Winning in China’s Mass Markets, Essay Example

Abstract

Marketing is essentially geared at enhancing consumer awareness and willingness to buy. A number of forces are bound to greatly influence the marketability of both goods and services. With reference to Nordstrom a leading departmental store in the US, a number of forces are cited. These forces are so influential such that the any firm does not have much control over them. It is advisable for any entrepreneur to successfully plan towards the best. This is in line with the prevailing impact of these environmental forces. These forces include competition, the political system, the legal frame work, and the economics among others. This paper examines the impact of these forces on Nordstrom and how the firm should plan towards achieving its best under their influence. To a broader extend, the paper also tackles the marketing strategy to be adopted with the penetration of the firm in to a foreign market. This is also in line with the distribution channel to be adopted for effective marketability of its products.

The forces that influence the marketing of Nordstrom departmental store

Competition

With regard to competition commonly perceived as a threat to dominate the market; the firm should strategize towards quality consumer service provision. As much as it is a threat to the marketability of the firm, this force is geared at benefiting the consumer. This is because stiff competition forces the parties involved to indulge in quality production in order to meet the consumer’s eye. The firm should   stay a head of the competition by adopting a very ideal corporate culture geared at fully satisfying the needs of the consumer. Customer satisfaction is thought to enhance a competitive advantage in a very competitive field of operation. The firm needs to identify that through customer satisfaction, the returns on the shareholding would definitely be increased. Nordstrom should thus identify a strategy where the customers come first with the employees usually in the second position oriented towards enhancing quality customer care and service (Ronald, 2002).

The economy

The prevailing economic situation is a force that is bound to affect both the firm and its potential customers. Hard economic cycles are bound to interfere with the purchasing powers of the customers. The demand for a number of items is known to reduce drastically in the event of economic hardships. With the move to computerize buying trends, Nordstrom is able to offer as per the purchasing powers of its customers. This is an aspect that would help the firm to stay on board in the wake of an economic crisis. The firm needs to adopt a number of measures that can enhance the selling of goods of a wider affordability and preference in line with the basics needs of life. This is because in the event of an economic crisis, most buyers will shift to buying items that they find very essential and can thus not do without.

The political system

The political system of governance is thought to be another strong force in the marketing environment. The system of governance has a very strong influence on the survival of businesses (Ronald, 2002). This is because the system has the power to set a number of regulations that may affect the operation of the business. Nordstrom is a firm that seems to have successfully managed to survive in the wake of a number of political systems in the sense that its line of operation does not seem to call for a lot of political influence and regulation. This firm seems to operate in a field where the regulations of the political system seem not to heavily affect it. The firm should thus be able to rally its own employees, shareholders and suppliers.

The legal framework

With reference to the legal frame work in the country of operation, the firm seems to have operated within the established provisions and has for ages not been in any way barred by the law. The firm has managed to survive without heavy implications in law suits. This is an aspect that seems to hinder the progress of a number of firms in the USA. The legal frame work significantly reduces the ability of firms to venture in to various prospects. Nordstrom has managed to emerge in a number of regions without much interference by the legal frame work. This is an aspect that can be attributed to the fact that the firm seems to be operating within the ideal legal frame work. The laws stipulated in any field of operation are meant to foster good practices and enhance fair competition. It is thus advisable for firms to limit themselves to operating within the legal provisions to avoid being sued and subsequently being thrown out of operation on legal grounds. The pricing of items by a firm has to be controlled by the legal frame work with reference to consumer protection.

Technology

Technology is yet another force that can influence the marketability of a firm.  The adoption of computerized systems by the Nordstrom firm is an aspect that has really helped the firm to effectively market itself. The chief executive officer of the firm Blake Nordstrom is thought to have found it worthy to computerize the systems within the firm. This has made it possible for the firm to effectively track and monitor its potential customers. This is done with reference to their implicated tastes and preferences that are maintained as a profile. With such a strategy, it has become possible for the firm to effectively satisfy its customers and alternatively retain and attract more hence increasing its marketability. This is a very vital tool of relationship marketing where customer retention is fostered.

The social environment       

The social force related to the customs of the buyers is an aspect that is equally influential in determining the market of a firm. With the ability to effectively track the buying trends of its customers, the Nordstrom firm is able to ascertain their tastes, likes, and preferences and strategize towards fully meeting them. The firm is thus able to focus on the implicated needs of the customers unlike its overall production.  This implies that the firm is able to obtain a great marketability for its products since it offers only what is highly needed on the market. Not knowing the cultural implications in the buying trends of the customers is an aspect that may greatly reduce the marketability of any firm.

