Global Marketing Management

TASK

1. Explanation regarding competencies of brand and their implication in international expansion

Burberry is an elite fashion brand that is known for providing high end fashion wears. The brand reflects prime quality, outstanding style and elegance in its products. Company is providing its valuable services from more than 150 years; therefore, there is strong brand recognition in the market. Therefore, the key competitive advantage available to Burberry is its powerful brand name and successful image in the market (Globalization - First era of modern globalization: to 1914, 2015). In addition to this aspect, the expertise of brand in digital marketing also serves as competitive advantage to the brand. Company was first to launch new iPhone applications like “Runway to Reality' which enables elite customers to purchase the designer fashion apparels from runway collection instantly (Strategy report on Burberry, 2015). Further, company also possesses competitive benefit in terms of digital innovation like introduction to Burberry Retail Theater. With this aspect, Burberry broadcasts its Spring Summer Collection live show into number of flagship stores that are present in different parts of the world. This further assists company in providing multimedia experience to its customers by live streaming fashion shows using HD (high definition technology) screens, speakers, etc. Therefore, company is able to attract large number of customers. Another competitive benefit available to firm is regarding creative and competent human resources that assist the organization in developing competitive market strategy. Further, Burberry has gained competencies for its trench coats which are famous worldwide.

Furthermore, company can use its competencies to expand in the international market. The global image will make it easy for the brand to attract customers in target foreign country. Thereafter, company can make the best use of its digital technology for entering in the foreign market. For instance, company has recently started digital branch in shopping mall that is located in China. Likewise, firm can open digital branches in foreign countries where it is still not operational (Core competence of digital marketing, 2015). Further, Burberry can expand its global presence by using online media. In this respect, brand can use social networking sites and other media channels like YouTube, Facebook, Twitter, Pinterest, etc. Further, Burberry can offer its products in international market by designing mobile applications for android cell phones. This will help in reaching the products of brand to the target customers. Thereafter, company can enter in the international market by using its core competitive product, trench coats and scarves that showcase outwear heritage of brand and elegance with supreme quality.

2. An analysis of Burberry's internal strengths and weaknesses

By analyzing the strength and weaknesses company will get better understanding of its functioning (Barney and Clark, 2007). Further, it can use its capabilities to overcome its weaknesses. Thereafter, it also enables the brand to take the best advantage of upcoming opportunities. Since, its inception that company is intending to expand its operations by entering into global market; it is feasible for the marketing manager of brand to critically analyze the internal strengtghs and weaknesses of brand. The description of this is as follows:

Strengths:

Strong brand image: Burberry is a well established brand that is providing luxurious apparels since 1856. Further, the brand is known for its royal heritage as its products were also admired by royals like Queen Elizabeth, Prince Charles, etc.

Digital innovation: Burberry is renowned for integrating digital technologies. Company is operating digital branches and flagship stores by giving multimedia experience to customers (Bharwani and Butt, 2012).

Strong business relationship with elite brand: Burberry has strong corporate relationship with elite brands like Apple. Company started its famous applications like Runway to reality through iPad. New digital store was commenced by company in T mall of China that is owned by Alibaba a famous e-commerce company.

International presence: Burberry has more than 500 stores in different foreign countries. Due to international presence, company has gained global recognition. Organization offers its products to both wholesale and retail customers.

Negotiating power with suppliers: Company has strong bargaining power with suppliers which reduce operating cost for the organization (Carney, 2005).

Royal warrant: Burberry has accepted Royal warrant from elite persons like Queen Elizabeth and Prince Charles; therefore, company can use this aspect for marketing its product as elite brand.

Engagement with community: Burberry is able to enhance interpersonal relationship with its target customers by using social media. Therefore, there are large number of fan following in social sites like Facebook, Pinterest, YouTube and Twitter (Hill, 2008).

Focused marketing strategy resulting in brand retention: Burberry believes in focused branding techniques which not only save the cost but also assists in easy brand recalling and retention. In this aspect, company promotes its high end products only through magazines, celebrity endorsement, fashion shows, etc.

