TKMaxx: Expansion Strategy Report for Germany and Croatia Markets

This report provides a comprehensive analysis of TKMaxx's potential market entry strategies for Germany and Croatia, focusing on its furniture range. It begins with an executive summary highlighting the company's global expansion goals and the competitive landscape. The report delves into cross-cultural marketing, including STP analysis (segmentation, targeting, and positioning) to identify target customers like office furniture users and households. Market analysis is conducted using PESTEL analysis to assess political, economic, social, technological, environmental, and legal factors, alongside an examination of competitive advantages. The report details market entry strategies, the 4Ps of marketing mix, and the CAGE framework to understand the cultural, administrative, geographic, and economic distances between countries. Recommendations are provided based on market research and strategic planning, offering insights into pricing strategies, social media marketing, and overall successful expansion. The report emphasizes the importance of understanding market demand, competitors, and international marketing program elements to establish a solid business plan.

EXECUTIVE SUMMARY
In this era of globalisation, many companies are coming to find better
opportunities for themselves in terms to enhance their market value. It leads to
competitive spirit of companies at international level market. Similarly, TJMaxx grabs
the opportunity for the expansion in global market. So it introduced it's subsidiary
TKMaxx in UK, as it possesses wide ranges of clothing, home décor and furnitures. This
report carries the different criteria of possible entry in new markets for TKMaxx furniture
range in Germany and Croatia markets. This report consists several approaches,
marketing strategies and market analysis which help the company to step in the new
market with risk assessments.
An cross market analysis STP is discussed in the first part of the report. Further it
has discussion on the market analysis using PESTEL analysis after that its competitive
advantage is mentioned. In step forward there is market strategies like entry in new
market, 4 P's, cage framework is used to describe about the products in more details.
Company has chosen Croatia and Germany in order to expand its business in
European countries, company has segmented its markets in psychographic,
demographic and on the basis of geographic segmentation. On the basis of
segmentation its targeted customers are its office furniture users and construction
places which require furniture. Company has adopted low cost pricing strategy at initial
stages and then when business will be established have decided to go for premium
pricing as it offers a best quality furniture to its customers. Company has also focused
on social media marketing strategy which will prove effective for attracting customers
and gain competitive advantage in the market.
This report gives the possibilities of successful expansion of company in global
market. It has discussion about the marketing entry strategies in which it sets their goals
to achieve and it has proper assessment of the market demand, competitors and many
more things. International marketing programme concludes the 4 P's strategies,
analysis of the economic, political or social factors of the country which help the
company to establish. All such assessment report helps in preparing the business plan
for the company to launch in the country.
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Design of Cross Cultural
Marketing Plan For TKMaxx
In order to succeed, your desire of
SUCCESS
should be greater than your fear of
FAILURE
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Table of Contents
1. INTRODUCTION AND COMPANY BACKGROUND....................................................4
2. CROSS-CULTURAL MARKET......................................................................................4
Cross Cultural Marketing-STP.......................................................................................4
Target Analysis...............................................................................................................7
Position Analysis............................................................................................................7
Product Attributes ..........................................................................................................8
Competitors....................................................................................................................8
Ease of application.........................................................................................................8
Price quality matrix.........................................................................................................8
3. Deciding of market entry strategy and mode ................................................................9
Set clear goals................................................................................................................9
Research market............................................................................................................9
Study the competition.....................................................................................................9
Choose mode of the entry............................................................................................10
Budget..........................................................................................................................10
Develop strategy document .......................................................................................10
Cage framework...........................................................................................................10
4. Designing of an international marketing programme ..................................................12
Design of international market mix (4 Ps for the company)........................................12
Pestle Analysis.............................................................................................................13
Competitive advantages...............................................................................................15
5. Recommendations.......................................................................................................16
REFERENCES................................................................................................................18
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1. INTRODUCTION AND COMPANY BACKGROUND
International marketing or global marketing is a marketing which is run at the
international level. International marketing is developed by the many multinational
companies in the world. These companies are operating their all marketing strategies
from the home country to other countries. When any company need to expand their
business across the particular country, in this condition company need to take action of
the international marketing. This is helping company to trading goods and services
among different countries. Present report discusses the product expansion with
establishment of manufacture and production unit of the company in emerging markets
that could prove to be profitable for the company.
