Marketing Plan for Ajax Alarms in Mexico

This paper provides a business plan to Ajax Alarms by explaining the external environment of Mexico and delineating the marketing strategy to Ajax what they are going to take in Mexico. The paper covers legal forces, cultural influences, economic factors, standardization versus customization, product policy, pricing, promotion, and distribution system. The recommendations for Ajax management are also provided.

Running head: MKT 310
MKT 310
Student’s name:
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Table of Contents
1. Introduction..................................................................................................................................2
2. External business environment....................................................................................................2
2.1 Legal forces...........................................................................................................................2
2.2 Cultural influences.................................................................................................................3
2.3 Economic factors...................................................................................................................3
3. Standardization versus customization..........................................................................................4
4. Marketing strategy.......................................................................................................................4
4.1 Product policy........................................................................................................................4
4.2 Pricing....................................................................................................................................5
4.3 Promotion..............................................................................................................................5
4.4 Distribution system................................................................................................................6
5. Recommendations........................................................................................................................6
6. Conclusion...................................................................................................................................7
Reference List..................................................................................................................................8

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1. Introduction
Ajax Alarms is a medium sized the US-based firm and it subcontracts the production of
its clocks to a Korean firm. The Korean firm produces Ajax Design based production and sends
the products to the warehouse in Kansas (Ajax.systems, 2018). Ajax Alarms also provides
wireless solutions in order to meet the needs of modern times. Ajax Alarms has few growth
opportunities in Canada and in the US; therefore, the managers of Ajax are thinking to expand
the business in Mexico. The managers of Ajax have decided to start selling the products in
Mexico. The purpose of this paper to provide a business plan to Ajax by explaining the external
environment of Mexico and delineating the marketing strategy to Ajax what they are going to
take in Mexico.
2. External business environment
2.1 Legal forces
Mexico legal system is different in many ways as the US follows the common laws and
Mexico follows the civil law tradition. Therefore, the business organizations may face penalty
which is ostensibly pre-determined. For the foreign companies, civil law codes are difficult to
understand and Ajax Alarms needs to take help from Mexico based in-country attorney. NAFTA
(North America Free Trade Agreement) does not allow the US attorney to work in Mexico
(Otero, 2018). In Mexico, foreign companies are responsible for creating any damage by
accidents. In Mexico, Ajax Alarms has to gain recognition from the federal and local
governments and the company has to take approval from the Ministry of Foreign Relations and
National Commissions of Foreign Investment.

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2.2 Cultural influences
In Mexico, commercial deals extend to beyond the contract and oral deals are also kept as
honored. Respect and trust are an intrinsic part of the business transaction and in Mexico; the
business persons use to call the people to their homes. Mexicans welcome the people at home
and they are warm. Mexicans feel comfortable in the distance between two people more than the
US living people. In America, the business meetings have to start at a proper time and Mexicans
have a less strict perception of the time. In Mexico, the people believe in hierarchical society and
in Mexico; the companies believe in inherent inequalities, subordinates listen what other said and
centralization is popular. As stated by Donelson & Esparza (2016), Mexico believes in
collectivist society and it is manifest of the long-term commitment to the extended family.
2.3 Economic factors
The Mexican economy is 15th largest and the GDP of Mexico touched the figure of
$1.149 trillion in the year 2017. GDP growth of the Mexican economy was 2.0% in the year
2017 and GDP per capita of Mexico is $9,304 (Smith, 2018). The inflation rate in Mexico is
2.5% at present and the unemployment rate in Mexico is 3.44% which is degrading with time
(McWilliams, Meier & Garcia, 2016). The World Bank published a report where Mexico ranks
49th in Ease-of-doing-business. From the utility products; Mexican economy got the GDP of
$276360 in the year 2017. In Mexico, the average household net-adjusted disposable income per
capita is $13,891 and it is much lower than the OECD average of $30,500 (Worldatlas.com,
2018). Therefore, the people in Mexico do not have the large amount to spend on security and
household utilities.

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3. Standardization versus customization
As stated by Qizhang & Goh (2015), the organizations expand their businesses into the
international market and the organizations adopt the international marketing strategies.
Standardization of goods means the mass production, uniform quality of the products, assembly
line and production focus, on the other side, customized goods are associated with varied
according to the needs of the customers and these are produced with market focus. Ajax Alarms
will take the standardizations strategy which means Ajax Alarms will the same level of quality
products in Mexico market as this strategy will enhance the brand loyalty of the customers. Ajax
Alarms will also use the strategy of standardization in case of pricing; therefore, the organisation
is going to sell the products in Mexico at almost the same price. Standardization in the global
market will increase consistency with the customers and it will also increase the lower costs of
the organisation.
4. Marketing strategy
4.1 Product policy
Ajax Alarms can take the strategy of setting the uniform characteristics of the products
which they generally sell in the US and Canada. Standardization of the goods provided in
different markets can be useful for Ajax Alarms as it permits the organisation to have uniform
suppliers. Ajax Alarms can take the strategy of product line-stretching as an expansion strategy
where the new products are launched in the same product line by just adding some different
features in the same product. Ajax Alarms stretches upmarket for higher margin or higher growth
through product-line stretching strategy. Ajax Alarms will proceed with an improved product

