Product and Target Market Planning for Foreign Markets
Purell Hand Sanitizer is a product of GOJO Industries. The product since its establishment in 1997 has enjoyed a large embrace by the American population, and the focus has been on foreign markets. GOJO Industries have taken the move to bring Purell Hand Sanitizers into the international market arena (Jordan et al., 2009). The case focuses on India. Purell sanitizer kills 99.9 percent of the most common germs and is portable to supplement regular washing of hands. The product promotes good health hence preventing the spread of diseases. Purell enjoys a competitive advantage over other rivals such as Colgate with numerous annual profits.
Purell brand has been experiencing constant market domination. However, the recent fall in its market share by 39.4% has prompted the move to enter new markets such as the Indian market (Jordan et al., 2009). Entering into the Indian market will need an evaluation of several aspects. The market in India is welcoming in that the population is overly large which creates a potential customer base. The population of India as per 2013 World Bank survey was 1.252 billion people. The majority of Indians live in the bottom of the pyramid economy level, and there are major disease outbreaks due to low hygiene levels and a large number of slums as a result of the high population.
A Cultural Analysis of the Indians is vital. The Hindi language is the dominant language among the population through a CIA analysis indicates that The English language is common. The Indian customers have a high preference to customization of a product before purchasing. Their culture has ties with notions before purchasing, hence the more attractive the packaging of the Purell product, the more it will receive a better market share. The Indian legal system follows the English common law and is democratic. The Indian government has been encouraging liberalization of the economy which means that the economy of the country is open for the international investors such as Purell owned by GOJO Industries. The geographic location of India is filled with a large number of people majorly in poorly developed rural areas. This offers an excellent opportunity for Purell since the hand sanitizer would be welcome to minimize the many sicknesses among the population.
Product Life Cycle
The cycle of the Purell Hand Sanitizer will base on various factors.
Introduction
Introducing the product in the Indian market will require adequate resources in terms of funds. The introduction should also involve consumer testing and the marketing for launching the product. The target market need to be evaluated to assess and skim how well the product could get reception, for example, how other related products were received.
Growth
The product domination should grow at a certain rate, and its achievable if more money is invested to maximize the potential growth. GOJO Industries should adopt a market growth strategy such as expanding the customer base and increasing the amount of sales and maximizing profits.
Maturity
The maturity of the Purell sanitizer in then Indian market will face competition, and here modifications and improvements on the product will be necessary to retain the competitive advantage. Purell will be mature if it has an overall competitive advantage and a large market share that allows it to benefit from economies of scale.
Decline
Finally, with time Purell may lose its market share and the best way to handle this would be diversifying the Indian market and more product differentiation. A way of dealing with the decline in the demand for a product is trying to reintroduce the product in other markets and more product promotion in the current one.
Purell comes in easily portable packages that are convenient to carry around in the pockets and purses for customers wherever they go (Jordan et al., 2009). The target market in India is diverse in that the economic pyramid has differentiated classes. However, the majority is at the base of the pyramid, and this means that this is the best market for the entry strategy. The key to success will be a prior study of the consumer behavior patterns and the psychographic trends. The feminine approach may be used to introduce the Purell sanitizer since women are known to value their health and efficiently carry items in their purses than men. Thus, this will help identify the best market approach for penetrating further into this region.
Global Distribution Strategy
The GOJO Industries in marketing the Purell hand sanitizer across the borders should consider the infrastructure in India. India has relatively well-developed transport and communication networks with international airports to aid link with other countries such as the US. This means that the distribution of the Purell product will be easier, and the transfer of information between trading parties will be efficient. Additionally, the country has enough access to the internet which means that modern business trends such as e-commerce will be possible to facilitate even online distribution of the product (Module-2, n.d.).
However, the distribution barriers also come in especially where the population is dense, for instance in Mumbai and Delhi. The reason here is that most of these cities face the problem of massive traffic congestions, and these would hinder easier distribution. Additionally, India has been known to be inconsistent with business policies and rules that change suddenly. Most of the foreign companies often develop their operations in the EPZ as a result of preferential treatments; hence Purell marketers will face this barrier (Ministry of Economy, Trade and Industry Japan, 2002). Similarly, the GOJO Industries will need to seek state government of India permission which is by itself a long procedure. Another barrier will be the sparse population density in the India’s interior due to the geographical spread of the rural areas. Similarly, competition barriers from Dettol and others such Himalaya Pure Hands may even cause obstacles to entry in the market.
