International Marketing Management
Introduction
ViTrox Company is one of the major companies that are ready to venture into the new market especially the big emerging markets which will allow increasing the profits and the services of the company to greater levels. ViTrox is a type of a company that deals with the development and designing of automated systems for inspection for the semiconductors and also for the electronic packaging of products. The company also deals with the development of electronic equipment for communication. In Malaysia, the company is popularly known for its machine vision and designing of electronics. During its establishment in the year 2000, the company had its main goal of becoming the best at providing electronic and other services (Drury et al., 2014). For instance, expanding to Korea is a brilliant move since the country is known to be a market for electronic and other devices which are machine related. This available market comes with a price to pay also the competition to other companies such as Samsung.
- Critically discuss some of the possible added difficulties and complexities your client international marketing firm might face when attempting to research the market for a product or service of your choice in one of the big emerging markets (BEMs). Explain how your client company could attempt to overcome the problems and complexities identified. Use specific examples to support the key points discussed.
- Market complexities
Korea is one of the major countries that have its economy increase to greater levels, especially in the electronic and machine related industries. The country is known for the manufacture and designing of electronic services which are used locally and others exported to other countries. Foreign countries which might consider expanding its services into Korea has a lot of challenges to deal with before reaping the benefits but also there are more opportunities for the business industry. Korea is currently looking for ways to strengthen its economic services such as the petrochemicals, steel, and shipbuilding which have recently declined (Baack et al., 2013). Due to this reason, the country is focused on encouraging technology in every operation that will ensure that the country is at the top of the list when it comes to production and exporting of its services.
However, Korea means of increasing its operations have made it difficult for companies to enter into its market. Deregulations and liberalization of the goods imported continue to be the major challenge for businesses. Documentation of the goods imported into Korea by the customs officers makes it challenging for businesses in Malaysia and other countries (Drury et al., 2014). Malaysia continues to make it clear that the goods exported into Korea are of value and this means that the country is willing to help the business expand into Korea despite the challenges. The technical barriers of the business to trade into Korea require companies to have certain requirements. Such requirements include the due process, new standards, labeling, and transparency requirements.
- Imports tariffs
Malaysia and Korea have implemented a particular strategy which will allow the countries to conduct business with each other on the basis of the agreement. Before the agreement which was enacted in the year 2012, the basic average tariff on goods was at 8 percent and the duty rates were very high especially on the agricultural produce. Based on the electronic services, the duty rates are very high since the country is trying to protect the current domestic industries (Drury et al., 2014). Korea maintains a tariff quota that is designed to make sure that the domestic industries are stabilized and at good stands in the domestic markets. The customs duties can be changed after every five to six months making it challenging to predict the possible future of any foreign business.
- Customs valuation
The duties are checked and assessed on a basis of cost insurance freight (CIF). The main methodology that is used in assessing and evaluating the customs is that which is known as the value method (Drury et al., 2014). Every business that enters into Korea must fulfill these requirements which are meant to ensure that the business does not come to compete with the local businesses which could see the local businesses fall while raising the profile of the foreign businesses. In this case, a value-added tax is included in every business expanding into Korea which is at 10 percent on customs value.
- Requirements and documentation for the imports
Every business hoping to expand into Korea must accomplish the following shipping documentation to the Korean customs. First is the commercial invoice and second is the certificate of origin. Based on the commercial invoice, it must be original and must be presented with the documentation for shipping which will include a unit value, total value, marks, quantity, shipping from and to where and the products and this also applies for the certificate of origin. The company could solve these problems by the use of specific strategies (Baack et al., 2013). Such strategies would include partnering with a local business and this will allow the business to enter the market without any major hindrances. ViTrox could also use the method of inviting interested investors into the company for the benefit of the business. For example, partnering with a company that deals with the development of local electronic appliances and other industrial equipment which are almost similar to what ViTrox designs.
At the multinational step, the business is marketing its goods and services in many nations and states in the world and specifically wants to gain some benefits from the available economies of scale. All the multinational businesses with the operating subsidiaries expansion to the global platforms form challenges to the officials and managers who are in control of the marketing department (Drury et al., 2014). Every market at the national level is different from any other market and this is a consideration that managers should hold in mind. The language, distance, customs and the normal practices form some form of communication difficulties which the businesses must face and define appropriately.
- Justifythe use, importance and expense of a multinational marketing information system (MMIS) to marketing management. Explain the component parts of such a system and the type of information you would consider important to include in such a system. Use a systems diagram or figure to illustrate the points made.
