Marketing strategy - Harvey Norman Assignment

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1/12/2019

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Contents
Introduction......................................................................................................................................2
About company............................................................................................................................2
Reason for the Selected country (India)..........................................................................................4
Market Segmentation.......................................................................................................................5
Target market...................................................................................................................................6
Recommendations............................................................................................................................7
Market entry.................................................................................................................................7
Franchising..............................................................................................................................7
Licensing..................................................................................................................................8
Marketing strategy.......................................................................................................................9
Positioning strategy...............................................................................................................10
Marketing mix...........................................................................................................................10
Product strategy.....................................................................................................................11
Price strategy.........................................................................................................................12
Place/ distribution strategy....................................................................................................13
Promotion strategy.................................................................................................................13
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

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Introduction
The aim of the report is to outline the marketing plan for a foreign brand that is willing to expand
their business operations and want to enter into the international market. The brand that has been
selected for the marketing plan is Harvey Norman. This has been found that the company has
vast opportunities in the Asian areas of the world. The country that has been selected for
expanding the business operations in India. In India, the company will make the presence by
opening the store which will help the company as they can expand their business in many other
areas. The report includes the discussion related to the target market, entry mode of the company
with the marketing strategy recommendations that will help them in performing effectively in the
Indian market. The data related to the company is captured with the help of the secondary
research. Moreover, the recommendations related to the marketing strategy that consist product,
price, place and promotion strategy that the company should follow in the market of India.
About company
Harvey Norman is one of the multi-national companies who perform their business operations in
Australia mainly with other countries where the company have their operations. The major
products that are offered by the company in the retail include furniture, bedding, computers, and
communication and consumer electrical products. The major areas were the company is
performing their operations include South Africa, Northern Territory, Tasmania, Australia, New
Zealand, Europe and South-East Asia and many others (Harvey Norman, 2018). The first store of
the company got open in the year 1962 by Gerry Harvey and Ian Norman. This has been found
that this is high time for the company to expand their business operations in other foreign
countries.

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Reason for the Selected country (India)
The Asian country which is selected for the expansion of the Harvey Norman company is India
and this country is selected because it is one of the developing countries which leads to the
opportunity for the company for the high profit and growth. Further, the market of India is
considered as the second most populous country. According to the United Nation estimation, the
current population of India is approx. 1,361,815,472 (Statista, 2018). This makes India equal to
17.74% of the total world population. The below-given image evident that in the near future the
population of the company is expected to rise which will lead to the opportunity for the rise in
the sales and revenue of the company.
(Source: Statista, 2018)
Further, India is currently has captured the second-largest population in the world and this is
expected after forty years it will capture top-ranking in China.

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PESTLE analysis for country
The pestle analysis of the Indian market helps in understanding the external factors that creates
the impact on the working of Harvey Norman. The below given is the discussion of same: -
Factors Description
Political factors Political factors majorly include change in rules and regulations
brought by the customers in the market. The Indian government
change in every 5 years which might lead to change in rules and
regulations. Thus, Harvey Norman can find moderate threat in terms
of political factor.
Economic factors The economic factors which majorly affect the working of company
include GDP, purchasing power of customer and others. According
to IMF 2017, India’s GDP is worth of $2.4 trillion making it the 7th
largest economy (Rahman, 2018). This has been found that the rise
in GDP will bring rise in the purchasing power of customer that
shows company has opportunity to earn revenue.
Social factors The social factors include change in customer behaviour in the
market (Baker, 2014). Indian market customers are changing with
the change in the trends which shows that the company should
consider the behaviour of customers while offering products. The
exclusive products of Harvey Norman will remain in demand in
Indian market which shows an opportunity for company.
Technological factors The technological up-gradation is bringing the change in the
company operations. Harvey Norman finds the new technology in

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the Indian which can be adopted by them for the effective operations
as the country is advance in terms of technology.
Legal factors Legal factors include the changes in rules and regulations that are
supposed to be followed by company. Harvey Norman company
need to ensure while entering into the market that they abide with all
legal obligations.
Environmental factors Environmental factors can affect the working of company because it
is essential to maintain the environment. The environment includes
safety and protection of the atmosphere and environment. Thus,
Harvey Norman company follow all regulations related to the
environment safety and protection.
SWOT analysis
Strengths
 Harvey Norman biggest strength is its products that they offer in the market with
effective quality.
 The company strength is that they are expanding their business with effective speed in the
market.
 The employees of the company are the biggest strength who contributes in making the
business strategy effective (Harvey Norman, 2018).

