International Marketing Substitutes World Market

Question: Describe about the International Marketing for Substitutes World Market. Answer: Introduction The report is about internalization of the product Almas Caviar. The company wants to expand their market from Iran to Japan. Almas Caviar is considered as the most expensive Caviar among other caviars in the world. The report will describe various aspects such as features of Japanese market in terms of Almas Caviar, SWOT Analysis, strategic planning, competitive advantage, segmentation and internalization of the product will be described in details in the perspectives of Japanese market. The study also focuses on the description of the product and its importance and demand in Japanese market. Brief of Almas Caviar Caviar is considered as another name of diamond. On the other hand, Almas Caviar is considered as the most expensive caviar in the world. The price of one kilogram of Almas Caviar is $25,000. There is a special thing about Almas Caviar that makes it special and very expensive. Almas Caviar is a type of Caviar that comes from beluga fish. Beluga fish is available only in the unpolluted waters of Caspian Sea in Iran (Wilson et al., 2015). The pristine waters of the Caspian Sea are responsible for making the Almas Caviar so special. Usually Caviar is grayish black in color. It is healthy diet and is very nutritious. However, Almas Caviar is pearly white in color. It is the specialty of this type of caviar, that is responsible for pushing up the price of this caviar (Fopp?Bayat Ocalewicz, 2015). Apart from that, the silky texture of Almas Caviar is also considered as the factor of price hike of this Caviar in the market. Almas Caviar is known as sieved and salted fish eggs. Almas Caviar has the unique personality that is very complex in nature. It is destined for palates and is very richly nuanced. Almas Caviar is the authentic flavor that is a traditional unique food i.e. a perfect hint of the Iranian Caviar. The eggs have an intense creamy and nutty taste. The rich flavor of the Caviar is formed due to the delicate process of salting. The presentation of the Almas Caviar is unique and is very unique. The container of Almas Caviar comes in a 24 karat gold plate. However, it is not available everywhere (Peraza, 2013). Reasons of entering Japanese market Japan is a country that is surrounded by water from its all sides. The product Almas Caviar wants to enter into Japanese market because Japanese people are fond of different types of seafoods. There are various types of sea fishes are available in the Japanese market and they are consumed by them in a relished way (Bronzi Rosenthal, 2014). Apart from other staple foods, sea foods in Japan play an important role in the dietary nutrition of people. Caviar is a different kind of seafood that is consumed in all parts of the world. Japanese market has a demand of Caviar in different parts of the country. Japan also cultivates different types of caviars from different kinds of fishes that are present deep under the sea. There are many types of agricultural practices that enhance the cultivation of caviar from the sea (Ye et al., 2014). Japanese government is now exporting different kinds of caviars to other countries in order to earn revenue from them. Japanese market is now considered as the world second luxury market in terms of Caviar production. However, Japan specializes in different types of Caviars that has no similarities with the Almas Caviar of Iran (Gerlach et al., 2012). Economy of Japan is very stable. GDP of Japan as of 2016 is $4.41 trillion. GDP per capita is 34,870. Japan is a developed country. It is the technological hub of Asia with different kinds of IT sectors and other technological sectors. People of Japan have high income. It represents that they can afford Almas Caviar that has Iranian royal touch (Zabyelina, 2014). SWOT Analysis Strengths: Almas Caviar is a unique form of caviar that is available only in Iran from Beluga fish that is available in the unpolluted waters of the Caspian Sea. Almas Caviar is considered as the most expensive caviar in the world due to its uniqueness and textures. It costs around $25,000 per kilogram. People are ready to pay for this caviar due to the unique attributes (Duarte Alonso, 2016). It is a type of organic caviar that is not only known for its pearl textured white jelly like caviar but also for its organic and nutritional benefits. As it is available only in Beluga fish, hence it is charged high from the customers. There is uniqueness in terms of packaging also. Almas Caviars are packed in a 24karat container (Di Zhu, 2015). Weaknesses: Japanese market already produces caviars and exports them into different countries. Hence, there will be a risk to enter Japanese market with a same genre of products. The domestic caviar market of Japan is highly developed. The location of the company can create problem in the process of foreign expansion. In recent times, Iran is not politically sound country; hence Japanese government can create any barrier while spreading their business in Japanese market (Adeli Namdar, 2015). It is seen that Japanese people are very rigid about their origin. There is a possibility that Japanese people will support their domestic caviars rather than this Iranian caviar. However, Iran does