TocoMAS Product Expansion in Middle East Market

Introduction

Holt and Quelch assert that all organizations operate in environments that influence their ways of doing business either directly or indirectly (69). This claim implies that for successful colonization of new markets, organizations must look for strategies of dealing with issues such as political instability while considering the impacts of various macro-environments within a selected location. Nevertheless, organizations should consider other attractive factors such as the availability of cheap youthful labor in the region and the legislative changes to encourage investment. This paper proposes introducing a new product (chicken hamburger) in the Middle East markets, starting with Saudi Arabia. TocoMAS, a hypothetical organization that is currently operating in the American market, makes, processes, packages, and markets this fast-food product.

Analysis of the Country of the Emerging Market

TocoMAS, a hypothetical retail company, is a rapidly developing organization. Currently, the organization has 250 retail stores located in different nations across the US market. These stores offer products such as vegetable salads, beef hamburgers, fruit juices, coffee, ice creams, French fries, and pizza. The company focuses on the American markets, although it plans to expand into international markets to increase profitability. One such market in the Middle East bazaar, especially the Saudi Arabian region. Although the organization is predominantly product-based, customer services are considered an important aspect of enhancing future growth. In the fast-food sector, the rate of serving customers and effective management of employee-customer relations are all important aspects of service delivery, which the management believes TocoMAS can use in building its long-term competitive advantage not only in the American market but also in the Middle East market.

Competitors of TocoMAS, such as Aldi and Lidl offer chicken hamburgers in their stores. As these organizations continue to expand globally in markets such as the USA and Russia, where they seek to take advantage of economies of scale, TocoMAS cannot afford to be left behind. TocoMAS struggles to secure an incredible market share in the retail market locally and globally, amid the high competition from organizations such as Aldi, Netto, Biedronka, and Lidl. On the global platforms, TocoMAS seeks to expand its operation to focus not only on the European markets but also on internationally emerging bazaars by opening up a store in the Middle East market.

Considering the challenges and opportunities in any new market, investors in the international arena have the freedom to make choices on whether to invest in the Middle East market. They can also opt to invest by deciding on the nations, which present fewer risks to their operations where the probability of success upon entering the markets is the highest. These decisions require the availability of frameworks and information together with insights that are critical to developing effective entry and expansion strategies. This move is particularly important for markets that are characterized by political turbulence and changing social developments.

Introducing a hamburger in the Middle East market exposes TocoMAS to varying cultural influences. Therefore, the strategy also calls for product diversification to meet the cultural needs of different people. Promotion and positioning of the product, especially in the Middle East markets, with a focus on Saudi Arabia, are important aspects of an internationalization strategy for TocoMAS. Evaluating the preferences of other international fast-food markets can reveal a different cultural preference. Through its creative and innovative team that brings new product designs, TocoMAS can develop an appropriate product marketing mix to meet the specific needs of the Saudi Arabian market.

Compared to other nations in the Middle East, Saudi Arabia is more stable politically. Hence, it is a suitable market of choice for introducing the new product. An investor who seeks to introduce new products and services in the Middle East market encounters various challenges whose proactive resolution is problematic due to the lack of sufficient data. This gap may hinder efforts to develop a reliable marketing plan. In the marketing planning process, many issues are considered, including decisions on products that are offered on the market for sale, the place where they are sold, pricing, and even the promotion techniques. The factors require a heavy input of consumption pattern data in a given market, which Rogman confirms its scarcity or its non-inexistence for developing markets such as those of the Middle East (par.13). How can TocoMAS arrive at a decision on how to re-engineer its chicken hamburger product to meet mass appeal for consumers in the Middle East?

Even though the Middle East nations present attractive markets for foreign organizations, political instabilities in nations such as Syria, Iraq, Iran, and the conflict between Israel and Palestine are a major problem that may make an organization susceptible to risks that may lead to financial failure. With these problems, it becomes important to provide a framework for entry modes to mitigate the impacts of the problems on business success. TocoMAS considers establishing business partnerships through licensing and franchising relationships with Saudi-established organizations.

Besides establishing business partnerships with locally established organizations in Saudi Arabia, developing appropriate marketing planning is necessary. In the market planning process, an organization must evaluate the capacity of the new product to meet the needs of the consumers when attempting to place a new product. The argument here is that goods and services offered for sale must deliver the utmost good to the consumers. For instance, foreign investors who seek to offer financial products and services in the Middle East need to understand the reception of contemporary financial systems in comparison with Muslim financial systems for them to compete aggressively with other organizations that are established in the Middle East nations.

Why the location of the emerging market is important

Venturing into emerging markets to sell the selected product is important. Such markets present the potential for building strong brands well ahead of the competitors. Entry into a new market calls for the analysis of the likely risk that prevails in specific markets of interest. Tim Rogmans case study presents the dynamics of the Middle Eastern markets. The dynamics are apparent after the discussion of various changes that occur in the Middle East market block in terms of changes in trends. The main trends, alternatively referred as megatrends by Rogman, involve political volatility, enhancement of business regulations, the large wealth of energy resources that are necessary to boost production, regional integration, and the emerging influx of participation of women in the development and maturation of the labor force in the Middle East (par.4).

