International marketing Essay Example

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  1. Executive summary

This analysis covers the market potential of the Japanese market as Dematic, a material handling and logistics automation company based in Luxembourg ventures into this new market. Notably, there are three main segments considered in this case, geographical, situational and benefit. The rationale for selecting these market segments is because; geographical segment will offer the best and unexploited market potential in main cities like Osaka and Tokyo. Situational segments will be important in the event of a disaster and benefit segment will focus on value improvement for better service delivery in the future. The growing demand for space is the driving force behind the selection of Japan as a potential new market for Dematic. Japan’s systems are still undergoing transformation and hence providing an important market gap that can be exploited. The market plan in this case is to commence by exploiting geographical segment before situational and benefit segments.

  1. Situational analysis

This analysis will consider the market segment, key trends in the market segment, profitability of the market segment and validation of the target market.

3.1 Market segment structure / evaluation / analysis

There are three main market segment structures that can be adapted in Japan. Dematic can adapt geographical segmentation, situational segmentation or benefit segmentation in the country. Geographical segmentation is based on areas of high demand of warehouse and other storage facilities as well as logistical assistance. Regions such as Tokyo and Osaka have high population density, high number of companies that may need inventory storage and supply chain services. Situational segmentation is also another option given the country’s vulnerability to natural disasters such as Tsunami and earthquake. Benefit segmentation is going to be particularly more lucrative in the future as customers turn to value added services to enhance efficiency and profitability as well as management.

3.1.4. Key Segment Trends / forecasts

According to Quijalvo (2013) the vacancy rate of Tokyo metropolitan is on the decrease, it decreased by 3.6% over the last quarter alone. Industrial space is also decreasing in Tokyo; it recorded about 6.4 % decrease by the end of August as reported by London-based investment Property Databank Ltd. In essence, the demand for space is on the increase in major cities in Japan. According to Dachs (2013) the future of the industry is bound to change as new economic trends such as new markets and new economic balance in China, Africa and India. Ecological trends are also going to be experienced in the next 10 years as natural resources become scarce and the need for sustainability fostered. New technologies will increase information exchange as Moore’s law continues. RFIDs are already in use and will continue in the logistic sector. The industry is also bound to be affected by new regulations and compliancy. Redesign of supply chain will be necessitated as current infrastructure became more congested.

3.1.6 Evaluate each segment “indicative profitability” (high, medium, low)




Currently, geographical demand is likely to be profitable as more companies seek space to store and transport their products within and outside Japan. This is especially evident in major cities such as Tokyo and Japan


This segment is likely to be explosive is disaster strikes.

This is future oriented segmentation that may favour value added services such as new technologies like RFID and new information system management

3.1.7 Identify (and so validate) the target market segment(s)” for the plan

There are three main target segments; segmentation is done based on expected income and future benefits. Geographical segmentation is more likely to be profitable once the business is launched in the region because; first Japan is running out of space especially in major cities like Tokyo and Osaka. With vacancy rate decreasing, there is need for increased housing and logistic facilities. More so, in the wake of the 2011 Tsunami and earthquake disaster, more companies are now resorting to warehousing and third party logistical assistance. Situational segmentation is a strategic approach that could prove its worth in the event of a disaster. The future is value added services; this is why the last chosen segmentation is benefit. RFID and other sophisticated computerised inventory management systems will be more essential as the need for efficiency is superseded by increased need for urgency and excellent management of inventory.

  1. Target Market Country Distribution Evaluation (“within and around” the target country)

The Japanese distribution system is complicated and less efficient as it is challenging to obtain access to Japanese distribution system. Japanese business practices are criticized for being outdated and inefficient and hence a major stumbling block for market entrants. Notably the distribution system is has many small scale firms both retail and wholesale consisting of many layers of wholesalers. There is a strong linkage among domestic producers, retailers and wholesalers. Japanese market penetration is therefore not easy for foreign companies. Over the past few years, the Japanese distribution system has open up both within and around the country. The adaptation of new technologies of inventory management and monitoring is inspiring this development in Japan. Dematic has a sound base for establishing business in Japan.

    1. Value chain analysis – draw schematic  from product source to end user

The value chain below is for milk products, this is chosen because to show suppliers will (supply chain) role in the product distribution process.

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(David 2005)

8. Marketing Plan

The market plan will consist of market entry strategy such as partners to work with, the budget of the business launch in the target market and performance analysis,.

8.1 Define target market segment(s) for this plan

The target market segment for Dematic as a material handling and logistic company is segmented based on geographical location, situation and benefits. The plan will therefore cover all the identified market segments but will launch them one by one starting with strategic geographical segmentation. The rationale for this is because of the profitability of geographical segmentation considering the growing demand of space and logistical services in Japan.

10. Appendix

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9.1 Project Gantt chart (key factors only)

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9.5 Any other relevant

Other situational analysis to be considered.

  1. Political

  2. Economic

  3. Ecological

  4. Socio-cultural

  5. Technological

  6. Supply chain

9.6 References

Chu, K & Katsuyo, K 2011, Japan Warehouses Draw Investors on Returns Post Quake, Bloomerg. Accessed from

Dachs, R 2013, Future Supply Chain, Global Commerce Initiative. Accessed from

David, HT2005, «Value chain analysis: an approach to supply chain improvement in agri-food chains», International Journal of Physical Distribution & Logistics Management, Vol. 35 Iss: 10, pp.744 — 761

Quijalvo, D 2013, Mitsui Fudosan to Invest in Japan Warehouses to Meet Rising Demand, Realestate. Accessed from