International Marketing Plan
Student ID: 1116820Executive summaryThis report creates a marketing plan for Micromax to enter into the Malaysian market. Currently Micromax is the 3rd biggest smartphone company in India. This report carries out a SWOT analysis of the company to evaluate its position and identify areas of interest before expanding into Malaysia. Different Product, ricing, promotion and distribution strategies are then developed to help the company succeed in Malaysia. The process followed involves identification of the Malaysian market that will be targeted. The characteristics of the target segment in terms of rural or urban location and their purchasing power is defined. The report then determines the needs of target segment and helps the company design a product that answers these needs. A timeline of important events is given and ends with a conclusion and recommendation section that shows that Micromax should focus the rural population and people with a low and medium purchasing power and develop Smartphones that are 4G enabled, have HD displays, good cameras, long batteries, slim phones, with latest android versions and good for gaming and music.
Table of Contents
TOC o “1-3” h z u Executive summary PAGEREF _Toc526949035 h 1Introduction PAGEREF _Toc526949036 h 2SWOT analysis PAGEREF _Toc526949037 h 3Product strategy PAGEREF _Toc526949038 h 5Product PAGEREF _Toc526949039 h 5Customer value PAGEREF _Toc526949040 h 6Differentiation PAGEREF _Toc526949041 h 6Segmentation and positioning strategy PAGEREF _Toc526949042 h 6Market segmentation PAGEREF _Toc526949043 h 6Market targeting PAGEREF _Toc526949044 h 7Product positioning PAGEREF _Toc526949045 h 7Pricing strategy PAGEREF _Toc526949046 h 7Distribution strategy PAGEREF _Toc526949047 h 8Promotion strategy PAGEREF _Toc526949048 h 9Problem Identification and solution, future management control and measurement system PAGEREF _Toc526949049 h 9Conclusions and recommendations and timeline PAGEREF _Toc526949050 h 11Timeline PAGEREF _Toc526949051 h 11References PAGEREF _Toc526949052 h 12
IntroductionWith the advancements in technology and globalization, businesses and companies have learned to go beyond geographical boundaries. This has made international trade very popular and brands are now trying to create markets in as many regions as possible. This is because of the increases in revenues and diversification that international trade offers businesses. However, before expanding into a new region, it is important for a business to conduct an analysis that helps show its abilities and the environment in the region it is expanding into (Kotabe and Helsen, 2014). To do this, a SWOT analysis of the company can be conducted and an analysis of the political, economic and social environments in the target country. When this is done, the business will be able to make a correct decision not only on if to venture in the target country but also on how to do so. Here an analysis that will help Micromax Informatics venture into the Malaysian market is done.
Micromax informatics is currently the third biggest smartphone company in India. Despite having been in the market for only ten years, the company has continued to show exceptional performance and its market share continues to grow. This has made it a great brand in the Indian market with phone models such as Micromax Canvas Sliver 5 and Micromax Amaze 2 taking the market by storm and competing against other big brands such as Samsung. Micromax started marketing its products to the rural population and later targeted the urban population too (Gan et Al., 2018). A characteristic of its products that helps beat other major brands is the relatively low pricing. As it is now, the company has achieved a lot in India and has reached the maturation stage and now it is time for it to think of moving into many other countries such as Malaysia.
This paper is purposed to help Micromax come up with a marketing plan that will see it venture and succeed in the Malaysian market. This is done by considering the strengths, weaknesses, opportunities and threats of Micromax and also conducting a research to determine the environment of Malaysia and then coming up with a strategy that covers the product, segmentation and positioning, pricing, distribution, and promotion measures that will help Micromax succeed in Malaysia.
SWOT analysisA SWOT analysis helps identify the internal and external factors that influence the performance of the business. The internal factors are the strengths and the weaknesses of the business whereas the external factors are the opportunities and weaknesses that the business faces (Kotabe and Helsen, 2014). This analysis helps evaluate the business, identify its muscles and weaknesses and show any prevailing or expected external factors that it can take advantage of or avoid for it to succeed. This is an important tool and it is applied herein to help Micromax identify the factors that can help or hinder its success in expanding into Malaysia.
Strong brand name in the domestic market
A good marketing strategy that focuses on rural population and employs relatively low pricing
Understanding of the needs of the local market
Strong financial muscles
Proper distribution channels
Good marketing strategies such as celebrity endorsement and word of mouth Little global presence
Perceived low quality of the products
A high population in Malaysia. This especially the presence of a rural population that will resonate with the products.
Online marketing that makes it easy to venture new markets
The potential for growth through improvement of quality to target urban and tech-savvy people. High competition from other major brands
Replication of phone models by unscrupulous business people.
