Export Plan for international Marketing Essay Example

  • Category:
    Business
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    4
  • Words:
    2431

Export Plan for International Marketing 14

Export Plan for international Marketing

Table of Contents

3Introduction

3Market and Situation Analysis

8SWOT Analysis

9Porter’s Five Forces

9Market Segmentation

10Customer Analysis

11International Market Research

11Market Size

11Environmental Forces

12Conclusion

13References

Introduction

Electric cars are the fastest rising car business worldwide. This is a business that our company ventured in. However, the business was domestic based in Australia. The electric car business in Australia has morphed and developed by a very large margin overtime. The benefit of electric cars is that they are environmentally friendly. Usage of electric cars is therefore the best way to curb environmental pollution. This results in a better healthy society. The supply of fuel both in Australia and the world over is very uncertain and keeps fluctuating. This makes its acquisition quite expensive and unreliable (Motavali, 2011 p.1). It therefore follows that the only solution out of this fuel mess is embracing the usage of electric cars and propelling its usage to even greater heights. It is in cognizant of this fact that we decided to develop and sell our electric cars internationally. Our aim is to have a huge international sales turnover having conquered the Australian market. The main international targets for marketing our cars are North America and Asia. We are targeting China specifically in Asia. They have the largest number of electric car buyers globally. This, therefore, is our export plan to these countries.

Market and Situation Analysis

The company’s international target market for electric cars is China. Statistics have shown that the cumulative sales of electric cars in China have been rising steadily. This is as shown in the graph below

Export Plan for international Marketing

Source- http://www.prlog.org.hybrid-electric-vhicles

This upward trend in the sales of electric cars in China indicates a brilliant marketing opportunity in these countries as shown in graph above. The international market is however influenced by a number of environmental factors. The company should take note of these factors and evaluate its strengths and weaknesses in dealing with them (Todd, 2012 p.24). These environmental factors comprise the economic, legal and political environments. The economic environmental factors that impact a company’s international business are as follows

Monetary Systems- A monetary system is defined as a combination of institutions and tools that are utilized by a given government to control the supply of money in its economy and provide money to the people. A country’s monetary system is a critical economic factor in the international business environment. Fluctuation in a government’s monetary system causes instability in its economy. Each business that is planning to go international should therefore consider the monetary system in the target country’s market as a prerequisite. China is among the countries with the most stable monetary systems worldwide. The Chinese Yuan is a globally celebrated currency for its stability (Klippenstein, 2014 p.1). The company considered this an added advantage regarding these markets.

Inflation- Inflation is the general increase in the prices of goods and services of a given economy. Inflation is another factor that really determines the kind of business in the international market. Electric cars are commodities that are less likely to be affected by inflation. Inflation mostly affects basic utilities like fuel and foodstuffs. The fact that electric cars do not need fuel is therefore an advantage that the company takes in a bid to go international. Despite the fact that inflation rates affect the general purchasing power of a country’s population, the Republic of China has not seen a very conspicuous change in inflation rates. The inflation rates in China in a period of 2 years, 2012-2014 were as follows

Export Plan for international Marketing 1

Source- http://www.tradeeconomics.com/NationalBureauofStatisticsofChina

These statistics show a very stable rate of inflation in China. This low inflation rate indicates a higher purchasing power of a country’s population. The market for the electric cars is therefore somewhat guaranteed.

iii. Interest Rates

The last international economic factor is interest rates. This is basically the cost of money that the company could borrow from financial institutions in the target markets. Economic statistics have shown that most banks in China have interest rates ranging 5-7%. These rates between years 2005-2014 have been represented in the graph below

Export Plan for international Marketing 2

Source- http://www.global-rates.com/images/charts-12-1015.jpg

These are very low interest rates. China is therefore the best international market for electric cars because payment of loans, if any, can be made easily and at lower rates.

Legal environment factors to be considered are the obtaining of licenses and taxes needed for operation in an international market. The Republic of China offers international trade permits and tax credits on electric cars (Anderson & Anderson, 2005 p.84). These are favorable legal conditions for international operation by the company.