The demographic characteristics of the region, the shift towards value consumption, turning towards the east, and the rising multinationals in the Middle East also constitute important trends that organizations such as TocoMAS should consider when establishing business operations in the region (Rogman para.8). The rising number of multinationals in the region is incredibly important. An increase in the number of people who have tastes for fast foods can encourage the local people to try new delicacies such as the chicken hamburger.

Another important situation for TocoMAS to consider when making decisions to venture into the Middle East markets encompasses the location choices. While making such decisions, Rogman identifies the lack of a reliable regional data on market value statistics (par.13) as a major challenge. The challenge may compel the organizations to rely on fragmented macro-level data collected by companies for their specific use. Even after identifying attractive business locations, Rogman maintains that the consideration of other factors such as infrastructural developments, taxation, and the difference between thresholds of political risks in different Middle East nations is important (par.13-16). For this reason, Saudi Arabia constitutes a suitable location for the company to launch its product in the Middle East region.

Mode of entry for the new firm and the reasons why the company will succeed if it chooses the particular mode of entry

New markets often present challenges in terms of aligning organizational culture with the local tastes and preferences, attitudes, and beliefs. For this reason, Rogman identifies various entry mode options (par.17) as important situations that foreign investors need to consider when arriving at a decision to invest in the Middle East markets. The possible entry modes that may work in the markets include franchising, exporting, and joint ventures such as mergers and acquisitions (Rogman par.17). Nevertheless, each of these modes is suitable to some extent, depending on different situations. Franchising and licensing are a good option for the organization to venture into the Middle East markets, including Saudi Arabia.

The organization is likely to succeed through the chosen entry mode since venturing into new markets, especially in foreign nations, requires organizations to exercise due caution to ensure success. While TocoMAS can develop strategies to cope with entry changes that relate to its internal structure, dealing with macro-environmental factors in a foreign nation such as Saudi Arabia is incredibly problematic. This situation underlines the importance of developing an appropriate entry strategy that ensures that an organization deploys the available knowledge and experience of working in foreign countries. The chosen strategy entails opting for franchising and licensing before focusing on full ownership arrangements.

Recommended business-level strategies for the company

To operate in any market, an organization must develop corporate and business-level success strategies. Business-level strategies entail the integrated and coordinated commitment and actions taken by firms to acquire a competitive advantage through the exploitation of their core competencies, particularly product markets (Hitt, Duane, and Hoskisson 98). At TocoMAS, business-level strategies define the target customers, the necessary clientele needs, and the manner of satisfying them. Therefore, customers form the fundamental foundation during the derivation of successful business strategies. Two paradigms of selecting the best and appropriate business strategies may be recommended for the company.

Firstly, the company can classify its consumers based on parameters such as age, tastes and preferences, and cultural affiliations among other demographic characteristics (Ronda-Pupo and Guerras-Martin 162). Secondly, it can proceed to define the needs of its target market segments. In the context of tastes and preferences, TocoMAS should focus on offering delicious, quick, and non-expensive chicken hamburgers that are appropriate for each age group. This strategy suggests that the business-level strategy for the company should focus on producing and availing what the clients require while considering how they want it done.

Organizations may possess several business-level strategy options. Some of the options include the extensive target strategy, the constricted target approach, the cost exclusivity stratagem, the competitive advantage strategy, the competitive capacity approach, the incorporated cost management approach, and cost leadership that is focused on the differentiation strategy. The integrated cost leadership strategy constitutes the approach that can yield the most significant long-term success. Hence, it forms a good strategy for TocoMAS.

Operational challenges faced by organizations that operate in the fast-food industry justify the choice. For example, McDonalds has a rich history of struggles to provide better services and low-priced fast foods meals. Due to the rising concerns about the nutritional value of fast foods, McDonalds resorted to providing healthier foods, which had low calories. In the context of aspects such as price, management, quality, and employee empowerment, McDonalds business remains well ahead of its competitors. These strategic efforts are part of the integrated cost leadership strategy (DAveni, Ravenscraft, and Anderson 369).

The strategies enable the company to adapt to environmental changes, acquire new operational skills, become technologically savvy, and/or leverage its core competencies while engaging in competition with its rival organizations. Clearly, based on this success, TocoMAS can benchmark from McDonalds. The success of the product in the Middle East (Saudi Arabia) can be analyzed in terms of the new product feasibility using approaches such as strategy tripod, SWOT analysis, Porters five-force analysis, three generic competitive strategies identified by Porter, Porters diamond model, and five dimensions of culture.

Strategy Tripod

Expanding into new markets requires the deployment of appropriate strategies for successful placement of a product in the market. Strategy tripod is an instrumental perspective deployed by organizations such as TocoMAS among others that seek to exploit the emerging markets. Strategy tripod has three leading perspectives, namely industry-based rivalry, firm-specific capital and competence, and institutional conditions and shift (Peng, Wang, and Jiang 920). An appropriate combination of these three perspectives facilitates the development of a working strategy, which then translates into product performance in the new market.