Marketing information systems have its main goal of making the role and need of creating and having a well-maintained information process for the business in making the correct and desired decisions. Each development begins with having a definition of the marketing information systems structure, determining both the internal and external databases and the computer applications. The next step is solving the problem by setting up the marketing information systems in the business (Baker, 2014). Businesses need the above information in order to be aware of the environment, customer needs and the market competition involved. Understanding the supply, transaction, demand, credit, and any other alternative requirements and data will enable the business to have an increase in the transparency and thereby developing good marketing and production strategies. Such data allows the company to have a reduction in the cost and an increase in the revenue and income of the business. Within the system, there are basically four types of the system that ensure that the progress of the company is at its best level.
Such programs include the executive which are at strategic level, the management information programs, decision program support at the level of management, and transactional process which is at the level of operations (Baker, 2014 p86). Each system at each level is designed to have specialization in the major functional levels. Therefore, every system is designed to assist and help the workers perform their duties at the best level in the management of the business. The areas include the manufacturing level, marketing and sales, accounting and finance, and the human resource department.
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Information
Marketing decisions and communications
At the internal reporting systems, every enterprise that has been in existence and operating for a varied period of time is considered to be very resourceful. The data in this system is underutilized since it is already computerized based on the organization. For example, production, financial, manpower, logistics and stock data is the kind of information at this stage. Such data is considered less helpful since the decision makers cannot access such data and use or to make decisions. Marketing research is very active when it comes to searching for information (Laudon & Laudon, 2016 p102). Doing such research ensures that the business is equipped with the best strategies to venture into the markets. Problem-solving using the available data assist the companies to make informed and good decision regarding the future of the company.
Through the model of marketing information system, the business has the capacity to handle and use the information to understand the customer management strategies. The model can be used in making the problems faced during the processes eliminated through the formulation of decisions which can support the system. Decision support systems can be used in making the strategies quality, tactical and very operational in every market (Laudon & Laudon, 2016 p90). A system that is very functional in terms of the information management balances the users against the goals and the future of the business. The multinational marketing information systems can be used in understanding the relationship with any customer. This is beneficial since the managers can make informed decisions regarding the customer behavior. Internal marketing is also increased by having the system in place. Inbound and outbound distribution and logistics are allowed by the enhancement of the marketing information systems. Benchmarking and evaluation of the customer service is highly increased when the company has a reliable source of information systems.
During the venture, the prices of the products and services at ViTrox are reviewed since it is a new market and this comes with the changes in the exchange rate for the currency. Strategic plans are made through the information systems developed. The end results of the information systems provide two possible choices which are the advantages and disadvantages. Advantages include the availability, communication, and globalization of the business (Baker, 2014 p65). The instant messaging through the emails, voice, and even the video calls make it beneficial to the business. One of the major advantages of having the systems is increasing the level of unemployment and job security (Laudon & Laudon, 2016). The paperwork is now done by the machines and also the security of the system is kept at risk due to sharing of information over a network which can be prone to hacking and accessed by unknown users.
- Critically examine the main factors your client international marketing firm would have to take into account when planning pricing decisions within your chosen BEM.
Selling any products in the international market and especially in Korea requires the understanding of the different factors involved which can impact on how the company makes its prices count in the international market. Such factors include the cost, competitions, attitude in relation to the products, government regulations, and the brand image. Looking at the cost factor which is basically the main factor to consider, ViTrox should consider the cost of getting the raw materials which is a direct cost and the cost of distribution which comes in as an indirect cost to the business. The cost of obtaining the raw materials in Korea is very expensive considering that most of the domestic companies are involved in this industry (McDonald & Wilson, 2016 p87). One might think of importing the raw material which is also expensive and which in many cases can be rejected by the country. Many countries prefer businesses to set up operations in the country rather than import since it means that there will be an increase in a number of products in the market and a reduction in the number of people employed in the various industries.
Competition is also a factor that the company must consider since there are already established businesses in Korea and which are not ready to share the market internally and externally. It is very challenging to compete in the international markets than in the home local markets. The foreign businesses have to compete with the other foreign firms which are under different market environment and regulations (Doole & Lowe, 2008 p79). Such high levels of competition reduce the chances for success for small businesses which do not have the advantage of being in the market for long periods of time. In some cases, ViTrox might be forced to consider other strategies to enter the market and this makes it prone to international challenges. Venturing into Korea is a good move but which is full of challenging situations.
