Market Entry Strategy and Marketing Mix for NEXT in Indian and Chinese Markets

Here is a short summary of the assignment content: The report provides an analysis of the international marketing strategy for Next, a UK-based fashion retailer. It highlights the growth potential in India and China, with the Indian retail market expected to double by 2020. The report also discusses the importance of understanding micro and macro environmental factors, including demographic trends, income levels, and cultural preferences. It recommends that Next adopt joint ventures or direct exporting as a market entry strategy, and suggests modifications to its marketing mix to suit local markets.

Internatio
nal
Marketing
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TABLE OF CONTENTS
Introduction.................................................................................................4
Analysis of macro and micro factors on the retail market........................4
Evaluation of the retail market potential with including a shortlist of
markets....................................................................................................7
Recommendation of two markets suitable for international expansion. . .8
Suggestion of market entry strategy for Next..........................................9
Recommendation of changes needs to be considered by Next in its
marketing mix..........................................................................................9
Conclusion.................................................................................................11
References................................................................................................12
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LIST OF FIGURES
Figure 1: PESTLE Analysis............................................................................5
Figure 2: Porter Five Forces.........................................................................6
Figure 3: Marketing Mix.............................................................................10
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INTRODUCTION
International marketing is defined as the principle of marketing
which is focused on developing business relationship in between two or
more countries in an effectual manner. It includes the procedure of
expanding business in the international market for fulfilling goals and
objectives of the organization (Cateora, 2008). In today’s competitive
world, Global expansion of business is necessary for commercial entity to
enhance their profitability and gaining competitive advantage.
Due to this aspect, present report is focused on describing the
importance of international marketing in the retail sector of United
Kingdom. Along with this, it defines the impact of micro and macro factors
of environment on the retail industry. Further, this report includes
recommendation of market entry strategy for international expansion and
availability new markets in which retail companies can enter. For better
understanding of this report, Next Plc has been selected.
Analysis of macro and micro factors on the retail market
Next is one of the leading British Multinational retail companies in
United Kingdom which deals in clothing, footwear and home products
(Czinkota and Ronkainen, 2012). Main aim of this organization is to
provide high quality of goods to their customers through physical stores
as well as appropriate online services for fulfilling their business goals and
objectives. As per the given scenario, management of company is
planning to enter into new markets to expand their business in an
international level. Before entering into the new market, it is essential for
the business entity to identify macro and micro factorsavailable in its
environment (Albaum, Albaum and Duerr, 2008). Clear understanding of
these factors assists the organization to make appropriate strategy to
gain competitive advantage.
Macro factors can be defined as the external and uncontrollable
factors of environment which have huge impact on development of
business. It includes the factors such as political, legal, social,
technological, economic and environmental (Papadopoulos and Heslop,
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2014). For identifying those factors, PESTLE analysis can be conducted by
the management of company.
PESTLE analysis
Figure 1: PESTLE Analysis
Political factor
Tax rate and interest decided by the government of UK have huge
impact on the expanses and revenue of the company (Jones and et. al.,
2005). Further, it is essential for Next to follow rules and regulations made
by the European Union for performing its business practices in a legal
manner.
Economic factor
UK’s current economic condition is unstable which creates short
term volatility in the sales of the company (Papasolomou and Vrontis,
2006). Fluctuation in sales may affect development of business. Moreover,
unemployment policy, monitory policy and other economic decisions of
government also affect the strategies whixh are created by the
management of company.
Social factor
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Changes regarding the fashion, lifestyle, demographics, perception
and income distribution has huge impact on the buying behaviour of
customers (Doherty, 2009).
Technological factor
In case of Next, online presence is the best opportunity for company
to boost it sales and enhance its number of customers (Michaelidou and
Dibb, 2006). However, new technology adopted by the major competitor
may have impact on the sales of company by reducing its number of
customers.
Legal factor
In accordance to legal factor, it is required for Next to consider
employment and labour policies of government at the time of making
their HR policies. Due to this aspect, they needs to provide better working
condition, salary and incentive to its human resources (Giffels, 2010).
Along with this, it is needed for business entity to follow regulations
regarding the safety, security and competition.
Environmental factor
Environment policies and regulations made by government
influence management to ensure the safety of environment at the time of
performing its business practices. Furthermore, the availability of natural
disaster, terrorism attacks and climate changes also have negative impact
on business development (Omololu, 2013).
In case of micro factor, Porter five forces analysis can be considered
by Next which helps the management to enhance their knowledge
regarding bargaining powers of customers, competitors and suppliers
(Papasolomou and Vrontis, 2006). Moreover, this method is focused on
gaining information about availability of substitutes and new entrants in
the market.
Porter five forces analysis
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Figure 2: Porter Five Forces
Competitive rivalry
There are a huge number of companies in UK in the retail market
which are focused on providing products that are related to clothing,
footwear and household goods. Due to this aspect, it can be said that
competitive rivalry is high for Next (Jones and et. al., 2005).
