International Mrkting 2

SOUTHERN CROSS UNIVERSITY GRADUATE COLLEGE OF MANAGEMENT ASSIGNMENT COVER SHEET

Student Name:

MUOGBUO ELOCHUKWU VINCENT

Student ID No.:

21692899

Unit Name:

INTERNATIONAL MARKETING

Unit Code:

MNG00724

Tutor’s name:

DR OLIVER NGODO

Assignment No.:

TWO

Assignment Title:

INTERNATIONAL MARKETING RESEARCH

Due date:

31st July; 2009

Date submitted:

31st July; 2009

Declaration: I have read and understand the Rules relating to Awards (Rule 3.17) as contained in the University Handbook. I understand the penalties that apply for plagiarism and agree to be bound by these rules. The work I am submitting electronically is entirely my own work. Signed: MUOGBUO ELOCHUKWU VINCENT Date:

31st July; 2009

TABLE OF CONTENTS

1. INTRODUCTION 1.1 BACKGROUND- COMPANY PROFILE 1.2 THE PRODUCT 1.3

LIST OF FOUR COUNTRIES

1.4

SELECTION OF COUNTRY

2. MARKETING RESEARCH PROPOSAL 2.1 INTRODUCTION 2.2 RESEARCH OBJECTIVES 2.3 METHODOLOGY 2.3.1

POPULATION AND SAMPLING

2.3.2

DATA GATHERING PLAN

2.3.3

DATA ANALYSIS PLAN

3. TIMING 4. COSTS AND BUDGETS 5. PROBLEMS IN DATA GATHERING 6. RECOMMENDATIONS 7. CONCLUSION 8. REFERENCES

INTRODUCTION Section 1 Introduction

The marketing research plan, with respect to assignment one obtainable with motive by Gethafoam. Due to its magnetism of the bedding industry growth; Gethafoam has adopted a market development plan to achieve sustainable growth in the next five years. Part of the strategy is to develop into foreign market by looking beyond national boundaries for market opportunities overseas. Thus, the company has selected the following countries Nigeria, Congo and Zimbabwean, of which Nigeria were chosen after careful survey of customer profiles and it having potential market for the mattress with huge advantage for Gethafoam plc as a company. Nevertheless, culture is one of the most exigent component of the international marketplace, which inclusively patterns of behavior and way of thinking whether people living in groups create, share and learn i.e. culture differs from group to another. The aim of this report is to give a synopsis of Nigeria culture and there consumers’ behavior. Moreover, it may provides the international marketer with clues on how the culture may affect on international marketing mix decisions The marketing mix deals with the way in which a business uses prices, product, people, process and promotion to market and sell its product. More so, the marketing strategy needs to take into account the culture, consumer needs and expectations, buyers’ behavior of people from targeted country Nigeria

1.1Company Background Weifong Industries Sdn.Bhd was incorporated in year 1969 and with almost 40 years of manufacturing experience, we are known as the leading manufacturer of natural latex foam mattresses and bedding products in Malaysia. The company is located at its own property at Lot 60, Batu 11.Jalan Cheras, 43000 kajang, Selangor and occupies a land area of 10,000 square metres.The company manufactures its product with the Dunlop technology process and its latest European automatic foaming machine automated line, its products are proudly manufactured using 100% pure natural, high quality latex from only Malaysia which is renown for its world class quality. Gethafoam are made in conformance to international specifications and had matched and passed various test standards such as certification from ECO umweltinstitute,Germany,Institute Umweltindtitute Bremen GmbH,Germany and the world renown Malaysia Rubber Board.Getha mattress also developed there own fire Retardant natural latex foam, which had been tested and passed FIRA International ltd (UK) With the ever-increasing international exposure of there products, participation in international trade shows worldwide, emphasis on continuous research and development is the key to there continuous growth and success. The company’s achievement had been duly recognized by the Malaysian government and they were honored to be the recipient of the “Product Excellence Awards “presented by Prime Minister of Malaysia,YAB Dato’Seri Abdullah.Ahmed Badawi,in the year 2005.Besides this, the company had also attained numerous prestigious awards, in recognition of its continuous growth in branding and excellence. For more confirmation: visit. www.getha.com.my/compro.htm.

