The report presented below includes detailed analysis and research of potential market segments for a rapidly expanding apparel company. Emergence of globalization has confronted before UNIQLO, with various benefits and advantages by effectively implementing international expansion strategy. The organization has been putting in lots of efforts for promoting the brand image of its products such as casual jackets and clothing for men and women both, of all ages. Company has acquired a leading position in Japanese market with effective implementation of its strategies and marketing plan. Acquiring the same position in potential market of various countries of North America and South America such as Brazil, Mexico and Argentina is the main area of concern for the organization. However, the report focuses mainly upon analysing and undertaking market audit with consideration to Brazil for highlighting various internal and external environment determinants affecting UNIQLO's market entry strategy with respect to the same (De Mooij, 2013).
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UNIQLO is Japanese oriented company dealing in retailing of clothing by taking mass-volume orders and purchasing the required inputs directly from global suppliers. It is the first largest producer of casual clothing for various segments in the market that effectively and efficiently utilizes its core competences to successfully acquire international market too. This section includes undertaking internal analysis of the firm with special consideration to company's analysis and product analysis. Analysis undertaken shows that the enterprise has been following the aggressive policy of store opening in various potential market all over the globe. The organization therefore follows this effective core competence by framing strategies that concentrate upon importance of exploiting the benefits of globalization. Moreover, the organization's key to success is one of its strategy that focuses upon designing marketing plan that enables acquiring inputs at possible least cost and producing units that are highly holding quality standards. At the same time, the organization has adapted this strategy to convey the benefits available from using Japanese products that are of high quality (De Mooij, 2010). The enterprise is enjoying the competitive advantage it has acquired by producing casual wear clothing at cheap prices rather then producing fashionable clothes as compared to its competitors. Market tends to indicate higher demand for casual clothing as compared to trendy clothes.
UNIQLO has been adapting with its global strategy of promoting its brand image by conveying the benefits of core characteristic features its wide range of products that includes manufacturing casual jackets, inner wear, socks, clothing, etc. Each important aspect related to the product such as planning, designing, researching or processing with respect to the product to be manufactured have been well considered in the marketing planning process. Moreover, branding, packaging and after sales services provided to customers belonging to different cultural background is considered equally important for the organization to increase the brand awareness on international basis. It has aligned its procedures and manufacturing process with latest techniques such as HEATTECH technology and AIRism technology. Adapting with latest technology has enabled the products to retain the warmth during winter season and also enable the customer to best suit with climate changes during summer season.
However, it is assessed that the organization will have to address various issues related to product acceptance in foreign market on account of different external factors prevailing in the industry. With context to Brazil, it is observed that the laws and regulations framed by Brazilian government restricts various companies to merge with those of Brazilian companies (Lee and Carter, 2012).
Different market entry techniques such as franchising, licensing, etc. have been adopted by the organization to establish a long term position in the market. It has been producing a unique range of products which are acceptable by wide section of customer's group including various classes such as medium class and high class customers. The enterprise has composed a marketing plan that concentrates upon manufacturing rainbow coloured units of output including wide range of colour selection to be provided to target customers. Providing the customers with wide range of selection ensures customer loyalty and satisfaction to a greater extent. Moreover, it has been designing attractive range of clothing for kids specially. Gross Domestic Product as well as Gross National Product are an effective tools of measurement of economic condition. Almost 50% of the population of Brazil consists of medium class customers, making the strategy of providing cheaper products more profitable for the organization. Brazil is a well established economy including maximum contribution of the service sector in boosting up the economic condition of the nation (Douglas and Craig, 2011). Efficient transportation and communication facilities provided in the region can be accredited to performance of service sector. Technological advancements have brought up a revolution in the clothing industry too. Improved road connectivity, air connectivity as well as port connectivity has enabled the organization to exploit the benefits of modified transportation facilities that can provide faster delivery of bulk orders at least cost. Brazil airport has connectivity with major trading countries of the globe. Using the technique of franchising, various store outlets can be developed by the organization to increase the number of distribution channels. Most of the customer belonging to medium class group indicate a trend of purchasing cheaper products that are holding best characteristic feature as compared to the product of other companies in the industry. Customers are expected to purchase expensive clothing and accessories very often as compared to regular purchasing of regular use products. Thus, customer's preferences are assumed to align with features of products of the company mentioned (Ko and et.al., 2012)
In prevailing market environment of competitiveness among clothing giants, customers are observed to be very much alert and aware of policies of each of giants. The enterprise therefore must adapt with excellently performing international strategies. Smart tactics must be adapted by the company to attract the customers of giant competitors such as GAP and ZARA, etc.
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Distribution of The Product
As mentioned above with reference to international expansion strategy adapted by the firm, the importance of designing an effective distribution strategy has been covered in the section. Distribution is an important departmental function for the organization as the entire performance of efficiently producing units of outputs would be a failure if strategies for distribution are not designed efficiently. Company has been using effective means of distribution channels such as number of retail store outlets in different countries, displaying products in large departmental super stores, etc. Moreover, the organization has also been using online means of distribution for reaching out maximum number of customers by connecting with them through online stores that operate on international basis.
There is a need for the organization to adapt with various direct as well as indirect means of distributing products on a large scale. The distribution strategy must be able to communicate its customers with the uniqueness of its products range and thereby influence them to purchase the same. It must be designed in such a manner so that the company is effectively able to capture wide section of market attracting potential customers too (Cannon and Yaprak, 2014).
