Introduction
The use of one particular market concept is regarded as the international market. The industry must put this principle into practice to expand its sales on all levels, ranging from those in their home country to those in foreign markets. When sophisticated forms of international marketing are put into practice, it is generally believed to be feasible for enterprises to operate in virtually all of the global targeted markets (Watson et al., 2018). The actions performed by Sannies, a shoe company owned by a family, have been addressed in this article. These actions involve the company’s efforts to develop a market value compared to the domestic market in specific international markets. By focusing on the information provided by the company’s board of directors, we have taken into consideration four aspects relating to international markets: product, price, distribution, and communication. According to the company’s investigation findings, each of these four problems affecting the international market has been explored, along with the pertinent questions and the answers to those problems.
Product
Branding issues that the firm will face before entering the European market
According to the viewpoint presented by Watson et al. (2018), the international market environment has been deemed to possess several uncertainties and issues that impact the expansion of the market and the dynamics of the business world. According to the Sannies case study provided, the company aims to grow its market and increase its sales in international locations. After a number of the company’s customers relocated to other countries, there was a rise in the overall demand for the firm’s shoes, which led the board of directors to decide to either create a company outlet or begin offering direct sales to the customers (Watson et al., 2018). In the high-end shoe industry, the corporation is up against several challenges as a result of the conditions of the market, each of which can be highlighted individually.
People are willing to pay extra for a name-brand shoe in the shoe business, one of the most competitive in the world. In light of the expanding number of designers, merchants, and manufacturers, the company has difficulty competing in the global market. According to Nguyen (2021), China, Vietnam, and Indonesia are the top three shoe-manufacturing countries in market share. In 2019, these countries will produce 75 percent of the world’s total footwear output. The majority of Sannies’ annual revenue of around £30 million comes from the United Kingdom and Ireland (Nguyen, 2021). It has been discovered that the company’s directors lack in-depth expertise and experience in worldwide marketing. The directors’ concerns about selling their Scottish heritage were dismissed as a bad idea for the company’s expansion.
The consistent shift in customer behavior concerning the shoe design, price, availability, and other options is another significant factor contributing to the existence of a sustainable opportunity for the company in the European market. A business in Europe known as S’annee has been in contact with Sannies and has requested that they modify their brand names to avoid infringing on their copyright and confusing customers (Nguyen, 2021). There are many different shoe different brands in the U.K. market, such as Joseph Chesney and sons, Foster and son, John Lobb, Barker shoes, and Grenson, that have already left their mark on the European footwear market; however, the Company Sannies is unknown to the majority of the population in Europe, which is a significant challenge faced by the organization for the instance of joining into the European shoe market.
Product Elements that Need to be Adapted in the European Market
The company should identify some of the product features where the incorporation can be made to enter and sustain itself in the European market, taking into consideration the challenges in international market trends addressed above. The product’s design, as well as its brand names and values, its value proposition, its color palette, and its packaging, are all parts of the product. Since most people in Scotland are familiar with the brand name, the business must concentrate on promoting itself in international markets using various means (Watson et al., 2018). It has been determined that the company provides five distinct style ranges in their local market in Scotland; nevertheless, it has to expand these ranges to reach a more significant number of customers in Europe.
Sannies’ foreign market promotion is aimed at customers who recently relocated to the European market and are eager to buy shoes from the same brand they had previously purchased. Independent retailers that sell Sannies items independently in the European market are included in the category of two-channel clients, as are international customers who have just relocated to Europe (Nguyen, 2021). These two channels can show that a more significant number of selling channels are needed for a corporation, including franchisees and direct company stores in Europe, as well as additional options like online selling.
Price
Increased CostCost that the company will Face when they Develop its Presence in a Particular Country
According to Al-Maamary et al. (2017), price is believed to be the most problematic aspect that an organization could confront at the time of entry into the international market, specifically in a country. This is the opinion of the researchers. The United Kingdom is where Sannies intends to build the foundation of its customer base. According to the provided case study, the company introduced their footwear brand into the regional market with limited pricing margin options. The minimum price for their shoes is now set at £150, and the highest price for their designer shoes is approximately £500 (Al-Maamary et al., 2017). After entering the U.K. market, various variables hiked up the price of making the shoes, and as a result, the company wanted to increase the price of their shoes to account for the rise in production costs.
