asala international marketing plan
TRANSCRIPT
International Marketing PlanGermany market
DR\ Marwan El Messiry
MBA -2016
Team Work
Haytham Mhamed
Eslam Gomaa
Asmaa Hussein
Dina Ismail
Mona Refaat
The world around us is changing at incredible speed , the competition is very intensive in the marketplace locally and internationally, as a result, Asala Company for natural cosmetics products has a great ambition to grow internationally, it figure out growth opportunity in the biggest European country in cosmetics industry Germany , where the great and big natural cosmetics market size.
Asala company established in 1996 working in several categories foods and natural cosmetics , Asala has ambition to export beauty and care products to Germany ,ASALA want every women to feel and look beautiful .
ASALA company
Introduction
Cosmetics Industry segments
Natural ingredients for cosmetics are maintaining their popularity Growing consumer interest in natural cosmetics products is expected to help sustain the demand for natural ingredients in the coming years. There is an important spillover effect as conventional cosmetics are starting to contain more natural ingredients.
Global sales of natural cosmetics demonstrated an impressive increase from around €5 billion in 2010 to €22 billion in 2013 (organic-market.info, 2014).
45% (€10 billion) of the global natural cosmetics market stems from sales of certified natural cosmetic brands, while the rest (55%) is considered as ‘near-natural’ cosmetics.
The European market for certified natural cosmetics amounted to around €2 billion in 2013. Germany accounted for 35% of this market, followed by France at 15%.
Innovation is quite high in these countries, especially in the UK and France, where product introductions are high.
The largest European markets for cosmetics are also large users in terms of per capita consumption. Except for per-capita sales in Poland, which are relatively low, per-capita sales of these leading European markets are well above the European average of €129 in 2014. Of these leading markets, Poland demonstrated the strongest increase in per-capita sales from 2005
to 2014, while Spanish per capita sales dropped the most.
Figure 3: Per capita consumption in the leading European markets for cosmetics between 2005 and 2014, in €
Barriers to entry Political & Legal
Germany is a democratic republic. The Social Democratic Party and the Christian
Democratic Union leads the political system since 1949. The legislature, the
judiciary, and the executive are the 3 wings which make up Government of
Germany.
Import Tariffs Germany Import Turnover Tax
Goods imported from non-EU states are subject to an import turnover tax .The
import turnover tax rate equals the VAT (value-added tax) rates of 19 percent .
As a prerequisite, the company must have the necessary import documents with customs proof of payment (import declaration). It is important to collect and present all invoices as originals in order to deduct any VAT charges from one's own tax liability or to get reimbursed by the German Ministry of Finance, if eligible.
Trade Barriers
Germany's regulations and bureaucratic procedures can be a difficult hurdle for companies wishing to enter the market and require close attention by exporters. suppliers are well advised to do their homework thoroughly and make sure they know precisely which standards apply to the product and that they obtain timely testing and certification The Single Administrative Document
The official model for written declarations to customs is the Single Administrative Document (SAD). Goods brought into the EU customs territory are, from the time of their entry, subject to customs supervision until customs formalities are completed
EORI
Since July 1, 2009, all companies established outside of the EU are required to have
an Economic Operator Registration and Identification (EORI) number. Once a
company has received an EORI number, it can use it for exports to any of the 28 EU
member states. There is no single format for the EORI number.
Cosmetics Regulation:
On November 30, 2009, the EU adopted a new regulation on cosmetic products
The law introduces an EU-wide system for the notification of cosmetic products and
a requirement that companies without a physical presence in the EU appoint an
EU-based responsible person.
Cosmetics legislation at EU level also:
requires that all products to be marketed in the EU must be registered in
the Cosmetic Products Notification Portal (CPNP) before being placed on the
market;
requires that some cosmetic products are given special attention from regulators
due to their scientific complexity or higher potential risk to consumer health;
ensures that there is a ban on animal testing for cosmetic purposes;
makes EU countries responsible for market surveillance at national level
Opportunities
SWOTStrengths Weakness
Threats
Germany has around 43,000 successful cosmetic institutes Their
success is based on guaranteed “made in Germany” quality .The
challenge is German’s acceptance to Egyptian Cosmetic product.
Capability to offer high-quality products and local based after-
sales support
Required Safety or environmental standards can complicate
access to the market (Timely testing and certification)
Germany’s relatively high marginal tax rates and complicated tax
Germany is the largest cosmetic market in
Europe followed by France, UK, Italy and
Spain
The naturel cosmetic market is rapidly
growing, which expanded approximately
by 7% in 2013.
Located in Central Europe Size: 357,021 sq km
Largest Cities (in million inhabitants): Berlin (3.5), Hamburg (1.8), Munich (1.4), Cologne
(1.0), Frankfurt/Main (0.69)
Conclusion: it‘s the right selection to start in europe by Germany in the biggest 5 cities and then
go spread along all Germany, and it will help us to penetrate other markets In Europe due to it‘s
strategic location.