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line creating new products like professional security systems. Ajax Alarms continues to grow in
technological design and engineering innovation.
4.2 Pricing
Ajax Alarms can take the strategy of premium pricing which is involved in setting the
price of the product higher than the existing products in the market. Premium pricing strategy
makes an assumption in the market that the products have higher values (Nagle & Muller, 2017).
Premium pricing strategy is also called skim pricing as it is an attempt to make the price top of
the market. The customers assume that the products will provide the best quality in the market
and it will automatically gain the brand image to assure the products will have better offerings
than competitors. Premium pricing strategy will help Ajax to have the better profit margin from
the sold products and Ajax will have the increased visibility. Ajax Company will automatically
set itself as one of the quality alarms and security system sellers in Mexico.
4.3 Promotion
Ajax needs to promote its entering Mexico through social media advertising as it is the
easiest way to promote the business among the customers. Ajax has its official pages on
Facebook and Twitter. On Facebook and Twitter, Ajax needs to share short videos and images
which must contain the new products and services. Ajax needs to advertise on Facebook and
Twitter targeting only Mexico based customers.
Ajax can use print media strategy where they can advertise using the wide-circulated
newspapers in Mexico and in the magazines. The language of the advertisement in the
newspapers like Reforma, El Norte and Milenio and La Jornada will be in English.

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Ajax can use the strategy of discount pricing as it will help to sell more products at very fast
paced. On the advertisements in newspapers, Ajax can take the strategy of sharing discounts and
customer success stories.
4.4 Distribution system
In Mexico, Ajax will sell the products in the open market and to the retail stores. Ajax
will have small offices in three regions of Mexico. From these three offices; Ajax will control the
distributions. From the US, Ajax will export the products to Mexico. In Mexico, Ajax Alarms
will use a chain of intermediaries through which the Ajax products move to be made available
for purchase by the consumers. Indirect channel distribution involves in product passing through
additional steps. Through export, the products will be reached to the wholesalers and the
wholesalers will deliver the products to the retailers. The retailers would sell the products to
consumers. Indirect distribution provides a smaller profit margin and the retailers carry the
multiple products (Ding, 2017).
5. Recommendations
Ajax management must have a good tax consultant in Mexico as paying taxes in Mexico
is not an easy process. Tax-paying in Mexico takes almost more than 240 hours of business time
per year. Tax legislation in Mexico is critical and complexity level of tax-paying can be reduced
through taking help of tax consultant.
In Mexico, registering the business and policy is a difficult and arduous task. In OECD
countries; it is taken almost 22 days on average to register the property and business. Ajax must
take help of the lawyer to deal with obtaining the certificate. Lawyer and attorney can help Ajax
to do the business following the regulation.

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Indirect distribution process will be followed by Ajax; however, to reach all the selected
markets in Mexico; Ajax management must hire the right set of people. Ajax will take the
strategy of Exporting to enter Mexico and getting the inventory under control can help the
management to distribute the products.
6. Conclusion
It has been noted that doing business in Mexico is that business itself is a lot less
straightforward. Whereas Ajax management trained in the American corporate culture might
often want to delve straight to the point when making business arrangements, meeting potential
clients, or presenting new ideas, Mexican businessmen will almost never begin to talk business
unless they have gotten at least a feel for the person they are sitting down with. In fact, many
Mexican businessmen consider blunt brevity to be a grave issue when meeting with other
potential clients or investors. Ajax Alarms can take the product-line stretching and premium
pricing in order to enter Mexico.
[Calculations of Financial assumptions are shown in excel]

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Reference List
Ajax Alarms. (2018). Retrieved from: https://ajax.systems/about/ [8th Oct 2018]
Ding, X. (2017). Modeling and Quantitative Analysis of the Impact of Direct vs. Indirect
Distribution in the Performance of a Supply Network. Management & Engineering, (27),
45.
Donelson, A. J., & Esparza, A. X. (2016). The Colonias Reader: Economy, Housing and Public
Health in US-Mexico Border Colonias. University of Arizona Press.
McWilliams, C., Meier, M. S., & García, A. M. (2016). North from Mexico: The Spanish-
Speaking People of the United States: The Spanish-Speaking People of the United States.
ABC-CLIO.
Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing more
profitably. Abingdon: Routledge.
Otero, G. (2018). Neoliberal reform and politics in Mexico: An overview. In Neoliberalism
Revisited (pp. 1-25). Abingdon: Routledge.
Qizhang, L., & Goh, M. (2015). Standardization and Customization. In TA-Q-BIN (pp. 149-165).
Springer, Singapore.
Smith, P. H. (2015). Labyrinths of power: political recruitment in twentieth-century Mexico.
Princeton University Press.
World Atlas. (2018). Retrieved from: https://www.worldatlas.com/articles/the-economy-of-
mexico.html [8th Oct 2018]