1.2 The Product Gethafoam produced the best quality mattress, carpets, cushion etc and automotive markets like technical foams for industrial, consumers and transportation industries. It has the same quality with the foreign brands, below are the product offerings. •

Getha Bond Adhesive

•

Getha mattress

•

Foam Wads & Rollers

•

Getha campus/leisure mat

1.3 The List of Selected Countries Gethafoam company propose to go international market and that has placed a demand on the marketing manager to conduct a research on three countries to choose the best suitable. The countries selected are. •

NIGERIA

•

CONGO

•

ZIMBABWEAN

1.4 Selection of One Country After suitable research demeanor on the three countries picked, Nigeria was selected via some convincing reasons which involves viz •

Political stability

•

Beneficial geographical condition

•

Positive economic condition

•

Admittance to free tariff etc

2.1 Introduction

Market research proposal is a plan, explains in detail the purposes of conducting the research, ways of doing it, the information needed for writing research and costs associated with it although there are clarity in domestic market, it is critical to conduct research on the prospect country for the difference in politics, economics, legal regulations on free trade or restrictions of operation. There are steps in the marketing research process (Kotler & Keller 2006). •

Definition of problem and objectives

•

Develop the research plan

•

Gather the data

•

Perform data analysis

•

Present the findings

•

Make the decision

2.1.1 Definition of problem The domestic market competition created a problem and the gethafoam considered how the operations of the company will progress in the next decade, with the high contested market share domestically. SWOT – analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues.

From the BCG matrix, when gethafoam existing product goes into the new Nigerian market, the best market strategy for the company to chose is the market penetration.

Existing markets

New markets

Existing product Market penetration

New developments Product development

Advertisement

Develop new range

Pre-launch the product Produce new range Market development Which Diversification

overseas market to enter?

Produce different types.

What information is needed for decision? Where is the target market (distribution places, people (Source from http://www.quickmba.com/strategy/rnatrix/bcg)

2.2 Research Objectives Two key research objectives for Gethafoam Company are: (l) How to penetrate into the market with high level of rivalry? (2) How to assess the feasibility of International market with its differences in Politics, environment, social and culture. 2.3 Methodology 2, 3.1 Population and Sampling Plan A sample is the segment of the population you select for market research purpose to representation (varying levels of reliability) (Kotler& Lee). Knowledge of fully understand society's behavior and fundamental attitudes is essential. The culture traits of a country have a profound effect on people's lifestyle and behavior patterns and these are reflected in the market place. This involves the what? How? Where? & who. For the sake for Sample data, we collect information from various sources. 1. Populations sampling (age, gender income). 2. Brands sampling (the brands that consumer prefer).

In this case cluster where formed to understand the approach of potential customers towards the brands, we conduct different questionnaires for proper survey and interviews for each diverse location. These shown in the table below. Group A East

Group B West

Group C South

Group D North

The sampling above can be done through visiting or conduct road show in various Supermarket, street corners, BRT stations and shopping mull. 2.3,2 Data Collection Plan Two methods are used in data gathering: 1. Primary data 2. Secondary data Primary data collection methods include survey, observation and experiment, interviews, focus groups, questionnaires. Secondary data is the data that is already gathered, compiled, and analyzed for some other purposes. This is via online technology research can now provide access to thousands of sources, such as newspapers, trade journals, news releases industry news letters and much more. The following ways have been proposed to carry out during the data collection process: Activity

Type

Purpose

location

(P= primary; S=secondary) 1 Survey via questionnaires P

Better

details

and

pertinent shopping malls, office,

questions being posed in the household forms to gather reliable and survey, 2 Observation/Personal

p

interviews

3

Experiment

schools

and

realistic airport To observe target market in Shopping malls action.

p

residents

This

will

enrich Departmental stores

Understanding of surveyors.

supermarkets,

It is the most scientifically

stores, and retail shops Same as above.

valued research technique. This is to capture cause-and-effect relationships-by selecting similar group

of

Complimentary

subjects.

e.g.

gift

the

in

chain

package

4 Survey via internet 5 Location of shopping complex and shop 6 Lifestyle and living

p

This

s

surveying. The locality will determine the

survey internet

s

turnover of sales Lifestyle of living will affect the

internet

standards

incurs

least

cost

in

Web

purchasing trend

2.3.3 Data Processing or analysis plan.

The information collected from section 2.3.2 is helpful in developing the correct marketing mix strategies for this potential country, Nigeria. Thus it is crucial to evaluate in detailed in order to penetrate the market successfully. The analysis plan set up is as follow. •

Customer preferences concentrate on the response from questionnaires and intercept interviews and focus on the marketing mix selection criteria by the customers, namely product, price place, promotion, people process and physical

•

Economic data – GDP and Lifestyle survey via internet.

