Marketing Strategies for UNIQLO
Added on 2020-01-23
14 Pages4404 Words221 Views
Business DevelopmentEconomics
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Executive summaryBrazil is a developing country that is doing great especially in the retail industry. People inBrazil also have a unique sense of fashion especially because of the climate conditions they areexposed to. Being a costal country, the climatic conditions are hot and humid. They thus havelight dressing and prefers brightly coloured clothes. UNIQLO has selected this country forinvestment due to the developing status of the country. The mode of entry into the Brazilianmarket will be foreign direct investment. This means that the UNIQLO will acquire facilities andeven equipment needed to manufacture the fashion clothes in that country. They will alsoemploy the use of low cost cheap labour available in the country. Moreover, they have a readymarket of the youths in the buran areas who they choose as their target market by help of localtalent from employees they employ. This is because the local population has more knowledge onthe way things work in their country. They can thus provide the company with knowledge onhow to go about to ensure that they succeed. Brazilian youths are in need of fashionable productswhich are of high quality and the company can supply them through various adjustments whichis a benefit to the company. There are various objective the company has and include reachingsales of £1m in the first 12 months, attracting 2m visitors to the store in the first 12 months, andstore opening. Moreover, achieving 10% brand awareness and recognition and establishing andpromoting online shopping. Strategies to achieve these objectives are discussed and finalrecommendations made.
III. Country selectedBrazil is among one of the developing countries which have a huge economy. It is located in thecoastal region and as a result, the climate there is hot as well as humid. The Brazilian retailindustry is developing which makes it a great target for international businesses willing toventure in the retail market there. For instance, the Brazil retail industry total revenue in the year2013 averaged 41.6 billion US dollars. This was a seven percent growth from the year 2009 andit is projected that as the country grows and develops, so will its retail sector[ CITATION Lak13 \l1033 ]. However, due to the developing state of the country, their communication andtransportation sector is not well developed. The company will thus have issues to accessingdifferent areas as well as with their marketing strategy which will require to be modified to fitthe target country. Brazil has most of the people living in the major towns. Moreover, it has a high percentage of thepopulation as youths. The people of Brazil, regardless of the age, have the taste, preference, andeye for fashion. This is especially due to the climatic conditions of the place which gives roomfor them to be fashionable and dress simply but nice. Moreover, they have a high per capitaincome which means that their disposable income can cater for the various needs of fashionwear. The market size is thus huge and there is much potential for the company to perform betterif the right marketing strategies are implemented. The main competitors that the company faces are Zara and GAP Inc. these are well recognizedbrands not just in the Brazilian market but also in the global market. They have a lot of differentstores all over the world. For instance, Zara has more than 2000 store all over the world some ofwhich are in Brazil. GAP Inc., on the other hand, has more than 3300 stores all over the worldand some of them are located all over Brazil. Competition is thus quite high and UNIQLO
marketing team has to step up and do a lot of brand awareness, promotion and advertising so asto give the company an opportunity to compete with these two competitors. Furthermore, their brands are also well established in the Brazilian market and thus targetcustomers already feel comfortable with these brands. This makes it a bit more challenging forthe company as it will be going up against the most established brands in the region. Moreover,these competitor companies, Zara and GAP Inc. do not just target one segment of the population.Rather, they have products for every person and they segment their market and productsdepending on the age group. UNIQLO, on the other hand, just targets the youth which will makeit harder to deal with the competition as the competitors offer a one stop shopping place for thewhole family and people of all ages. IV. Entry Mode Selection The entry mode selected for this company is foreign direct investment. This is whereby thecompany transfer funds from the resident country to another country where they purchasephysical capital which includes factories, machines and other equipment they require to workand manufacture products for sale in the that domestic market. This is the market entry modewhich UNIQLO will implement for entry into the Brazilian market. There are various reasonswhy this is the best entry mode. First, it helps the company avoid tariff barriers as well as theother non-tariff barriers which the country imposes as a barrier to trade and protection of thedomestic market. Since the company will be producing in the country, they will not be subjectedto barriers to trade which occur while importing[ CITATION Jac14 \l 2057 ]. Moreover, the company will take advantage of the low cost cheap labour available in thecountry. Brazil is a developing country. It also has a huge population. As a result, there is a lot of
labour available as the unemployment rate is also high. The cost of this labour is also low asopposed to other countries where labour is expensive. Furthermore, the company can use localknowledge from the employees they employ to learn how best to venture into the domesticmarket in Brazil. Foreign direct investment entails company establishing a firm in the localnation. They thus have to employ local employees as importing labour is expensive and thecountry regulations requires foreign companies to employ local employees. By so doing, they getan opportunity to exploit the knowledge these local employees have in regard to the domesticmarket and the target consumers. This provides them with an opportunity to learn what theyrequire to do so as to compete fairly and thus offers them a competitive advantage over exportersof commodities to this nation as well as other competitors[ CITATION Tej16 \l 2057 ].Foreign direct investments also allows the company, in this case UNIQLO, to have a high degreeof control over their investment. This is not the case with other entry modes such as mergers andacquisitions or even joint ventures. Through foreign direct investment, the company retails soleownership of the company. This allows the company to have all the control over the company’soperations. It also means that the company’s management makes the decisions on their ownwithout having to share this power with another group. By so doing, they can determine what isbest for the company and work towards the achievement of the set goals without anyinterference. Moreover, it allow them an opportunity to be more flexible and easily change thestrategies that are not working as required without taking too much time. In the cases of jointventure and other entry modes, the company management would require to call for meetings soas to discuss changes that are required to be done which can sometimes take time due tounavailability of all required personnel. However, in this case, the company can make immediate
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