As discussed in the next section, the SWOT analysis environmental model provides the required approach to analyzing the industrys internal capabilities for TocoMAS to introduce a new product in Saudi Arabia. A discussion of Michael Porters five forces forms the basis of evaluating industry competition for TocoMAS. However, to develop an appropriate business strategy, a consideration of a third perspective, namely institutional-based concept, is necessary. According to Peng, Wang, and Jiang, this concept entails informal and formal institutions (923). Saudi

Arabia has formal institutions such as business laws and regulations that are influenced by Islamic systems and philosophies. TocoMAS must comply with the laws and regulations to conduct business in the emerging market. Informal institutions comprise norms and the behaviors of the Saudi societies. As a consumer society, the Saudi population does not object the consumerism culture. Therefore, the success of chicken hamburgers in the market will only depend on the capability to deal with industry competition while leveraging on internal resource capabilities for TocoMAS.

SWOT Analysis

In the daily operation of a company, situations are encountered, which act as strengths, weaknesses, opportunities, or even threats to the success of any organization (Hill and Westbrook 47). For TocoMAS, strengths include its ability to offer high-quality chicken hamburgers, pursuing the low-price strategy, and ensuring that operation costs are minimal. The company has also managed to establish a strong presence in an emerging market such as India and China. Therefore, it has learned and acquired experience on the challenges of successfully launching a product in a new market. Amid these strengths, TocoMAS encounters some weaknesses such as the relatively small brand in regions where competitors have managed to establish a higher presence. For instance, while TocoMAS has 100 outlets in Germany, Aldi has 8000 outlets. TocoMAS has low establishments in the global markets. Pursuing the low-cost strategy makes some customers consider the organization an outlet for cheap products or low-quality items.

Opportunities available for TocoMAS to capitalize on to enhance its success include the introduction of its brand in international markets where its competitors have a relatively low presence. Such markets also need to be dominated by retail organizations that have relatively lower economies of scale in comparison with TocoMAS. These bazaars include the Asian and African retail markets. Consequently, the Saudi Arabian market is a good opportunity for the company. Another opportunity for TocoMAS includes investment in promoting its brand to create consumer awareness. This move can help it in dealing effectively with the competitors in the local Saudi markets. The company has a major weakness since it cannot cater for all consumers who look for complete retail shopping experience. The organization has the threat of the changing government policies and regulations for the retail industry in Saudi Arabia and its engagement in price wars with competitors.

Porters five-force analysis

Different factors shape industry competition. The Porters five-force method is one of the ways of analyzing these forces. These forces include competition in an industry, pressure from new entrants, pressure from substitute commodities, customers bargaining authority, and suppliers bargaining command (Porter 57). The degree of competition comprises one of the most important factors for TocoMAS while expanding its operations in the emerging market. In fact, many emerging organizations are operating in the fast-food industry. This situation threatens to take up TocoMAS market share in case the upcoming companies open new outlets in the emerging markets such as Saudi Arabia. Such organizations include Wendys, In and Out, Burger King, Jack in the Box, and Taco Bell among others.

The increased rivalry in the industry makes the fast-food industry incredibly dynamic. Organizations keep on exploring mechanisms for enhancing their competitive advantage, including innovation of new products that meet the emerging needs of the consumers. For TocoMAS, innovation and product differentiation encompass central mechanisms for ensuring that it dominates its competitors. The bargaining power of the buyers tops the list of the most important competition forces for the companys new market. The success of TocoMAS depends on the strength of its customer base. Therefore, apart from retaining the existing customers, it should also seek mechanisms for attracting new customers who are loyal to the competing brands. TocoMAS encounters major challenges while attempting to attract and keep customers whose influence on their bargaining power rests on concerns about eating healthy diets. These concerns force fast-food consumers to demand healthier products. To this extent, TocoMAS should anticipate facing challenges when trying to place and market its chicken hamburgers in Saudi Arabia as a healthy meal.

Although TocoMAS adopts healthier diets in its menus, the negative profiling created by books such as A Fast Food Nation and the film Super Size Me may influence it negatively in the emerging markets such as Saudi Arabia. With the mentality that fast foods are unhealthy, when a TocoMAS advertisement runs over the media, buyers can attribute such negative effects of fast foods to TocoMAS, especially because the company is foreign. However, this challenge is mitigated by the selection of franchising and licensing as an entry strategy into the Middle East market. This strategy ensures that customers will only consider chicken hamburgers an addition menu to locally established brands.

Three Generic Competitive Strategies Identified by Porter

In the Saudi market, TocoMAS can have a below or above-average industry profitability. Above average profitability is crucial to maintaining its competitive advantage. For this goal to be realized, TocoMAS should deploy product differentiation and/or low-cost strategy. According to Michael Porter, these two mechanisms for accomplishing the competitive advantage translate into three different generic competitive strategies, namely focus, delineation, and price management (Porter 57). Through cost management, TocoMAS may become Saudi Arabias chicken hamburger leader through pursuing economies of scale or having preferential accessibility to raw materials. Pursuing the economies of scale is feasible, considering that it has a huge resource base in the American market. This market can permit it to have the capability to recruit many suppliers through the licensing and franchising entry strategy into the new market.

Porters Diamond Model

In the book, The Competitive Advantage of Nations, Porter develops the diamond model for analyzing competition in a nation. In the Saudi Arabian emerging market, such competition may give TocoMAS a competitive disadvantage or advantage. The diamond model features factors such as the environment, firm, demand situation, and the related and supporting industries as its main four perspectives (Porter 59). For success in introducing the new product in Saudi Arabia, TocoMAS needs to consider conditions from the dimensions of raw materials, people who offer customer services, financial resources, expertise, and its knowledge bases. Where some of these conditions may be unavailable, their exportation subject to compliance with Saudi Arabian law and regulation on the importation of human resource is necessary. Figure 1 below illustrates a recommended approach to relating various perspectives of the diamond model as proposed by Michael Porter in The Competitive Advantage of Nations.