Political factors include the political stability of the governments that are bases to the car markets. These could include government orders on exports and international trade. The Republic of China is very stable politically. Such a calm environment is best for international business operations.

An analysis of the electric car market in relation to the 5 C’s of strategic marketing has also been conducted. This is a prerequisite for the company going international. These five C’s are in relation to the following

Customer- The Company should analyze the needs of its customers and make a concerted effort to satisfy them. The electric car customer base in China is mainly comprised of individuals who have the desire to conserve the environment while enhancing transportation at the same time. Most of these customers already own or have used fuel-driven cars before. They, therefore, have quite an experience in driving and would advertently compare the ability and performance of these electric cars relative to the fuel-driven ones. The company should tailor its cars to meet the individual needs of each of these consumers (Klippenstein, 2014).

Company— The Company, initially based in Australia has found this opportunity to start operating in the international market. Having conquered the domestic Australian market has given the company a great insight into its strengths and capabilities. The company has a great level of expertise and knowledge that is instrumental for the electric car production. The cars are therefore of good quality and very environmental friendly.

Competition— Many companies are coming up and joining the electric car production. This poses a very stiff competition to the company. This was among the reasons for going international; in order to outweigh the domestic competitors. However, the company still needs to perfect the electric car production. This will give it a higher pedestal than the competitors.

Collaborators- the Company could collaborate with other companies. They could be other electric car production companies or accessories production companies. The company could, for instance, collaborate with another battery company. The result of such collaboration would be assembly and selling of complete products to the customers. Collaboration would also increase the knowledge and expertise base. This will promote the quality of the company in overall.

Context- the Company has analyzed the political, economic, social and technological aspects in China. There have been no limitations to the electric car market in respect to the political, social, economic and technological factors. In fact, these factors are very favorable to electric car business on the China market. These have been described above.

SWOT Analysis

The company also analyzed its strengths, weaknesses, opportunities and threats in the process of making its operations internationally. The company’s strength lies in its knowledge and expertise base in electric car production. The technological know-how applied by the company is very advanced. As a result, the costs of production are reduced which eventually increases the returns. Electric cars are also produced on a large scale. The company, therefore, takes advantage of economies of scale.

The weakness of the company could be the process of transition from domestic to international operation. This is a very technical phase that requires well thought-out strategies and plans (Motavali, 2011). The company has to seek advice from external and even internal sources within the company in order to complete the process successfully.

The opportunity to go international is, in itself, a great chance for the company to grow and develop beyond bounds. The China market has a large customer base and buying capacity. The company is to seize this opportunity to become a world-class electric car production company.

In terms of threats, the company in its bid to go international, faces a potent threat from competitors. The electric car business has attracted very many investors in the recent past. The company is, however, stepping up in its production efforts.

Porter’s Five Forces

An analysis has also been conducted in relation to the Porter’s Five Forces. The company is faced with the threat of new entrants to the electric car market. As mentioned earlier, the electric car business has attracted very many investors and entrepreneurs in the recent past. This, however, could serve as an insight for the company to start providing quality products to its customers in order to stand out (Murphy, 2014 p.1). These new entrants could also develop to become a threat to the company in terms of competition. This still calls for provision of quality by the company in order to remain raised above the bar.

The main threat of substitutes for electric cars is the fuel-driven cars. However, electric cars have an edge over the fuel-driven ones because of the environment friendliness aspect. The company also boasts of flexible and reliable suppliers that give it an added advantage. The bargaining power of electric car buyers in the international market is definitely quite high. The company should establish low introduction prices in order to ensure customer satisfaction.

Market Segmentation

The international market for electric cars is segmented into three main divisions:

Organizations in the public sector- The most prevalent customers to electric vehicles are the international market are public sector organizations. These organizations are most likely required to foster environment friendliness by the respective governments. There therefore purchase and use electric cars in order to meet this requirement.

Households that own multiple cars-These are individual households that already have other fuel- driven cars but would like to ‘experiment’ with electric cars. These households are also oriented towards environment friendliness. However, this segment comprises people with different tastes and preferences. The company should therefore meet the needs and desires of each individual household by providing electric cars that fit the customer’s wants.