The attitude by the members of the country such as Korea might reduce the chances for success for the business. Every consumer in the international market usually develops some level of attitude that is very negative and which makes it impossible for the business to thrive. Korea has international standards and therefore if any business from a lower level country tries to venture into the country, the market can be very difficult to venture into (Doole & Lowe, 2008 p36). The prices are usually higher and this creates certain perceptions which are disadvantages to the ViTrox Company. The brand image of ViTrox makes it compete at a comfortable level but also presents certain challenges which might affect the growth of the business. Other brand images such as Samsung have the capacity to grow and increase their operations compared to ViTrox which will need an improved strategy to be known in the Korean world. The international market is priced according to the level and this might mean that the company will be charged higher premiums to compete.
Government regulations are also factors which influence the prices of the commodities to be sold in Korea. The country responsible for the exportation of the products is supposed to be very conversant on how the prices are given and set in every market (McDonald & Wilson, 2016 p50). The prices are enacted by the government and they have to be followed every time the company does business in Korea. The government can influence the prices on the basis of the highest cost and the lowest cost for any product ViTrox sells in Korea. Duties and taxes are also determiners to the prices of the commodities. The cost and the duty paid to the Korean government should be known by the company in order to pay the required amounts. This cost is similarly reflected in the cost of pricing the products in the member country. Also, the size of the shipment usually matters to the company (Farrell, 2015 p45). Such regulations are set in order to prevent the companies which might take advantage of the small shipment to import commodities and then sell them at a higher price in the same market. The positioning strategy is also a determinant in the prices of commodities in Korea. Value and quality positioning are the main methods of positioning for the company and which will enable the relation and the competitive level of the business in the Korean market. Value positioning is considered to be the best method since it has a low cost of the units served.
- Critically discuss the possible differences and likely additional complexities in integrated marketing communications strategy when your organisation begins operations in your chosen big emerging market.
Any company can choose to either adopt a new communication strategy or use a strategy that is effective in the local market which is the home country. Different markets require different strategies when it comes to the advertisement and development of new products. The brand name of the company is very important since it allows the business to either thrive or shut down. In some countries, certain names are against the traditions and so the company has to consider the name of the company which must be in line with the traditions of the company (Andrews & Shimp, 2017 p46). If the customers are not happy due to the brand name which might be against their traditions, then there is a high chance that the product will be rejected and the company will face a lot of losses. Every company applies a company name that is very standard when it comes to advertising its products. This makes it very beneficial for the company during expansion making this a quality strategy for success.
There are strategies and quality methods of identifying a good communication and brand name in a country like Korea where ViTrox is considering expanding its operations into. One of the strategies includes having well defined goals and the possible limitations of the campaign. The marketing channel must be clearly defined in order to take care of the different open channels in Korea. The resources available for the campaign are also very important to consider in the development of the campaign. Building awareness of the products requires some level of advertising which are aggressive to make the target market very aware of the existence of the products in the local market (Armstrong et al., 2015 p41). Many people in Korea might think of changing the company they buy the electronic and industrial products and machines from and chose to use ViTrox as the main supplier. This can only be identified and reached if the company does some aggressive advertisement of the products. Using the business summits and exhibitions is beneficial to the company. Exhibitions invite the major stakeholders in the country and other potential companies and members of the public who can be potential clients to the ViTrox industries. The efforts and goals of the company have to be clearly defined by the company. Each business venture requires improved services and developed methodologies to deal with the competition in place (Farrell, 2015 p34).
In most cases, the target audience of the company products is business owners and individuals who have the interest of doing businesses such as electronic handling. Such a market can be big or small compared to the level of marketing done in the specific areas or country. Choosing a market that is both profitable and very receptive is very important for the business. Consumer insights can be used to identify where both of these proportions can be located and which is the best mode of advertising to reach such goals. Use of strategic thinking and data driven approaches, the objectives and the goals of the company can be identified to the best level in the business. The standards of operations must be objective and selective enough to influence quality business operations. Having an analysis of ViTrox is beneficial since it will help in locating the available insights to the business. The strength of a business in Malaysia can also be the strength of the business in Korea and therefore very important to think about this option for the success of the business (Armstrong et al., 2015 p27). Also the strength, weakness, threats and the opportunities available in the market can be helpful in identifying the target audience. The perspective of the consumers is very important in choosing the marketing strategy. The factors in the advertisement industry that could ruin the business must be focused and leveled to influence the success of the business.