Applying the diamond model in the introduction of a new product in Saudi Arabia as an emerging market.Source: (Porter 61).
Figure 1: Applying the diamond model in the introduction of a new product in Saudi Arabia as an emerging market.Source: (Porter 61).

Five dimensions of culture

Norms, values, and ways of thinking define culture. Hofstede defines it as collective programming of the mind, which distinguishes one group or category of people to another (89). The author regards culture as having five dimensions, which comprise authority span, ambiguity prevention, independence versus communism, masculinity versus femininity, and time course (Hofstede 92). The five dimensions of culture can be used to show how demographic changes can be effective and/or if people are ready to expand into the new Saudi Arabian market.

Power distance defines the manner in which power distribution occurs across the society. A low power distance is witnessed in emerging markets such as Saudi Arabia. The implication is that culture favors autonomy and personal responsibility while developing and marketing products. Therefore, people are more likely to accept the new product offered by TocoMAS through its business partners since they regard chicken hamburgers as complying with the considerations of customer needs and wants in their design.

Both the American and the Saudi cultures are highly uncertain. Such culture permits innovation and creativity, as opposed to standardization of products. Consequently, if the new product meets their preferences and needs, people in Saudi Arabia will accept it. People are open to innovation and creativity, especially considering the existence of individualistic culture. The blend of feminine and masculine cultural orientation makes the Saudi Arabian market even more attractive for TocoMAS. The demographic changes in Saudi Arabia are pointing towards the distortion of long-term tradition orientations. Hence, potential detriments to institutional change as a necessary move towards applying the tripod model in the Saudi Arabian market are seizing to affect consumer behavior. The five dimensions imply that people are ready for the expansion of TocoMAS through its chicken hamburger into the emerging Saudi Arabian market.

Conclusion

Whether an organization specializes in offering services or selling products, the aim of colonizing a new market is to increase the profitability levels. The objective of increasing profitability is to augment competitive advantage. Any factor that makes this goal unrealizable constitutes a major hindrance towards establishing a business in foreign nations new markets. Indeed, an organization can only invest in a foreign nation after calculating the probable risks and determining the possibilities of developing workable risk mitigation strategies. While the strategic location of various emerging markets such as the Middle East nations is attractive for international organizations that seek to expand their business portfolio to grow their profitability, it is essential to consider risks, especially political instability in the region.

Works Cited

DAveni, Richard, David Ravenscraft, and Philip Anderson. From corporate strategy to business level advantage: relatedness as resource congruence. Managerial and Decision Economics 25.7(2006): 365-381. Print.

Hill, Tim, and Rachel Westbrook. SWOT Analysis: Its Time for a Product Recall. Long Range Planning 30.1(2009): 4652. Print.

Hitt, Michael, Ireland Duane, and Robert Hoskisson. Strategic management: competitiveness and globalization concepts, New York: NY, Cengage Learning, 2011. Print.

Hofstede, Geert. Cultural Constraints Management Theories. Academy of Management Executive 7.1(1993): 81-94. Print.

Holt, Arthur, and Timothy Quelch. How Global Brands Compete. Harvard Business Review 7.3(2007): 68-75. Print.

Peng, Mike, Denis Wang, and Yi Jiang. An institution-based view of international business strategy: a focus on emerging economies. Journal of International Business Studies 39.3(2008): 920936. Print.

Porter, Michael. The five forces that shape strategy. Harvard Business Review 3.1(2008): 56-63. Print.

Rogman, Tim. Entry Strategies for Middle Eastern Markets, 2014. Web.

Ronda-Pupo, Armando, and Luis Guerras-Martin. Dynamics of the evolution of the strategy concept 1962-2008: a co-word analysis. Strategic Management Journal 33.2(2012): 162-188. Print.

Earthquake Bed Product in the Italian Market

An earthquake bed is a new product that elicited mixed reactions from the general public. However, it is highly necessary to assess the probability of the success of launching this product in a specific country. There are several factors that have to be considered. The main goal of this paper is to discuss environmental variables that have an impact on the customers decisions, using Italy as the example of a country where earthquake beds might be distributed.

All factors that have an impact on the performance of a company are called marketing environment variables. A company needs to learn about a market environment in order to cope with such issues (Dawson 2014). Environmental variables are divided into two categories. These are macro and micro environment variables.

The first factor relating to a micro market environment is suppliers. An earthquake bed is a new product on the Italian market. Hence, the innovativeness of this product, along with the absence of any competitive offers, can attract new buyers. Another significant factor is resellers. The effectiveness of a marketing strategy relies on distributors and their reputation. As an earthquake bed is a new product on the Italian market, there are no well-known sellers of this innovation. Therefore, it will take time to introduce this product to a broad audience.

Macro environment variables play a crucial role in the successful implementation of marketing strategies. The first factor is economic. An unfavourable economic climate affects the customers decision-making process. However, the Italian economy is one of the largest in the world. In 2016, the Italias gross domestic product was $1.8 trillion (Italy  market overview 2017). Specialists say that the key economic indicators will be increasing in future years.