The company can produce 20 percent of their profit through sales made at their company shop. Fifteen percent of their profit is achieved through sales made to independent shoe dealers, and 30 percent is generated through direct sales to their most valuable clients (Al-Maamary et al., 2017). The use of channels that allow the company to generate thirty percent of its total profit through direct sales to its most valuable clients is essential to its ability to generate a profit. Cost of export, shifts in consumer demand, increased competition in the new market, and the impact of Brexit are some of the primary factors contributing to the increase in CostCost incurred by Sannies due to their decision to extend their business into the U.K.
Pricing Issues to be addressed by the company when they Enter a Mature Western European Market and Emerging European Market
Taking into account the case study of Sannies, the company encountered some price challenges when it decided to venture into a developed country in western Europe and emerge into the European market. When considering the first factor of joining the matured European market, it is possible to state that the term “matured economy” refers to a nation with a sustainable population and a stable financial growth facility (Al-Maamary et al., 2017). This is important to remember because entering the matured European market is the first step in doing so. A steady population or declining death rates are two factors that contribute significantly to the stability of a country’s market. Countries that makeups Western Europe include France, Germany, Austria, Monaco, and Switzerland, amongst others.
Even though these markets have sophisticated development facilities in a variety of industries, there is a low rate of gross domestic product and declining price spending on building infrastructure. This is something that has been discovered. A low rate of inflation is believed to be the scope for these western countries; yet, it may produce pressure on new global sectors at the time of entrance into these markets, as the pressure has been evolving into new employment prospects. The fact that the CostCost of living is relatively low affects the consumer’s tendency to want to buy more expensive goods.
On the other hand, entering a market economy that is considered emerging suggests that the country is making strides toward a more advanced level of industrialization. The company may experience price challenges due to low earnings per capita and limited job opportunities (Al-Maamary et al., 2017). Instability in political systems is another factor, as this might affect new companies’ pricing strategies and commercial endeavors. The interest rate prevalent in the East’s developing economies is another factor contributing to strategic pricing gaps.
When looking at the two options for entering, it would be more helpful for the company to join a mature country in Western Europe. This is because they would not need to make any new innovative potential ramifications for the growth of the market, but once they entered the market, they would have the facility to remain in it for the long term.
Distribution
Logical Issues the Firm will consider when Entering an Emerging Market in Eastern Europe.
According to Wouters et al. (2021), logistical problems arise when a company’s plan fails to account for a specific scale of activity. This is a consideration that was made. Having problems with logistics at the same time as breaking into a new market in Eastern Europe causes delays in the manufacturing process and the delivery of the finished product. According to the case study, when the firm Sannies chose to enter the Targeted market, it had a logistical obstacle to reducing shipping costs. This was one of the challenges they faced (Wouters et al., 2021). One further logistical challenge that the corporation can encounter is expanding the scope of innovation across all sectors, despite having a limited budget, and this is not the only one.
Business Process Improvement
The shoe manufacturing method is continually being upgraded, improving the shoe’s style, design, color, branding, and marketing. This presents a significant issue for the company’s logistics department, where the company does not have enough money to meet these logistic market standards to compete with other shoemakers in developing countries in Eastern Europe.
Customer Service Improvement
This is a significant problem in logistics, wherein customers voice their worries about the lack of transparency in the styles they may choose from and the punctuality of their deliveries. It is challenging for Sannies to grow in the targeted market region since other brands in the industry could match customers’ demands.
Cost of Fuel
When the company first attempted to break into the Eastern European market, they were challenged by high expenditures, most of which were attributed to transportation expenses. One of the vital logistical difficulties that the organization has is the rising CostCost of fuel, which, when added to the whole CostCost of transportation, is considered one of the most significant concerns. According to a recent study by Haliloglu et al. (2021), the Cost of a liter of diesel fuel in Bulgaria is currently 1.404 United States Dollars.