•

Market segmentation- to analyze the venues with high sales turnover and target customers

•

To understand the packaging referencing by customers

pop

up

3. The table below indicates our suggest time frame on the research process Week 1-4

Activity Desk research

Purpose Venue To gather secondary data on Own office three countries in order to

5-8

Fly

to

select the best. countries To gain better insight of what Nigeria ,Congo and

selected 9

Selection

you see is what is what you get Zimbabwean concept one To keep

of

panorama

country. management

staff

Arrangement is done informed to

the

gethafoam

to

Own office

well

achieve

the

Gethafoam company’s objectives

management and seek 10-11

for the consent To sketch

the To

conduct

the

survey

in

Own Office

questionnaires format Nigeria based on the group and on

the

pertinent category summarized in 2.3.1 it

questions and answers will determine the product are wish to be attained 12-15

interested by the population

within its own country Complication on data To summarize the information collected

Own office

through gathered

19-20

survey and interviews. To evaluate data and To analyze for decision making

Own office

21

prepare the findings To present the report

Own office

To

seek

decision

endorsement making

international

to

and go

4. Costs and Budget for Research Item No. 1

Description

Purpose

To send at least two To survey around the country of

Amount ($) 50,000

marketing staff to Nigeria its opportunities and threats to .Include air ticket, hotel conduct observation research accommodation and meal 2 3

allowances Agent outsource cost Harmonizing

gifts

To engage agent in Nigeria to conduct the survey to To attract more customers to fill

10,000 5,000

people who fill up the up the forms in more delight 4

questionnaire forms Closet rental

5

supermarkets effective way Other miscellaneous bill For other expenses and offer e.g.

telephone

manners in To gather the survey data in more

10,000 2,500

claims benefit to staff

entertainment The above table where used to illustrate for budgeting and costing, which however finalized at rates of $77,500. 5. Problems in Data Gathering

•

Time and tolerance is required to have several endeavor in order to collect the data needed.

•

Due to inadequate of fluency with the foreign place- this leads to bogus assumptions and imperfectly defined research problems.

•

Statistic data and information about gethafoam seems to be limited.

•

Regency of data (age of data) - the most current data gathered by way of internet is not the latest version.

•

Through mailing and telephone Surveys may not obtain full responses in, accurate responses attitudes and behavior of customers which lead to in exactness of data collected.

•

Lack of thorough demographic information and even in trying to reach sampling units and Consumer behavior- People could rebuff to collaborate to provide genuine answer to the questions.

•

Random sampling errors – these errors occur due to variation in a sample data.

RECOMMENDATION For the challenges faced during the data gathering Nigeria textile Mills commended to conduct primary research to overcome the familiarity with foreign environment Individual survey and observation in different environment convey the most reliable data compared to the mailing or telephone survey. Via observation and questionnaires we can view the consumer behavior and their attitude authenticity. All team members and staff in the organization being the consumer before progressing to penetrate the overseas market. This means we must put ourselves in the consumers’ shoes to understand our products in term of quality, taste and price. This is to conduct the survey within the immediate family members, relatives and friends to obtain the answer whether we have confident to go international, when faced with the situation where there is no data available, or the secondary data sources are inadequate then it is necessary to begin the collection of primary data in the form of quantitative and qualitative research (cateora, 1996). Due to the inadequate and reliable data collected from internet for its aging reason we must also search for the magazines such as Weekly Business and journals for better updates. After research of the potential and viability of Singapore market here after some recommendations about the further strategy to go to the new market even though all the information is already gathered PLC still should prepare contingency strategies to cope with the Crisis which cannot be anticipated such financial crises, terrorism and when penetrate a new international market, PLC should better use segmentation strategy to fulfill every kind of customer need. In order to gather, sort, analyze evaluate and distribute needed, timely and accurate information to marketing decision makers. International marketing information system is necessary for PLC to do better.

