1. Executive Summary
The objective of this study paper will be to conduct a secondary marketing research study for Panasonic Company on how suitable it will be for them to market their electronic products in Thailand market. The assumption is that Panasonic Company has not had its presence in the Thailand market before. Among the many products that Panasonic Company manufactures, the LCD televisions will the main product for study. In conjunction the company mission and objectives this study will also access environmental factors of Thailand, examine SWOT analysis of the company and marketing mix to be applied in the new Thailand market.
2. Company profile
Panasonic Company is part of a major Japanese company of groups known as Matsushita Group that goes back to 1918, when Konosuke Matsushita a Japanese industrialist started a small business to manufacture electrical products, his business was based in Osaka Japan. Presently, Matsushita Group has greatly grown to become a global company with more than 300 companies and a workforce of more than 250,000 employees. The company manufactures and markets over 15,000 different products under different names, which includes Panasonic, Technics and National among others. (Panasonic Company, 2008)
3. Panasonic vision, mission, goals
Panasonic Company aims at becoming a global leader company by the year 2010 through pursuing its management objective of realizing ever-present, networking the society and also coexisting with the world surrounding through latest technology.
Mission; the mission of the company is;
To realize ubiquitous networked society where individuals can easily communicate to each other
Striving to produce new value based technology basing on the “customer first” principle Source www.panasonic.com.au/products
This paper will therefore look into the requirements and plans needed for Panasonic Company to enter a foreign market successfully. The main issues that will be addressed by the paper will be; country analysis using PESTEL, company analysis using SWOT, entry strategies, marketing mix and final evaluation.
Thailand
Thailand is among one of the well economically growing country in Asia currently, and it is considered to be a good country for doing business.
4. PESTEL analysis (environmental assessment)
PESTEL analysis is used to investigate the vital factors, which affects an industry and the influence they have on a particular company or companies operating in that particular industry. PESTEL is means political, Economic, Social, Technological and Legal factors. These factors are the environmental factors to be analyzed (Punnett and Ricks, 1997)
Political factors
Whereby the companies have to deal with the political interferences that may be practiced by the Thailand government According to research political systems of nations affect the conduct of businesses; Thailand political environment is currently stable. Over the past three years Thailand has been transformed to a more respected economy. However, bribes are still part of business deal in the country; also the legal system of the country is very complex. So Panasonic Company has to expect complex procedure in legal such are licensing. (Punnett and Ricks, 1997)
Economical factors;
Thailand is one of the countries that is witnessing high economic growth rate, its real GDP has grown in the last few years reaching 5.% in 2006. Inflation rate in the country has eased for the years at it has steadily remained at 5% Another good sign of economic growth of the country is unemployment rate which is estimate to be about 2.1% with the population having a high literacy level. This transforms to high value labor force. Panasonic Company will thus be able to get ready labor which is well educated and skilled. (Muhlbacher, Leihs & Dahringer, 2006)
Table 1, showing Economic indicators of Thailand
|
GDP- real growth rate |
5% (2006) |
|
GDP –Per capita |
$9,200 (2006) |
|
Labor force |
36.42 million (2006) |
|
Unemployment rate |
2.1 (2006) |
|
Inflation rate |
5.1%(2006) |
|
Imports |
$119.3 billion f.o.b (2006) |
|
Imports –partners |
Japan, 20.1%, China 10.6% USA 6.7%, Malaysia 6.6%, UAE 5.6% Singapore 4.5% (2006) |
(Data extracted from www.cia.gov.com)
Social factors; unfortunately, Thailand has extreme disparities in terms of wealth. Majority of upper class and middle classes live in Bangkok. These two classes have relatively high earnings and are highly susceptible to foreign products and luxurious goods. On contra poor people are majority of the Thailand population, their consumer liking shows very limited western influence, and this is attributed to not being colonized by any foreign powers in the recent history. Majority of the Thais are Buddhist with a good presence of Muslims. Thai is the national language and it is spoken by majority of the population. English is spoken by view executive. Panasonic Company having its origin in Asia will easily sell its product in this country to cultural aspect. (Muhlbacher, Leihs & Dahringer, 2006)
Technological factors are another key factor to be put in consideration before going global. The country telecommunications, transportation system, electricity and ports have shown some strain over time due to economic growth. Accordingly Panasonic Company may find strained when using infrastructure available. But of late the country has been trying to improve the systems and the company will not have a lot of difficult.