When the company first attempted to break into the Eastern European market, they were challenged by high expenditures, most of which were attributed to transportation expenses. One of the key logistical difficulties that the organization has is the rising CostCost of fuel, which, when added to the whole CostCost of transportation, is considered to be one of the most significant concerns. According to a recent study by Haliloglu et al. (2021), the CostCost of a liter of diesel fuel in Bulgaria is currently 1.404 United States Dollars. In contrast, the CostCost of a liter of diesel fuel in countries such as Romania has reached 1.48 United States Dollars, and the CostCost of diesel fuel in Poland has reached 1.511 United States Dollars.
Advantages of Developing Online Presence rather than Flagship Stores
Using data from a case study of Sannies, it can be concluded that the company’s directors planned to construct a flagship shop primarily in the capital cities of Europe. On the other hand, the corporation might be better served by expanding online than by constructing a new flagship location in Europe. The following is a list of some advantages of developing an online presence.
Large Range of Audience
Any firm that decides to improve its online presence has the opportunity to connect with a broader spectrum of clients, both domestically and internationally. More and more individuals worldwide use internet programs to buy everything from groceries to luxuries like cars and vacations (Dwivedi et al., 2021). The company’s website and mobile application must be improved so that customers can easily browse and purchase shoes from the company’s website. Flagship stores could not cater to such a broad spectrum of customers because of their limited range of locations and inability to communicate effectively with their customers.
Accessibility, Brand Building and Advertising
It is easier for clients to choose their preferences from a wide range of online products than at a physical flagship store, limiting the company’s potential customer base. With a website, a company can take advantage of more advertising opportunities than a flagship store (Yang et al., 2021). For the company to succeed in the worldwide market, they can push their tagline, “Guide shoe ye know,” which translates to “the nice shoe a person knows,” thereby promoting their brand.
Communication
Advantages and Disadvantages of the Three Promotional Plans
Advantages of promotion by the Grown Sales Team
Jahan et al. (2021) believe that sales promotion is essential to a company’s survival and growth in a competitive market. Using the sales force to promote products and services has certain advantages in today’s buyer’s market. This boosts sales and alters the consumer’s perception of the product. Because it can target specific clients and expand the company’s overall distribution, it is beneficial to the company.
Disadvantages of promotion by Expanded Sales Team
Sales promotions have several drawbacks, including increasing price sensitivity, focusing on short-term promotions, a smaller potential income pool, and shifting how customers view prices.
Advantages of promotion made by digital influencers
Influencer marketing for Sannies effectively raises brand recognition while fostering consumer confidence. The fact that it takes long-term relationships into account and saves time and money for the business was a bonus.
Disadvantages of promotion made by digital influencers
It is difficult to find the correct digital influencers, but based on the company’s study, the wrong ones could lead to poor promotional outcomes. The popularity of digital influencers on social media determines how much growth by promotion may be achieved.
Other promotional methods would you recommend to the firm.
There are some unique promotional strategies that might be proposed for the company when they want to expand their business in global markets, taking into account the various promotional possibilities on the worldwide market. Nike and Adidas employ various marketing strategies, such as social media promotions, direct mail, and other effective public relations techniques (Wouters et al., 2021). Promotion on various social media platforms is advised for this business since it allows the brand numerous opportunities to create trust with a worldwide customer base. For most organizations, social media promotion is one of the most effective and practical methods for increasing business trends, based on market research by Kaur (2017). Direct mail advertising, on the other hand, is a good option for the firm because it allows it to connect with a wider audience.
Conclusion
In conclusion, Sannies can choose from a variety of marketing and promotional techniques in order to break into international markets. The company requires to be more involved in the particular market changes in order to target the western and eastern regions of Europe. By doing so, the company will be able to grow while avoiding the disadvantages that would otherwise be encountered by selecting and implementing specific market strategies.
References
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Haliloglu, E.Y., & Berument, M.H., (2021). The Asymmetric Effects of Crude Oil Prices and Exchange Rates on Diesel Prices for 27 European Countries. Global Business Review, p.0972150921999035.
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Wouters, O.J., Shadlen, K.C., Salcher-Konrad, M., Pollard, A.J., Larson, H.J., Teerawattananon, Y., & Jit, M., (2021). Challenges in ensuring global access to COVID-19 vaccines: production, affordability, allocation, and deployment. The Lancet