Introduction
When exporting wetsuits from UK to Australia, the firm has to consider the forces of macro environment models. This is necessary in order to resolve the conflict that arises from the changes in economy, legal, political, and cultural factors.
In most cases, exportation of products is influenced by the political and economical factors rather than choice. Through exporting the wetsuits, the firm will strengthen its growth and survival in competition.
The firm will expand its production in wetsuits in order to meet the demands of the domestic customers and those of the Australians. The firm will look at its strengths to ensure that the returns are as expected in the end production (Czinkota & Ronkainen 2007, p.10).
A thorough research is undertaken because customers’ acceptance is important to the entrant of new firm. The size of the market and the number of targeted customers is necessary for the firm to understand the market problem, the gap of production and the willingness to purchase.
In the study, the firm will seek to know whether the marketing strategy in Australia differs with those of the UK or the availability of ready markets for wetsuits that will reduce resource on time and money.
It has to look at the similarities and differences in the promotion models and practices in order to advance where needed and maximum utilize the opportunities offered. Moreover, the firm will analyze the market in terms of difference in distribution and competition strategies (Czinkota & Ronkainen 2007, p.14).
Business and market environment
The dynamism in the market require that the firm monitor the environmental factors that affects the exportation of wetsuits, the behavior of competitors, the channel of different participants in distribution chain and the receptiveness of the customer.
This is to allow the control in efficiency level, profitability, and marketing structure (Albaum, Duerr & Strandskov 2005, p. 34).
The firm has to learn the favorable location for its receiving distributors depending on the potential market and resources available.
The factor influencing location of the distributor is the economical activity in the area, the mode of spending by the consumers, the cultural background, and factors influencing the market force in demand and supply (UK Department for Business Innovation and Skills 2011, p.2).
The firm will center on the economic environment surrounding the market in the Australia. Thus, it will fully examine factors and issue related to rate of exchange rate between the two countries and the intervention by the government on either taxation or spending to foster necessary economic growth rate.
Thus, the firm will look at the changing interest rates and trade policies in Australia with comparison to the ones in the UK (Albaum & Duerr 2008, p.87).
The environment of the business divided into macro and microenvironments. The microenvironment plays a great role in the development and the success of the firm from the customer, suppliers, competitors, employees, and distributors of the firm.
The macro-environment factors involve the difference in the exchange rate and interest rate. Identifiable is the difference in the exchange rate that makes exports from the UK to Australia much cheaper (UK Trade & Investment, Services for Exporters & Importers 2011, p. 1).
Key factors arising from PESTEL
These are factors that influences management of the firm to export wetsuits in Australia, they include the trade barriers between the two countries, changes in government policies and regulations, changes in taxation systems, change in demography and the changes in laws that may be an advancement of the existing in UK or completely different ones.
Hence, the PESTEL model will be to analyze the macro-environmental factors whish are political, economical, social, technology, environmental and legal factors (Czinkota & Ronkainen 2007, p.12).
Political factors are policies by the government, an example being direct intervention in the running of the economy by influencing factors of demand and supply in the market. The UK government has rapidly increased the public awareness in the involvement in the international markets.
The policy adapted by it encourages potential exporter by giving by giving them subsidies (Reuvid & Sherlock 2011, p. 67). Accordingly, the Australian government has established policies and framework that encourages the foreign investment into the country.
This influenced by the improved infrastructure of roads and rail to allow free and fast movement of good and service within the country. The firm will utilize the raid down foundations that encourages investment and trade between the two governments (Institute of Export 2011, p.1).
The social factors are those that influence the social trends of the people in demanding their products. Notably is that both countries have different population trend where UK is characterized by increase in ageing population while Australia has a population has a population of mixed ages.
Thus, the firm will tap the increasing demands of suit in the country as well as availability of laborers in the wider market. This will create a pool of increased market due to the falling demand in the UK (Noonan 1999, p. 34).
Technology factor has led to new processes in the production of differentiated wetsuits, which caters for all income level earners.
The adaption of advanced technology has seen a reduction in the cost of production and improvements in the quality of wetsuits. Both countries have adapted the online buying and selling which reduces the cost enabling the firm to plan and facilitates the orders by the customers.
