Table of Contents
Virtually all organizations the world have jittery when it comes to expansion and going multinational. While this is understandable due to the uncertainties which are totally unforeseen, carrying out a proper marketing strategy that captures the dynamics of the country or market to be penetrated may assuage the obscurity of this uncertainty. ROXY was one such an organization, specifically, when it was in the precipice of jumping into Japan’s market. Nevertheless, the lifeline to this state of affair became graspable when ROXY brand noted that it could make use of the marketing strategies as a way of penetrating Japan, its new market. This paper therefore takes to analyze the marketing strategies and analyses that are to be used by ROXY as a tool to penetrating this new market.
As an organization, ROXY mainly deals in female fashion clothing design, making and branding. Having been founded in 1990, the company made its core operations board sports, thereby necessitating its launching by its brand affiliate known as Quicksilver. The founding of the Roxy logo was the culmination of its efforts in 1993. Having redefined itself as a large clothing company for young ladies, the brand also deals in making home items, wetsuits, footwear, perfumes, hard goods such as snow and turf, among others. Having grown its wings in the US and into the UK and other countries, ROXY is interested in entering Japan as a new market. It is against this backdrop that analyzing the dynamics of the Japanese market in respect to ROXY’s operations therefore becomes strategically expedient.
It is very probable, totally ascertainable that upon entering Japan’s market, ROXY brand is poised to realize growth, stability and profitability, with the veracity of this standpoint being seen to be verifiable on certain grounds.
The first premise of ROXY brand’s possible success in Japan is totally and inextricably interwoven in the nature of ROXY brand and Japan’s demography. In the first place, ROXY is largely a popular female fashion clothing brand on one hand. Japan on the other hand is a country which is rich in the number of females. According to the 2010 statistics, females in the age group of 1-14 years are 8,344,800 while those in the age bracket between 15 and 64 years are 40,533,876. Further analysis show that those in the age bracket of 65 years and above are 16,234,419. This means that ROXY has in Japan, an unshakable source of market for its brands due to the demographic dynamics in the country (Freeman, 2008).
According to Hsu (2009), a look at Japan also shows a country which is politically stable. To show for this stability, there is a bicameral parliament for Japan’s legislative organ, the Emperor (Akito), the Prime Minister as the head of the government and the cabinet. That the political atmosphere of Japan is liberal enough to accord ROXY brand the much needed laissez faire condition for trading is a value which is well exemplified by the fact that since the 19th century, the country’s judicial system has mainly been based on the European (especially Germany) civil law. With the political stability that Japan imbues, ROXY is likely to carry out its transactions smoothly.
Lenses (2001), divulges that the socio-cultural setting of Japan is also another factor that is bound to spur on the success of ROXY brand. Japan remains faithful to the oriental culture, upto the moment. On the other hand, ROXY brand has the ability to make its fabric designs suit the culture that the Japanese ascribe to. For example, ROXY brand is able to make the kimono, which is a traditional garment which is worn by women, children, and sometimes, men. In the same wavelength, the making of the obi, the furisode, the zori (women’s sandals that have been made from straw), yukata, waraji, tabi, the detejime (a traditional silk band), the hanten, the hiyoku (worn under the kimono), the happi (the tasseled woven fastener), the haori-himo and the Juban. In simple terms, the distinct culture and dressing that the Japanese adhere to will have already done product profiling for ROXY brand. Product profiling is the modification of a product in a specific manner that will suit the needs of the local market (Ballon, 2008).
To Meilich (2000), the technological endowment that Japan enjoys is likely to also favor the operations and success of ROXY brand. At the moment, Japan is technologically advanced with at least 130 US billion dollars being given to 700,000 researchers off from Japan’s national budget annually, thereby being the third largest budgetary allocation to science and technology researches. Japan is well advanced in the making of industrial machines and robotics, chemicals, semiconductors, optics and even automobiles. Apart from these, the country has physical infrastructure which is poised to facilitate the operations of ROXY brand. For instance, besides the hydro, the natural gas, the coal and petroleum, the nuclear power which Japan has is known to help in the generation of 22.5 percent of the nation’s electricity. This is to mean that ROXY shall not run any dearth in power supply (Freeman, 2007).
