International Marketing

This report is about a company named Myrurgia, Puig Beauty & Fashion Group, is a multinational whose activity is based in the perfumery, cosmetics and fashion sectors. Company wants to expand its business of personal care products (Lactovit) to other countries. From the initial research, the company has found Middle East as a target market.

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The report is based upon the four parts. These are as follow:

* The first part of the report is based upon the screening criteria in order to select the new market for Lactovit. In Middle East, there are many countries such as Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, Turkey, UAE, and Yemen. We short list the countries to six or seven countries depending upon the geographical, demographical or social factors and then rank the criteria in order of importance to select the most favourable market. We will do research on the economical, social, political and cultural aspects of the countries and give the ranking according to their importance.

* The second part of the report depends upon the company’s (Myrurgia) penetration during the next five years in a specific country. In which country should Lactovit should be launched first?

* The third part of the report is based upon the timing and market entry strategy for the company. What is the best time for a company to enter and how should it enter into that country. Either company has to wait for some time or the company should enter into the market right now.

* And in the end, we have to see which factors company should consider while launching their new communication strategies into that country.

Part 1:

A: Criteria for Segmentation: Middle East has proved an attractive market for European and US companies, with hotel development, fast-food outlets and retail outlets being seen increasingly in the major cities of the region.

In geographic terms there is some arguments about the definition of the region that we generally known as the Middle East. An analysis of the region’s political, economic and business prospects for 2001 by the Business Middle East (2000) included the following countries: Algeria, Bahrain, Egypt, Iran, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, Turkey, United Arab Emirates and Yemen.

It could be argued, however, that this should be classed as Middle East and North Africa (Siddiqi, 1999). Mike Readman, Universal McCann’s network director for the region, suggest that three sub-regions can be identified:

1. North Africa – Morocco, Tunisia and Libya

2. The Levant – Egypt, Syria and Lebanon

3. The Gulf – Saudi Arabia, Qatar, Bahrain and the United Arab Emirates

The Dubai based MD of Mindshare Gulf suggest that it is the third of these sub-regions, The Gulf, which is the market with most potential.

Bahrain and UAE are competing to become the regional business hubs and the 2002 Index of Economic Freedom published by the Wall Street Journal ranks Bahrain as the freest economy in the Middle East. The report suggest that there are number of reasons to be optimistic about the region’s prospects including moves to open economies to competition, welcoming foreign investors and the modernisation of economies. But there is also some instability in the region due to Israeli-Palestinian conflict.

The total population of the Middle East is 283 million, making it comparable to the markets of the EU and the USA (Thomson, 2001). The region’s economies have young populations compared to most developed economies. (Emerald Full Text Article: Middle East Expansion)

The merger of the six states of Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman that form the Gulf Cooperative Council is a union of political and economic strategies, somewhat similar to the European Union.

While a small enclave on the world map, the GCC has attracted in-bound investment that is more than a match for many “first-world” economies. With a combined GDP of $600 billion and a population of 34 million, the GCC is ranked as the world’s 17th largest economy. (

As we are dealing with beauty and fashion group product in the Middle East, the segmentation is based on the psychographic of the consumers. We can not segment it on the basis of demographic factors because this is a product for consumers who are very careful about their beauty and fashion patterns, lifestyle. These types of products fall in luxury products. Mostly women and young age people are more concerned about their beauty and fashion. It’s very complex to segment in psychographic segmentation. We use focussed segmentation to target a market.

B: Ranking of Criteria According to Their Importance:

Following factors should be kept under consideration while selection of a country. These are: Population, GDP Real Growth, Expenditure on cosmetics and toiletries by grooming sector, GDP per capita and Imports of a country. The total weight is 100%.

1. The most important factor is the Population (25%). If population of a country is large it means that we have a larger segment of market to be served. The country has potential and we can make a large number of customers which will increase our profit. And in the end it’s all about earning money. Lactovit is a fashion and beauty product and today which is the age of globalization and modernisation, people of every age is interested in the fashion and beauty. So I rank this factor as the highest important factor.

2. The second most important factor is the GDP Real Growth (20%) of country. It tells us how strong the economy of a country is? It’s an important factor because our company wants to launch its product to other countries and we have to keep in mind that if that particular country has a strong economy or not. If you launch your product in a country which has weak economy than there is chance of failure. As our product is only related to fashionable and beauty concern people who want to spend money, so we should target those markets that have strong economy and a good number of those types of customers which we can only find in strong economies.

3. The third most important factor is the Cosmetic and Toiletries market worth (18%). It tells us what is the current sales volume of the cosmetics and toiletries products in the particular markets. From the sales volume we can forecast the market potential.

4. Expenditure on cosmetics and toiletries by personal hygiene per capita (15%) is the fourth most important factor. It tells us the amount of money spend by a person on products like sun care, bath gel, shampoo and other beauty and fashion products. With the help of this we can understand what is the current situation of the same type of cosmetic products and what will be the future forecast. ( Euromonitor International)

5. GDP per capita (12%) is at number fourth. The GDP of a country divided by its total population yields per capita GDP. It tells us how much a person is involved in the growth of its economy.

6. The last important factor is the Imports (10%) of country. It’s an important factor which tells us about the how much a country is open to other countries. If a country is importing a large number of products then it’s a good indicators for other companies to enter into that country and do their business their. The import factor also indicates the hurdles and barriers in importing. If there are no hurdles and barriers then it’s easy for a country to do business their.

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