Many companies as a result of the concept of globalization are now experiencing advanced technologies. Globalization has taken center stage and now many firms have increasingly utilized the use of e-commerce or Internet marketing. The technology of production has continued to develop leading to more premium brands are being produced by the company to fulfill the new demands of the customers that keep changing with time. (Hollensen, 2004)
Legal factors are another factor that must be analyzed before going international. The most significant law which governs main of foreign- owned business in Thailand is the “Alien Business Law. This law governs three main types of businesses in general business in category are not allowed for foreigners while category B and C are open. Nonetheless Panasonic Company will not be affected by the law on the basis of its business activities. (Daniels & Radebaugh, 1997)
Cultural factors;
To understand the cultural aspect of Thailand, it god to employ Hofstede model which identifies five primary dimensions of understanding differentiating cultures, which are power distance PDI; Individualism IDV, Masculinity-MAS, Uncertainty Avoidance UAI and Long-Term Orientation- LTO (http://www.geert- hofstede.com) In comparison for Singapore and Thailand, differences in uncertainty avoidance… Thailand has high UAI.
Growth of Electronics products
The chart below shows the growth of electronic products over the past six years
The chart above clearly shows that the market share of electrical home applications has been increasing an indication that the market in Thailand is good and it can sustain new players. Data adapted from www.thailand4.com/news/sc/consumer
5. SWOT analysis
Strengths
Brand image of the company is highly recognized
Financial resources of the company
Global Market leader in Plasma TVs,
Growing economy of GDP =5% (2006) (as shown earlier in the table 1)
Well technological advancement to offer high quality products
Well suited for increasing market requirements for large screen TVs in digital era
The reputation and reliability of the company’s products will make it possible for the company to market its products to a wide range of customers
Weakness
Weak currency of the country
High uncertainty avoidance from consumers
Lower communication level especially internet usage, hence using it as a marketing tool not viable
Opportunities
Growing economy possible will enhance Panasonic customer purchasing power
Easy to open and expand the network no major legal requirements
Middle class and upper class citizen ready to buy new foreign products
Panasonic can use the coming Olympic event in Asia (China) to promote its Plasma televisions as there will be an increased need and increase sales in promotions.
Threats
Unstable political atmosphere may affect Panasonic business in Thailand
Harsh competition, as almost all other electronic companies
Most of the population is lower income earners and may have reduced purchasing power
The pie chart below the popularity of brand name of Panasonic and its competitors in south Asia, It can be seen that the company is well known.
Source; www.thailand4.com/news/sc/consumer
6. The existing marketing objectives and quotas of the company
The company aims at becoming a leader in the industry by the year 2010, through undertaking management objectives which, realizes the importance of coexisting with the world environment through use of latest technologies. In that line the company aims at
· Gaining 12% of the total market share in its first six months of operation estimated to amount to USSD 3.million
· Reach 24% of the total market share in its first 12 months doubling its revenue to USSD 6 million.
7. Segmentation Strategy - Company’s target markets and customers according to geographic, demographics, psychographics and benefits (breakdown by %)
Market demographics
Basing on the culture of and social aspect of Thailand, it can be deduced that Thailand have integrated purchasing behavior thus the company will target both male and female young and middle aged individuals target segment. This market segment should drive the company sales to expected USD 3 million in the first 6 months. (As shown in table2)
Psychographics
The mainly targeted group will be the middle class and the upper class who mostly reside in Bangkok; this is the group which readily buy especially expensive and luxury products. The Panasonic company electrical products will thus be highly expected to sale.
Panasonic is dedicated to keeping a standard of high excellence; all manufacturing plants of the company have thorough quality control that checks all the products that are manufactured in the factory. Each product has to pass a set of tests before going to the market.
Marketing strategies
Market selected
The company’s management selected to go international by trying to sell its consumer electrical products to UK. (Chee and Harris, 1998)
Market entry mode
These are ways in which Panasonic company can seek to market its products in global market and usually depends on the quality of the company’s products and the nature of competition that rival firms employ in trying to expand there market share and to maintain there growth. There are various methods of entry to different markets and Wolf Company has to select the effective ones depending on cost, risk and the degree of control, which can be exercised over them in terms of security. The following are some of the modes of entry:
Direct Exporting
Indirect Exporting
Joint Ventures
Licensing
Strategic Alliance (Cullen & Boteeah, 2005)
8. Recommended Marketing Mix Strategy - including the product, price, place and promotion strategies that may be utilised by the company.
Marketing mix
Product: Panasonic Company deals with a variety of electrical products ranging from home hi-fi systems to broadcasting equipments. The product of the company are said to be unique as compared to of that of its competit