The much that Japan has invested in to construct an extensively dense road network is reimbursed by the 1.2 million kilometers of tarmac road which serves as the chief source of transportation. Japan’s roads are single-networked and thus allow high speed travelling and easy access to the major cities. Alongside the dense road network are the dozens of railway companies such as the JR enterprises, the Kintestu Corporation, the Kio Corporation, and the Seibu Company which all serve as competitive alternatives. To add a feather to Japan’s cap of competent transport system are the 173 airports in Japan, with its Haneda Airport being Asia’s second busiest airport. Japan has also many ports with Nagoya Port which accounts for the country’s 10 percent of Japan’s trade being one among these. It is therefore clear and beyond any point of controversy that ROXY brand is likely to thrive on this dense system of transportation, having so many alternatives (Brock, and Ulrich, 2010).
ROXY is also to be favored by the developed communication infrastructure in Japan. As early as 2009, Japan already had 44.369 million landline STDs and 114.917 million cellular phone users. General assessments on Japan’s telephone line describe the same as: excellent for both international and domestic use. By 2008, the broadcast media in Japan was excellent, while the country had 99.182 million internet users by 2009, and 54.86 million internet hosts by 2010. It is therefore easy to see that advertising will be a very easy and tenable feat to achieve, in the event of seeking to make conscious, both the prospective and potential client about the imminence of ROXY brand, its products and operations (Schmitt and Rogers, 2004).
According to Linden (2008), the legal nature of Japan is also a value that is bound to help ROXY attain its goals and the realization if its policies and mission statements. The veracity of this is seen in the fact that the registration of multinationals and foreign companies is normally not arduous, while the taxation of the same is only slightly higher than the local companies. This is bound to reduce ROXY expenditure (Jones, et al., 2000).
A number of firms that are very successful in their area of production have chosen to operate and stick within their market niche with no intentions of expanding its activities to foreign countries. However, there are a number of firms that for them to increase their sales and make appropriate returns they are forced to enter and expand their operations to foreign markets. It is automatic how the impacts of the entry mode chosen by entities in gaining access to foreign countries can be. There are a number of techniques that can be employed by entities to expand their operations to foreign countries (Rachhold, Gauxete & Tinson 2004). These techniques should only be applied after thorough research has been carried out to determine their appropriateness of it in the business environment. This is because what may be very appropriate and becomes a success in one area may not work as anticipated in the other market.
Some of the mechanisms that can be used to penetrate new and foreign markets include exporting, joint venture, and licensing, franchising and direct investment. In choosing and deciding which type of entry mode a firm will use, a number of key factors are looked into. For example, we look at the costs to be incurred, the speed, flexibility, risk factors, the objectives of the firm in the long run and the pay back period; this is the period by which the firm expects to start receiving returns from its investments (Ferrel & Hartline 2008).
Export can be divided into either direct of indirect export. Direct export involves a case where firms manufacture goods and products within its home country and then export them to customers in foreign countries. On the other hand, indirect export implies to a case where a firm sells its products to a third party who in turn sells these products to foreign countries. Licensing is another method of entry to foreign countries that Roxy brand can be able to use (Paley 2006). Licensing involves being granted a license of operation by licensing agency to carryout trade in a foreign country. In return the firm that has been granted this license will have to pay loyalty fees to the licensor. This form of entry is very efficient since the risk cases are very low.
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Franchising can also be termed to as another category of licensing. It entails putting together all those entities that led to the success of an entity in its home ground and then franchising the ingredients to a foreign market. The investor in the foreign market may receive assistance from the franchise owner in relation to marketing and training so as to ensure that the products produced satisfy the expected standards (Ferret 2005). A very good example of a firm that has employed this technique is the McDonalds. Joint venture involves sharing risks with an entity in the foreign country. It involves the coming together of two firms in the formation of a firm which in turn carries its operations within the foreign country. In our case, it is very possible for Roxy brand to form a joint venture by simply joining with one of the fashion plants in Japan. Through joint ventures, firms are able to share expertise, knowledge and even resources which in turn assist in developing the firm and driving it towards the right direction of making high returns from its investments (Paley 2006).