TKMaxx is a subsidiary of the American apparel and home goods company TJX
companies. Company are operating their stores in many countries l United Kingdom,
Australia, Germany, Poland, Ireland, Austria etc. It deals in the retailing industry of
United States and other parts of the world. Parent company was founded by Bernnard
Cammarata established in Framingham, Massachusetts, US in year 1976. In 1994, the
first international store opened in Bristol. TJ Maxx modified the name to TKMaxx to
avoid confusion with the established British retail chain. Company offers many items
like; clothing, footwear, bedding and domestics, furniture, giftware etc. Company began
their first store in the United Kingdom in year 2007, Croatia between 1999 and 2001,
and then in the Germany opened on October 4, 2007. In the march 2009 company
launched their first e-commerce site. At the first stage company only selling handbags
on the e-commerce site but later company start selling other accessories as well.
Company's Australian store was started from 2017. Currently the TKMaxx is one of the
most popular retailers in the UK, because company's prices of the products are
generally lower than other major stores (Akter, Rahman, and Radicic, 2018). Now
Company have more than 500 stores in the Europe. It has reported a gross profit of
£464m within 52 weeks in February ending 2019 and also profit before tax rose from
£87.1 million to £120.5 million during the same period and also sales increase upto
6.4%. TKMAxx is aiming to launch its business in two European countries which are
Germany and Croatia which can profitable markets for the company. As, TKMaxx is a
departmental store and besides there has been a growth in retailing sectors in these
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two countries and it can prove profitable for the company to establish its stores in these
countries. In order to establish a business there are various tasks which a company has
to go through such as conducting cross cultural market analysis which is important.
After gathering a proper information company have to decide and select proper mode of
entry. Once entering in the market company has to design a proper marketing program
for attracting and successful business process which is mentioned in this report.
2. CROSS-CULTURAL MARKET
Cross Cultural Marketing-STP
Segmentation
Segmentation in the market research is primarily needed to decide the target
audiences for the company's product. Target countries of the company are Germany
and Croatia. TKMaxx operates wide range of the retail stores in clothing and home
related items. They have many stores in the US, Great Britain, Austria, Asia continents.
But they have planned to cover the market in Germany and Croatia. Target customers
of the company are the office or business furniture user and house hold furniture users.
So the market research according to the demographics, psychographics, geographic
segments are as follows
Basis of
segmentation
Strategies
Demographics
Segmentation
It is very important characteristics of the country that helps to
evaluate the target market, also it gives the idea about the
customers segments. It is necessary when company plan for the
international expansion. For this purpose, two countries from
same continent is evaluated.
Germany's current population is 83,663,787 (Germany
Population, 2020). It has mixed economy and their GDP is
6.45% (Germany GDP, 2020). Croatia population 40.8 lakhs
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2018 and has quite stable economy in the world and GDP
growth 2.9% (Croatia GDP, 2020). so Croatia is small country
(Reich, 2017). Overall there are less furniture range in country-
market because they don't have manufacturing units.
TKMaxx uses to launch there furniture unit in the Croatia.
Germany has average monthly salary of per capita about
€2300, and they have very large range of furniture in their
country. So other companies have shared the market about
70%. That's why company needs to launch higher budget range
products in this country and different styles with the latest
designs and country's market is already upmarket which needs
higher investment amount to compete with other competitors
(Cartwright, McCormick, and Warnaby, 2016). In Croatia, they
have low manufacturing units of furniture, so they can establish
their furniture manufacturing unit at low budget because people
can easily afford their products.