India charges foreign companies high corporate taxes as compared to the domestic ones. For instance, in some cases the local firms are charged 35% while foreign one 40%. In addition to the heavy taxes, Purell will face tariff that come in three forms for the international companies. These are necessary taxes, countervailing tariff and special additional tariffs. The documentation will involve strict and restrictive foreign exchange control (Ministry of Economy, Trade and Industry Japan, 2002).
Global Promotion Strategy
One way of entering foreign markets is through product promotion and awareness. New products get launched properly into a new market through the creation of knowledge among the potential users (Peng, 2009). India has an average access to various media through which details about Purell such as its use, pricing, benefits among others can be communicated. This will need consideration of the target market whether they have access to the media used to promote the Purell awareness. TV Channels such as Tamil India TV, radio stations, newspapers, and posters are some of the media that can be readily available by the larger population being targeted. Health magazines and journals would also be useful for posting articles relating to Purell. Similarly, social media such as Facebook are very popular in a country like India with its large population and would serve well to advertise the Purell product.
Similarly, the distributors may also play the role of informing the targeted market and others about the product. The use of intermediaries such as local retailers will easily get the Purell sanitizer into reaching most of the targeted users. For example, if the target is at the base of the pyramid, then local shop owners who serve the larger part of the population are appropriate in the promotion and distribution channel. Hence, partnerships with them would be necessary. The GOJO Industries will have to put in consideration the conservative nature of the Indian culture. Hence, the promotion methods chosen should show moderation and decency without crossing boundaries that are taboos to the Indian society. The adverts and other promotion methods should aim at promoting the culture while marketing the Purell sanitizer.
PUSH Strategy
The best strategy to use is the PUSH strategy. The flow of demand should be from Purell to the wholesalers, then to retailers and eventually the consumer. The intermediaries such as wholesalers should include companies such as W.B Mason and Staples, who deal in industrial goods.
PULL Strategy
The PULL strategy is also appropriate since it will win customer loyalty for the Purell product. A superior approach for this would be sending direct mail and coupons to particular consumers to help spread awareness and make the customers demand the sanitizer (Jordan et al., 2009).
Pricing Strategy
The target market concentrates at the base of the pyramid where most of the income levels are low in both disposable and per capita income. Most of the households earnings go to self-sustaining needs (Sachin & Sreyamsa, 2011). Therefore, the price chosen should tally with this. Additionally, as seen earlier, foreign companies in India are levied high corporate taxes. Hence, it would be important to adjust the prices to compensate for the expenses on the export duties plus the tariffs and taxes. India is an economic perform, and this means that the market can be extended to even higher social classes with higher prices. The best strategy would be designing differentiated products of the same Purell brand to suit the disparity in income levels. That is, both the low and high-income earners can access the product but at different prices to maximize sales and returns (Peng, 2009).
Analysis of demand for the product is necessary. The large population may offer a good customer base. However, the demand will depend on factors such as the popularity of the Purell sanitizer, its reception in the market, benefits among others such as similar existing products. Additionally, there will be stiff competition from similar products such as Dettol and the Himalaya Pure Hands. Such rivalry may even create barriers to entry and retaliation. Evaluation and skimming of the existing products’ prices will help GOJO Industries set the best prices as per the target market.
The capital base for GOJO should be adequate to overcome all entry barriers. Partnerships with local supplementary products providers such as health companies will be a better step in overcoming any entry difficulties. Also, agreements with the local government will also smooth the entry strategy for the Purell Hand Sanitizer.
References
Jordan Berman, Salvatore Salemme, Eric Naranjo, William Lombardi, Samantha Litvak, & Kara Brandofino. (2009). Marketing Plan. Purell Gel Brands. Retrieved from https://d284f45nftegze.cloudfront.net/walombardi/Purell%20GelPads_Marketing%20Pla n.pdf
Mike W. Peng. (2009). Entering Foreign Markets. In Global Strategy (2nd ed., pp. 153-181).
Ministry of Economy, Trade and Industry Japan. (2002). Barriers to Business in India. Retrieved from Ministry of Economy, Trade and Industry Japan website: http://www.meti.go.jp/policy/trade_policy/asia/sw_asia/data/Barriers%20to%20Business %20in%20India.pdf
Module-2. (n.d.). India: Natural Environment, Resources, and Development: Transport And Communication [Pdf]. Retrieved from http://www.nos.org/media/documents/SecSocSciCour/English/Lesson-13.pdf
Sachin, S, & Sreyamsa, B. (2011). The Base of Pyramid distribution challenge: Evaluating alternate distribution models of energy products for rural Base of Pyramid in India. Institute for Financial and Management Research. Retrieved from http://web.mit.edu/idi/idi/India- %20The%20Base%20of%20Pyramid%20distribution%20Challenge-IFMR.pdf
