Pottery Market: The Capital China Company

Market Research Advice

In order to expand its operations the company would have to move beyond the local boundaries of England and explore newer nations. There are plenty of opportunities which are available for The Capital China Company in countries where agriculture and agricultural products are popular. As the first initiative the company needs to select two countries one from Europe and another from other parts of the world. France could be a huge potential market for the company to sell its products, whereby Brazil in South America could be the other country that they could target (Alliance-Leicester commercial bank n.d).In order to expand and establish its base in these two countries the company needs to conduct a thorough research. A market research where it reveals the possible ways and places them could initiate their moves to start off well.

As the company promotes its four products in a same scale it therefore needs to conduct a market research for each of the products and get the possible expansion for them? This could be done by conducting a Porters five forces analysis in the proposed countries. It includes:

• Threat of new competition: The Company would have to consider the possible threat that is coming in from the new entrants from the Chinese markets.
• Threat of substitute products: There are numerous substitutes that are available currently. The plastic products are among the close substitutes whereby glassware products are also regarded as very close substitutes.
• Bargaining power of customers: With increased suppliers the margins would reduce which would require the company to cut down its prices and hence profits.
• Bargaining power of suppliers: The Company offers products which are largely prepared in house and with low number of suppliers this probably would be on the lower side.
• Intensive competitive rivalry: This is on the lower side as well with very fewer players in the market.

Further taking due considerations to the Political, Economical, Social, Technological, Environmental and Legal aspects the company needs to perform the following as per its market research strategy:

• Identifying new markets: Targeted locations, cities, towns, or villages in both the countries where the company could start its operations.
• Finding New Customers: The demand for the product by the company may not be as prevalent as it is in its home country. With the right positioning strategy and relating their products to the use of the people could help them find new customers as well.
• Analysing current records: One of the other elements that need to take care in the market research by the company is to analyse the current sales as well as market area for similar products by the other larger players. This would help the company establish the perfect market size and the requirements each place might have. Taking into account for some of the smallest players to the largest players and averaging their sales could possibly be the primary target for the company to manufacture.

The possible ways through which The Capital China Company can collect the above research could be through the following methods:

• Industry reports: A thorough analysis of the same would reveal the regions where the 4 products could be targeted within the country based on the use they have. Also identifying the activities which use the products such as agriculture, households, etc. could be well located from the reports. Industry reports could be by the economic bodies of each country, the company itself, the government, media reports, journals, internet articles and more.
• Competitor Reports: Getting to know about the major players of the industry for the specific regions and analysing their reports would reveal the places where they operate. It will also help the company to estimate the scale of operations and possibilities for presenting their products. Further they may study out the types products which are popular in the local markets of the two countries and could plan their products in the manner expected.

Compiling the information they accumulate with the reports as well as other sources the company can pull out significant data and analyse it further to get a clearer picture of the market and the demand of its range of products. The secondary source of data could be the best research instrument through which they could collect the entire data required for a correct international business decision. It includes collection from the above mentioned sources by a dedicated team within The Capital China Company and related to the plans they have for their products.

Evaluating and considering the right countries for entering for their four businesses

There are several means through which the company could evaluate and conclude that their decisions to enter a particular country would be feasible. Some of them to consider while planning the same would be:

• Households: Usually it is seen that bone china products are popular among the households especially the ones living in the towns and villages. A country where the number of villages and towns are more such as Brazil would be the ideal place to target for this line of company’s products.
• Catering Industry: Depending on the catering industry and the forecasts of the possibilities with respect to the competition in the market the company can consider going to a place where the market has huge number of caterers. With a large base of catering units they can target their pottery especially created for the catering industry and exploit from this line of products.
• The Cities and Luxurious lifestyles: There is certainly a market for the art lovers who like to try out products to make their house look different. Evaluating the markets where this trend is highly prevalent for people using wallplates as collections would also be among the high priority destinations for the company.

Altogether with the above factors in mind the company would need to analyse the results of the Porters 5 forces and the PESTLE analysis to understand the environment of the new countries it wishes to enter. Based on that the company would be in the best possible position to judge the future potential of the newer markets.

