by her daughter and grandchildren. Debenhams and Bhs. They are priced higher then budget retailers such as Primark. who works in IT. quality and value of products. 5. Noemie Lenoir. Elizabeth Jagger. In the run up to Christmas. as well as using the current faces of womenswear – Myleen Klass. Womenswear is synonymous with value for money. They have a solid range of fashion basics that fill basic utility needs. but lower than the upper segment of the high-street such as Coast and Karen Millen. These are well established mid-price department stores. driving the economy and helping create such a noticeable emergence of the middle classes in the capital. and Golden Triangle. July 2008). Brazil is rich in natural resources.9% this year and the service sector has seen a 5% expansion. .1 Political National debt remains high in Brazil. To increase its annual GDP. which has lead to a commodity and farming boom this year.1% increase in the next 4 years. ENVIRONMENT – Brazil As South America‟s largets economy. Brazil has traditionally exploited its natural resources to create income (electricity through hydro-electric power.  Debenhams Bhs C&A (a store previously popular in the UK) would be M&S‟s closest competitor in Brazil. due mainly to an increase in domestic demand. Commerce is growing. Brasilia. large amounts of money is being invested into infrastructure and tackling labour informality due to high external demand and a more efficient policy for exporting being implemented. 6. 6. 6. oil. timber and mineral mining) but is increasingly turning its attention to industrial exports (currently the 7th largest exporter of steel) as well as white goods and the automotive industry.2 Economic Brazils has an increasingly successful economy –with a GDP of $1. Industrial firms have helped expand the gross domestic product by 6. but the government is committed to improving public debt ratios and has strong poverty-alleviation policies. at around 42% of GDP. but offer a more homogeneous fashion scene than Marks and Spencer. Growth has been “fuelled by consumer spending as Brazilians enjoy rising incomes and cheaper credit” (BBC News. Improved domestic financing and consolidation of macroeconomic stability has lead to improvements in Brazil‟s business environment (the largest in South America). M&S therefore could bring a much needed variety to the lively and cosmopolitan Brazilian cities. along with other large department stores such as Renner (branded „Penneys‟ in Ireland and the US) and Lojas Riachuelo.849 trillion and a forecast of a 4. natural gas. representing 14.000 rose by 31.4% of the total.4% (compared to a steady 6.6%. after the other BRIC nations. 2006 In the period 2002-2006:    Per capita disposable incomes (annual) rose 3. small families on Brazilian soap operas. retailers can expect a sustained boom in the new mass consumer market in Brazil” (Euromonitor.3 Sociological Brazil is the 6th highest populated country in the World. up from a 10-year low of 11. this high population density has lead to the build up of shanty towns and an even higher rich/poor divide. rural areas. The population is mainly urban dwelling (around 80%) due to large immigration to the cities from the poorer. The literacy rate is high for a developing nation at around 88.000 rose by 36.0% of the total. Unemployment is low – at only 9% for the country and there has been an increase of 40% to the formal employment sector over the last decade. September 2007)  6. from a 10-year low of 5.1 million.) Due mainly to the opening up of the Amazon (through the Trans-Amazonian Highway/Carajous mining project) the infrastructure of both roads and railways in Brazil are to a . the US and Indonesia.1% during most of the last century).due to aspiration towards fictional.1% The number of households with annual disposable incomes over US$10.6.4% in 2002. Disposable income is rising due to an increase in the middle classes – “as the size of the middle class expands exponentially.8 million. There has been a significant decrease in birth rate to around 4. The number of households with annual disposable incomes over US$15.8% in 2002 (Euromonitor.0% to 3. Radio stations and TV have a large influence in Brazil (often credited with the decrease in population growth . However.6% to reach 7. September 2007) Annual household disposable income distribution: 2002 vs. representing 7.4 Technical Communication in Brazil is high – with 39 million telephone lines in use. 120 million mobile phones and 50 million internet users. and the main language spoken is Portuguese. which is a little lower than M&S‟s core demographic in the UK. Still keeping its quintessentially British charm. There is competition from large department stores in the country such as Lojas Renner and Lojas Riachuelo (Brazils second largest department store chain) so it is important for M&S to differentiate itself. it would be much easier to make the transition into neighbouring territories than trying this as an unknown British brand.high standard. TV and radio advertisement campaign should be implemented. If successful. for the import/export of goods. a roll out of poster. This will encourage not only add-on purchases but return trips to the store. M&S should take advantage of this. Brazil – SWOT Analysis Strengths – Brazil has a large population with great aspiration towards their Western counterparts. as well as improved brand image. This however should be adapted to have a more Latin feel. with the exception of Chile and Ecuador. M&S is emblematic of both and could provide Brazilians with a new mid-market way of shopping. Threats – Brazil is the 7th largest producer and exporter of steel in the world. not being cheap but having prices that match their garments fairly. encouraging them to adopt similar traditions and also live to a very middle class lifestyle. designated Capitol) and each of the cities in the countries golden triangle: Rio de Janeiro. it would be recommended to keep prices the same as in the UK. both of which are risky industries – due to the current economic crisis and the possibility of resources running out.1 The marketing mix Price – M&S is renowned for its value for money. There are over 700 airport runway facilities and 7 ports around the coast. respectively. mainly for use within the automotive industry (as the 3rd largest car producer). These will be stand alone. Opportunities – As the largest country in South America. Similar to their large scale UK advertising campaigns. Place – Opening 4 flagship stores. the expansion into Brazil could open M&S up to a wider market within the continent. Brazil shares its borders with every other South American country. However. It derives a large amount of its GDP from the car industry and its natural mineral reserves. such as 10% off purchases. this statistic is the result of a high number of young within poor families and does not necessary reflect the demographics of the group that the company will be targeting in terms of disposable income (middle class bracket). Once established in Brazil. This could be in the form of a discount day. it would be advisable that M&S hold a grand opening with some monetary advantage to its first customers. Therefore. to appeal to the mass population. TV etc). in the form of bauxite and timber from Amazonia. as with its other international franchises. Weaknesses – The median age of Brazilians is around 29. but preferably a redeemable voucher for later purchases once a certain amount is spent in store. by the use of famous models from Brazil such as Alessandra Ambrosio and Ana Beatriz Barros for the women‟s division and Bruno Santo and Michael Camiloto to head up the men‟s sector. To encourage customers to the newly opened stores. Sao Paulo and Belo Horizonte. one in Brasilia (the countries new. . Tactical Planning 8. 