Weaknesses:

Premium prices: The products offered by Burberry are too costly therefore; it cannot be afforded by middle class customers. Company has gained image of costly brand which impacts the sales of low priced products also.

Restricted product line: As compared to other brands of fashion and beauty segment, Burberry has limited product line with having apparels, accessories, etc. (Doh, 2005).

Intense competition with other brands: The sales of Burberry are declining from past few years due to shift of customers to other brands like Gucci, Louis Vuitton, Prada, etc. Therefore, brand is facing intense market rivalry.

3. An analysis regarding external opportunities and threats

Described below is the analysis of various opportunities and threats that Burberry would face while operating in domestic as well as in international country.

Opportunities:

Diversification into emerging markets: Burberry can expand in the international market such as Egypt, Thailand, Turkey, etc. where company is not functioning. Further, the competition level in such countries is quiet low which means that firm will have enhanced opportunities.

Changing lifestyle of customers: With the integration of developed and developing economies, demand of fashion outwears and accessories are also increasing in the emerging countries (Czinkota and et.al., 2009).

Expansion in product line: Burberry can expand its product line by adding other types of products and services. This will also give competitive benefit to company in comparison to its rivals.

Increasing demand of high end products: The demand of premium products is witnessing as a hike rate of 33% (Indian market) which states that company has good possibilities if it expands its market share in developing countries.

Sponsorship of Fashion events: Burberry can sponsor more fashion events and other shows that will enhance the popularity of brand (Bharwani and Butt, 2012).

Threats:

Increasing competition: The market competition for Burberry is increasing from brands like Gucci, Prada, Jimmi Choo, Hermes, etc. that is major threats for the existence of brand.

Fake products: The major threat faced by Burberry is regarding the limitation of brand of its products which can impact their brand equity (Hill, 2008). Therefore, fake products sold in the name of brand can impact the image of Burberry in the market.

Changing taste of customers: The customer’s tastes and preferences changes rapidly which result into short life span of product and offerings would become outdated and remain unsold in the stores.

Furthermore, with the help of PESTEL analysis, the impact of external factors on the operations of company can be illustrated. It is explained as follows:

Political factors: It refers to rules, regulations, taxation and other policies framed by UK government. Burberry is functioning in various developing countries therefore; it is also required to consider the regulations of respective host country. In this respect, company makes timely payment of tax and other duties.

Economic factors: GDP, GNP, inflation, monetary policies and other economic policies of country can impact the performance of company in domestic as well as in foreign country. The reduction in disposable income can directly impact the demand of products offered by brand. The recession of UK resulted in increased sales of Burberry products (Bluementritt, 2006).

Social factors: The lifestyle, income, tastes and preferences of customers can impact the functioning of company. Therefore, by understanding the social factors of target market before expanding its operations, firm can get fruitful outcomes. In this respect, organization has gained popularity in Indian market by making the best use of social factors.

Technology: The upgraded technology assists Burberry in getting competitive advantage (Technology and Globalization: Modern-Era Constraints on Local Initiatives for Land Reform, 2000). Company is the first brand to start live streaming shows in its flagship stores; therefore, customers can buy products from catwalk. Further, firm is also using e-commerce sites like artofthetrench.com which enable the consumers to order customized products.

Environmental factors: With the growing environmental awareness, it is becoming crucial for the organization to consider environmental factors. In this aspect, company is recycling its waste that can be further used in insulation of car parts. Thereafter, Burberry is doing energy efficiency by using LED lightning, renewable energy, etc.

Legal factors: The legal regulations can impact the performance of company. Therefore, Burberry ensures that it strictly adheres the policies like competition, employment, discrimination, etc. (Czinkota and et.al., 2009). Therefore, company ensures that it indulges in healthy trade practices only. Thereafter, while appointing staff, it ensures there is no discrimination on the basis of caste, creed, gender, religion, etc.