Dynamic changes in technology which may make the products obsolete
Micromax has succeeded on building a strong brand name in India and this is a strength and a motivating factor which shows it is possible for it to do the same in Malaysia. Again, the company seems to understand the needs of the local people and thus has made products tailored for them, such as long serving batteries, and thus these products will be highly welcome in Malaysia (Singh et Al., 2018). Over the course of business, the company has made enough money to make it risk into other areas. In 2017, the company had revenue of 1 billion USD (Singh et Al., 2018). The ability to build versatile distribution channels and use relevant marketing strategies will help the company venture into Malaysia successfully. The Malaysian market offers opportunities such as a high rural population and many ICT oriented people who make online marketing effective (Profile, 2015). The company however faces its own weaknesses and other external threats such as the perceived low quality of its products and competition from other major brands.
Product strategyProduct strategy involves the identification of the market needs and coming up with products that have the features required to solve those needs. In India, Micromax found a need for smartphones for the high rural population and later moved to the urban population. In Malaysia, the rural population is only around 24% and poverty levels are low (Profile, 2015). Most of the people use the internet and therefore the market for smartphones is high.
The needs of the Malaysian market therefore point to a smartphone that offers high internet speed rates, good battery life, slimness, and also a good appearance. Micromax therefore needs to understand these needs and use its innovation and creativity to market its products to the market. The following factors need to be addressed before Micromax sells its products in Malaysia.
The company needs to identify the product it will be selling. What type of smartphones will be sold? In this case, Micromax needs to focus on Smartphones that are 4G enabled, have HD displays, good cameras, long batteries, slim phones, with latest android versions and good for gaming and music.
When the product has been defined, then the company will be able to determine the value that the product is adding to customers. This is important as it also helps in creating the marketing strategy. Here the value is more speed, more memory, better photos, more applications and lower prices.
The company also needs to tell how its product is different from the rest. Currently, the major smartphones in Malaysia are Samsung, Apple, Huawei, Oppo and Xiaomi. Micromax should identify something these companies are not offering and focus on it. This can be long battery time or just appearance of the phone.
Segmentation and positioning strategySegmentation, targeting and positioning is a marketing strategy that involves dividing the market into different segments based on the different characteristics of each segment and then determining the economic attractiveness of each of the segment and then selecting one or more segments to focus in (Schlegelmilch, 2016). when the segments are selected, products tailored for them are made and marketed with relevant strategies that the segment can relate with.
This step involves identifying the different basis of segmentation for the target market. The Malaysian smartphone market can be segmented according to the geographical location and the purchasing power. Geographical segmentation divides the population into rural and urban population. Purchasing power divides the population into high, medium and low purchasing powers. The rural population is around 24% of the total population (Profile, 2015). With a GDP per capita purchasing power parity of 26,808 USD as at 2016, the population can be said to have a high percentage of people with a medium purchasing power (Profile, 2015).
This step involves selection of the segments to be targeted. As shown above we have the rural population, urban population, high purchasing power, medium purchasing power and the low purchasing power. Selection of a segment to focus in will be made by identifying the niches in the market. The present companies such as Apple, Samsung, Huawei and Oppo are all focusing on the urban population and the high purchasing power population. The medium purchasing power population is also targeted by these companies. This leaves a niche for Micromax to focus on the rural population, the low purchasing power and also the medium purchasing power population.
Product positioningAfter the selection of the market to focus in, it is important to position the product to fit that market. How this will be done has already been discussed under product strategy and will involve focusing on more speed, more memory, better photos, more applications and lower prices.
Pricing strategyPricing is important in international market as it not only determines the willingness of the target market to spend their money on the product but also speaks a lot about the quality and functionality of the product (Spann et Al., 2014). There are different pricing that companies can use to achieve different goal. These include price skimming, penetration pricing, economy pricing and others. The strategy used depends on the goal that the company wants to achieve and the purchasing power of the target market.
Micromax wants to market itself as a high-quality economical phone to the rural population and people with low and medium purchasing powers. To do so, several pricing techniques can be combined. One of such techniques is the penetration pricing that starts by selling a product at a relatively cheap price to get a market share and then adjusting the price accordingly after the market is conquered (Spann et Al., 2014). Micromax should however be careful with this strategy as in the smartphone market, low prices are associated with low quality. The company should therefore determine the prices of similar quality phones by other companies and sell at a price slightly lower than that.
Another pricing technique that will be used here is psychological pricing. This involves making buyers respond to emotions rather than rational basis and involves things like price point perspective where instead of selling at $200, an item is sold at $199 (Spann et Al., 2014). Again, this strategy also makes a call for Micromax to make sure their smartphones are not too expensive or too cheap as this has an effect on the perceived quality.
Distribution strategyA distribution strategy helps in getting a product to the target customer. It involves identifying the correct chains that reach the customer in the most efficient way. In Malaysia, here is an increasing trend in online shopping. With more than 20 million smartphone users, online stores seem to be attracting a lot of customers (Seetharaman, et Al., 2017). Micromax should take advantage of this trend and partner with the major online stores in the country such as Lazada and Zalora will help the company in reaching a lot of customers (Seetharaman, et Al., 2017).