Advertising and Promotion
Advertising is an important context of marketing with reference to the enterprise undertaken in the report. Advertising is a technique that is used by the organization to convey the unique features of the product to customers including those of who are potential for the company (Cannon and Yaprak, 2014).
Promotion is an activity undertaken to promote the brand image of the product for increasing demand and awareness of customers with respect to unique qualities and characteristics of wide range of products. Various promotional techniques used by the company have been mentioned below:
- Sampling: For establishing a prominent position in the market, it has been analysed that company must use this common method of promotion. As the company is planning to enter a new market, it must provide free sample of its products to attract customer for converting them into permanent customer. Customer will surely purchase the products in future if he will be satisfied with the characteristic features of different range of product.
- Coupon: Coupon is also determined as lucky draw wherein customers are provided with opportunity to select a coupon randomly. Winners are thereby selected randomly and are awarded with exciting offers that encourage the customer to make future purchase. Coupon delivers a great sense of excitement and happiness to customer which motivates him to establish future relationship with the company.
- Contests: Contests are undertaken with a view to popularize the brand image of company's product. Customers are encouraged to participate in answering simple questions and are rewarded by selecting upon the best among them.
- Instant draw: Instant draw in an promotional technique applied wherein customer is asked to scratch a card. Particular product's name is mentioned in the card and the same is determined upon scratching the card after purchasing is completed. The customer is offered with the product mentioned on the card as reward for encouraging them to make future purchases too (Schumann and et.al , 2010).
Comparision of Products
ZARA is one of the competitor of UNIQLO that has influenced the company to design effective strategies with respect to promotion, distribution as well as pricing. ZARA is a brand that sells expensive products as they are designed uniquely with limited design for each of them whereas UNIQLO follows the strategy of selling cheaper products. ZARA has limited store outlets concentrating upon selling products to limited customer groups whereas the company mentioned has been following policy of aggressively developing more number of outlets for increasing supply in the market. ZARA has been concentrating upon making maximum profit margins by selling units at a higher price to limited customers unlike UNIQLO (Moeller and Harvey, 2011)
UNIQLO has acquired a prominent position in the international market on account of rapidly expanding business activities using effective marketing techniques. Moreover, the products manufactured by the company are admired by most of customers from different geographical background over the globe. With context to increased demand for the products manufactured by the organization, it has adapted the strategy of enlarging customer base by exploiting the opportunities of increasing market size. Bulk orders are placed by the various store retailers and online market stores to align with the orders placed by customers from all over the globe. Having a prominent position in the market has enabled the organization to acquire a unique position in the purchasing list of its customers. Moreover, the price of various range of company's products being reasonable has acquired attention from potential customers too. Company has been successful in pulling the interest of customers that were initially associated with its competitors such as ZARA and GAP. Therefore, company's products have acquired a unique position in large departmental stores as well as small retail shops too. UNIQLO has largest market size as compared to others in the industry having different geographical orientation (Steenkamp and de Jong, 2010).
Government Participation in the Marketplace
After the crises that emerged from European Countries, the government of Brazil thereafter realized the need to promote textile industry for boosting up the economic condition of the nation. Along with harsh government policies that restricted expansion of clothing industry, the government however simplified the complex structure of taxation. Various textile association that have been developed on public basis, are working for promoting the idea of economic stability by focusing on encouraging imports and exports that enables exchange of foreign currency. Moreover, these organizations are also providing required assistance to companies having origin other than that of Brazil. Government have been observed promoting application of different establishment techniques such as franchising and licensing through which increase in number of store outlets will be possible thereby providing sources of income to its people. Thus, the clothing industry is thereby expected to attain increasing importance from government side with increased investment of funds for establishing and promoting the same (Gibbs, Ilkan and Pouloukas, 2007).
It can be concluded here that UNIQLO needs to improve upon the quality of its products rather then concentrating on fashion attributes to be included in the products. High rate of taxes and tariffs have been restricting company's scope of expansion of business activities as successfully as it has attained with respect to China, Hong Kong, etc. Brazil is fifth largest country in the world enabling the organization to exploit the benefits to be attained on account of increased demand of population for high quality and cheaper products. Strategies to be adapted by the organization must consider focusing upon the importance of capturing maximum target markets by effectively applying policy of producer cheaper products along with ensuring the quality criteria adopted by various customers including the potential ones.
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Books and Journals
- Cannon, H.M. and Yaprak, A., 2014. Cosmopolitan-based cross national segmentation in global marketing simulations.Developments in Business Simulation and Experiential Learning.28.
- De Mooij, M., 2010.Consumer Behavior and Culture: Consequences for Global Marketing and Advertising: Consequences for Global Marketing and Advertising. Sage.
- De Mooij, M., 2013.Global marketing and advertising: Understanding cultural paradoxes. Sage Publications.
- Douglas, S.P. and Craig, C.S., 2011. Convergence and divergence: Developing a semiglobal marketing strategy.Journal of International Marketing.19(1). pp.82-101.
- Engelen, A. and Brettel, M., 2011. A cross-cultural perspective of marketing departments' influence tactics.Journal of International Marketing.19(2). pp.73-94.
- Gibbs, P., Ilkan, M. and Pouloukas, S., 2007. The ethics of marketing in Muslim and Christian communities: Insights for global marketing.Equal Opportunities International.26(7). pp.678-692.
- Hultman, M., Katsikeas, C.S. and Robson, M.J., 2011. Export promotion strategy and performance: the role of international experience.Journal of International Marketing.19(4). pp.17-39.