Population: 81.7 million (0.97 male(s)/female) Population Growth Rate: -0.06% (2011 est.)
Language: German
- Age Structure:
- 0-14 years: 11.0% , 15-64 years: 72.1% , 65 years and over: 16.9% (2010)
Ethnic groups:
- 91.9% German - 2.0 % Turkish- 6.1% others
Conclusion: our target Segment is a large segment in Germany that can consume the natural
cosmetics products of Asala
Availability of plants raw material
Prices & raw materials aver much less than
Europe
Need adaptation to skin needs in cold
environment.
Need high degree of quality and purity
due to high standard and regulation
Technological
Germany is a very advanced country. It is spending a lot of money on research and
development. Germany’s position in the European Union has a noteworthy science
and technology components
The cosmetics manufacturer decided to modernize its raw material warehouse using
professional modules. Using a shelf operator terminal, which covers more than 3500
storage locations, raw materials and supplies are available for the production of
cosmetic products.
The aim of logistics is to have the right goods at the right time at the right location in
the right quantity. This applies to end products for external distribution, as well as for
the internal distribution of supplies and raw materials, and packaging material.
Reliable production can only be guaranteed by state-of-the-art logistics and
warehouse technology.
There are many cosmetic application centers with about many uniquely qualified
experts worldwide that provide comprehensive support to cosmetic manufacturers
from around the globe. While each center has its own local focus of expertise, they
all research the latest developments in raw materials as well as perfect their use in
cosmetic applications.
At Germany the cultures of people describe family important. At Germany Sunday is still officially a family day of rest that "still has a sacred quality," though few families actually attend church then.
Women play an important role in the workforce in Germany, and many aspects of social and family policy are designed to make this possible
Political System: The Federal Republic of Germany is a democratic, federal and social
constitutional state. Together with the basic rights, these principles form the inviolable
core of the constitution guarded over by the Federal Constitutional Court.
Largest economy in Europe forth largest in the world.
GDP. $2.5 trillion (2014) ,GDP real growth rate 2.0% ,GDP per capita 45,000
Curency: Erou Exchange rate: 1 Euro equals 1,05 US-Dollar (March 2015)
Unemployment rate: 5,4% (08/2012) extremly positive
Inflation rate: 0.9% (2014) Industrial production
growth rate: 3,7% (2010), 3,0% (2011)
Economy characterized by small and
medium enterprises (>85% )
Very attractive for foreign investors (>10,000)
foreign companies, with >2 million employees and sales of >750 billion/year
GDP Growth In Germany
The overwhelming majority of German students attend public schools. The whole
German education system, including the universities, is available to the children of
bona fide expatriates.
There are also many private schools. Although education is a function of the federal
states, and there are differences from state to state, some generalizations are possible.
There are several varieties of university-level schools. The classical universities provide a
broad general education and students usually attend them for up to six years
The Technical Universities are more aimed at training students for specific careers and
are usually attended for four years.
Today, the major media production centers are located in the “old” West,
newspapers of the former GDR “German Democratic Republic “are usually
controlled by Western companies, broadcasting is integrated into the Western
dual system.
Radio is a popular medium in Germany at daily consumption and Germans
spend about 219 minutes per day on television, split about evenly between public
and commercial programmers.
The Internet, the growth in mobile handhelds, and the triumphs of the social
media have significantly changed how the media are used
Today, 55.6 million Germans over the age of 14 (79 percent) are online.
In Germany, for example, the progress of the online magazine Krautreporter,
launched by crowd funding in 2014, is being followed with bated breath.
Christianity is the largest religion in Germany, with an estimated 61% of the country's
population.
-Second largest religion is Islam , with between 2.1 and 4 million adherents (2.6% to 5%
Study shows that Germany and France have the largest Muslim populations among
European Union member countries
German law generally makes no distinction between Germans and foreign
nationals regarding investments or the establishment of companies.
Intellectual property is well protected by patent. The investor rights can be
enforced by Germany’s efficient judicial system.
Germany has an open and welcoming attitude towards foreign direct investment
(FDI).
The German society is a truly Individualist one
Small families with a focus on the parent-children
relationship rather than aunts and uncles are most
common.
Highly decentralized , German society, work and families treat people with equality
In business, Germans are known to be assertive, though not aggressive.
German managers and employees are often close
A direct and participative communication
Germany is considered a Masculine society.
Performance is highly valued
People rather “live in order to work” and draw a lot of self-esteem from their tasks.
Managers are expected to be decisive and assertive.
Germany it is a pragmatic country. In societies with a pragmatic orientation,
people believe that truth depends very much on situation, context and time.