Bargaining power of suppliers
In retail market, there are huge numbers of suppliers which are
ready to link with the brand like Next (Czinkota and Ronkainen, 2012).
Therefore, the bargaining power of suppliers is low for this company.
Bargaining power of buyer
Due to availability of more businesses in retail sector, customers
can easily attract and switch towards other brands. Therefore, bargaining
power of buyers is high in the case of Next (Albaum, Albaum and Duerr,
2008).
Threat of new entrant
Threat of new entrants is high for the company because big label
businesses can enter easily in the market of clothing and home products.
Threat of substitutes
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CompetitiveRivalry

Threat of substitutes is very low in the case of Next because it is
focused on offering products of all brands (Jones and et. al., 2005).
Evaluation of the retail market potential with including a shortlist of
markets
In United Kingdom, development of retail market has been
increasing continuously which is influencing commercial entities to
maintain quality of its products and services for satisfying customers in an
effective manner. In accordance with the study of (Papasolomou and
Vrontis, 2006), retail sector is growing continuously in the international
market. Due to this, quality of products and services is also increasing as
well as the demand and supply. Better enhancement of business in global
market has huge impact on the profitability of company and on its
development.
In modern era, there is a huge competition in the retail market of
United Kingdom which influences the organizations to adopt appropriate
strategies to attract more number of customers and is getting competitive
advantage (Omololu, 2013). Along with this, the availability effective
marketing decision is also necessary for business entity to enhance its
knowledge regarding customers, suppliers, competitors and other
environmental factors.
In United Kingdom, huge support is provided by the government of
country to retail companies for promotion of business and creating
healthy competition at national and international level (Cateora, 2008).
Due to this, an action plan was announced by the prime minister of UK in
the year 2012. This plan is focused on supporting major brands that is
expanding business in the global market.
In accordance to given scenario of Next, management of company is
planning to expand their businesses in global market in order to boost
their sales and profitability. As per the recent scenario, online presence
and cyber retailing are the best solution for business entity to enter into
new market (Czinkota and Ronkainen, 2012). With the help of these
technologies, organization can enter successfully into the new market as
well as can enhance their position in market.
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Due to availability of more competition, it is necessary for
management of company to focus on the international expansion of
business. For enhancing business in international market, it is needed for
Next to shortlist some countries where they can operate successfully
without any barriers (Jones and et. al., 2005). In this manner, countries
such as China, Paris, Singapore and India have wide scope for retailing.
Recommendation of two markets suitable for international expansion
In case of retailing, Asian countries are the best platform for Next to
operate its business in the international market. In addition to this,
management of company can expand their business in the cities of India
and China where retail market has been increasing very rapidly. In case of
India, five stores of Next are already running in a successful manner. In
spite of this, it is required for the company to operate physical and online
stores in other cities.
Enhancing business in India is the major opportunity for Next
because availability of branded products attracts Indian people. Along
with this, Indian youth are always keen to adopt new brands regarding
clothes, footwear and other personal care products. Due to involvement of
more companies, retail market in India has been emerged as one of the
leading and growing sectors. As per the report of Retailer Association of
India, it can be said that the growth of retail industry will be going to be
doubled by the year 2020 (Retail industry in India, 2015). Therefore, it will
be very profitable solution for Next to operate its stores in more cities of
India.
Furthermore, the growth rate of online trading is very high in case of
India due to increment in number of modern customers. Along with this,
the scope of internet and social media marketing is also very huge in this
country. Due to this aspect, management of company can operate their
online stores in an effective and successful manner in cities of India.
When talk about the china, it is a new platform for company to run
its business. But it will prove to be best opportunity for Next to enhance
its profitability and revenue as well as its development. In accordance to
the study of Omololu, (2013), it can be said that china is one of the major
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leaders in the retail sector in all over the world. Along with this, the
growth rate of its retail sales is increasing continually from the year 2009
(Development of retail sector in China, 2015). Better enhancement of
retail sales shows that operating business in cities of China will prove to
be advantageous for the management of company.
In China, income of population has been maximizing rapidly.
Therefore, they are focusing on spending money for household items,
clothes, footwear and other products. Enhancement in income has huge
impact on the demand of fashionable and branded products. Availability of
demand and supply of those products can become the major reason for
the success of Next in China.
Suggestion of market entry strategy for Next
In order to grow business in India and China, the market entry
strategies such as joint venture and direct exporting should be adopted by
the management of company. With the help of these strategies,
organization can enter into new market in an appropriate and in a
successful manner. In joint venture, two or more companies create a
temporary partnership for making separate business entity by sharing
their resources such as men, money, materials and machines. Joint
venture ends with the completion of the business objectives for which it
has been created. In this partnership separate name is given to third
company which is created by both parties.
In joint venture, partners contribute their financial resources for
development of business and shares profit and loss arising from that. In
modern era, it is the most effective method for establishing business in
new markets which divides the costs and risks in between the partners.