Market Entry Methods

There different types of methods which the company may adopt to enter a particular market. Some of the popular methods followed globally could be: (Wright 1998)Direct Exports: This could be one of the methods where economies of scale would come into the picture. Depending on the market size and the demand for the product the company may directly export its products in any of the two markets. It can be done by sending its expert sales representatives and building a local team in the country they got to. Here the entire process of procurement, shipment and sales would be under the company which would allow it to manage the entire process in the manner it prefers. While the advantages could be greater control, direct customer interaction, better quality control, etc. there are disadvantages as well. The disadvantages would include high start-up costs, increased risks, more number of employees required, etc.

• Indirect Exports: The second method of indirect exports could be the other choice the company has. It would require the company to choose a potential distributor in the abroad country who could get orders and manage the product distribution within the new country. With this the company would only be required to deliver and ship as per the orders they receive. Usually there are four types of indirect export options the company has. With any of the 5 bodies mentioned below the company can kick start their entry in the new markets:
  • Export trading companies (ETCs)
  • Export management companies (EMCs)
  • Export merchants
  • Confirming houses
  • Nonconforming purchasing agents
  • Licensing: The Capital China Company can opt for the licensing option as well. Under this option it can either exclusively or non-exclusively manufacture their products for a fixed period. Here the company would manufacture its own products in the foreign country by just sharing its technical knowhow and tying up with the local company. 
  • Franchising: This is one of the popular modes of entering the markets today. It can franchise out its brand name and sell its products through a franchisee. While the advantages include low costs of running a unit disadvantage would be that profits would be minimized.
  • Wholly Owned Subsidiaries: Opting for any of the methods such as a Greenfield investment or acquiring a local company may be the option as well. This will allow the company to have its own brand and sell its products with total control. The negatives again would be higher costs of operations and increased risk.
  • Joint Venture: This is one of the age old techniques which companies have been using for years. Getting connected with a local player in the market and starting up with a joint venture is a good option. This would actually make the company have a partner which is aware of the local conditions and hence could provide extra financing as well to leverage the company’s operations (Learn Marketing n.d).

Entering the new countries

With the company looking to enter two different markets where one is in a totally new environment it is recommended to follow two different styles of entering.

• France: As it’s within the same continent and pretty near to England where The Capital China Company Operates the entry method could be franchising. The company can get in touch with a local player or a few retailers and provide them franchise options to sell their brand of products. Being a popular product brand now it would actually help the company to attract franchisees in a much easier manner.
• Brazil: Brazil is a big country and opportunities certainly are huge. The company can go for the option of Joint Venture with a local player and start selling its products. As other forms of entering the markets require investments going for a partner in a totally new environment would be recommended. The local partner would not only provide finances to the company but the understanding of the local markets as well.

Does the company need to standardize its products?

As per the concerns raised by the board of directors the matter raised reflects that they would like to standardize their products but still were unsure of how they might be affected. This could be one of the options which the company might consider but only in its domestic markets. Basically the company has been aware of the local demands and understands what is popular and what is not. So standardizing the products they sell in the local markets would be better for the people in England. However, standardizing its products for the people internationally may not be recommended.

The possible reasons for not standardizing the product for the international customers are:

• Acceptability: As company is pretty new to the international markets it needs to test out its products and provide a variety to the customers. Depending on what the customers prefer the company can deliver the products. In case the company starts with standardized products it may not turn out to be acceptable by the customers. So rather than standardizing the option for providing customized products would be a better option.
• Costs: In case a company makes all the efforts to standardize the products it is producing and it does not click for them it could result in increased costs. Besides just the wastage of the products already produced it may affect the setup cost and attract fresh investments for providing customized products.
• Changing Needs: With more innovative products available every day the change in preference is seen quite often in most of the products these days. So a regular analysis and customizing products as per the changing trends would be the best option for the company rather than standardizing.

The positives of standardization include:

• Reduced costs of production,
• Better quality of products,
• Increased efficiency,
• Ease of meeting the demands of the consumers, etc.

When the negatives of standardization are discussed they include:

• Dangers of products getting obsolete,
• Change in consumer preferences
• Change in prices for the products due to changes in production costs,
• Reduced variety in the products offered, etc.

Integrated Marketing Communication plan and strategy to address the company’s products in both the European and wider global market-places (Biz Reseach Papers 2008)

The Capital China Company has been popular across the country of England. However there are various things which are affecting the company and could be a difficulty in its progress. Presently the company holds an upper hand due to its range of products on offer. It includes virtually every product made of China pottery which is customized to meet the preferences of the individuals in the country of England. But with major expansion plans in place where it would be catering to other countries both within and outside Europe a strong communication plan and a strategy to address to the products would be essential. The integrated marketing communications plan for the company could be as follows (Wipo n.d.):

General Overview

The plan includes the process of developing and customizing products as per the results obtained through the constant market research and customer feedback.