not have any good image from political aspects. It has a negative image on media that will create a negative image in the minds of customers. The taste and flavor of Almas Caviar may not be liked by Japanese people (Wang et al., 2013). Opportunities: The company can charge premium price for the product. It has almost no competitor regarding the type of caviar. It can create a new market altogether in Japan. It can create a positive image about Iranian foods in Japanese market (Hosein et al., 2013). Threats: Governmental regulations can cause a threat for the company. People may not like the taste and flavor of the new type of caviar. Barriers related to taxation are occurred in the expansion. Distribution channel of the existing domestic caviar producers can be a severe threat for this new entrant (Jinjarak Zheng, 2014). Strategic Planning Strategic planning of entering into a foreign market consists of two sectors such as short-term plan and long-term plan. Strategic planning of Almas Caviar will be done after conducting an extensive market research regarding the different factors of Caviar market in Japan along with the data regarding different companies that are into selling caviars in Japan. However, a proper planning is required for entering into Japanese market (Hosein et al., 2013). The two types of planning are described in the following. Short term plan Almas Caviar at the beginning of the foreign entry in Japan will try to establish their brand among the minds of the customers and consumers of Almas Caviar. The product is a new genre of product in Japan. Japanese people are accustomed with different kinds of caviar. Almas Caviar is a royal form of Caviar that is specialized only in Iran. It is a rare species of Caviar. Japan will now have the opportunity of having Almas Caviar. The short term planning of the product, include adopting different types of traditional legacy media and digital media for reinforcing the idea of Almas Caviar among Japanese for increase of sales (Gerlach et al., 2012). Long term plan Long-term plan of Almas Caviar consists of different types of strategies that include capturing market share, and a well position in the market. Almas Caviar in the end will achieve the number one position in the royal and luxury caviar market in Japan. It a niche category of Caviar, that is not available in many parts of the world. Hence, by keeping premium price of the product, it can achieve higher revenue with a higher brand image (Duarte Alonso, 2016). Source of competitive advantage Differentiation From Porters generic strategies, it can be said that Almas Caviar has adopted the differentiation strategy in the aspect of competitive advantage. Differentiation is described as the nature and type of the product i.e. Almas Caviar. It is a niche product that will provide a tough competition to the other domestic Caviar production companies. Since, Almas Caviar is a niche product and is targeted to a niche segment of customers in Japan; it adopts the differentiation strategy in order to provide a cutting edge to the existing companies of Japan. Cost of the product will be high (Jinjarak Zheng, 2014). For maintaining the high quality and a good position in the Japanese market, Almas Caviar will be packed in a 24 karat gold tin package. Apart from this, the product differentiation of Almas Caviar is unique. Japanese companies will not be able to copy the features of the product because Almas Caviar is an Iranian product that has the taste and flavor of Iran. Apart from that, Beluga fi sh is available only in the unpolluted waters of Caspian Sea. It is the specialty of the Almas Caviar (Di Zhu, 2015). Despite of this, the pearl textured silky structures of Almas Caviar is not found in any other types of caviar. The company that will be selling Almas Caviar will provide Japanese customers a hint of the authentic Iranian flavor with royalty and luxury. Hence, it can be said that to enter Japanese market, differentiation strategy is appropriate for Almas Caviar for market penetration. Segmentation Segmentation is an important aspect of expansion of a product in a new market. As it is a premium niche product, hence segmentation of Almas Caviar will be done accordingly. The company can adopt geographic and psychographic segmentation. Almas Caviar can be sold at various luxury hotels and restaurants of Tokyo that are specialized in selling sea foods. Expensive clubs of Tokyo can also be targeted as they serve sea foods to the customers. The segment of people that will go to these clubs and restaurants belong to the higher income group people (Jinjarak Zheng, 2014). They will not be bothered about spending money on foods. Guests of these restaurants and clubs will be eager to taste this Iranian flavor of Caviar. It is a form of Caviar that is not previously available in Japanese market. Hence, it can be said that Almas Caviar must target different types of customers that can be categorized in the group of higher income group. In the aspect of psychographic segmentation, people wi th higher class and have spending habits on new products are targeted by the company. Usually youth segment and families of higher class are targeted. The main motto of the company is elite product for super rich elite customers (Allen et al., 2013). This is the perfect strategy adopted by