PART 2: Gathering of Secondary Data in Nigeria Political

Political

Political stability.

Environment

system(research

&

http://humandevelopment.bu.ed/dev:indicators

findings Taxations

Tax system (Research Taxation and duties are 100% exempted

Environmental

Findings)

Income tax rate is less than 4% after 10 years

Research Findings

Variation in Environmental regulations from

regulation

state to state.

Employment law

Research findings

and The unemployment rate in the Nigeria jumped to 8.1 percent, the highest level since late 1983, as employers slashed 651,000 jobs.

Trade

and

Tariff Research

Restrictions

findings

and The Trade and Tariff restrictions are generally high, especially on companies with African Origin

Economics Factors in Nigeria Employment

Research The unemployment is high, increases to 8.5%

Rate

Findings

Economic

Research

GDP growth averaged 5.6% since

Growth

Findings

2002

Inflation

Research

Rates

Findings

Exchange

Research

Rates

findings

Socio-cultural Environment

Inflation rate fluctuates between 17-25%.

and Potentially favorable

Population

Research Findings

Population growth is among the highest in the

Growth Rate

Age Distribution

Consumer

developed countries

Research Findings

Research Findings

Behaviors)

The age distribution for the Nigeria increased in the mid aged

Notable for continuously changing consumer buying behavior.

Technological Trends Distribution and

Research and

Distribution of products by the use of

Communication

findings

technologies e.g. marketing information

Channels

systems

Technology

Research

inducement

findings

Rate of

Research

Technological

findings

and According to statistics in 2004, 120 million people in Nigeria use the internet. and Development

in

technology

is

fast

changing

Change

According to the data obtained, there are opportunities for growth in Nigeria. With the state of the economy ranging from the inflation rate, the subsidies for African countries, effective channel of distribution, political stability and so many others touched in the analysis above. Section2 Cross cultural values and consumers behaviour

Cross cultural marketing is defined as the strategic process of marketing among consumers whose culture differs from that of the marketers own culture at least in one of the fundamental cultural aspects, such as language, religion, social norms and values, education, and the living style (kotler 1994). At the mainstay of culture, lie its values. As defined by Rokeach, value is an enduring belief that one mode of conduct or end-state of existence is preferable to an opposing mode conduct i.e. consumer behaviour.eg applying unpleasant colour in the embroidery and latex in making the mattress is well accepted in the Malaysia but may perhaps be considered a disrespect in Nigeria, values endow consumers with standards for making comparisons’ among alternatives. To suitable the importance of values in consumer behaviour, first we need to identify valuable market segments’ to target within the Nigeria market, using an apt marketing mix. Fundamentally, our crucial targets are defined by elusive consumer characteristics defined by their lifestyles, reimbursement sought; mattress is a reflection of order, as a result of innovator. VALS MODEL SEGEMENT inhabit this niche segment Previous consumer features sort after involves, geography i.e. states, provinces densely populated by blacks, demographics i.e. youths between 16-30, and the elderly personnels, religions oriented. The behaviour of the identified consumer groups above towards product consumption is subject to the values and value systems therein, thus the need to evaluate differences in value systems between Nigeria foreign market and Malaysia parent country to establish the differences in behaviour amongst these segments. Understanding the implications of these differences is of these differences is of significant importance to the international marketer. Decision Making Strategies for international marketing mix (7ps) The basic question now is when launching a product into foreign market; do you standardize or adapt your market mix to the foreign market? Gethafoam can either adopt to use an adapted marketing mix to market the mattress in Nigeria or standardized marketing mix. Conversely the best unforeseen event approach is to consider a bit of the both; 40%/60%.  Product decision: Standardization / Adaptation