Another important factor is demographic. Age, an education level, lifestyle, and some other characteristics have a significant impact on the situation on a market. The Italian population is around 60 million (The Italian market environment 2017). However, most people are Italian. Hence, there is a little ethnic diversity what makes a purchasing power weaker. On the other hand, people between the ages of 15 and 54 comprise more than 50% of the population (Italy demographic profile 2017 2017). It is a positive factor for the development of a new market.

The most crucial aspect for distributing this type of product is a natural factor. The main purpose of an earthquake bed is to protect an owner from getting injuries in case of an earthquake (Around the world 2015). Italy is a seismically active region. Italians experienced many devastating earthquakes. Therefore, the introduction an earthquake bed to the Italian public might inspire a great interest.

In conclusion, the analysis of environmental variables on the Italian market shows that the launching of this product has a good chance of success. Taking into account micro and macro environmental factors, one may say it will be a very profitable enterprise. However, the quality and safety of the product are fundamental issues that could have a more significant impact on the favourable outcomes of this venture.

Reference List

Around the world 2015, Protection from an earthquake, online video. Web.

Dawson, J 2014, The marketing environment, Routledge, New York.

Italy demographic profile 2017. 2017. Web.

Italy  market overview 2017. Web.

The Italian market environment 2017. Web.

Cemex Cement Production and Distribution: Market Analysis

Marketing Research

The cement market consists of any activity that is aimed at the manufacturing and distribution of cementitious material. Companies usually provided aggregates such as gravel and sand. Customer-specific products such as ready-mix concrete and asphalt are also part of the market. The market consists of several global manufacturers and distributors such as Cemex, Heidelberg, and Lafarge as well as regional power players (Allied Market Research, 2017). There are a lot of barriers to entry into the industry and new markets. The market is expected to annually increase in demand, thus exceeding available supply and capacity in emerging markets. The industry strongly relies on the construction and building activity since concrete and mortar are the most common cement products used for this purpose. However, the cement manufacturing sector is strongly influenced by government regulation and macroeconomic, financial trends (Transparency Market Research, n.d.).

External Environment Scan

Table 1. PESTEL Analysis. (self-generated).

PESTEL Analysis
Political Governments control various critical aspects regarding the cement industry. Raw materials and energy sources such as coal are usually price regulated. Tariffs may apply during the transportation of copious quantities of material such as cement. The excise tax is applied to production.
Economic The industry is dependent on the GDP and economic growth in a region. Infrastructure development is based on economic factors. Economic recessions and stagnation decrease market demand.
Social The industry consists of a sizeable organized sector and small private companies. Low-level consumers may choose to buy from local businesses rather than branded cement.
Technological New technologies are necessary to improve the quality of cement while decreasing energy use. Every aspect of cement manufacturing is technologically based. Impact on cost and value chain structure in the industry.
Environmental Regulations and trends for sustainability require the use of alternative fuels and materials. Necessary to decrease pollution from cement production. Climate change calls for sustainable methods of production and changing attitudes towards cement usage in developed countries.
Legal Government regulation may limit growth or force restructuring of assets during entry into new markets, particularly through acquisition such as when Cemex purchased Rinker in the U.S. Adherence to various laws regarding safety, quality, and anti-trust.

Table 2. Porters Five Forces Analysis. (self-generated).

Porters Five Forces Analysis
Industry Rivalry The industry is extremely competitive as global and regional corporations are seeking to maintain control of the cement market and compete for any arising demand. There is an insignificant variation to the product for companies to differentiate themselves.
Buyer Power The cement industry is fully dependent on buyers of the material. Therefore, buyers hold a lot of influence and are strongly valued by cement manufacturers. It is common and profitable to hold close contractual relationships with major buyers that will use the cement for their construction projects.
Supplier Power Many companies have independent limestone and coal reserves necessary for production. Suppliers usually do not have a significant impact on the industry other than the price of raw materials, which in turn may raise prices for cement products.
Threats of New Entry There are significant barriers to entry on any noticeable or global scale since the market is oversaturated with competition for essentially a similar product. The economies of scale are difficult to achieve with numerous regulations in place.
Threats of Substitutes Practically all cement is similar in substance and production techniques, available to any major companies and has not been modified for decades. There are minor variations in quality or materials used according to the customers needs. Overall, cement as a construction material has no direct substitutes (IBEF, 2017).

Market Size and Growth

In the last several decades, the cement industry has experienced globalization. It is a competitive market in established and developed economies. Countries or whole regions may become more susceptible to the cement market growth due to the level of demand or the availability of raw materials. Emerging markets such as India, China, Brazil, and Eastern Europe are approximately 70% of the global cement demand with the other 30% being North America (Lafarge, 2007). The global market was valued at $6.56 billion in 2016 and is expected to grow to $8.3 billion by 2023 at 3.4% CAGR (Allied Market Research, 2017). The global Portland cement market is set to reach 5.2 billion tons in 2020 (Transparency Market Research, 2017). The U.S. cement industry has experienced growth in the last several years, due to increased demand by a slowly revived construction sector. In 2012, the U.S. customers purchased 76.6 million metric tons of cement for approximately $7.5 billion worth of shipments which is a 9.1% increase year over year (Portland Cement Association, 2013). This shows that the market offers the potential for increased growth but should be closely monitored for activity in the construction sector which is closely correlated to economic development.