The environmental factors include the climate and weather changes in the two countries. Due the current global warming, there are changes in climate that has an effect on the environment. Australia has favorable weather for wetsuits wearing compared to that of UK that differs with season.
Thus the market is larger in Australia compared to the in the UK which is directly proportion to the weather condition. The exportation of wetsuits will be environmental friendly to the Australian population (International Chamber of Commerce 2011, p. 2).
The legal factor relates to environment legal factors surrounding the firm and its distribution in Australia. There has been a change in the legal matters in the UK that has led to changes in the behavior of the firm on the way it competes with other and the way it serve customers by following the stipulated laws.
Similarly, the Australian government has come up with different laws regarding consumer protection, employment laws, rules in competition and legislation on safety and health. Thus, the rules as similar since environmental policy and human rights are common in the international agreement.
Thus, the firm will look at various PESTEL frameworks that are similar to the one in the UK and practiced in the Australia in order to maximize the economies of scale.
Competition
The success of the firm in selling wetsuits is directly related to the degree of competition in the country. In Australia there are many firms selling suits that are of different brands. Thus, the firm will also have different brands that are of high quality in order to woo more customers to buy the suits.
Since it might be hard to know the strategy of the competitors, the firm will relay on the non price competition which include advertisements, branding and promotion.
The firm will look at a way to ensure that customers get their orders in time by providing sufficient distribution store countrywide and having qualified sales representatives (Gillespie 2010, p. 70).
Impact of international market
There are various effect of exporting wetsuits from the UK to Australia which includes the balancing the accounts of trade. Both countries have a comparative advantage in production of a certain product. Their gross national product is different according to availability of resources and economic activities.
In both countries, the budget is deficit where the total aggregate expenditure is greater that the total income. Thus, involvement in exportation will tend to balance the deficit in the trade accounts of both countries (Czinkota & Ronkainen 2007, p. 39; Albaum, Duerr & Strandskov 2005, p. 93).
The firm in UK will achieve the economies of scale in the production and distribution. The firm will be producing more wetsuits cheaply due to large production hence increasing the profits.
Similarly, shipment and distribution of the wetsuits within Australia reduces due to mass and bulky transportation. The result will result to development and growth of the firm to meet the consumer preferences and to take the advantages of mass production (Faire 2007, p. 7).
There will be increased varieties in the Australian market that will be resulting from increasing competition. Competition increases the firm innovativeness leading to improved service and products hence making consumer to choose from the varieties of suits. The wider availability of suits in the market leads satisfaction in consumer preferences (Czinkota & Ronkainen 2007, p.42).
Specific impact on products/industry
The firm will have an additional profit due to the economies of scale and increase in the market share. Increase profits led to the growth and development of the firm due to the extension of the markets. The profits margins expected to be high in Australia compared to the UK due to changing population (Reuvid, Sherlock & Sherlock 2011, p.46).
There is enhanced extension of the product life cycle. Some types of wetsuits do not have sell well in the UK. Such introduction in the Australian market for the continuity of the cycle there by ensuring that the brand does not completely die in the market.
There an even spread of risk to the firm, where selling similar products in different markets. In UK, there is an increasing ageing, which is different to that of the Australian where the population is evenly with their years.
This ensures that the economic depression in one country does not lead to complete loss to the company. Thus, the risk is widely spread to increase profits and resource base (Reuvid & Sherlock 2004, p.40).
More so, seasonal fluctuations are evenly out by exporting wetsuits in Australia. The demand in season will lead to the firm benefiting as Australia has different seasons compared to that in the UK. The firm will take the advantage of seasonality to provide the suits in various locations fully in the market.
It also assists to meet the interest of the nation where the UK government advocates for exportation and imports restriction. The firm will take the advantage of exports incentives offered by the government (Reuvid, Sherlock & Sherlock 2011, p. 48).
Inco terms
These are terms regularly used in trade where both buyers and sellers have a role to play in each term. Thus, the firm will invent different terms with a universal standard of definition. These terms will include cost, delivery, risk and placement (Reuvid, Sherlock & Sherlock 2011, p. 180).
In the cost, the prices quoted of the wetsuit include all expenses incurred from production to consumption. Thus, the buyer in Australia will pay a value equal to the cost of the finished suits; that is paying for the raw material, cost of production and cost of distribution including warehousing, custom duty and advertisement cost.