the company in terms of segmenting their target market. Initially Tokyo is targeted, gradually the other metropolitan cities of Japan will also be targeted. Going International In the phase of internalization strategy, the company will adopt licensing as a form of entry mode in its short term strategy. On the other hand, after the success of the short term strategy, foreign direct investment will be chosen as the long term investment. However, the decision is made on certain assumptions and proper research. There are advantages of choosing licensing as an initial mode of entry than foreign direct investment at the initial phases. There are certain reasons that are responsible for making this decision by the strategic management department of the company. The advantages of licensing for Almas Caviar are described below. The company will provide license to well reputed and established licensee in Tokyo or other parts of Japan that will allow the company while testing in the Japanese market. Apart from this, the licensing system will help the company for further exploration without much investment of capital and management of time (Allen et al., 2014). The company of Almas Caviar will make profit from this approach. This is because, the licensee will have their own market reputation and market knowledge regarding caviar in Japan. The Iranian company can use their marketing tactics and their strengths in penetrating the market (Fain et al., 2013). The company will provide Almas Caviar to the licensee. It will sell them in the market. Since, it will be charged premium from the premium customers, the licensee will be able to earn huge amount of money from the market. In return, the Iranian company selling Almas Caviar will be earning royalty from the licensee. Besides this, the company will also have a share of profit from the amount of Almas Caviar sold in the market (Mims, 2015). The royalty income along with the share of profit from the licensee will help in earning additional return on investments on the investments that was previously done in research and development. It will reduce the risk in terms of failures of the research and development department of the Iranian company. There are huge investments required in terms of designing the patents that are using by different licensees of Caviar in Japan. If any mistakes occur, the Japanese government may throw case in the aspect of patent infringement litigation. Investment in this sector of industry is huge, as the product is a niche product and is very costly as it is a rare product in the market. Maintenance of Almas Caviar and its transportation requires huge investment that should be incurred by the company itself. Licensing will prevent the company to incur other forms of investments in the field of failures in research and development while penetrating Japanese market (Rejeb Arfaoui, 2016). On the other hand, after choosing Licensing in the initial stage, FDI will be chosen by the company as a preferred entry mode for exploring Japanese caviar market. Full form of FDI is Foreign Direct Investment. The company will invest in Japanese market after earning revenue in the initial stage during adopting licensing as preferred foreign market entry modes. During this period of time, the Iranian company will be able to earn both reputation and revenue from the Japanese Caviar market. It is very important for the company to earn trust and loyalty from the premium customers of Almas Caviar in the market of Japan. Apart from that, before investing in the market, the company must have a proper detailed knowledge about the consumers preference and other aspects of caviar market in Japan (Sielen, 2013). As the company is new in terms of caviar in Japanese markets, there are many risks that are related to the company at initial phase. Choosing licensing will help in solving many issues that are initially occurred in penetrating Japanese caviar market. However, in the long term plan of the company, foreign direct investment in the different sectors and aspects of caviar market in Japan will help them in gaining a substantial market share along with much reputation from the targeted customers in Japan. It will also help in providing a cutting edge to the domestic cheap caviar producer in Japan (Gaio et al., 2015). Conclusion The report illustrates the foreign entry of the Iranian company that will be selling Almas Caviar in the Japanese market. It also provides an idea about the nature and type of the product along with its demand in the Japanese market. Apart from that, the study also describe different attributes of Japanese caviar market that will help the company in choosing appropriate foreign entry modes for exploring Japanese market. Licensing is the first preference of the company while entering Japanese market. The advantages are described above in the report in terms of choosing licensing over foreign direct investment in their initial short term planning of the company. References Adeli, A., Namdar, M. (2015). The Iranian Caviar and its Substitutes in the World Market.Ecopersia,3(1), 933-944. Allen, D. E., Amram, R., McAleer, M. (2013). Volatility spillovers from the Chinese stock market to economic neighbours.Mathematics and Computers in Simulation,94, 238-257. Allen, D. 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