Market Trends

Due to declining expansion in China and low oil prices, the construction industry has experienced stagnation in 2015. The cement market declined by 5.4% after experiencing a 4.3% growth in the previous three years. 2016 saw a modest 0.8% growth with a gradual increase in the following years (Cision, 2016). Cement is increasingly being used in a variety of construction applications including infrastructure and application. The importance of Portland cement in these applications will perpetuate growth on the global market. The need for grouts and mortars in the production of roadbeds, foundations, plasters, and screeds will increase demand (Transparency Market Research, 2017).

Environmental sustainability remains a key trend in the global cement industry. It is exemplified by several practices. The use of alternative fuels is encouraged to reuse and recycle waste during the cement production process which traditionally uses coal to operate the cement kiln. Innovative progression in terms of development is required to become sustainable. Large production volumes of cement produce significant air pollution. Therefore, the trend is to develop a type of cement with high-operating efficiency with a decreased environmental impact. Furthermore, there is an increased demand for green cement which is derived from alternative fuels and recycled materials, while adhering to environmental regulations for sustainability (Business Wire, 2017).

Target Market

Cemexs global export strategy is focused on optimizing capacity utilization by diverting resources from markets showing signs of stagnation to ones experiencing demand growth, thus maximizing profits (Securities and Exchange Commission, n.d.). The company can be financially proactive by observing macroeconomic drivers be an early entrant as a supplier at a target location. Cemex maintains a strategy of differentiation by providing cement with a high-operating efficiency at a low cost. It positions its strategy as not merely as a provider of raw building material, but as an opportunity for development. Cemex should pursue emerging markets and locations as their target. There has been a significant focus worldwide on creating infrastructure in areas that have not been traditionally booming markets for cement. In the United States, that may be rural areas or locations with aging infrastructure that needs critical replacement.

The target market should be picked based on the most lucrative regional segment, using economic forecasts for growth and development. The interdependence of cement sales with the construction industry requires focusing on locations with rapid urbanization and socio-economic improvements which would drive up the demand. Large commercial projects that are tied to government contracts or events (such as Olympics) increase possibilities within a given target market. The Asia Pacific, as well as North America, are predicted to emerge as the most profitable market segments for Portland cement (Transparency Market Research, 2017).

Market Segments

Construction remains the primary sector of demand in the cement industry. It can be divided into major segments of civil engineering (industrial), residential and commercial projects, or renovation (Lafarge, 2007). The market is usually segmented by region and countries, with Asia-Pacific expected to see a 4.3% CAGR growth. The type of cement also segments the cement market. White Portland cement is the primary product, maintaining a market share of approximately 50%. White masonry cement has approximately a 30% market share with a CAGR growth of 2.6%. Other types such as Calcium Aluminate cement only hold a small share of the market since white cement is more applicable, both practically and aesthetically, at a lower cost (Allied Market Research, 2017).

Customer Analysis

The cement industry has a wide variety of customers, some of which include concrete producers, pre-cast concrete producers, contractors, and builders. There are also small-scale purchases by masons and renovators. Customers may have varying requirements for the cement performance and characteristics based on the type of construction or project. There has been an increasing trend for cement produced using energy-efficient methods with low environmental impact. Order purchases are usually placed in large volumes or per contract basis over some time (Lafarge, 2007). Cemex strives to meet customer demands according to their construction needs. Cooperation with clients is based on manufacturing and engineering expertise which the company provides so that the product will meet the requirements outlined by the customer.

References

Allied Market Research. (2017). White cement market by type (white portland cement, white masonry cement, and others) and by end use (residential, commercial, and industrial)  global opportunity analysis and industry forecast, 2017-2023. 

Business Wire. (2017). Cement market  trends and forecasts by technavio.

Cision. (2016). The global concrete and cement market key trends and opportunities to 2020. 

IBEF. (2017). Cement.

Lafarge. (2007). Information on Lafarge. Web.

Portland Cement Association. (2013). Cement industry overview.

Securities and Exchange Commission. (n.d.). Certain information with respect to Cemex. Web.

Transparency Market Research. (2017). Global portland cement market: Increasing infrastructure development projects to fuel demand, says TMR 2024.

Transparency Market Research. (n.d.). Cement market  global industry analysis, size, share, growth, trends, and forecast 2016  2024.

Galaxy Chocolate Product Launch in Canada

Introduction

This paper provides the launch of galaxy chocolate launch in Canada. The launch comprises of a number of section including market research, a review of segmentation, targeting and positioning strategies, as well as an examination of international market. All these sections provide crucial information needed for the purpose of effective launch in Canada. For example, the market research emphasizes on the examination of the research question, designing of the research with the emphasis on establishing the study participants, and the research schedule. On the other hand, the STP section examines the segmentation of Galaxy Chocolate in Canada, as well as establishes a detailed marketing mix for the highlighted target market. The last section, international marketing focuses on the PEST analysis and marketing mix of galaxy chocolate with respect to the target market of Canada.

Market Research

The successful launch of any new product in a given market requires careful analysis of the potential of the product to succeed in the given market. Such analysis can include carrying out a market research and the examination of the segmentation, targeting and positioning aspects of the new product. In the case of galaxy chocolate launch in Canada, a market research will be carried out to evaluate the products feasibility in Canada.