4. Segmenting, targeting and positioning of Burberry

In order to expand its market share and to increase its customer base, Burberry can enter in the foreign market. The emerging market will provide greater opportunities to people to serve the needs of customers in a better manner. It has been identified that company is not having its presence in country like Thailand therefore; it can enter into the market of target nation. However, to facilitate such entry, it can take help of segmenting, targeting and positioning. This can be further explained as follows:

Segmentation: It is the marketing tool through which entire market is divided into small parts which further help in reaching the target customers effectively. Burberry can divide market on the basis of various factors like demographic, psychographic and behavioral, etc. The demographic factors involve division of market on the basis of age, gender, occupation, etc. Thereafter, psychographic factors involve division of market as per the lifestyle, tastes and preferences of customers. Further, behavioral segmentation involves purchasing patter, needs of customers, etc. (Alexander, Quinn and Cairns, 2005). By considering these factors, company can offer range of fashion apparels and accessories for both men and women in between the age of 16-40 years. Further, company can attract brand conscious customers of elite group who prefer traditional yet stylish wears. Thereafter, major consideration can be given to women who love to do shopping.

Targeting: It is a marketing strategy through which Burberry can select the prospective customers to whom they want to market their product. Here, the business enterprise can target elite customers of Thailand. Further, to target them, company can again use applications of iphone (Bluementritt, 2006). Further, Burberry can also use celebrity endorsement by promoting the products through famous celebrities of South East Asia, UK, etc. Shows sponsored by Burberry can be organized in Thailand which will attract the target customers.

Positioning: With this strategy, Burberry can attain a distinct position in the minds of customers. For this aspect, firm can use online marketing by making use of its competitive benefit in terms of digital technology. The firm is known for live streaming its fashion shows in its outlet. The same can be used in new stores of Burberry in Thailand. However, the strong brand image of company will assist in getting new position in the new market.

5. The realistic marketing objective that can be set by Burberry in Thailand market

In order to ensure successful market entry, company can make SMART objectives. With this, firm can set specific, measurable, attainable, and realistic and time bound goals for the business enterprise. The main objective of preparing SMART objectives is that it will assist the firm to attain the goal. Therefore, it will serve as a guide for the managers and other employees (Hamilton and Webster, 2012). The marketing objectives will provide a framework which will be considered by the executives of Burberry while functioning and taking business decision. Since, company is intending to expand in the international market of Thailand; marketing objectives will play an important role. Thailand is a renowned tourist destination therefore; company cannot only target the local residents but also various customers that are coming from diversified nations. Therefore, company can explore larger customer base and can expand its market share as well as profitability (Nandi, 2009). The realistic marketing objective can be explained as follows:

SMART Objectives: The marketing manager of Burberry can frame the specific goal that it wants to attain. Here, the firm wants to expand its market share by 25% and can also increase the sales of high end clothing segment by 30% in 1 year. However, company is repeatedly alleged that it is mostly favored by women customers therefore, it can increase the male customers by 10% solely in Thailand (Tomlinson, 2013). For this aspect, Burberry can increase promotion for attracting more men. Further, the firm wants to increase number of fan followers solely from Thailand. Therefore, new social groups, pages, etc. can be used. Thus, company can expand its market base by using indirect and direct channels of marketing.

6. Market entry strategy that can be used by Burberry

There are large numbers of methods that can be used by business enterprise for entering in the foreign market. To enter in the Thailand market appropriately, market entry strategy can be used by the marketing manager of company (Westport.Brown, 2006). There are various methods of market entry like export, counter trade, licensing, joint ventures, etc. Therefore, company can analyze the production cost of target market; Thailand and if the cost is too high, it can export its products. Further, organization can produce in the target nation. Thereafter, firm can also enter into joint venture by small clothing organization of UK. From the aforementioned option, it is feasible for Burberry to enter in the market of Thailand through joint venture. The market entry strategy can be explained as follows:

Market entry strategy

Burberry can identify small business yet leading business in clothing segment as this will further give competitive advantage to company (Market entry strategy, n.d.). In addition to this aspect, firm can gain benefit for the knowledge of partner firm regarding preferences of local customers, their taste, purchasing pattern, etc. Further, joint venture will also assist the business enterprise in sharing risk. Thereafter, joint venture will give synergy advantage to company (Bramwell and Lane, 2000). Thereafter, Sainsbury can also avail benefits from the resources that are owned by the partner company. Therefore, organization can get benefit of technology, human assets, fixed assets, etc. of joint ventured company. Apart from this, firm can also setup new outlets in Thailand.

