Introduction to Sheng Siong and their expansion plans
Question:
Provide a brief overview about the market entry process of a Singapore based company Sheng Siong which is aiming to expand in Japan.
The purpose of this task is to provide a brief overview about the market entry process of a Singapore based company Sheng Siong which is aiming to expand in Japan. The task provides details about the segmented target market of the company in the Japan market and market entry mode of the company as well. Furthermore marketing strategies which shall be adopted by the company while entering in the target market are discussed in this task. Lastly, the marketing mix tells about the internal resources and capabilities of the company which they shall use to sustain their growth in the retail market of Japan.
Sheng Siong is Singapore’s largest company involved in retail business. Further the company operates a Groceries Retail chain store in Singapore including 33 stores. The company is located on all profound places in Singapore and has a recognized name in the country which shows that the company has successful earned the target market and now they shall expand their business so as to earn more profit. In respect to that, the company is aiming to expand their business in retail market of Japan as Japan’s retail market is world’s second largest retail market which gives scope to the company to gain more revenue (Sheng Siong 2017). More details about the company’s marketing strategies and target market are discussed below (Appendices 1.1):
Segmentation refers to the process of identifying the segment from the market which is suitable to the company to target so as to earn more profits. There are many types of customers present in the market but not all are fit for the company, some might actually purchase the products and some might just negotiate, also some customers might create a different brand image of the company as expected (Jetro 2009). So, the segmentation process defines the customers on different basis which tells about the prospective customers whom the company shall actually target.
Market segmentation of Japan retail market for Sheng Siong Company
- Demographic Segmentation: This type of segmentation is on the basis of age, gender, religion, ethnicity, language, education and income. Initially talking about the supermarket it shall be noted that it is a place where all types of goods are available so there is no age barrier for the company to target, all age group of people buy products from the supermarket stores. Further in Japan, all type of income level of people is present who purchase products from the supermarket. But mainly the company shall target the middle level income people from the market, because they can become the regular customers of the company and initiate repeated sales (Japan Retail News 2017). The company needs to understand the religion and ethnicity of the country and then introduce products in the supermarket so that they are widely adopted by the people of Japan. Thus, the demographic segmentation represents that the company shall target middle income level people who are close to the religion and taste which is widely preferred in Japan.
- Geographic Segmentation: This segmentation divide the country on the basis of their geographical factors connected with the country. Further in the country Japan the country shall initially aim to enter in the market by place their store at Tokyo, Tokyo is the capital of Japan which is famous for trade and business worldwide. So, if the company shall start to expand their business by opening their chain in the city Tokyo, this will help the company to become famous and initiate sales to the larger segment in the market (Japan Strategy 2017).
- Psychographic Segmentation: This type of segmentation refers to the process of understanding hobbies and lifestyle of people living in that particular region. The market is segmented on the basis of the interest of the customers present in the market. The Japanese people have neither luxurious nor sober lifestyle, so the supermarket business is best fitted for the country as it provides all types of products and services to the customers present in the market (Export.gov 2017).
- Behavioral Segmentation: Talking about behavioral segmentation, this process divides the customers on the basis of their purchasing behavior. As discussed above that people in Japan have adequate per capita income which gives them cash in hand to spend. So, most of the purchases in the country are made from the supermarkets only. So, it gives the advantage to the country to target higher segment in the market and initiates their sales (Verbeke 2013).
Further on the basis of above mentioned segments the customers are target in the market on which the company mainly concentrate too increase their sales. The segmentation will help the company to decide and target the adequate market that is willing to purchase the products from the company. The customers who Sheng Siong shall target are middle aged married or single people who rely on supermarkets for fulfillment of basis needs (Cavusgil, et. al., 2014).
Market entry mode is a crucial decision which shall be taken by the organization with full solidarity by looking at the all possible aspects present in the country. Aspects being favorable and unfavorable to the organization to compete in the target market shall be looked and then only choose the correct way to enter in target market for the purpose of expansion. Further it shall be noted that in the country Japan there is high change in culture, ethnicity and language if compared to Singapore, it will become beneficial for the company if they will expand their business in japan by the way of franchising. Franchising refers to the process when the owner of a company provides right to other person situated in different country to sell the franchisor’s product under their brand name (Leonidou, et. al., 2015). This gives an advantage to the customers to enter in the adequate target market and flourish their sales in the correct market. The franchisee will initiate sales under the name of the brand which will create identification in the market. The company Sheng Siong shall choose this strategy to enter in the market because the employees of the company do not know he Japanese language nor the taste and preference of the customers living there so if a person who is familiar to the environment will create sales under the name of the company then the it will provide aid the company to target the actual market and make profit (Appendices 1.3). Further franchising will provide adequate profits to the company as well, as the company will take calculative risk by allowing the native to japan to lead their business in the country and earn profits (Buckley, and Ghauri 2015).