Research question

Research questions are considered as suitable approaches through which a researcher examines any phenomenon under study (Creswell, 2009). Therefore, in the case of galaxy launch in Canada, a number of research questions will be used to examine the feasibility of galaxy chocolate in the country. These include:

  1. What are some of the promotions that are most effective in getting individuals to buy any type of chocolate?
  2. What are some of the factors that customers consider in a new bar of chocolate before buying it?
  3. What drives customers to purchase chocolates?

Sources of secondary data

This market research will focus on examining the potential of galaxy chocolate in Canada. As such, sources of data are needed to provide the necessary information that can be used to draw comprehensive inferences. For this reason, secondary sources of data such as journals, books and website that contain information related about galaxy chocolate will be used. However, these sources must be credible for the data collected to be reliable. Therefore, the secondary sources of data will be scholarly

Designing the research

The study will involve both primary and secondary sources of data. The primary data will be obtained from various study participants in selected in Canada to provide responses that can be used to answer the research questions formulated above.

Methodology

Research methodology refers to the technique as well as any procedures that a researcher uses to collect and systematically analyze data in order to make inferences with respect to a given study phenomenon under investigation (Creswell, 2009). In case of this research, the study will focus on the collection of primary data from individuals in Canada to gauge the feasibility of launching galaxy chocolate in Canada.

Canada has a large population and thus, it would be cumbersome to work with the entire population of Canada. Therefore, the study will make use of simple random sampling technique to obtain a sample size that is reasonable enough to work with. The decision to use the simple sampling technique is based on the fact that this type of sampling technique allows for inclusivity of units in a sample as it gives all study units and people an equal chance of inclusion (Mitchell & Jolly, 2010). Additionally, the technique is reliable as it avoids classification of errors and is free of human bias.

The target population, which refers to the units or people that a researcher hopes to use in the collection of the required data, in this study will be all people visiting snack shops in Canada. However, the use of the random sampling technique will focus on at least 50 individuals to be included in the study sample for the survey on the launch of galaxy chocolate in Canada.

Schedule

The responses from the selected individuals are needed as soon as possible for the purpose of making decision with regard to the launch of galaxy chocolate in Canada. The table below provides the schedule of the research.

Establishing the sources of data 1 day
Choosing the methodology 1 day
Selection of the study participants 1-2 days
Designing of survey questions 1-3 days
Carrying out actual survey 1 day
Analyzing collected data 1 day

Table 1: Research schedule.

Segmentation, Targeting and Positioning

Segmentation

The segmentation of galaxy chocolate in Canada is carried for better understanding of the needs as well as requirements of the customer groups to be targeted and to ensure efficiency in product positioning and precision in the selection of promotional techniques to be used. The segmentation will be based on demographic, behavioral and psychographic aspects of customers. The demographic segment is based on the fact that many people in Canada consume chocolate. Secondly, consumption of chocolate in Canada is high on special occasions (behavioral). Lastly, there people in Canada have various lifestyles and interests.

Targeting

Given that most people consume chocolates irrespective of age but with respect to their lifestyles and interests galaxy chocolate in Canada will target individuals based on the psychological segmentation. The targeted market in this case will comprise of individuals with the will power to pay for premium quality chocolates, as well as households and non-household customers.

Positioning

Galaxy chocolate in Canada will be positioned as a premium chocolate for everyday consumption. To meet consumer touch point, galaxy chocolate will need to create image, people, channel, service, and product differentiation. However, such differentiation will be based on the strategies adopted by competitors in the market.

Marketing mix

Product

Galaxy product will be designed to meet the needs of different people according to their psychographic needs.

Place

The channels of distribution of galaxy cholate will focus on ensuring that almost all parts of Canada are served with the product. As such, widespread channels of distribution that focus on distribution of galaxy chocolate in the urban areas will be adopted.

Promotion

Various products promotion methods will be adopted for the purpose of ensuring that there is full awareness of the advantages of galaxy chocolates over the other brands of chocolates in Canada. Some of the promotional strategies to be used to create the necessary awareness include public relations, sales promotions, and advertisements in press and print media as well as personal selling.

Price

Galaxy chocolate will be priced according to the specific target group; for example, there will be the premium galaxy chocolates packaged for the high-end customers in Canada. In addition, low priced galaxy chocolates will be available for household and non-household consumers.

International Market

PEST Analysis of Canada

Galaxy chocolate is to be launched in Canada and thus, it is important to determine the factors available in Canada that can influence the success of the product both in the short and long-term. As such, the PEST analysis of Canada with respect to its suitability for chocolate launch is presented below.

Political factors

Canada is ranked among the top countries of the world that experience as stable political environment. This is attributed to the fact that the country has a strong parliamentary political system, and with a constitutional approach that is based on democracy (Blake, 2015). The implication is that there are no negative fears associated with political instability, which can lead to losses to any investments carried out in Canada.

Economic factors

The economy of Canada experiences a dominance of the service sector, which was considered to contribute about 70.2 per cent of the countrys gross domestic product in last year. In 2009, Canada experienced the global recession. Unlike other countries in the region, Canada was able to survive the recession through the availability of strong fundamentals (International Monetary Fund, 2014). The available of stable sources of energy in Canada contributes significantly to the living standards of people in Canada.