The central part predicament in global marketing is whether to sell an indistinguishable product (a global brand) throughout its sales area or to make whatever modifications are needed to relates for confined differences. The mattress is a niche brand targeted at common niche segment within the Nigeria country Apparently desires may be universal, but the motivation, elevation and expressions of these needs vary, so in essence the product decision on whether to standardize or adapt the mattress is questionable based on two hypothesis. Presence of Global Communities: Global communities, entail homogenous groups or market segments of people with similar lifestyles and values. The mattress is originally targeted towards the youth’s ages; the best estimate is that average youth in Malaysia divulge similar characteristics with similar race within the Nigeria .This is not completely true as these people are reared on different norms and values, the average Malaysia is very respectful to there seniors and is quite symbolic in demonstrating this mattress is usually for resting and enjoyment hour, the case may be difference in Nigeria making products decision for standardization unfavourable. Convergence and Divergence of Consumer Behaviour This is as a result of cultural imperialism; countries are becoming similar with respect to penetration and consumption of confident goods but not in respect to the motives for buying them.Basically, Nigeria when compared to Malaysia display little convergence at the macro level, we so far apart from GNI (gross national income).however this does not necessarily imply a divergence of consumer choice at the micro level, for e.g. Malaysia youth and a Nigeria show talent for upholstery furniture, yet the reasons for purchasing differs. A Malaysian may purchase foam for resting while Nigerian man for furniture use only. Product lifecycle and Adaptation Obviously some reimbursement from Standardization include; economies of scale in production, Marketing, management, distribution etc, usually standardization saves cost' however one major factor disturbing the standardization of mattress' is the product phase within the product life cycle. In Malaysia, the product has attained its peak phase unlike the Nigeria, for its product new compete. Hence there is need for extensive adaptation to profitably ascertain the mattress within the Nigeria, The strategy would be to think worldwide, but act local

Analysing the Product for Adaptation: In accumulation to cultural struggle to Product acceptance, which may oblige adaptation, physical attributes can influence the recognition or elimination of a product. Similarly, the mattress is Multi-dimensional and the totting up of its features and attributes determines the amount of satisfaction received by consumers thus there is needed to divide its many dimensions into three distinct components; Its core Components: Gethafoam mattress core components consist of its design and quality. These features tend to differ across borders as they reflect contrasting implications to consumers taste. In Malaysia, the 'mattress, is made mostly in latex; this might replicate rebuff because consumers are more aligned to spring mattress in Nigeria market’. For example; the quality of the product can be altered .Basically, these adjustments are costly because a change in the platform (core component) can affect product processes, hence it need additional capital investment; however it is necessary to adapt the product to the cultural variations as ubiquitous in the Nigeria. Packaging: These include style features, labeling, trademarks, brand name etc. The importance of each of these elements in the eyes of the consumer depends on the need that the product is designed to serve. Products refer to the offering based on the product or service variety, design, features, quality, brand name, packaging, styling, size and colour varieties, performance, image etc. In making the product offering decision Gethafoam plc will need to look into the standardization and adaptation strategy based on various factors as discussed. Gethafoam Plc needs to make a decision on the product offering as to whether to standardize or adapt the mattress to international markets. The most important reasons driving Nigeria multinational companies towards international tactical adaptation are culture, market development, competition, laws, economic differences and differences in customer perceptions while the most important reasons for standardizing are global uniformity and image, economies of scale and synergetic and transferable experience. Consistency with consumers, easier planning and control and stock cost reduction are of less importance.  Price (Standardization or Adaptation) low cost price

Changes in the marketing environment may require a review of the prices of products already on the market or for a new market. For example, an announcement by a large firm that it is going to

lower its prices makes it necessary for other firms in the industry to examine their prices. Culture is not an independent variable in the business equation. Rather, culture exists, or should exist, to support the business strategy. If culture is how we get things done, strategy shows us what needs to be done. Usunier (2000) argues that price is a significant element of communication and a decisive element in the social interaction between buyer and seller. Gethafoam Plc needs to look into their pricing strategy and for very obvious reasons review the strategy on a regular basis. The price objective, demand and costs estimate needs to be determined  Promotion (Standardization or Adaptation)

Promotion refers to the awareness created for the preamble of a new product and availability of an already existing product by means of advertising and selling activities. The main goal of promotion is to make customers responsive of product features, its uses and reimbursement Promotion activities help firms to position their products in the right way in the market to reach the target customers. Effective promotional activities consist of a clear and simple message which is directly targeted at a specific group of people, reached by means of a suitable medium like television or print adverts. The message should be consistent with the overall marketing image of the firm and should reach the target audience and generate the desired response. Promotional activities involve advertising, personal selling, public relations and sales promotions. Gethafoam Plc needs to develop their promotion strategies for all of these stated reasons. Individualistic cultures' high attraction to the Internet is often attributed to the egalitarian, democratic nature of the Internet (de Mooij, 2000, 2004). The strong influence of Individualism on the consumption of the Internet, which is a relatively impersonal medium of communication, is also connected with the essential and product-specific aspect of cultural communication styles. Gethafoam Plc needs to be sentient of this since the Nigeria has the predisposition to purchase products online and these needs to be considered as a channel of promotion. Hofstede (1991) refers to Hall's concept of Context and concludes that high Individualism is very often connected to "Low-context" communication, whereas low Individualism (Collectivism) very often is connected to "High-context" communication. According to Hall