Micromax should use an intensive distribution strategy. This involves working towards having as many outlets as possible. These outlets should even be moved up to the rural areas where the company is likely to get more customers. Having retailers in many areas will help make it easy for customers to get the products and thus easier penetration of the market.
Promotion strategyPromotion is the methods that a company uses to communicate with its customers about its products. People will buy products that they have heard about and therefore companies always use all means possible to get positive words about their products to the target markets. In choosing the correct promotion strategy it is important to determine the characteristics of the target market and the nature of the product. In India, Micromax used word of mouth and celebrity endorsements to promote its products.
In Malaysia, different promotion strategies will work. The company should consider focusing more on social media marketing. This is because the target population is very active on social media and thus this method will reach them effectively (Seetharaman, et Al., 2017). Celebrity endorsements will also work in Malaysian and therefore should be used. The promotions should emphasize on the unique features of the product (Hollensen and Raman, 2014) and relevant phrases can be used to make the product be viewed as an economical and high-quality smart phone.
Problem Identification and solution, future management control and measurement systemThe company should not only consider current issues but also analyze trends so as to determine future prospects and identify any problems that may arise. Problem identification involves identifying the areas of interest, analyzing the present evidence, making judgments and then coming up with plans to improve the situation, implementing the pans and then monitoring the progress. There are different problems that Micromax can face in its operation in Malaysia. One of these is the unstable Malaysian currency which may result to lack of balance in the cost of good and selling prices and thus risking probabilities of losses (Kotabe and Helsen, 2014). Other problems include tariffs that may make international trade costlier and the risk of double taxation in both Malaysia and India. To avoid these, the company must make sure that it fills all the necessary documentation for international trade and also focus on having a production plant in Malaysia so as to balance the production costs and selling price. The company should also identify all the possible tax incentives it can get and apply for them (Kotabe and Helsen, 2014). Market penetration and high competition problems are also likely, but these can be easily solved through pricing and having high quality products (Kotabe and Helsen, 2014).
For effective future management control, the company should set goals and objectives that need to be achieved after given periods of time. These will be used as benchmarks to tell how the company is doing and also guide the management in making decisions (Kotabe and Helsen, 2014). With the possible problems identified and their solutions determined, it is the responsibility of the management to make sure that the necessary steps are taken to avoid them.
There should be identified measurement systems which should also be time bound. The company needs to define its path by setting where it wants to be after a year or any selected period if time. Performance should be measured by the number of units sold, profit made, market share, the number of customers reached and different other measures (Kotabe and Helsen, 2014). Measurement is continuous and should be done frequently as it also helps the management in making decision depending on the feedback received.
Conclusions and recommendations and timelineInternational marketing requires an understanding of the company, its products and the target country environment. When this is understood the necessary product, pricing, distribution, and promotion strategies to be used can be identified. Each strategy should be specific to the needs of the company and the target market.
It is hereby recommended that in expanding to Malaysia, Micromax should consider targeting the rural population and people with low and medium purchasing powers. This will require the creation of a product that is if high quality and relatively cheap. The price should not however be too low form prevailing prices as this may send a message of low quality. Online distribution and marketing is highly recommended.
Analysis of the needs of the Malaysian market 1 month
Development of the right product 1 month
Creation of distribution channels in Malaysia 3 months
Promotion of the product Continuous
First assessment After 6 months
Expansion After the first assessment
Second assessment After 1 year
ReferencesGan, M., Yang, S., Li, D., Wang, M., Chen, S., Xie, R. and Liu, J., 2018. A Novel Intensive Distribution Logistics Network Design and Profit Allocation Problem considering Sharing Economy. Complexity, 2018.
Hollensen, S. and Raman, A., 2014. Social Media Marketing. Marketing Canada-Journal.
Kotabe, M., and Helsen, K. 2014. Global marketing management.
Profile, M.D., 2015. Demographic profile. Population (ACS), 685(12,851,684), pp.318-558.
Singh, M. K., Kumar, H., Gupta, M. P., and Madaan, J. 2018. A Glimpse of Sustainable Electronics Manufacturing for India: A Study Using PEST-SWOT Analysis. In Global Value Chains, Flexibility and Sustainability (pp. 271-281). Springer, Singapore.
Schlegelmilch, B.B., 2016. Segmenting Targeting and Positioning in Global Markets. In Global Marketing Strategy(pp. 63-82). Springer, Cham.
Seetharaman, A., Niranjan, I., Saravanan, A. S., and Balaji, D. 2017. A Study of the Moderate Growth of Online Retailing (Ecommerce) In the UAE. The Journal of Developing Areas, 51(4), 397-412.
Spann, M., Fischer, M. and Tellis, G.J., 2014. Skimming or penetration? Strategic dynamic pricing for new products. Marketing Science, 34(2), pp.235-249.