Geographic
Segmentation For furniture manufacturer it is very necessary to
understand the geography of the country and make feasible to
launch their products in the particular country. For the
manufacturing units it is very important to have the relative
facilities to the potential market. Supply chain has main role in
these criteria, so it is very necessary to analyse the availability
of the supplier and production. Croatia is developing country in
such ways like they are trying to connect their market globally,
so that the TKMaxx can utilize this factor for their new target
segment (Veturi, 2018). As TKMaxx provides products at low
cost, they assess the whole market and customers demand so
that gives them idea to go cheaper than others. As, Croatia
geography is appropriate to access all the necessary things in
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terms to cost saving. Also, they can take advantage of being
located near to the Germany which helps them to provide raw
material and shipping cost is low. So the Croatia is considered
quite accessible in comparison to Germany
Psychographic
segmentation
It is about the consumer behaviour by dividing the market
according to psychology of the consumers in terms of the
lifestyle, personality traits, values, opinions, interest of
consumers. All these study about the people of Croatia will help
the company to establish in the market, so that they can launch
their products in the market (Akter, Rahman and Radicic, 2018).
As it is developing country people get more employment when
its manufacturing unit is established there and stores open in
the market will provide the reasonable goods to the people with
new trends. It raises the lifestyle of the consumers.
.
Figure 1Segmentation analysis
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Country selection and product fit
It is necessary to decide where the company wants to open new unit of
production which is beneficial for them. Like TKMaxx chooses the Croatia to open their
new range of the furniture store in country, it is very profitable for them. It is also
beneficial for the country in terms of economy and GDP growth (Adewole, 2018).
People can get stylish furniture from their stores at affordable prices. It is best fit product
in the country in terms of people demand.
Target Analysis
People in Croatia are mostly dependent on the other furniture production
companies like ERA Grupa, Delight Office, Natuzzi Store Zagbreb etc and other retail
stores which provides the home and office décor and, furniture at high prices.
Nowadays the corporation is mainly aimed to young generation and middle-aged people
as they first buy the products like furniture, home décor to raise their living standard
(Cartwright, McCormick and Warnaby, 2016). These people have stable average
income.
The company needs to process in the global market by analysing the factors like
their selected global market what allows to operate the company in related areas as
well. So that, they can business easily. Specific target of the company can be office or
business furniture users as they require furniture in use or to decorate their offices.
Business or offices are always in need of furniture throughout the year so they are the
target customers. Another target customers are household furniture users families
constructing new houses or are renovating their houses. These are also target
customers because people keep on constructing and renovating their houses which can
prove efficient target customers for the company. As the Croatia per capita income is
less than 800 EUR per month. So that they can go for the products to buy them as the
company provides the product in low cost. They should take care about the comfort of
the people in the country, their target audience is cover under the selection strategy
(Chandran, and Bhattacharya, 2019). People mostly dependent on the other countries
like China, Russia etc. to import the raw material which costs high to the country. The
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local marketers sells their product at high prices. It gives the advantage to TKMaxx to
invest in the market of Croatia as it provides the high revenue.
Position Analysis
Positioning describes that how the product is positioned in the consumer mind.
To attract the consumer and make them realise the need the product. Company should
give the full efforts to make availability of their products in the market, this includes four
factors to position the product in the market (Cichocka, 2016).
Product Attributes
It is about the characteristics of the products, product specification is needed. All
details about the product should be cleared as they do the analysis of the product and
compare their products with other which tells the difference. Like TXMaxx should give
the products details, quality factors, price of their products they should be comparatively
good with other companies product (Schroeder, 2017). So people of the Croatia will
give the priority to their products and buy them.
Competitors
Company should analyse the market and their competitor, they have knowledge
about other brands will help them further assessment. It gives the idea about setting the
price, quality and other major factors needed to establish the company in the market.