Rachhold, Gauxete & Tinson (2004) asserts that direct manufacturing in foreign markets can be used by Roxy Brand in entering the Japanese market. This entry mode involves a firm setting its manufacturing plants in foreign countries after the government has given it a go ahead. It is common that a number of governments give tax exemption to new investors so as to attract foreign investors to their countries (Paley 2006). The government benefits by having more of its citizens employed by these firms.
In arriving at the most effective entry mode, it is important to pay attention to time, coming up with an effective mechanism and being able to create an impeccable image of the firm through carrying out a number of promotional activities requires time, money and efforts. It is therefore important for Roxy Brand to remember that brand names are not things that are made overnight especially in countries that are very different from one another (Mattoo, Olarreaga & Saggi 2004). In addition, competitive advantages by firms entirely depend on the environment present in the market and how the product has been positioned. From the various entry modes that have been discussed above, it is advisable for Roxy brand to employ the joint venture concept since it is more advantageous than the others. Some of the advantages of the firm include: it is very easy to acquire and utilize the skills and competencies of the workers that are not available within Roxy Brand firm. Secondly it is easy to penetrate the market easily because the people on the ground already understand the requirements of the market and the demands and needs of the customers. There is also the spread of risks, joint ventures enhances faster payback and entry (Ferrel & Hartline 2008). Lastly, the firm will avoid barriers presented in form of tariffs and thus being able to satisfy the requirements and expectations of the locals.
Target Customer Profile
Statistics regarding the population representation of Japan shows a very sharp decline in the rates of birth for the last few decades. There is a clear distinction of how this population decline has occurred during the last three decades especially if we compare Japan and its G7 member countries. By the June of 2008, the Japanese population was estimated to be at 127.7 million. For an entity that is focusing on fashion such as Roxy Brand, it is very important for it to take into consideration this drastic change in the change in Japanese population when it is structuring its policies so as to come up with the right and achievable goals and objectives. Similarly, eyeing the level and the type of population shall help the firm to avoid impeding shortfalls that come as a result of formulating and designing products that can not be able to command the demand that had been anticipated for (Carter 2006).
According to Karan & Gilbreath (2005) it is true that there is a change in the age of the population. This has had drastic impacts on the trends of the fashion industry due to the complexities that exist between fashion and age. Roxy Brand in the past has taken it upon itself to try and study the fashion correlation that exists in a number of countries where it has had interests of opening new entities and its subsidiaries and venturing into the fashion industry of these countries, but in all this time, minimal interests have been given to the Japanese market. Muller ( 2007) asserts that the there is anecdotal proof that brings to our attention the possibility of women dressing in designer cloths and fashions that may be considered to be youngsters and women that are young in age. This is a great distinction especially when these women in Japan are compared with women in the same age bracket in the western countries. For instance taking an example of Australian women, it will be noticed that women in the age of twenty will dress very respectful and behave like adults; this is the opposite of Japanese women. Women in Japan in this age will dress more like teenagers.
According to the studies carried out by Karan & Gilbreath (2005) it was found that finding women in their late and early thirties wearing knit Burberry blue labeled tops that were initially targeted at teenage girls in their early twenties was no news o anything strange. Women in cities such as Tokyo, Ginza and Jiyugaoka will be found wearing cute hair accessories that are meant for teenage and young women in the west. From these findings, it is possible to know the type of fashion products to be introduced into the Japanese market as what may be thought to be strange in one part of the country may not be same in the other part of the world. These illustrations are ample proof depicting the market picture of fashion products in Japanese and how the Japanese market can play tricks to investors if a keen eye is not kept.
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In the year 1990, it was estimated that for every square kilometer, a total of 327 Japanese people were living in it a figure that was very high than that of the United States. Just like a number of countries within the Asian societies and those that were considered as postindustrial, Japan has been faced with these problems that are associated with aging. For instance by the year 1989, around 11.6% of the total population was made up of people above the ages of 65 years and above and projections made in that year claimed that by the year 2030, those within this bracket would be estimated at 25.6%. Such a shift would imply that Japan would be one of the world’s countries with the oldest populations. This according to Carter (2006) is as a result of low fertility rates. Armed with this information, Roxy Brand knows the best strategies to apply if they are to penetrate the Japanese market.