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Weakness
 The company face the competition from global players which shows that market share of
the company is limited.
Opportunities
 Harvey Norman Company has the opportunity to offer the products at low cost in market
that helps them to win the mind of the customers.
 The company has opportunity to expand their lifestyle by leveraging the brand name
(Harvey Norman, 2018).
Threats
 The frequent change in the customer behaviour towards the purchase of product and
service is one of the biggest threats.
 Consumers are conscious for quality and brand name is one of the threats that is faced by
company when they expand their business operations in other countries.
Market segmentation
The market segmentation is considered as the process of dividing the market into the potential
customers or group of people based on the different characteristics. The target market of the
company is depended on the segmentation done by the company (Armstrong, Adam, Denize and
Kotler, 2014). Thus, it is essential for the company to segment the market which will further help
in deciding the market for targeting the customer's group.
Demographic Segmentation: - Demographic market segmentation divides the customers on the
bases of the different attributes which include income, age, occupations and many others (Baker,

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2014). Harvey Norman segments the customers with the high and middle-income group with the
different age group people starting at the age of 18-35 years, 35-55 years and 55+.
Psychographic Segmentation: - Psychographic segmentation shows the division of group on
the bases of attitudes, aspirations, values, lifestyles of consumers and other different criteria
(Chernev, 2018). Harvey Norman found that there are different customers present in the market
with different values and lifestyle. Moreover, the products like furniture, bedding, computers and
communication are preferred by the customers in India as this will add comfort to their lives.
Behavioural Segmentation: - In this market of India, the company also consider the behaviour
segment in which the customers are segmented on the basis of their choices and preferences
towards the product and services offered by them (David, 2011). The behaviour for the brand
and their products can be evaluated with the help of the usage rate, benefits needed, loyalty and
others.
Target market
A target market is a particular group of customers at which the product or service is aimed by the
company. The target market is considered as the subset of the total market for a particular
product or service (Frynas and Mellahi, 2015). Harvey Norman Company needs to decide their
target market present in the India market from the segmentation.
The company generally attempts to expand their business operations through the market
segmentation and satisfy the specific customer needs and wants in a range of the different target
markets. The company makes use of the multi-targeting strategy as this strategy specifies that the
company targets multiple segments. The primary target market of the customers includes the

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demographic in which the customers of different age group with middle-income slab are
preferred on prior basis. The major age group which is targeted on the primary basis is 18-35
years. Further, customers who want to consume products like furniture, computers, and
communications are targeted. Along with the customers who believe in lifestyles and values are
also targeted by the company.
Moreover, Harvey Norman offers products which are majorly used by the customer and they
understand the benefit of the same. In addition, the quality products of the company can also
make customers loyal towards the brand. In the secondary research, this has been found that the
company majorly segment on the basis of the cost-conscious group because while purchasing the
products most of the Indian consider the price of the products that they are purchasing. This can
also be evident with the switching cost of the Indian as they switch frequently. For instance; If
there are two companies who are dealing in similar brand with different pricing strategy then the
customers will prefer the brand with low pricing strategy. According to this target market, it is
must for the company to make the relevant strategies that can help them in performing their
operations effectively.
Recommendations
This section includes the recommendations related to market entry, marketing strategy and
marketing mix of the Harvey Norman in the Indian market. All these elements are essential to be
considered by the company for making the successful entry in the Indian market.
Market entry
Market entry is one of the planned strategies for the distribution and delivery methods of the
goods and services to the new target market. The market entry strategy includes the different