Target Customers

The target customers would be the people of Brazil and France. The company needs to use the methods like prototype making and regular customer feedbacks would be an added advantage to the marketing plan while facilitating the strategic steps for the company (Free Donia Group 2011). This helps in improving customer satisfaction and look for new customers. SWOT analysis reveals the following points:

• Strength: The Company has the range of four related but different products in its portfolio. This gives it the strength to offer an entire range of possible products in their domain.
• Weakness: The Capital China Company in relation to its expansion to the new markets is weak in terms of the local market situation of the company
• Opportunities: Being a considerably new market for the products it has offered this gives them the opportunity to showcase the entire range and exploit the possible gap in terms of demand for similar products and the supply.
• Threats: Just like the other company coming in from China and offering similar products at much lower costs the company faces the threat of competition from them in these two regions as well. For instance making a huge investment in these countries and failing to counter these threats could well weaken the expansion plans for the company.

Marketing Objectives

The Marketing objectives for the company would be establishing its brand and increasing visibility. This would help them in increasing their visibility and showcase their products among the people. Moreover they need a strong backup to the company for establishing their feet in the new markets. The other objectives which the company would highly target is beating out any competition which it might be facing. Pricing as well as innovative products could be the possible ways to target the new customers. (Marketsinc n.d.)

Marketing Strategies

• Product Costing and Pricing Strategy: Here the company needs to plan out its pricing structure while covering all its costs and profits. Based on the production realities and the market research conducted the company could understand the standard of product which people demand and price at which it is acceptable. With this picture clear in mind the company could cost the production costs and further customize its products.
• Market-testing products Strategy: Testing out products and the way it is accepted is one of the major things a company needs to evaluate. With different people there certainly different tastes and preferences of each. So product sampling or distributing souvenirs for the pottery products among people could be a form of testing its products besides advertising it among the public.
• Production Strategy: As the market the company is in the products once produced cannot be modified or recycled if required. So the company should always limit its production to a level and constantly keep an eye on the demands of each. These could be checked customer reactions or the production systems in place.
• ·         Promotion Strategies: Although present all over England The Capital China Company has been popular in a limited section of the England area. It needs to brand itself, spend on advertising, hold exhibitions, etc. One of the other forms of promotions seen today is internet. Here the company can showcase its products on their websites and put on regular updates for new releases and fresh arrivals. Using the social media for promoting their products could also be a great option the company should look forward to.

Marketing Communications Objectives

The marketing communications objectives would be to state clearly the channels of distribution, the concerned authorities, the possible means of shipment, the assigned responsibilities for the entire distribution process, etc. (Slideshare n.d.)Marketing communications strategies

• Define Responsibilities: The first and the foremost things for the marketing communications strategy would be to define the responsibility and the concerned people for carrying out the entire process starting from procurement to distribution.
• Creating a distribution channel: Creating the right distribution channel would also be essential so that the process related to the entire manufacturing to the products being available to the customers is defined. This makes the entire process streamlined and effective.

Budget

The company would have to allocate its budget in the right dividing its expenses in both the new countries. Based on the market size revealed from the research conducted the company would have to allocate adequate funding to provide the backup to the operations in both the countries.

Difficulties for implementation of the above plan and strategy

Conducting business is always difficult, irrespective of the plans one may have there are always roadblocks that come in between. Similarly for The Capital China Company to implement the above plans and work on their strategy would require countering many difficulties. Some of the possible difficulties which may come in between are:

• Sources for information: Whatever may be the data source there is every possibility that the company does not get the exact picture. Besides unreliable sources it is very difficult to get the exact data for the company.
• Stiff Competition: This is one of the major issues the company is facing. With increased imports from the Chinese markets and that too products at much lower rates has made it difficult for the company to promote its products. A section of its market share also has witnessed a downfall where the newer companies are eating up its shares. This would make it difficult for the company to implement its marketing communications plan in the new territories as well.
• Demand and Supply: One of the other difficulties which the company might face is maintaining a balance between demand and supply. In case it does not take the right measures to study the market it may happen that the company produces products more than it could sell. On the contrary it can very well happen that the company is not able to meet up the sudden increase in demand or supply products as per its demanded. Both the cases would equally hamper the marketing plans of the company and hence be a difficulty to its implementation.

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