Background of the Mexican market

The overall market in Mexico is a reflection of the spending trends among Mexicans. The economy is rapidly growing with very encouraging consumer demands for a variety of goods and services. The anticipated exchange rate between the dollar and the peso is equally promising. The data below illustrates the overall view of the market in Mexico. This data can be a vital guide to foreign investors like Nordstrom.

Marketing strategy to be adopted with the need to penetrate in to a foreign market (The Mexican market)

With the need to penetrate in to a foreign market, the firm needs to strategically make it self known. This can be done through ideal communication and advertisement. The adverts can cover the range of products offered by the firm. Since there exists stiff competition in any market, there is need for the firm to focus on aspects that are bound to lure the consumer in to buying their product and not of the rival. Owing to the economic crunch, the purchasing power of a number of consumers has been reduced. The advertisement can thus be very productive if it focused on priced reductions on the goods offered. This is thought to enhance the acceptability of the brand of the firm within a new region of operation. Clearly indicating why the consumer should not pay more for a similar product by getting it from the firm is an aspect that the advertisement should address. The use of advertisement coupled with price reduction is a very ideal strategy of market promotion for a firm venturing into a foreign region. Advertisement will create publicity with price reduction offers suiting the purchasing power of the prospective customer owing to the tough economic situation (Kenneth, 1998).

Marketing distribution channel to be adopted in a foreign market

It is advisable for the firm to identify the most fitting way through which its products can get to the consumers. A channel of distribution is simply the path followed from the production of goods to the consumer. It describes the paths along which the goods will be moved before they finally get to the consumer.

For a new market where the firm seeks to gain marketability, it is advisable for the firm to eliminate the use of many intermediaries before the goods can reach the consumer. This is because such intermediaries are bound to fix their own prices in order to recover a number of costs. Such an aspect will in turn change the pricing of the commodities and thus interfere with the purchasing power of the prospective buyer. It is thus ideal for the firm to opt for an exclusive form of distribution. With such a strategy only authorized intermediaries are entitled with the distribution of the product. This makes it easy for the firm to monitor the pricing in an effort to effectively meet the consumer needs in line with their purchasing powers.

The rationale on the choice of marketing and distribution strategy in a foreign market

There are various agencies that can be used in the distribution of goods in a foreign market. A big number may wish to hold title to the goods while a handful distribute on the basis of commissions on the overall sales. The use of an exclusive form of distribution is ideal in a foreign market. This is because the firm will have much control on the pricing of the products. Intermediaries are not preferred with the distribution of goods in the foreign market as they tend to fix their own prices in an effort to recover costs.  The formulation of a marketing entry strategy requires assessment of the preferences of the channel of distribution. For firms used to selling directly to retailers in their home market; the use of wholesalers in the foreign market seems averse. The use of both retail and wholesale levels in the foreign market is thought to intensify economic growth. This is contrary to the use of many intermediaries that is bound to reduce the growth of the economy.  It is possible for a distributor to market in line with the economic development with the use of both retail and wholesale marketing than with the use of many intermediaries. Carefully avoiding the use of many intermediaries that are bound to increase the pricing of the product is essential. A short distribution channel is thus ideal. The data below represents a model effectively adopted in as number of leading Chinese firms. Adopting such a strategy is bound to offer a competitive advantage. Such a strategy extends far beyond price reductions in the promotion of sales.

Conclusion

The following factors should be considered in the choice of a distribution channel: The implicated value of the products, the longevity of the products; whether the products are long lasting or highly perishable, and the range of the products alongside the expected turnover with the sale of the products. The above factors are all rated to the product. With relation to the market, the following factors should be considered: The number of both the customers and the distributors and the overall size of the market. This goes hand in hand with the expected volume of sales and the growth prospects. With relation to the prevailing environment, the following factors should be considered: The state of the infrastructure in the region of operation, the political and economic state of that region which also reflects on the implicated regulations of trade. The customs regulations and constrains alongside the availability of distributors should also be considered. These factors point to the forces initially implicated in the business environment. A critical assessment of these factors is thus an ideal structure in dealing with these forces.

Reference

Kenneth, R. (1998). Managing channels of distribution. Washington: amacom Div American Mgmt Assn.

Ronald, R. (2002). Managing organizational behavior. New York: Greenwood Publishing Group.

IBM. (2007).Winning in China’s mass markets: New business models, new operations for profitable growth. Retrieved August 23, 2009 from http://www- 935.ibm.com/services/us/index.wss/ibvstudy/gbs/a1027248?cntxt=a1005266

Infocanada. (2006). Study of The Mexican Market Project Summary. Retrieved August 23, 2009 from http://www.llbc.leg.bc.ca/public/PubDocs/bcdocs/419612/Mexico_Consumer_Travel_Trade_Research_(Summary).pdf