Strategy and Market Considerations
France has a population of 63.9 million people. Unemployment stands at 9.9%, while its recent GPD growth was recorded at 0.4%. Its latest total GDP inflow is $2.6 trillion. In terms of regulatory efficiency, France enjoys an index of about 79.0 business liberty, while trade freedom is 83.0 (Barot, 2015). In addition, investment freedom scores an index of 70.0. There are no capital ceiling requirements before starting a business venture in France.
The NY Shoe Company targets the most appropriate customers in overseas marketing in France. The target group in France values:
- Modernity and variety in life
- Humanism and care
- Key features of the company’s target group
- Ethics and values guide the lifestyle of the French people, and therefore, the NY Shoe company will stick to ethical operations and professional code of conduct in France (France Demographics Profile 2016, 2016).
- They live an active life and often, seek for new encounters and adventures. Hence, NY Shoe Company will introduce shoe designs that are not common in France to attract adventurous buyers.
- They are used to high-quality and fashionable products since the capital of France, Paris is often referred to as the ‘Fashion capital of the world.’
- People in France have a tendency to walk everywhere since it is the peculiarity of their culture, so offering them a comfortable but stylish footwear option.
- Similar to New Yorkers, many people in French cities, have a busy lifestyle that calls for comfort and practicality in footwear; however, being fashionable, the French also want their shoes to be stylish and luxurious.
In terms of language, the official language in France is French. The regional dialects are rapidly declining. They include Flemish, Basque, and Alsatian. There are also foreign languages such as Swahili and Creole patois. Hence, NY Shoe company will use French as the mode of communication since it is 100% official and can reach the majority of the targeted consumers.
The company will also produce more shoe sizes for males and females aged between 25-54 years because they form the bulk of the French population (38%). The success or failure of the shoe business in France may most likely be affected by cultural differences. Hence, the design of the shoes will be able to meet the needs of the local markets in France. For instance, the production and marketing teams are going thoroughly to comprehend the demographic profile of the targeted market. The NY Shoe company knows the cultural values of the target market. The local customers in France have desires that will be met by the types of shoes to be exported to France (Barot, 2015).
Legal and control barriers such as corporate organizational practices, restrictions, duties, and treaties as well as labor employment laws will be vital considerations before the company ventures into the foreign market in France. The NY Shoe company needs to understand the preferences of its customers, the management is opting for an equity mode of entering the foreign market in France (Calandro & Chair, 2016). Hence, the NY Shoe company will either establish fully-owned subsidiaries in France or opt for a joint venture since the company needs to develop a closer relationships with its customers (Barot, 2015).
One of the reasons for taking France as the target market is because of its large business size. The massive consumer base will accelerate the growth of the shoes business. Second, France has limited trade barriers. The ease of registering a new business in France is quite high. Besides, government policies are accommodative and therefore, NY Shoe Company will establish itself promptly.
Marketing Considerations
One of the key steps with regards to marketing is target market identification. NY Shoe Company is planning to offer luxurious footwear for people on the go so that the product will be targeted to French men and women aged 25-54 with an income of $150,000 and more. The new style of shoes will be of special interest to customers that value high-quality materials in conjunction with comfort, so the target audience is people that want to look effortless and stylish without spending too much time on it.
Because France is a country of high fashion, the key marketing strategy NY Shoe Company can employ is collaborating with fashion personalities and influencers that can promote the product. Since French people walk a lot in they everyday life and prefer to stay comfortable, the shoe will fit perfectly into the market segment of busy people who value style and fashion. The product position strategy will be associated with a specific demographic rather low-price strategy since it is counterproductive to offer a fashionable and high-quality product for a low price. Instead, NY Shoe Company should pay extra attention to marketing the product to specifically fashionable people on the go. In 2016, the shoe segment of the fashion market in France acquired overall revenue of $2,572,6 million (Statista, 2016); this indicates that the company has an opportunity to acquire tremendous revenue since there is a demand for fashionable footwear in France. The French fashion industry (Paris Fashion Weeks) is one of the most important factors that influence the decision-making of many customers, so the company can collaborate with fashion editors, designers, and influences to promote the product.
Product and Pricing Strategy
Before selecting the type of shoes to sell in France, the management will explore aspects such as supply gap, funding, access to raw materials, and government policies. If all aspects of the new shoe brand in France are uniformly represented in the market, it will harm differentiation and segmentation. Some modifications are necessary.
The company will use any of the following strategies:
- Economy Pricing depending on the cost of production;
- Psychology Pricing based on the tastes and preferences of buyers;
- Bundle Pricing in order to attract more buyers who will be offered discounts;
- Pricing at a Premium for highly competitive footwear.
High-end comfortable shoes that are still in fashion will be the main product focus of the company. The firm will do all that is legally allowed in France to attain its business objectives. Its product offerings will entail manufacturing of the high-end athletic shoes that will be very comfortable to wear by both men and women. The company is geared towards serving a specific segment of customers in France so that it can optimize its profits. While many companies prefer to manufacture footwear products at the lowest prices possible in order to attract as many customers as possible, NY Shoe Company will choose to go in other directions since it targets the higher end of the market sector. It will not compromise on the quality or the methods of manufacturing since the most important thing is producing a high-quality shoe of immaculate design that will appeal to the target audience of fashion-conscious but busy people that walk a lot in their everyday life, similarly to the people of New York. For that reason, the cost of producing one piece of shoe in each category has been documented below:
The above relate to the current high end shoe cost due to the following features of the NY Shoe company. According to Fitzpatrick (2011), the standard cost of materials is 16% of the wholesale cost, making it $16 to get materials for one pair of NY Shoe Company sneakers.
- New look and unique style, high quality design;
- Luxurious but comfortable footwear that could even be worn to Paris Fashion Weeks;
- High-pricing strategy to cater to high-end market sector where the prices on products are usually higher;
- Similarity in culture. For instance, the above cost structure entails a single product, which is a fashionable athletic shoe for men and women. Both pairs of sneakers (men’s and women’s) are targeted at the higher end at the same time with being practical and comfortable. In both New York and France, people have a tendency of walking as much as they love being fashionable since it is part of their culture.
References
Barot, G. C. (2015). Fundamental concept of international trade. CLEAR International Journal of Research in Management, Sciences & Technology, 5(10), 1-5.
Calandro, E. E, & Chair, C. C. (2016). Policy and regulatory challenges posed by emerging pricing strategies. Information Technologies & International Development, 12(2), 13-28.
Fitzpatrick, J. (2011). Shoe pricing – from cost of production to retail price. Web.
France Demographics Profile. (2016). Web.
Statista. (2016). France fashion. Web.