International Marketing
Executive Summary
This report has been based on OSIM International. The main purpose behind this is to cover all strategic aspects of the company in detail regarding its business operations. In-depth research has been conducted regarding the increasing trends of a healthy lifestyle. A situational analysis has been done to discuss the SWOT and PEST analysis. According to these, it can be concluded that OSIM belongs to such a market where growth is slow for them but still they’re holding a strong competitive position (Cateora, 2007).
It is recommended that for Osim’s future growth and development the internal condition must be emphasized. The most important aspect which should be considered is the human resources. It is essential to have the appropriate culture and to build up a conducive environment to manage people. In the external environment, the PEST analysis is quite important. It is evident that necessary changes will be made in the organizational structure to cope up with the external environmental factors such as political, economic, socio-cultural and technological.
Background
OSIM is an international company which deals in health related lifestyle products. In 1980, it was found in Singapore by Ron Sim. Initially, they were operating with the name of R Sim Tradings. They used to manufacture electric appliances for households. They engaged their initial start up capital for promoting their products like knife sharpeners and mobile clothes drying rods. In 1989, they changed their name to ‘Health Check and Care’. At that moment, they decided to shift their product line’s focus to products related with healthy lifestyle. After this change, they succeeded in their development. They managed to market their products into Malaysia and Indonesia (OSIM International)
It is an internationally acclaimed market leader in the industry of health related products such as foot massagers, slimming belts, pedometers, massage chairs and other such equipments. They are quite well known in Malaysia.
Currently the vision of OSIM is to be the market leader on the healthy lifestyle industry. Their mission is to challenge the will and strength of their clients. Their goal is to offer a healthy lifestyle for their customers (OSIM International)
Reason For Choosing Philippines
The major reason for selecting Philippines is that their location is strategically ideal as it is situated in the middle of South-east Asia. Besides this, Philippines is a developing economy and the population is growing over there. It is a good opportunity for Osim to target them for their products as they are quite technological savvy people (Batra & Stone, 2003).
Another reason for choosing them is that the customer’s purchasing power is rising over there. This will be a positive aspect for Osim as they can reap high profits by achieving good sales. By entering into a foreign market, they can gain the advantage of growing in terms of sales, customer base and revenues (Batra & Stone, 2003).
Business Environment
In this report, our main focus of discussion and analysis is the internal and external environment of Osim International in Philippines. For the analysis of the external environment, we are going to discuss the PEST analysis. It is mainly used for planning regarding expanding internationally. It is quite an effective tool that helps to determine the factors and the suggestions on how Osim should react towards the variations in the environment directly.
Political Factors
These political factors include the taxation policy, government stability, foreign trade regulations and social welfare policies. The government of Philippines is considered as quite liberal regarding such governmental policies. They will stick to the principles which have been decided by the World Trade Organization regarding the trade policies. Business firms like Osim which are operating from other countries are allowed to do their own business.
Economic Factors
Philippines is catering to many customers as it is one of the most important commercial country in Asia. In Philippines, there are both kinds of buyers which are local and foreigners. They will have to alter their short and long term plans due to any kind of changes in the economic factors like inflation, recession, exchange rates, changes in production costs and levels of unemployment (Emtage & Suh, 2004).
Socio-Cultural Environment
According to some researches, it has been observed that Philippines has a very low risk avoiding factor. This means that their customers have an impulsive buying behavior. Besides this, another socio-cultural characteristic was observed that the customers have a high level of a longer time period orientation. Osim will have to plan accordingly regarding the strong brand loyalty in Philippines. After observing the buying behaviors of customers, it can be concluded that the customers choose such products which are of a higher quality and unique. For this purpose, they will have to make sure that they have a well-built customer relationship management (Emtage & Suh, 2004)
Technological Environment
Customers from Philippines will have a strong urge for technologically savvy products. They would want such health related products which are innovative and easy to use. Osim is offering highly innovative and technologically advanced products which give a way to their customers to achieve a healthy lifestyle in a very original manner. They are very much committed to provide the products by integrating the latest technology in them.
Swot Analysis
For the purpose of assessing the internal business environment, we shall use the SWOT analysis. It is a very effective tool for examining the business organizations’ strengths, weaknesses, opportunities and threats. SWOT is an abbreviation of S for strength and W for weaknesses which are under the control of business organizations management team. It is known as the internal analysis. Then, T is for threats and O for opportunities which are uncontrollable by the management. It is known as the external analysis. It is used for planning business strategies effectively. This process will involve identification of the organizational internal strengths and weaknesses and the external environmental opportunities and threats (Hill & Westbrook, 1997).