7. Four Ps of marketing to be followed by Burberry in Thailand

The four Ps which are to be followed by Burberry in Thailand are as follows:

Product- Product can be defined as the goods and services which satisfy the needs and demand of people in the market. The products of Burberry are apparels for the age group of 16 to 40 years which company will sell in Thailand (Bharwani and Butt, 2012). In addition to this, the special feature of these apparels is that they will be more fashionable and trendy. Thailand is also considered as one of the most popular tourist destinations in the world. Therefore, the products of Burberry will not only satisfy the needs of local people but these apparels will also be sold to tourists.

Price- Price can be determined as the value of a product. At the time of determining prices, businesses are required to be very careful as the sales rely on the price to a very high extent (Asgary and Walle, 2002). Burberry will sell its products on high prices while doing business in Thailand. The rationale behind this is that it will help company to maintain its brand image in an effective manner. Burberry is considered as a famous brand in clothing industry and therefore, the prices of its products offered in Thailand will be high.

Place- Place is the location from where people can buy products and services of an organization. Burberry will sell its products with the help of three physical stores in different locations of Thailand. At the time of selecting appropriate location for the store, brand will take care of the fact that location is easy to access and people do not have any kind of difficulty in finding the products (Hill, 2008).

Promotion- The promotion will be carried out by using both the sources which are online and offline. Ads will be displayed on social media sites such as Facebook and twitter whereas promotion will also be carried out on Television and newspapers.

8. Analysis of marketing budget

The marketing budget for Burberry in Thailand will consist of three major activities which are online promotion, advertisement on television and newspapers as well as events. Further, the budget of all these activities is mentioned as below:

Online promotion: ฿, 20000
Advertisement: ฿, 100000
Events: ฿, 50000

Company will try to carry out all the marketing activities in the given budget so that marketing objectives can be achieved in the best possible manner (Vander, 2010). The budget will also help the firm in reducing extra expenses. Thereafter, organization can keep track of its inflows and outflows.

CONCLUSION

From the aforementioned report, it can be concluded that globalization is an important concept that will assist company in expanding its business operations. The internal analysis reveals that Burberry has a strong reputation in the market. Further, firm enjoys competencies with regard to digital marketing and powerful brand image. Thereafter, external analysis states that in order to stay competitive, it is important for Burberry to consider the macro factors. Segmenting, targeting and positioning will help the firm in making successful entry in the market of Thailand.

REFERENCES

• Alexander, N., Quinn, B. and Cairns, P., 2005. International retail divestment activity. International Journal of Retail and Distribution Management. 33(1). pp. 5-22.
• Asgary, N. and Walle, A.H., 2002.The cultural impact of globalisation: economic activity and social change.Cross Cultural Management: An International Journal. 9(3). pp.58 – 75.
• Barney, J. B. and Clark, D. N., 2007. Resource-based theory: Creating and sustaining competitive advantage. Oxford: Oxford University Press.
• Bharwani, S. and Butt, N., 2012. Challenges for the global hospitality industry: an HR perspective. Worldwide Hospitality and Tourism Themes. 4(2). pp.150 – 162.
• Bluementritt, T., 2006. Integrating strategic management and budgeting. Journal of Business Strategy.  27(6). pp.73 – 79.
• Bramwell, B. and Lane, B., 2000. Tourism Collaboration and Partnerships: Politics, Practice and Sustainability Clevedon. Channel View Publications
• Carney, M., 2005. Corporate governance and competitive advantage in familycontrolled firms. Entrepreneurship theory and practice. 29(3). pp. 249-265.
• Czinkota, M. R.  and et.al., 2009. International business. Dryden Press.
• Doh, J. P., 2005. Offshore outsourcing: implications for international business and strategic management theory and practice. Journal of Management Studies. 42(3). pp. 695-704.

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