Introduction
The decision of Aeropostale to venture their business in Mexico will not only ensure their growth but will also intensify their presence in the global market. The Mexican market has favored businesses that deal with apparel because of the increasing wages, availability of young consumers, and fashion receiving much attention. These factors have made Aeropostale move to the Mexican market (Forbes, 2014b).
In addition, Aeropostale’s associate Liverpool has tremendous knowledge in running large businesses, and with its market proficiency, Liverpool will be in a position to open Aeropostale businesses at the best locations in Mexico (Jain & Trehan, 2010). Consequently, this will complement the product’s popularity in America.
Various external environmental factors influence global marketing strategy. They include political, economic, legal, social, technological, and environmental factors. Political factors involve all aspects of the political environment that can influence business operations. Political factors are important because they determine the government’s approach to business and the liberty within which these businesses can run (Neelankavil & Rai, 2014).
Economic factors comprise factors linked to wages of consumers and the manufacture of products (Jain & Trehan, 2010). Economics aspects are important because they influence the buying power of consumers.
Social factors affect demand and tastes, which change with fashion and available income (Jain & Trehan, 2010). These factors are important because they can either reduce or expand opportunities for new markets.
Technological factors include the presence or absence of advanced technology that helps in the distribution of goods and services (Forbes, 2014b). It enables firms to communicate and manipulate the flow of their products.
Environmental factors include policies involving environmental protection. These policies prohibit the import of products that destroy the environment (Neelankavil & Rai, 2014). On the other hand, products that improve the environment may have a favorable market in the host country.
Legal factors describe the legal conditions in global business. The legal aspect is important because it controls the running of companies in global markets. Companies venturing in foreign countries should observe the laws of that country when doing business (Jain & Trehan, 2010).
Mexico indicates that it is a strong market for expansion by retailers because of its both Social and economic factors. The Mexican market provides favorable conditions for businesses that deal with clothes. This is because people are paying more attention to trends in the fashion industry, and more young people are purchasing products. This is a great opportunity for Aeropostale so that they can meet the demand in the Mexican market.
Secondly, Aeropostale specializes in clothing for children between four and twelve years. These children rely on their parents for any purchases. The good economic environment has enabled adults to receive good wages and thus have the ability to buy clothing for their children.
Body
Aeropostale has used similar marketing strategies in both the U.S. and Mexican markets. One similarity is that in both countries, they have specialized in kid’s clothing. Aeropostale has studied both markets and discovered there is a need for children’s clothing between the age of four and twelve because other competitors focus on teen’s clothing. The objective of Aeropostale to satisfy this social need in the market has ensured their growth in the U.S. market, and they hope to yield the same good results in the Mexican market (Ferrell & Hartline, 2012).
Another marketing strategy that Aeropostale has considered in both markets is the economic aspect of its consumers. Both in the U.S. and Mexican markets, consumers have the purchasing power (Forbes, 2014b). The good economic environment in both countries has enabled consumers to have money, and therefore they have no limitation to make purchases.
The Mexican market has favored business specializing in clothes. Aeropostale has taken advantage of this opportunity to expand its business in Mexico for kid’s clothes (Jain & Trehan, 2010). In addition, Aeropostale is using its partner, Liverpool, to expand its business in Mexico. Liverpool has great experience in the Mexican market; hence Aeropostale is using it as its marketing tool to initiate its new businesses. However, in the U.S. market, Aeropostale is not collaborating with any company to grow their business.
One marketing strategy that Aeropostale is applying in Mexico is to open their businesses in separate outlets and store-in-store locations in Liverpool unit stores. This strategy will enable them to expand their business because of the popularity of the namesake brand. However, in the U.S., Aeropostale located their businesses in malls where there were few people going and out on foot. As a result, Aeropostale is planning to close its store-based malls and locate locations with more pedestrian traffic (Ferrell & Hartline, 2012).
Conclusion
Aeropostale marketers have a great responsibility to play to ensure that their business is growing in the Mexican market. First, they have to carry intense research on fashion to know what is currently trending, especially for the young generation. In addition, they should know whether there are any cultural or social barriers in Mexico, which could reduce their sales. For example, the marketers should know the language that most people are familiar with since it could hinder communication when selling.
Learning Reflection
This project has helped me learn that environmental factors play a significant role in the operations of both a domestic and international business. I have discovered that environmental factors can either provide favorable conditions for a business to thrive or expose the business to threats, which can limit the growth of a business in a particular market. In addition, I have learned that before setting up a business, marketers should take their time to study the market and understand the environmental factors, which might affect their business so that they can take advantage of the available opportunities.
Reference List
Ferrell, C., & Hartline, M. (2012). Marketing Strategy. US: Cengage Learning.
Forbes. (2014). Aeropostale Soars After Sacking CEO For Former Boss. Web.
Forbes. (2014). Mexican Expansion Will Give P.S. From Aeropostale A Much- Needed Push. Web.
Jain, T., & Trehan, R. (2010). Business Environment. New Delhi: FK Publications.
Neelankavil, J., & Rai, A. (2014). Basics of International Business. UK: Routledge.