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options that can be used by the company for making entry. These strategies include direct
exporting, Licensing, partnering, Joint ventures, franchising and many others. Out of these
strategies, this has been found that the company generally select two strategies which include
licensing and franchising (Lovelock and Patterson, 2015). In licensing, Harvey Norman can take
the license from the government to operate their business in the Indian market. Further, in the
franchising, the company can give permission to sell their products and services in terms of the
profit sharing. These both strategies are generally applied by the company. Thus, it is
recommended to the company to adopt licensing strategy in the Indian market.
Licensing
Licensing is one of the contractual arrangements where the company transfer the right to
distribute or manufacture a product or service in the foreign country. Harvey Norman needs to
pay a fee or percentage of sales in the exchange for the rights in the Indian market.
Advantages
 The advantage of licensing to the company is to get the easy and quick entry into the
foreign markets and this allows the company to jump border and tariff barriers.
 Licensing can offer the large returns on the investment which can be realised fairly
quickly (Laufs and Schwens, 2014). Moreover, this reduces the risk of the company in
terms of the financial and legal perspectives which increase the opportunities of the
company.
Disadvantages
 In the licensing there will be a low level of control and licensee will become a
competitor.

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 The poor quality management can affect the brand’s reputation in other license territories
which is one of the biggest disadvantages.
Considering the analysis, it is suggested to the company to select the licensing strategy because
this helps the company to open their own store in the market and there will be less risk to the
company. Further, the returns of the company will increase and also enhance the other future
opportunities for the company because they can expand their business operations in other
countries. The licensing strategy has been suggested to the company because of there are many
other companies who have followed the same strategy to achieve the success in the market, For
instance; Harley Davidson automobile company, John Deere, Coca-Cola and many others. The
company Coca-Cola is licensed company with the branded products in the market of India.
All these brands are able to manage their operations effectively in the market with this the
licensing strategy has supported their expansion for forming effective marketing strategy. This
entry mode creates the impact on the sustaining marketing strategy of the place that shows the
way to make the products available to the customers (Kumar, Rahman, Kazmi and Goyal, 2012).
Marketing strategy
The marketing strategy is considered as a business overall game plan for reaching people and
turning them into the customers of the product or service that the business provides. The
marketing strategy of the company includes the value proposition and competitive advantage of
the company.
The value proposition of Harvey Norman: - The value that is offered by the company to
ensure that to provide the right product at the right place. Along with this, the company ensure
that they are offering the value of the high-quality product at the price which can be affordable

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for the customers in the Indian market. It is suggested to the company to understand the culture
and preference of the customers which helps them while offering the services to customers.
Positioning strategy
One of the marketing strategies that are recommended to the company is the positioning strategy
in the Indian market (Hitt, Li and Xu, 2016). The country includes different people with the
different preference so it is must for the company to make a position for the brand in the mind of
the customers. It is suggested to the company to make the place in the Indian market where
numerous competitors are present. The company should make the position with the minimum
price with the high quality. Further, it is essential for the company to focus on branding strategy
which is a long-term plan for the development of a successful brand in order to accomplish the
specific goals.
Marketing mix
The marketing mix is defined as the set of marketing tools that the form make use to pursue its
marketing objectives towards the target market. The marketing mix includes the broad level of
marketing decisions on the basis of price, place, promotion and product strategies (Hollender,
Zapkau and Schwens, 2017). The marketing strategy recommendations for the Harvey Norman
Company are based on the analysis of the market that helps the company to achieve the success.
The marketing strategies that the company should follow in the market of Indian are discussed
below: -

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(Source: Hollender, Zapkau and Schwens, 2017)
Product strategy
The product is an item that is built or produced to meet the needs of the customers. The major
products which are offered by the company include retail of furniture, bedding, computers, and
communication and consumer electrical products. These products are considered as the core
products of the company which they should offer in the market of India. Further, the company
can bring some new bring some new products in the Indian market after considering their needs
of customers in the market (Hollensen, 2015). Moreover, the company should deliberately
showcase the products in their stores and should make use of the power on the suppliers so that
they can grant the exclusive items in the Indian market. This has been found that in the Indian
market, the exclusive products are rarely available which will lead to the opportunity for getting
successful. It is suggested to the company to ensure that they are able to offer effective after sales
services which are very valuable for the customers present in the Indian market.