The product positioning
One of the functions of the marketing manager is to position the product in the market in order to create brand loyalty. To ensure that Roxy brand, a fashion product produced by the Australian fashion Company, is accepted in the Japanese market, the product should be differentiated from the other products offered in Japan. In competitive market structure many goods that are similar are offered to the market. The goods supplied to the market are similar both in prices and in quality thus the organization should differentiate its products to appear different to those already in the market. Product differentiation is a marketing strategy that make the product provided by the company appear different and thus the company acquiring the competitive advantage over the rival companies in the market (Sawyer, 2004).
The marketing manager would apply several marketing techniques to ensure that the Roxy brand is differentiated from other fashion products provided by other companies in the Japanese markets. Some of the techniques that would be used to differentiate Roxy brand so that it appears different from other fashion products and thus create a strong brand name include sales promotion, enhancing the quality of the product, adjusting the time the product is to be supplied in the market (Arping & Lóránth, 2004).
Sale promotion is one of the techniques that the marketing manager should apply to ensure that the Roxy brand is acceptable in the Japanese market and hence creating a strong brand name. Sales promotion entails a lot that are geared toward creating the awareness of the existence of the product in the market. Sale promotions include activities such as advertisements, offering after sale services and giving discounts to the customers. Sales promotion ensures that the brand is known in the market and thus consumer can differentiate it with other fashion products offered in the market. Another way of product differentiation is providing products of high quality compared to those that already exist in the market. The quality of the product goes together with the price (Shy, 2008). The customer perceive the prices of the product to mean high quality thus the Roxy product should be introduced in the Japanese market at high prices compared to the fashion products in the market. This would have psychological effect as the customer would view it as being of high quality. Lastly, the marketing manager should differentiate that Roxy brand according to how it is available in the market. The marketing manager can reduce the product in the market and thus accessible to the rich and affluent members of the society. The marketing market can also provide the Roxy brand in large quantities in the market to be available to every member of the society (George, Joll & Lynk, 2008).
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It is most likely that ROXY is likely to grow very fast upon making incursion into Japan’s market. This has always been the case whenever it has introduced a new product or entered a new market. For instance, ROXY made over 1 million US dollars in 1991 when it introduced its sportswear.
Marketing mix strategy is also referred to as 4 Pc’s of marketing. Marketing mix strategy includes pricing, product, promotion and place. The marketing manager should apply the 4Pc’s in order or for the product to be acceptable in the market. One of the marketing mix strategies is pricing. Pricing involves determining the prices to be charged for the commodity in the market. The pricing of the product can be used by the company to create competitive advantage for the company. Therefore the marketing manager should be very careful while determining the prices of the products since can either make the customers demand more of the product or not. The prices of the goods in the market have a psychological effect to the customers. If the prices of goods offered in the market is high, customers may shy away from consuming the product and going for other cheaper products offered to the market as stipulated by the law of demand. On the other hand the high price of the goods charged in the market may be taken to customer that the good supplied are of high quality and thus people would demand more of the product as compared to other products that are charged at low prices (Reid & Bojanic, 2009).
There are various pricing strategies that can be applied by the Marketing manager determining the prices to be charged for Roxy brand. The marketing manager should do a good research while determining the prices to be charged in the market. One of the pricing techniques that should be applied by the marketing managers is skimming pricing. Pricing skimming is a technique of pricing that should be applied by the marketing manager while introducing Roxy brand in the Japanese marketing. The skimming pricing is the pricing technique that ensures that the introductory prices charged is high for the organization to recover for initial costs. The initial costs that are used in developing the products are very high and thus the organization should charge high prices for the products during the introductory stage of the product and after recovering all the costs that were incurred during the development of the product, the prices falls (Casabona & Traf, 2010).