Strengths
Osim is a well established and internationally recognized brand name in the industry of healthy lifestyle products. They have managed to create a high demand for their products. Most of their customers belong to the niche market. They have a large extensive network of outlets where a diversified range of products are being sold in different geographic locations. They currently have around 608 outlets across Africa, South Asia, North Asia, Middle East and Europe. All over these retail outlets, Osim gives the same message of welcoming others by attractive displays.
Weaknesses
Osim is offering all such products which are not in the category of commodities. They are quite costly and pricey for most of the customers. The buying behavior of their target market is being affected by the cost of the products for the customers. Besides this, there is another aspect of threat that is the variations in the consumer preferences and taste. Their sale of products is solely dependent upon the demand created by customers who may surely get affected due to changes in their tastes and attitudes. It cannot be guaranteed that the efforts in brand management, niche marketing and product innovation will enable Osim to meet the customer expectations. It is possible that demand may decrease due to downfalls in the economic cycles. People might not consider them essential for their healthy lifestyle.
Opportunities
Osim should realize that Philippines market is an emerging one where healthy lifestyle is being welcomed whole-heartedly. They should be expecting a higher profitability from a large market. They will be covering an extensive range of Philippine markets by creating unique and innovative products which will be competitively priced but easy to access. Osim should try to link up with famous health studios and fitness centers for promoting their products. This will be helpful for them to expand extensively. It will also help to earn few allies with the assistance of these establishments.
Threats
One of the major threats for Osim is that they will have to face the hardship of expanding their sales in a new market. The value of money in Philippines has risen recently. This is because of the drastic changes in the currency exchange rates caused as a result of the international markets. Other threats can be related to the health diseases and other such activities. The continuous and rapid success of Osim products has managed to raise awareness among customers about counterfeit products. Negative media publicity and other competitors within the market can affect their business operations. All these factors are inter-related and they can be caused as a result of another.
Marketing Mix
Marketing mix can be described as one of the essential aspect regarding marketing. It is categorized in four parts which include the product, pricing, placement and promotions. These are known as the four P’s of marketing to help the business organization in its operations and achieving their appropriate target market. Customers are not a part of the marketing mix because whole of the marketing mix is aimed at the customers (Yoo, Donthu & Lee, 2000).
Now the four aspects are explained briefly. The product under consideration can be classified either as a consumer product or as the producer’s product. It means that it may be purchased by individuals for personal use or it may be purchased by some business to use it. Other features of the product are also included in this such as the outlook, size, quality and attractive packaging. Secondly, the price refers to the level of pricing which the business organization wants to achieve by selling their product to the customer. The pricing of the product will be decided according to the channels of distribution being used, business image, business objectives and other competitors. On that basis, the pricing can be decided. Thirdly, the placement describes the product where it will be sold to their target market. It refers to such a point where there are retail outlets and stores. The product should be easily available over there for the customers. Another aspect to the placement is the channel of distribution; it means that the business will deliver their product to customers through the retailers, wholesalers and distribution companies. The last P is for Promotion of the product. It is a process of introducing the product in the market and to sell it by attracting customers. It is done to raise awareness among the customers. There are different types of promotions which can be done like personal selling, sales promotions, advertising, packaging and branding. It is the most important form of communication between the customer and product (Yoo, Donthu & Lee, 2000).
Product
Osim sells products which are related to a healthy lifestyle. These products include the head massagers, back massagers, eye massagers, massage chairs, slimming belts, blood pressure monitoring machine, water purifier, soothing gel pads and pedometers. Their goal is to enable their customers to recognize their brands products easily. They want to provide them maximum satisfaction. If they feel that their product is not meeting the customer expectations, then they welcome feedback and accept the criticism whole heartedly. Then plans are made to modify the product for fulfilling the customer’s needs.
Place
Osim has placed its products at various retail outlets. This also help is raising customer awareness of their products. They have outlets all over the world like in China, Cambodia, Iran, Hong Kong, Malaysia, Taiwan, UAE, USA, Saudi Arabia, Austalia, Bahrain, Korea, Spain, Brunei, Kuwait, Macau, Thailand, UK, Vietnam and Singapore. Their main headquarter is situated in Singapore. Osim has intelligently built their main outlet in one of the busiest city which has the highest living standards.