(Hall & Hall 1990) members of low-context cultures have less personal contact with each other; therefore communication must be very detailed and very explicit.

 Place (Standardization or Adaptation) location

“Place” refers to the distribution channels used to get a firm’s products from the manufacturer/service provider to the end customers. Place is also known as channel, distribution, or intermediary. For business to be successful, it is important that the product/service offerings are at the right place at the right time. Therefore great importance should be placed in determining the distribution medium. The selection of distribution method should be carefully made keeping in mind the target audience and the positioning of the product in the market. Gethafoam Plc needs to adopt the adaptation strategy in its bid for expansion into other countries and market around the world as its globalization strategy focusing on managing capitals through prudent and strategic growth since various countries have different cultures with regards to their buyer behaviour based on their distribution channel cultures. In high power societies globalization is broaden supply chains internationally at a time when market instability is increasing, exposing companies to greater uncertainty. Port stoppages, customs delays and transportation capacity constraints are just some of the dangers global companies face every day but this will not be the case of Gethafoam Plc entering the Nigeria due to the fact that the culture is such that the individualistic nature of the residents also encourage the customers to buy products online.  People (Standardization or Adaptation) staff/ good delivery

Hofstede (2003) viewed culture as a construct and therefore is “not directly accessible to observation but inferable from … behaviours and useful in predicting other … behaviour” (p 69). Edward Hall (1976) proposed that the difference in communication among different societies lies in their context. ‘High context’ societies depend more on the external stimuli for behavioural cues whereas those in ‘low context’ cultures are more direct and explicit in their communication and this affects the behaviour of the people and this needs to be considered for human resource. In Nigeria the collectivism culture encourages all staff to think in one direction but the

individualistic nature of the Nigeria may also hamper group think and work, therefore a blend of local and foreign workers should be encouraged to strike a balance. The foam industry in Nigeria is more of a feminine field as it is considered a place for women and it is assumed that women will be more creative than their male counterparts this will not be the case in the Nigeria as the industry is a mixture of both sexes. In going global, Gethafoam Plc needs to put all this culture into consideration as well as identify the laws on labour in the country of expansion like demography where Malaysia workers do not have to attain a certain age to work whereas in the Nigeria only people over 18years of age can work.  Process This assumes a separate role within the marketing mix, as it involves the procedures, task schedules, mechanisms, activities and routines by which a product or service is delivered to the customer. Identification of process management as a separate activity is a pre-requisite to quality improvement. While the people facet is important in customer service, no amount of interest and effort from staff will overcome continued unsatisfactory process performance. The foam industry in Nigeria emanates high standards of quality hence there should be a precedence need for Gethafoam plc to incorporate and use for success in this new market. The weather in the Nigeria requires that the product be produced according to the needs of the consumers and Gethafoam plc needs to be alert of this therefore they need to use the adaptive strategy without compromising on quality since their slogan is “Malaysians’ quality foam, high quality latex’. For example, can Dunlop technology be added to wool while it can remain 100% latex? Suppliers have to be responsive to this adaptive strategy else Gethafoam Plc may need to be involved in vertical integration to ensure that raw materials are readily available for production although the procedure for production could remain similar.  Physical evidence (Standardization or Adaptation)

Gethafoam should adopt standardization in some aspects of their physicals like buildings, logos and slogans since they have been known for Asian’s quality mattress and has a symbol of the Asian legacy which is the quintessence of their product offering, the buildings and factories should have a particular pattern if laws in the Nigeria allows for it. The environmental laws on pollution by factories may differ from place to place and this will definitely affect the structures

for example, in Malaysia factories are encouraged to be high storied so as to take pollution further up the atmosphere, in the Nigeria biotechnology is encouraged to discourage global warming therefore the building structure may differ.

Conclusion