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(Source: Išoraitė, 2016)
Core products: - The core product of the company includes furniture, bedding, computers, and
communication and consumer electrical products.
Actual products: - The actual products are the additional features that are offered to customers
in support to the core products. These additional features include the exclusive products of the
company which they should offer in the Indian market.
Augmented products: - The augmented products are the additional features that are offered to
customers in support to the supplementary products. In this, the company should offer the
effective before sales and after-sales services in the market.
Price strategy
Price of the product is the amount that the customers pay to avail the product in the market. This
has been found that the company make use of the price skimming strategy in which they initially
charge the high amount and then reduce the price of the products. In the market of India, it is
suggested to the company to make use of the competitive pricing strategy because the people in

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India are cost sensitive (Kotler, 2015). This strategy is formed by keeping the focus on the target
market that is cost conscious. Thus, they should make use competitive pricing strategy in which
they will compare the prices of products that are offered by the competitors and then decide the
prices of their products. It is suggested to the company to keep this strategy as this is the way
through which they can become successful by grabbing the attention of maximum customers.
Further, in the near future after setting the successful business in the Indian market company can
implement the price skimming strategy which will help them to attain high profit from the
market.
Place/ distribution strategy
Placement or distribution is one of the essential parts of the marketing mix strategy and this
contributes to the positioning of the company (Kumar, Rahman, Kazmi and Goyal, 2012). It is
suggested to the Harvey Norman Company that should select Mumbai or Delhi as the place
where they can get the maximum customers for their products and services.
(Source: Harvey Norman, 2018)
Moreover, slowly and eventually the company should expand their business if they get the
positive returns. The store of Harvey Norman at the places will make their products easily
accessible and available to the maximum customers. Further, they can form the ties ups with the

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supermarkets in India where they can take the place for their stores. The place should be
premium that can contribute in attaining the high revenue with the sales in the Indian market.
It is recommended to the company to make use of the Intensive distribution strategy in which the
company can perform the mass marketing of the products with the help of which they can cover
the entire market for their products and services (Wilson and Gilligan, 2012).
Promotion strategy
Promotion strategy includes the actions through which the company can generate awareness
about the brand and their products available in the market. It is recommended to Harvey Norman
to make use of the offline and online promotion strategy. In the offline promotion strategy, they
make use of the advertisement, personal selling and many others (Luca and Suggs, 2010).
Further, the online promotion strategy is increasing with the rise in the use of digital platforms.
Advertisement
The advertisement is one of the effective methods to generate awareness in the Indian market.
The company should generate awareness with the help of the online and offline advertisement. In
the offline method, the company should promote products through newspapers and magazines
(Musso and Francioni, 2014). Further, the online advertisement can be done through different
channels which include the use of social media. The advertisement can be done through
Facebook ads, Google advertisement and many others. The below given is one of the examples: -

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(Source: Harvey Norman, 2018)
Personal selling
The personal selling is one of the effective ways to generate the awareness which should be
followed by the Harvey Norman Company for their staff members in India. The skilled and
knowledgeable members are required in the Indian market who can form the direct connect and
relationship with the customers for selling their products in the market (Rothaermel, 2015).
Harvey Norman should provide the training to the employees through which they can learn to
contribute in promoting their brand.
Online promotion
Harvey Norman should make use of the online media for promoting their products in the market.
The use of social media is increasing due to which the customers prefer to check the reviews
through online mode. Moreover, this has been found that social media advertisement also
contributes in increasing the presence of the Harvey Norman existence in the Indian market.

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Conclusion
In the end, this can be concluded that Harvey Norman Company can successfully expand their
business operations in the market of India. Though, the company need to follow some strategies
that support for achieving success in the market of India. The target market has been selected in
the Indian market on the basis of secondary data research. Further, according to the selected
market, it is suggested to the company to either adopt the franchising or licensing strategy in the
market for promoting the products. Further, marketing strategy includes the positioning strategy
and value proposition that the company offer to the customers present in the Indian market. This
has been found that Indian market will be new for the company as the owned store due to which
it is must for the company to analyse the needs and demands of the customers who are present in
the market. In the end, there is discussion related to the marketing mix strategy that plays a vital
role in the company when it comes to operating the business in India. The strategies are
suggested to the company according to the Indian market so that they achieve success.

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