Market Segmentation of Japan Retail Market for Sheng Siong Company
The Japanese economy is very sophisticated which tells about the customers present in the environment. So, the organization needs to initiate good and differential marketing strategies to lead in the target market. Also there is presence of high competition in the market which pressurizes the company to use to proper marketing strategies to gain competence in the market (Thi Hong Nguyen, Wood, and Wrigley 2013). Further the strategies which the company Sheng Siong shall utilize to capture the market are discussed below:
- Product marketing Information: The retail market of japan is product sensitive, the customers do not look for the price or promotion techniques butt the only prefer good product in the market irrespective of the choice of the crowd. The customers will prefer the products which match to their requirements in the market even if other customers are switching to other brands then also they will buy the product if they find it suitable. SO the company mainly needs to focus on their product concept so that they can enrich the product with qualities which will make it preferable in the market (Wild, Wild, and Han 2014).
- Choose of Franchisee: The organization shall focus on their selection of adequate franchisee that can properly hold on their business activities in the Japanese market. The organization shall be Japan based company which shall have adequate knowledge about the market of japan and its customers as well. This selection is directly connected to the reputation of the company so Sheng Siong shall choose an organization which adds attractiveness to the name of the company in the Japanese market. In this way the customer will get attracted towards the products of the company (Buckley, Burton, and Mirza 2016).
- Detailed Technical Specification: The organization shall provide all the detailed information about the products which they are offering in the market. As it is their right to attain information about the product which they are buying. This process will help the customer to gain trust on the product and services of the company. Apart from that the company shall hire Japanese employees in their organization who shall provide such technical details to the prospective customers. For that the employees shall also attain adequate information about the products which they offer (Johnson 2017).
- Reliable point of contact and customer service: The organization shall open their stores at place where the customer can easily approach them in the market. This process will rapidly increase the sales in the market; also talking about the online services there shall be reliable point of contact. This states that the organization shall make authentic transaction while initiating sales online, also the employee shall be available to the customer’s issues all the time. This will improve the efficiency of the customers in the market. After sale services shall be organized in a manner that the employees are all the time available for the customer even at their door steps (Laufs, and Schwens 2014).
- Good communication and interpretation skills: The employees hired shall be efficient enough that they can understand the Japanese language and interpret in the same language. Also they shall have adequate knowledge about different languages as well so that sale is initiated efficiently without any barrier (Shin, and Hamilton 2014).
- Development of Website: The Company shall develop their online website from which the customers can initiate sales and receive products at their door step. This process will increase the sales of the company and create a bond with customers as well. Also development of website will add fame in the name of Sheng Siong. It will also help the company in online promotions as well (Blackburne, and Buckley 2017).
Marketing mix refers to the set of actions and tactics which the company shall use in order to promote the sales of their brand in the target market. It is a set of mixed element which helps the organization to know about their product and way which they shall use to promote the product in the market. The below mentioned marketing mix will help the organization Sheng Siong to target the Japanese market easily and motivate sales in that market.
Product: the product decision refers to the process of deciding what type of goods and services should be offered to the customers in the market so as to initiate sales. Product is one of the most important elements of marketing mix, also the organization Sheng Siong shall focus on their product concept to earn revenue in the international market. As people of Japan mainly focus on the quality of the product resulting to which the organization needs to create differentiation in their goods and services so that objectives are attained. The company shall concentrate of the technological improvement in their products and services so that better level of satisfaction is receive to customer with good profits for the company as well. Also the products created shall be developed in such a way that it portrays the ethnicity and the culture of Japan so that people are insisted to purchase the product from the retail store (Ang, Benischke, and Doh 2015).
Price: Price is the key element which drives the success of and failure of an organization in an international market. The prices decided for the product shall give level of satisfaction to the customers as well. If the customer is willing to buy a product at high prices then the product shall also product that level of satisfaction to the customers. Nominal prices of the product will help the organization to gain more level of customers and earn optimum revenue as well. The pricing shall include the packaging, manufacturing and distribution cost of the particular product, and this strategy shall also be clearly stated to the customer so that they don’t feel insecure while paying for any product in the market. The organization shall also provide discounts to the initial customers so that they get attracted towards the company. Discounts offers will help the organization to target customers on the initial basis (Štrach, and Wiesinger 2015).