With the help of this method management of Next can perform its
business practices in an effective manner by making partnership with the
retail companies of India and China.
Other than this, direct exporting is also an appropriate market entry
strategy which can be considered by business entity. Direct exporting is a
well-established and very traditional method of operating business in the
foreign markets. It includes the procedure of marketing of goods in one
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country produced by another country. In accordance to this method, the
Next can sell their products in India and China with the help of agents and
distributors. In order to conduct direct exporting, there must be effective
online and delivery services in between customers and company. Lack of
these services has huge impact on satisfaction customers. Along with this,
effective communication is the most essential in between the both buyer
and business when direct exporting is conducted.
Recommendation of changes needs to be considered by Next in its
marketing mix
Marketing mix is an appropriate business tool of promotion and
advertisement of products and services which is mostly used by the
marketers. The tool needs to be considered by management of Next at
time of offering their products in the new market. Availability of marketing
mix assists business entity to perform its practices in an effective manner
regarding brand awareness and customer satisfaction. Marketing mix
includes the following elements such as price, product, promotion, place,
physical evidence, people and process.
Figure 3: Marketing Mix
Price
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In order to expand business in an effectual manner, it is required for
Next to set reasonable price of its products at the time of introducing its
product. Availability of reasonable price is very beneficial for the company
to enhance its customer value along with attracting more number of
buyers.
Product
In today’s competitive world, it is the most essential for business
entity to maintain the quality of goods as per the requirement of
customers. Due to this aspect, organization needs to identify needs and
expectations of buyers by adopting methods of survey and compliant
procedure.
Promotion
There must be effective communication in between the customers
and management of company to provide proper information to them.
Therefore, it is required for the business entity to adopt appropriate
method for performing the business activities regarding the
advertisement, sales promotion and personal selling. In case of Next,
celebrity endorsement is the best option for marketing of products.
Place
The location of store must be reach of target customers from where
they can purchase products very easily. In order to attract more
customers, physical store should be located in the centre of city.
Furthermore, it is necessary to involve activity of E-commerce in the
business transaction for providing more options to buyers.
People
Without the availability human resources, business cannot achieve
success. Therefore, there must have qualified and trained staff in
company for fulfilling its goals and objectives in an effective manner. In
order to recruit better staff, campus placement is the best option that can
be considered by Next. After recruiting, it is needed for organization to
provide training to them to enhance their skills and abilities.
Physical evidence
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Physical evidence can be defined as the factors which compliments
to the offered products or services. Due to this aspect, there must have
appropriate lighting in the store of company to attract customers in more
effective manner.
Process
In marketing mix process denotes the effectiveness of systems,
technologies and tools used by the management of company. In the case
of Next, online trading through internet and mobile application is very
effective solution for enhancing efficiency of its processes.
CONCLUSION
As per the above description, it can be concluded that international
marketing is one of the crucial aspects of marketing management which
helps the organization to operate its business in global market in an
effective manner. Along with this, it is the best opportunity for commercial
entity to enhance its profitability and revenue. In order to expand
business in a proper way, it is required for the management to identify the
micro and macro factors of environment. Clear understanding of these
factors assists the organization to gain competitive advantage by making
appropriate strategy. However, business entity needs to select better
market enter strategy at the time of developing business in the new
market.
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REFERENCES
Books and Journals
Albaum, G. S., Albaum, G. and Duerr, E., 2008. International marketing
and export management. Pearson Education.
Cateora, P. R., 2008. International Marketing 13E (Sie). Tata McGraw-Hill
Education.
Czinkota, M.andRonkainen, I., 2012. International marketing. Cengage
Learning.
Doherty, A. M., 2009. Market and partner selection processes in
international retail franchising. Journal of Business
Research. 62(5).pp. 528-534.
Giffels, M.,2010. Analysis of NEXT plc and its environment.
Jones, P. and et. al., 2005. The benefits, challenges and impacts of radio
frequency identification technology (RFID) for retailers in the
UK. Marketing Intelligence & Planning. 23(4).pp. 395-402.
Michaelidou, N. and Dibb, S., 2006. Product involvement: an application in
clothing. Journal of Consumer Behaviour, 5(5), 442-453.
Omololu, E., 2013. The Strategic Expansion of Hennes&Mauritz AB: A
Potential Acquisition of Next or Ted Baker PLC. Available at SSRN
2202976.
Papadopoulos, N. and Heslop, L. A., 2014. Product-country images: Impact
and role in international marketing. Routledge.
Papasolomou, I. and Vrontis, D., 2006. Building corporate branding
through internal marketing: the case of the UK retail bank
industry. Journal of product & brand management.15(1).pp. 37-47.
Online
Development of retail sector in China. 2015. [Online]. Available through:
<http://www.chinabusinessreview.com/understanding-chinas-retail-
market/>. [Accessed on 19th October 2015].
Retail industry in India. 2015. [Online]. Available through:
<http://www.ibef.org/industry/retail-india.aspx retail market in
India>. [Accessed on 19th October 2015].
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