8. 7. Promotion – With such a large percentage of the population having access to the mass media (radio. in order to try and build M&S into a retailer rather than just a brand. For the first year it is possible that the company will not make profit due to the large amount of advertisement required to build a loyal customer base as well as investing in long term assets such as props and premises‟. M&S should retain their 90 day exchange policy and high standards of customer service. Implementations of Strategy    The implementation procedure will take place over a 6 week period of renovating the acquired site for each store and heavily merchandising the interior and windows to reflect that of M&S stores in the UK. This will mean having a well trained and competent local teams running the store – upholding the standards that M&S have come to stand for. . in order to help build M&S into a globally recognisable brand. however.Confidential 9. By doing this. Autograph and Per Una lines. As the dominant language in Brazil is Portuguese and the currency Brazilian Real. cost is lowered as new ranges do not need to be designed or produced.Confidential 10.  Packaging Packing should remain the same as it does the world over.This promotional event should be advertised on both national and local radio to spread awareness to locals but also to the periphery. its important that they sell a similar range to their other international stores. 9.2 Costs Involved .  Pre/after sales service As with its UK stores. these will need to be used to accommodate the local population and not turn into a purely tourist based income. Staff will also need to be trained during this time.  Range Because M&S would be trying to establish themselves as a department store with a British image. Product decisions  Branding Keep the M&S identity but infuse a South American charm to make it appealing to the masses. M&S clothing (men. It is important. The garments will be made in existing M&S manufacturing sites and shipped over 1 week prior to opening so that stock can be checked. its essential to include the Limited Collection. Budgets In order for the expansion of M&S into Brazil. To continue the middle-range price and product mix. 9. the company needs to have an outgoing of less than its turnover in the long run. where as local and national TV and radio promotion will start 2 weeks before opening. Advertisement in the form of posters on billboards and buses around the city will start 4 weeks before the planned opening of each store. not to alter the brand too much as it then looses its western appeal and becomes much like the existing competitors in Brazil – loosing its niche. to encourage those who can afford it to come into the main Cities to spend. segmented and merchandised correctly to give the store the correct ambience to impress new customers. women and children‟s) would be able to be easily transposed to this market. Because of limited cultural restraints apparent in Brazil.1 Sales Forecast . Although the major European ethnic stock of Brazil was once Portuguese. by 2000. will allow progress to be monitored at head offices across the globe. Africans. . indigenous people of Tupi and Guarani language stock. The images for in store and advertisement will need to be completed several months prior to the opening in order to be allow time for distribution to the national press to try and drum up interest and free editorial space in the correct issue (timed to the opening of the store). Intermarriage between the Portuguese and indigenous people or slaves was common. These measurements could be:  Through sales figures – are the stores meeting the predicted targets?  Through brand perception – is it clear that M&S is now a recognised brand amongst Brazilian people? If not. It would be necessary for an area manager to be responsible for the Brazil division. brought to Brazil as slaves. and Belo Horizonte. to ensure an equally high standard in each of the 4 cities to encourage good brand perception. Brazil has the largest population in Latin America and ranks sixth in the world. Four major groups make up the Brazilian population:      the Portuguese. Monitoring Like any other M&S venture. This information will not only show how well the stores are doing but in which divisions to allow appropriate stock replenishment. through EPOS. Rio de Janeiro. who colonized Brazil in the 16th century. Rapid growth has aided economic development but also has created serious social. Urban growth has been rapid. The majority live in the south-central area. who have settled in Brazil since the mid-19th century. the stores progress will need to be monitored to see how effective it is and whether a new strategy needs to be implemented. 81% of the total population were living in urban areas. which includes the industrial cities of Sao Paulo. subsequent waves of immigration have contributed to a diverse ethnic and cultural heritage. and political problems for major cities. Brazilians Population Structure With an estimated 175 million inhabitants (2003). how could this be improved?  How successful have the forms of advertising been – is it necessary to vary the publication/radio station in order to attract a wider audience? The IT systems in place. environmental. Europeans Asian immigrant groups. Despite class distinctions. About 80% of all Brazilians belong to the Roman Catholic Church. national identity is strong. about 5 million Europeans emigrated to Brazil. Parana.marksandspencer.finance.htm http://tutor2u. Santa Catarina. settling mainly in the four southern states of     Sao Paulo.com/business_review/international.asp . and racial friction is a relatively new phenomenon. Germany.bbc.graph deutsche bank http://uk.yahoo. References http://www. and Rio Grande do Sul.l http://annualreport.From 1875 until 1960. Japan.html (2) http://news.alfredbrand.stm .uk/1/hi/business/7446938.net/business/marketing/market_analysis_marketshare_intro. and the Middle East.com/q/pr?s=mks. most others are Protestant or follow practices derived from African religions. Immigrants have come mainly from Italy. Spain.com/populationstructure. Poland.co. Brazil is the only Portuguese-speaking nation in the Americas.
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