Place: Place refers to the decision of the company which is related to the distribution channel. The organization shall initiate distribution channels in such a way that the products of the company are easily available to all the prospective customers present in the market. Apart from that the outlets of the company shall be placed at such locations where it is approachable by all. As the company is based in the supermarket industry so it shall open its stores at all famous places. Apart from that online services of the organization shall be designed in such a way that right product is reached on right time at right place (Appendices 1.2). Distribution channel places a major role in this process; the organization shall link their products with distributor who can cost-effectively place the products and services in the market. With the help of good channel of distribution the organization will gain competitive advantage in the target market (Naidoo, and Wu 2014).
Market Entry Mode for Sheng Siong
Promotion: Promotion has now become one of the most important concept which help an organization to reach to the target market and create an impact on their. The organization Sheng Siong shall initiate promotion by using various methods to as to increase the sales. The retailers shall constantly communicate with the customers by using different types of methods and approaches. Personal selling, direct and indirect selling, digital media communication, sponsorship and advertising are some of the ways which the organization shall use to promote their product in the international market. The organization with their promotions shall let the customers to know about their unique selling proposition so that the customers are insisted to purchase the products of Sheng Siong. As the promotion mix helps the organization to reach to the whole target audience at the same time, so the organization shall promote their products and services in such a way that it keeps at the different types of customers interested in the activities of the organization (Yuen 2015).
People: People refer to the people who are connected with the working of the organization. The employees who are connected with the working of Sheng Siong organization shall be capable enough to drive efficiency in the organization; they shall help the organization to reach their desired objectives in time. Also they shall promote the name of the company in the market so that customers purchase the products, apart from that the employees shall also behave properly with the employees and should be welcoming so that the customers creates a good image about the product in the target market (Carpenter 2015). Customer-staff interaction is one of the important aspects which help the organization to make repeated sales as well. Internal marketing shall also be initiated by the employees so as to motive sales in the internal market. Lastly their activities should portray the culture of both Japan and Singapore and they should make themselves available on working hours for the customers and their issues (Balsas 2017).
Process: process talks about the ways in which the organization initiates their manufacturing and organizing functions in the organization. The Franchisee company present in Japan shall utile the process initiated by the Singapore branch of the Sheng Siong organization. The order processing techniques shall be implemented by the organization in such a way that it takes minimum time to complete the order. Also the process shall develop the product in such a way that it meets the demand of the standardized product created by the organization. Service delivery and product quality activities shall never of compromise by the organization as they are the aspects which create the good will of the product in the target market. The marketing shall be recorded by the organization and the database management system shall be developed by the organization to improve the quality of their process (Magnier-Watanabe, and Lemaire 2017).
Physical Evidence: it refers to the shops layout shall be presented in such a way that it gives pleasing environment to the customers present in the environment. The ambience of the store shall provide a positive vibe to the customers so that the customers create a mind to initiate sales for the company. Also the attenders at the stores shall be warm and welcoming so that the customers interact with them and get to know more about the activities of the company and their achievements as well. The atmosphere of the store shall be good and the products shall be kept at the approachable places, and area should be clean so that the customers create a good mind set about the company (Huang, and Liu 2017).
Marketing Strategies for Sheng Siong in Japan’s Retail Market
Conclusion
Thus in the limelight of above mentioned events, it shall be noted that the organization Sheng Siong is a Singapore based supermarket company which is aiming to expand its business in the international market of Japan. Japan retail business is regarded as second best industry worldwide which gives an advantage to Sheng Siong to initiate their activities and earn profit, but it is not easy for the organization to enter in the retail target market of Japan, so the organization aims to enter in the Japanese market by the way of franchising. With this way the company will easily target the right customers present in the market and earn profit. This will also help the organization to become famous in target market by using adequate strategies, as the franchisee would already have knowledge about Japanese market conquer. Further the above mentioned task explains the target market selection done by the company, market entry process, marketing strategies and the marketing mix of the company. Marketing mix helps the organization to analyze its resources and capabilities and indulge them to attain satisfaction in the target market. The report justifies the requirement mentioned in the task
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