Green’ companies— These are private companies that value environment friendliness. These companies would also like to improve their public image by fostering environment conservation. They attempt to achieve this by purchasing and using electric cars (Garling & Thorgesen, 2001 p.59). This is the other vibrant market segment for electric cars.

Customer Analysis

Most electric car customers are the middle class households who want to experiment with new automobiles. Electric cars are still a new entry in the car market. The customers therefore still have the mindset of the fuel cars. This ought to be done away with. Most customers also have the worry of running out battery charge when they are not in a position to recharge (Motavali, 2011). This is called range anxiety. Some customers are also still in doubt about the reliability of electric cars. The company therefore needs to step up in advertisements and promotions of electric cars. This will give customers a positive insight into the usage of electric cars and eventually embrace it wholly.

International Market Research

Market Size

The market size of electric cars in China is relatively large from the global perspective. Moreover, the market continues to expand by the day. This expansion has been contributed by overwhelming support for these cars by the government and demand from private consumers.

The demand for electric cars in China even extends to the public transport sector. This upsurge in demand for electric vehicles is due to the growing bid to conserve energy in order to cut down on large scale oil importations. It is also a means of environmental conservation.

Research by Electric Vehicles Initiative, 2013 (EVI) shows a rise in China’s cumulative stock of electric cars by 20,000 units in a period of one year. In 2012 alone, China sold about 11,375 electric vehicles. The total production that same year for the electric cars was 12,552 units. 11,241 units of these were pure electric cars while 1,416 units were plug-in hybrids. These numbers show a large market size for electric cars in China. This is therefore a very lucrative market destination for exporting electric cars.

Environmental Forces

The environmental forces in China are very favorable to the production of electric cars. According to Colum Murphy (2014), the Chinese population has a new driven ambition for electric cars which increases their demand for the same. Beijing Municipal Government, in February 2013 approved the sale of electric cars in this capital city of China. This step saw a massive total purchase of electric cars both by public and private bodies. Some electric cars were even bought to operate as taxis and buses (Murphy 2013 p.1). This was an effort by the Chinese government to reduce reliance on oil. Electric cars were also turned to as an attempt to improve the quality of air. The people of China are, as a result, being emancipated to purchase, own and use electric cars. Such an environment is very favorable for the introduction of imported electric cars into the market.

Conclusion

In conclusion, the plan to go international on the sale of electric cars is very comprehensive. The company’s target market- China has very conducive environmental factors for this business. A thorough market and situational analysis has been conducted to enhance efficient market penetration by the company’s electric cars. Quantitative data on market sizes in China has also been provided to evaluate the viability of the electric cars in the China market. Analysis has also been done on the environmental factors in this market and qualitative data on these forces provided. The company’s plan to go international is therefore, a definite and huge success.

References

Anderson, C. & Anderson, J. (2005). Electric and Hybrid Cars: A History. New York: McFarland.

Garling, A. & Thorgesen, J. (2001). Marketing of Electric Vehicles. Business Strategy and the Environment. Bus. Strat. Env. 10, 53-65.

Klippenstein, M. (2014). Electric Car Market Share in 2013: Understanding the Numbers Better. Retrieved on 05/05/2014 from http://www.greencarreports.co/news/1089555_electric-car-market-share-in-2013-understanding-the-numbers-better

Motavali, J. (2011). Plug-and-Play Batteries: Trying Out a Quick Swap Station for E.Vs. The New York Times.

Murphy, C. (2014, February). Electric Cars Get a Needed Jolt in China. Retrieved on 05/05/2014 from http://online.wsj.com/news/articles/SB10001424052702304071004579406791647975728

Todd, J. (2012). Creating the Clean Energy Economy: Analysis of the Electric Vehicle Industry. International Economics Development Council. Retrieved on 05/05/2014 from http://www.iedconline.org/clientuploads/Downloads/edrp/IEDC_Electric-Vehicle_Industry.pdf