The oil and gas reserves in Canada are significant not only to the economy of Canada but also to the worlds economy. For example, the countrys natural gas reserves are ranked 21st in the world in terms of size. Increased investment opportunities especially in the service sector have kept the economy successful. The implication is that most people in Canada have a high purchasing power and hence, the launch of galaxy chocolate in the country can be successful (International Monetary Fund, 2014). In spite of this, the country faces the challenge of increased Current Account Deficit as well as trade deficit.

Social factors

Canada comprises of both young and ageing population. In spite of this, the young population in the country forms the highest percentage in terms of key strength, and accounts for about 54.6 per cent of Canadas total population.

Technological factors

The manufacturing sector in Canada presents a significant opportunity in terms of technology. In addition, the young population in Canada is constant users of technology due to the introduction of social media platforms and the availability of internet-connecting devices. Such an opportunity can be used to create awareness of the galaxy chocolate products in the country through social media platforms.

With respect to the above PEST analysis of Canada, the marketing mix for the target market is provided below.

  • Product: the design of the galaxy cholate will feature the social and business culture of Canada. As such, various brands will be availed based on the specific needs of different people according to their psychographic needs in Canada.
  • Place: First, the channels of distribution will focus on specific urban areas in Canada for the purpose of gaining knowledge of the consumption habits of chocolates in Canada. With time, the company will focus on widespread channels of distribution to almost all parts the country. Therefore, the company will use locals to distribute the product from the company, through C&F agent, distributors, retailers and lastly to the consumers.
  • Promotion: various products promotion methods will be adopted for the purpose of ensuring that there is full awareness of the advantages of galaxy chocolates over the other brands of chocolates in Canada. Since the product is new in Canada, outside printed media, personal selling and advertising will be highly used.
  • Price: the price of nay given product is determined by its quality. In the case of galaxy chocolate, it targets all people in Canada but with differentiation based on psychographic needs. As such, the premium brands will attract a high price relative to the size of the market in Canada and consumption rate. On the other hand, other brands will be available to cater for the medium class in Canada given that the country has a high population of young and unemployed people.

Market Entry Methods

Market entry methods are described as the strategies that a new product uses to enter a foreign market. International markets are diverse and different and thus, it is not possible that one market entry strategy fits for all (Kenneth, 2015). In the case of galaxy launch in Canada, the partnering approach is more preferred. The decision to use the partnering market entry approach is based on the fact that it is an important approach especially in international markets which are very diverse in terms of social and business culture as in the case of Canada (Häussler, 2006). As such, the involvement of local partners will be important in this case as they will bring in contacts, local market knowledge as well as customers.

References

Blake, R. (2015). Politics and the Federal Principle in Canada: Newfoundland Offshore Oil Development and the Quest for Political Stability and Economic Justice. Canadian Historical Review, 96(1), 32-60.

Creswell, J. (2009). Research design: Qualitative, quantitative and Mixed methods approaches. Thousand oaks, CA: Sage.

Häussler, C. (2006). When Does Partnering Create Market Value?. European Management Journal, 24(1), 1-15.

International Monetary Fund,. (2014). Canada: Financial Sector Stability Assessment. IMF Staff Country Reports, 14(29), 1.

Kenneth, S. (2015). Foreign Market Entry Strategies. China-USA Business Review, 14(8), 1-15

Mitchell, M., & Jolly, J. (2010). Research design explained. Belmont, CA: Wadsworth.

VHS: Product Life Cycle

For each product that is available on the market, there is a specific life cycle. The four stages of the cycle include the introduction of the product to the market, growth, market maturity, and decline (White, 2019). The discussion of the product life cycle will be illustrated with the help of the VHS tape example. Initially created by JVC, VHS tapes were the main format for carrying and watching video footage in the 1980s and 1990s (WDD Staff, 2010). Today, the tapes are considered outdated and inconvenient, which means that the product has already reached the decline stage of its life cycle.

At the first stage of the VHC life cycle, the product was developed. The stage was associated with the company coming up with the specific idea of creating the product. In 1971, the companys engineers, Shuzuo Takano and Yuma Shiraishi, created a team for product development, which finished their work in 1973 with a functional prototype (Ganapati, 2010). An essential step at the stage was to develop a set of objectives associated with the benefits of the tape.

The stage of market introduction implied the rolling out of VHS tapes by VHC. A relatively slow profit growth characterized the period because product development costs exceeded sales. VHS tapes were first introduced to the general public in 1975, which meant that it took VHC two years between the creation of the first prototype and the introduction to the market (C-Scott, 2016). The third stage was the products growth, which was characterized by the rising acceptance of VHS tapes by the public. This stage lasted until 1998, with the tapes being the most widespread carrier of video content. After the peak in 1998, the sales of VHS tapes matured and declined, as they were replaced by DVD carriers that were more compact and convenient to use.

References

C-Scott, M. (2016). Please rewind: A final farewell to the VCR. The Conversation.

Discover. (n.d.). Web.

Ganapati, P. (2010). 1977: VHS comes to America. Wired.

Sister Snog. (n.d.). Web.

Sport Clips. (n.d.). Web.

WDD Staff. (2010). Blast from the past: Vintage technologies that we no longer use.

White, S. (2019). Principles of marketing (2nd ed.). Toronto, ON: Bridgepoint Education.