Products available already in the market will give the idea about their design and style
and trend in the country they follow, so that they can prepare their business plan
(Camilleri, 2018). TKMaxx should have to analyse their competitors, substitutes in
market which tells the present scenario. So that they can make the people to buy their
furniture at affordable prices, and they are better than other for people.
Ease of application
As ease of use is what the furniture manufacturing aim for in every product they
design. As they can measure this by the comfort, how much comfortable the product for
the people of all age group in the country. Also they should give reliable quality to the
people in affordable prices. Such thing should be mentioned before the company
establish in the country. So more people would be attract towards this. TKMaxx needs
to consider the life goals of the people and they provide the products in terms of fulfilling
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their basic needs (Johnson and et.al., 2019). Company establish their branch in the
market to goal for long term.
Price quality matrix
Price and quality are major points to be considered by the company in terms to
establish in new market. As they provide good quality of the furniture to their target
segment and cheaper than other brands so the people more attracted towards them. So
TKMaxx is very genuine for price and quality measure like they provide quality products
at low cost (Dolnicar, Grün, and Leisch, 2018). They have successfully passed all the
quality assurance management systems and satisfy all the criteria at international
quality system. They have all the passing certificate of quality.
3. Deciding of market entry strategy and mode
A good marketing strategy is needed for the company to enter in new market. If
they plan their strategies before launching the product, it minimizes the risk and crucial
factors which can affect their business in the particular country (Busse, 2017). By going
insight of the market research all other factors are analysed so that they can make a
business plan. It helps in enhancing the chance to be in lead, and they can perform the
profitable operations in the new market place.
Here are six steps to be followed when develop a market entry strategy
Set clear goals
Company needs to set their goals and targets they want to achieve. As they have
mentioned their objectives clearly, it will help them to work in that particular direction.
Like TKMaxx set their goal (Rowley, 2016) to sell their products like furniture in the
Croatia they have identified their target to cover the market and earn profit in six
months.
Research market
Analysis of the factors which affect the market most. This research about the
market of the country gives the proper scenario of the present condition, so it implies to
future plan of the company in new market. The analysis of the consumer demands,
competitors in market, marketing strategy is important. As they have keen idea about
suppliers, production, and operational units and their work flow. It will help them to make
their own strategy and how to implement it.
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Study the competition
During the market research, company came to know about the competitors.
Study of the competitors is major to be analysed, it gives the idea of their products, their
design, they get to know indirectly about the consumer demands, also their marketing
strategy hey follow to stay in market. Local vendors, suppliers, retail stores, they should
gain basic knowledge fashion trend in the market, pricing, quality (Johnson, 2016). Such
give criteria should be assessed previously.
Choose mode of the entry
The mode of the entry of the company is direct exporting its products by opening
its stores in Croatia because it enters in market with their ownership. They directly cover
the market with manufacturing their own products. After market research they have to
choose the right time to enter in the market.
Budget
Company have the full assessment of the funds, they should have reports about
the investments they need, their stakeholders, investors (Mohammad, 2015). the
planning needs the cost of productivity and marketing products, labour cost, set up cost,
locating new stores in market all such costs should be calculated and then they need to
manage their funds.
Develop strategy document
Each and every point should be documented related to developing the entry in
new market. This provides much relief to the company in terms to track the progress as
they start to establish the work in the new market they can find out the points and also
match with related criteria is followed or not (Guo, and et.al., 2018). If they skip any step
they can reverse the process at a time and work accordingly.
TKMaxx is very sensible in terms to grab new market and enter into new market.
They have expertise in it as they have opened their chain of the retail stores in Austria,
Germany, Ireland, UK, US, Asia etc. According to their previous experiences they are
able to work on the projects to establish their manufacturing and production units in the
Croatia as they have went through the consumer demands and current market condition
(Fleischmann and Phalet, 2018). So they planned their future in this market, it will be
able to meet the desires of the customer and raises their life style standard.
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