Price
Osim is known internationally as one of the high standard brands which sell health related products in the market. It is well reputed because of its own image, name, safety and quality. To set up a price for the product, it is necessary that the objectives for pricing should be determined. Osim has used the cost-plus pricing. In this method, the total cost of production is calculated for the product. Then, the profit margin is also added to this. It then forms the selling price. They are also using the competition-oriented approach of pricing. It means that they set the price according to the pricing comparison with a competitors’ product. Few of their products are priced in accordance to the price being charged by their competitors.
Promotion
It is the last but most important aspect of the marketing mix. Promotion refers to the methods used by a business organization to make their target market aware about the products’ existence. Osim usually advertises online on their websites and social media. Online advertising is said to be comparatively cheaper as compared to the other methods. Customers can avoid the hassle by just visiting the website and getting all the desired information for free. Brochures about the products are distributed to the visitors when they come to see the products physically at the retail outlets.
Marketing Strategy
Target Market
Osim is offering its healthy lifestyle products to middle aged men and women. They may be aged 30 to 55 years. Usually, people of these ages are more health conscious than the youngsters. They will prefer to adapt a healthy lifestyle by using these products. They will belong to the upper niche market where they’ll have a higher income level. They will have the required purchasing power.
Marketing Issues
Osim might face few issues related to marketing in the Philippines. It can be said that they will need to keep struggling for improvement over the next few years. They will have to cope up with the situations where target market’s preferences will change. They may require doing some adaptations in their products to meet their customers’ expectations. Their marketing strategy needs to be altered due to the changing tastes and preferences of their customers (Bearden, 2006)
Another marketing issue which they can face is that there may be risks involving the ups and downs in an economic cycle. Demand will be decreased during hard times in the economic conditions. There may also be a threat for being quite vulnerable to health diseases and other such activities. This will surely impact the sales and profitability (Cateora, 2007).
Market Positioning
Osim should be promoted as an environment friendly product which is to be used for achieving a better health. This will help in building up a brand image and perception in the minds of its customers. It needs to be positioned as a technologically advanced product which helps in incorporating a healthy lifestyle. It can be promoted extensively by putting ads through technology and internet like by using the social media networks. It will help in creating brand awareness and a positive brand image.
Marketing Objectives
The basic objective of Osim’s marketing and promotional activities is to become the market leader of the industry of health related products. They want to manufacture such products which will motivate the customers to take care of their health. They will feel more health conscious when they use these products. Osim wants to raise awareness regarding importance of health among their customers. When they are well informed about this, they will gradually feel more conscious about their own health and their food intake (Bearden, 2006)
Business Conclusion
The international venture decision of Osim into Philippines is very appealing and attention grabbing. They have clearly assessed the needs of this particular market. They also have a chance of catering a niche market segment in the country. They will need to become quite flexible so they can deal with the external environment demands. It can only be possible if there is a balance among both the internal and the external environments.
They can strongly plan to implement and execute the plan of expanding into Philippines. For this purpose, they should be well prepared for catering or handling the situations where their performance is likely to fail because of serious threats and weaknesses which they are facing. These threats and risky situations are not a problem for Osim. They can easily overcome it and they should surely plan to expand their business operations into Philippines.
Osim focuses more on the management and information rather than creating unnecessary products. Due to this, they have managed to develop a set of principles which is to be followed by everyone. This includes the cost efficiency, effectiveness and simplicity. When all customers are satisfied, it means the employees and management are highly committed to these principles. Osim was able to achieve a large market share by utilizing its competitive advantage of manufacturing easy to use products for its customers. Such innovations have helped Osim to achieve their targets and market strategies.
References
- Bearden, I. (2006). Marketing: Principles and perspectives. Academic Internet Publishers, Inc..
- Batra, G., Kaufmann, D., & Stone, A. H. (2003). Investment climate around the world: Voices of the firms from the World Business Environment Survey. World Bank Publications.
- Cateora, P. R. (2007). International Marketing 13E (Sie). Tata McGraw-Hill Education.
- Emtage, N., & Suh, J. (2004). Socio-economic factors affecting smallholder tree planting and management intentions in Leyte province, Philippines. Small-Scale Forest Economics, Management and Policy, 3(2), 257-270.
- Hill, T., & Westbrook, R. (1997). SWOT analysis: it's time for a product recall.Long range planning, 30(1), 46-52.
- OSIM International (). OSIM Corporate. [ONLINE] Available at: http://corporate.osim.com/index.html. [Last Accessed 08 December 2014].
- Yoo, B., Donthu, N., & Lee, S. (2000). An examination of selected marketing mix elements and brand equity. Journal of the Academy of Marketing Science,28(2), 195-211.