They show an ability to adapt traditions easily to changed conditions, a strong
propensity to save and invest, thriftiness, and perseverance in achieving result .
Rituals and Holy Places.
• The local church dominates the central area of nearly every German
settlement.
• German churches are often impressive architectural structures,
• The areas surrounding the towns and villages are typically strewn with shrines
and chapels.
Death and the After life. Nearly 70 %of Germans are members of a Christian church,
and share common Christian beliefs inhimmel(heaven) andhölle(hell) as destinations
of the soul after death.
Funerary rites involve either a church service or a civil ceremony, depending on the
beliefs of the deceased and his or her survivors
Germany insist on written rules and detailed codes of conduct.
by planning everything carefully they try to avoid the uncertainty.
In Germany there is a society that relies on rules, laws and regulations
International Marketing selection process
Why Germany ?Screening of markets process
South America
North Americ
a
WesternEurope
Eastern Europe
Africa& Middle
east
Asia/Pacific
By PDT Acceptance
South America
WesternEurope
Eastern Europe
Eastern Europe
GDP 21 Countries BERI index
By uncertainty
avoidance
Germany UK
FranceItaly
Brazil Spain
SwitzerlandS. Africa
Germany UK
FranceItaly
Brazil Spain Qatar
RomanS AfricaIsrael
KuwaitUAE
SwitzerlandUK
GermanyS.Africa
Primary Target Market
SwitzerlandUK
GermanyS.Africa
Germany
Biggest market Size
Marketing Attractiveness
Factors 1
Very
boor
2
Poor
3
Medium
4
Good
5
Very
Good
% Weight
Factor
Results
G
Market Size S.A G 21% 105
Market growth G /SA 15% 60
Prices G S.A 15% 60
Buying Power S.A G 21% 105
Market Access G S.A 21% 63
Political
/Economic riskS.A G 7% 35
100% 428Marketing Competitiveness
Factors 1
Very
boor
2
Poor
3
Medium
4
Good
5
Very
Good
% Weight
Factor
Results
G
Product to fit
DemandS.A G 40% 200
Prices G S.A 25% 100
Marketing G 25% 25
Communication G S.A 10% 40
100% 365
Why Germany ?
Germany (4.3 & 3.7)
S. Africa (3.85& 3.95)
UK (3.92 & 4.35)
BERI index
G S.A
Germany Marketing Segmentation
Age Usage Rates
18-25 Daily
25-40 Weekly
40+ occasionally
Age/ usage rate Daily Weekly Occasionally
18-25 1 S1 S2 S3
25-40 3 S4 S5 S6
40+ 3 S7 S8 S9
Criteria S1 S2 S3 S4 S5 S6 S7 S8 S9
Market Size 1 1 1 9 9 3 6 6 3
Market growth
1 1 1 3 3 3 3 3 3
Buying power
1 1 1 6 6 2 6 6 3
Total 3 3 3 18 18 8 15 15 9
S/P Skin care Hair care Deos
S4 -
S5 -
Data
Primary
TechniqueQuantitative
Qualitative
Objective
Exploratory
H1: German People will not accept the Egyptian cosmetic products
H2: The frequency of using the cosmetic products is higher in the middle age female segment.
H3: German people always get their natural products from Drug stores on regular bases.
H4: German people don’t trust sales through salesman in face to face communications
Yes Probably No
Factors Weight
ProductProduct differentiation +1
Product Complexity -1
InternalFactors
International experience -1
Firm Size Zero
Desired modecharacteristics
Risk averse -1
control +1
flexibility 1
TransactionSpecific factors
Tacit natureof Know- how
zero
Opportunistic behavior +1
Transaction cost +1
External factors
Social culture -1
Distance Country risk +1
Market size and growth +1
Direct and indirect tradebarriers
zero
Intensity of competition -1
Small number of relevant export +1
Total = +1*15=.66
Entry mode decision
Intermediate modes
Factors influencing the entry mode descion
Factors High Average Low
Product policy Basic needs Aesthetic criteria Chemical,
functional criteria Package
Price policy Consumer Prices. Price positioning . Transfer pricing.
Distribution policyDistribution system
Communication Policy Communication
targets Massage (USP) Layout Media selection Timing Sales Promotion Brand Name
Analysis of a company’s standardization potential
ASALA company will apply the penetration pricing strategy to stimulate the growth and gain market share in terms of sales volume by offering the products with low prices .
ASALA company for natural products will choose selective strategy to distribute its products in Germany through main distribution channels
Drug stores are the largest sales channel by far whose natural products rose by 10 % in 2015
Specialized stores
Modern trade
Big wholesaler
Penetration Pricing
Selective
Pricing Strategy
Distribution Strategy
Thanks