Delivery will call for both the firm and the customer to take the responsibility of transportation of the suits. This depends with the distribution stores countrywide and the type of customers.
The cost of transportation to the port, freight and to the stores will be included. Some customer will purchase online hence they will bear the cost of transportation to their premises which leads to an increase in price but convenient to them.
Under the placement policy, all wetsuits customers will get their orders all over the country since the firm will have many distribution stores. This ensures that demand can be met hence the consumer satisfaction and loyalty to the firm.
The management of the firm will indentify the region with the highest number of sale by looking at the market share hence are able to follow the right distribution and sales channel. This led to supply chain development and full investment on it in order to allow for efficient system of distribution that is centralized.
Accordingly, the firm will use different ways of increasing sales and the growth of the firm by effectively availing all the customers’ requirement electronically. Hence, it is the management of the firm to ensure that the new and the bestselling brands are available throughout the year (Czinkota & Ronkainen2007, p. 69).
Promotion
The firm will adopts different promotion methods in order to create awareness to the Australians and the knowledge of the different varieties. It will enable the firm to establish its name in Australia using its brand.
Thus, it will stimulate consumer preferences and interest in the firms’ different brands after proper establishment. The promotion will include advertisement, promotion in sales, personal selling, and better publicity (Business Link n.d, p.3).
Advertisement will entail the use of media, billboards, posters and others supportive links like face book. They will assist in establishing a relationship to the potential customers who will be knowledgeable on the different brands of wetsuits available in the stores.
Publicity will involve proper display in store countrywide and the firm supporting in the community outreach program since that is one role in the firm. The firm will adapt a promotion mechanism where customers buy wetsuits with discount.
It would in some way give an addition suit to the large quantity purchased example is where one buys five suits and is given one. For publicity and awareness, personal selling can be encouraged where the firm will hire a number of sales personnel to sell suits outside the store, more so in the residential areas.
Challenges
The firm faces different challenges’ in the implementation of various strategies. The first is the maximization of the sales in each store countrywide. This can be so if all the sales opportunities available are fully utilized and maximized to increase the returns of the firm.
Accordingly, in the maximization of the profits from the sale the firm faces competition that is stiff due to the change in the price wars, discounting rates, aggressiveness in the market and the exchange rates. This will see the firm increasing supply chain in the countrywide to ensure all needs are meet.
Second is the existence and increasing counterfeit fears in the industry. An example is where a firm produces a product only to find the opponent producing almost the same brand and type with only small distinction.
This might lead to competitors innovating survival tactics of getting the same materials cheaply and manufacturing brands that are similar. Due to lack of proper implementation of legislation, the counterfeit are on the increase even if the government sets new rules.
In addition to that, technology tends to be a challenge in the marketing and efficiency of the firm. Even if it uses the best and the most advanced technology, sometime the demand is more that they can meet.
More so, technology can be functional in one area and less functional in the other. Thus, the assumption of online sale increase might be misleading when designing the business plan.
Recommendations
Exporting wetsuit will be enhanced by cultural support, where the firm will improvise environmental conditions that will lead to increased sales and good reception.
Such will be enhanced if there are set targets to be achieved, adapting decision-making by participative model, increasing employee’s incentives, and increasing commitment and having committed management.
Firm should adapt long-term objectives and avoid short term planning, which are expensive and inconsistency with the modern developments. However, the strategies are to be consumer satisfactory in the efficiency and standards that will results to increased sale and good reception to the brands.
Conclusion
In this global era, for a firm to be competitive it should support technology initiatives in management in order to enhance development competence. The study captures various ways in which the management can see through the success of the increasing wetsuit in Australia.
However, it is affected by inadequate sources of capital, lack in the willingness to purchase and pay premiums, poor infrastructure in information technology and poor organizational structures (Czinkota & Ronkainen pg 46).
Finally, for the firm to be effective in customer satisfaction and increasing its returns, everything including goals, process, products, purposes, and administration to be reviewed for quick adoption of new requirements.
The study has highlighted different theories and their contributions to success in marketing strategies of wetsuits. It has also concentrated on the marketing theories either new or old, tools, technologies deployment, Organization structures, and the attitude of consumer in decision making.
References
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