Understanding the competition and the competitive edge is vital for the business. Competitive advantage of the business is supposed to make it possible for the business to thrive in a country like Korea. Finding a unique strategy which the current competitors in Korea lack in their marketing strategy is vital to see the business rise above the normal standards (Andrews & Shimp, 2017 p36). How one country performs its operations should be very different to the strategy of ViTrox to ensure that the market is both influenced and targeted towards the company’s products. The media can be used to the advantage of the company. Promoting certain programs can increase the level of awareness and the possibility for success. Some people try to incline themselves to the products of one particular company that showcases difference in terms of design, quality and mode of technology used. In a country like Korea, the method which can be very advantageous in offering a wide range of audience as the target market is by use of technology. Technology through the billboards, social platforms and other platforms opens the channels for increasing acceptability of the products in the market.
- Critically examine under what circumstances might your international marketing firm consider using joint ventures to exploit business opportunities within the selected big emerging market (BEM)?
Joint venture is a particular strategy that is used by companies which want to achieve particular goals relating to the market. Joint venture is a process where at least two or many businesses come together and joining their resources and form of expertise in achieving the goals which each wants to achieve. Many businesses form ventures when they want to expand to the international market and other local markets. Moving into a new market can also be a reason to form a joint business strategy particularly when targeting the overseas markets. ViTrox can gain from such a strategy to reduce the effects that are brought about by the issue of venturing into a new and foreign market. Joint venture is not considered to be a partnership of any kind since there is a definite end to the operations due to focusing on a particular undertaking or project. Joint venture offers certain benefits to both companies that have chosen to use this strategy which increases the product awareness and marketability.
ViTrox could be in possession of quality strategies while operating in Malaysia but there are benefits when it considers the joint venture when entering into Korea (Yan & Luo, 2016 p32). This is due to the fact that the venture could offer more resources, the technical expertise could be increased, the capacity can be increased to better levels, and the advantage of having a venture with a recognized and a grown business for the distribution of services for the company. The company name will however change in certain cases but in most cases the business name stands according to the company standards. In this joint venture, ViTrox will maintain its name but due to the venture and promotion by another company the term partnership will exist.
There are different types of ventures which are options ViTrox can consider when choosing the method. The objectives and goals of the members who choose to form the joint venture are very important and form the reasons and the type of venture to consider. One of the available options is to have an agreement on co-operation with the business in a specified and limited way. For instance, ViTrox could use the existing businesses in Korea to set up a joint venture which will allow growth and distribution of the devices and machinery manufactured by ViTrox. Both of these companies which have the agreement could have a signed contract which sets up the conditions and the terms of doing business. A separate joint venture is also an advantageous setting to consider which is flexible and more enhanced. In this case, a new company is formed to deal with the operations of the companies under agreement.
Partners in each company own the shares and this means that management is also shared between the two companies (Chang et al., 2015 p301). A business partnership is also a venture that many businesses consider as beneficial as the other types of joint ventures. Using this strategy, it means that the two businesses might be dissolved into one business. This allows the management and control of the business to be focused and at its best level. Management of this type of venture is simple since the operations are concentrated to one specific goal which is to succeed in the market. Under the economic reasons, joint venture ensures that the business stays in operations for more than the expected times. It is very expensive to start operations in a country like Korea without having a joint venture especially when the company is bound to face major competition in the Korean market (Raj & Deka, 2014 p21). The benefits of joint ventures vary from country to country but in our case, the benefits are more than the risks involved. Faster growth, productivity increase, and the generation of more profits are the main benefits of having the joint venture.
Accessing the local new market and the available distribution channels opens the opportunities for success of ViTrox industries. Sharing the risks involved at the entry level allows the business to have a reduced cost when entering into the Korean market. ViTrox is an already established company in the home market and therefore there is no possibility of the company to experience lack of funds to operate in the global market (Yan & Luo, 2016 p34). Therefore the risk of going bankrupt due to regular borrowing is minimal for ViTrox. The customer base in Malaysia increases the chances for success of the international market at ViTrox. The joint venture will ensure that the competition is minimized at all levels. Due to the venture with the home country business in Korea, the prices become more manageable at all cases.
Conclusion
ViTrox can get the best out of getting into the Korean market through the available marketing strategies. In Malaysia, the company has already established a base for the products and therefore makes it possible for the company to even get better results through venturing into the big emerging market in the world (Yan & Luo, 2016 p50). The emerging markets provide a particular reception and capability of the companies to grow to greater levels and this makes them perfect market targets to focus operations in the future. There are many benefits which a company can get from venturing into new market apart from unlimited profits. Korea is an emerging market that is growing at a high level and therefore good for growth.
References
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