Penetrating prices is another pricing technique that should be applied by the marketing manager when introducing Roxy brand in the Japanese markets. In penetrating pricing strategy, the company charges low prices for the product at the initial stage to attract the customers and thus purchase more of the product. The low prices charged for product ensure that more of the Roxy brands are purchased by the customers in the Japanese market. The pricing of the product has a psychological effect to the customers; high prices may mean that the product is of high quality while low prices may be taken to mean that the product is of low quality. Thus the price of Roxy brand should not be set too low for to be taken the product is of low quality. The marketing manager can also apply promotional pricing to determine the price to be charged on Roxy brand. The promotion pricing entails reducing the price of the products during some seasons such as festivities to encourage the customers to buy more of the product. Promotional pricing technique is applied when the company wants to clear the stocks to create room for more stock (Tavella, 2005).
The segment pricing refers to the applying different prices for the different market segment. The marketing manager should differentiate Roxy brand to appeal to different market segment. The product should be differentiated to appeal to different customers in the market. In the Japanese market, the marketing manager should appeal to different groups in Japanese market that include the rich, the middle income earners, the low income earner, the young and the old alike. The product should be differentiated to appeal different and thus charge different prices to different market segment taking into consideration the purchasing power of different customers in the market. Another pricing technique that the marketing manager should apply while introducing the Roxy brand in Japanese market is the captive pricing. Captive pricing strategy ensures that the product is offered together with other essential product and thus encouraging the customers to demand for the product that has just offered in the market (McGuigan & Moyer, 2008).
Time-period pricing is another pricing strategy that should be applied by the marketing manager while introducing Roxy product in the Japanese markets. Time-period pricing involves providing the product and low prices during some seasons of the year especially during festivities. The Roxy brand is a product in fashion industry and thus it appeals more to people during some seasons as compared to periods especially during holidays and festivities. The marketing manager should ensure that the prices of Roxy brand are reduced through offering discounts to encourage people to buy more of the product. Low prices entitle the company to make low profits but since the people are motivated to buy more of the products from the low prices charged, the company would end up making a high profit from the bulky sales it makes during some seasons during the year (Feinschreiber, 2004).
Another P in marketing mix strategy is the product. The product here is the Roxy brand that is offered by a fashion company in Australia. Roxy brand is a fashion product that is meant to be introduced to the Japanese markets. Fashion products are luxury goods that mostly are assumed to be demanded by the rich and affluent. The marketing manager should ensure that he promotes the Roxy brand to appeal to people of all social standing and hence increase the brand acceptance in the Japanese.
Place is another marketing mix strategy that should be adopted by the marketing manager in introducing the Roxy brand in Japanese markets. The place utility is created by transporting the commodity from the area where it is produced to where it is consumed. In our case the Roxy brand is manufactured in Australia and it should be transported to other places including Japanese market to create place utility.
Promotion is another marketing mix strategy that the marketing manager should apply to make the Roxy product known in the Japanese market and thus creating a strong brand name and thus a competitive advantage to the company. Promotion entails all activities that ensure that the product offered in the market is easily recognized. The promotional activities ensure that the customers makes repeated purchases of the product after making the first purchase in what is commonly known as creating a brand name. Promotion activities include advertisements, offering after sale services and offering discounts (Schaeffer, 2010).
It is an indisputable fact that the Japanese fashion industry is known for its jubilant, luxurious, creative and buzzing teenage vibe. According to the definition of marketing by the American marketing association is understood as a process that involves the planning and carrying out what has been planned, attaching value to a product or a service, promoting the idea, sharing ideas and goods and services with the aim of satisfying the goals of the individual or the entity.
Carrying out such a strategy by Roxy Brand is very health requirements because it will assist the firm know and prepare adequately for what it expects in the market (Muller 2007). As realized, the Japanese market is very different from the market provided by the western countries. This therefore means that the expectations of the Japanese market. It is logical for the marketers to apply and employ an assortment of ideas and strategies in structuring its goals regarding to how, when and where the information of the product will be presented to the consumers. The goal behind employing these strategies is to try and persuade customers into buying particular products and services (Ferret 2005).
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For companies that want to enter foreign markets and increase their sales, it is important to come up with an entry mode that takes into consideration of the available competitors and the potential clients. Some crucial factors to consider in choosing an entry mode include barriers, nature of service or product, resources, competitions and the policies that have been stipulated by the international market.