International Marketing Plan

1.0 Introduction

Cosmetic Y is a UK-based cosmetics company that specializes in a broad selection of vegan and plant-based products that are palm-oil free, skin-friendly, and organic. There are presents for the house as well as products for the bath and the face and body like soaps and oils. The firm was founded in 2016 as an environmentally friendly business initiative. Currently, it is looking to expand into the Thai market. According to the International Trade Administration (2019), the beauty and cosmetics business has grown quickly in the United States during the previous six years, with an expected annual growth rate of 7.2 percent to 7.9 percent. According to the analysis, the sector is expected to increase by 7.3% year through 2022. This industry is rising at a rapid pace, as per the Asian Development Bank.

2.0 Host Country Attractiveness

Defining the target market’s micro and macro environments is critical to market planning. This is accomplished by doing environmental scanning (Camilleri, 2018). The political, economic, and cultural elements of the host nation, in this instance Thailand, will be examined to achieve this goal.

Political Risks

As a constitutional monarchy based on parliamentary democracy, Thailand’s government is led by its Prime Minister (Nordea Trade, 2016). Foreign investors may be subject to new rules, additional taxes, administrative expenses, security and trade obstacles, as well as political stability threats from the government’s policies (Morgan et al., 2018). Thailand’s military-based administrations have played an important role in maintaining political stability, as shown by statistics from the Global Economy (2019), and the authority has also provided investment assistance (Banco Santander, 2019). It was given an A4 political risk rating, which indicates that the climate is now stable, but it is prone to abrupt changes, which might have a negative impact on corporate institutions (Global Edge, 2018). Additional threats are posed by the Thai Corruption Report (2020) identifying the police force as very dishonest.

Opportunities

• Presently, the nation is politically stable for companies to be set.
• There are very few competitors’ country.

Challenges

• Probability of political changes that may impact the business in future
• Possibilities of increased duty for foreign business
• A lot of research is needed for the business to thrive well

Economic Factors

Businesses are susceptible to political and economic risks when the economy is unstable, which is one of the most essential enabling conditions (Krasteve, 2016). In the CIA’s global factbook, Thailand’s economy has developed gradually over the last few decades. There is minimal unemployment and inflation in the nation, and the public and foreign debt are kept within reasonable limits. (CIA.Gov, 2019; the World Bank, 2020). The growth of the economy has been greatly aided by more tourism and improved infrastructure (Khalil, 2018). Due to their purifying properties, the goods have a large market among the country’s tourist population (Sunanta, 2020). The rate of inflation has risen in recent years and is expected to continue growing in the future. Inflation influences interest rates, according to Galal and Lan 2017.

Opportunities

· A big market for the brand is provided by the working population’s financial stability.

· Customer satisfaction and cheaper advertising expenses may be achieved with good infrastructure, which simplifies communication channels and delivery times.

· As the second-largest economy in Southeast Asia after Indonesia, Thailand has the potential and market for high-end products.

Challenges

• As inflation rises, the economy becomes more unstable, making the business results more unclear.
• Profits are overestimated as a result of currency fluctuations.
• Rate of interest are high making borrowing difficult.

Cultural Factors

Although the English is on the rise owing to globalization, Thai is still the most widely spoken language. Even if the language barrier must be overcome in order for a brand to enter the local market, it is still necessary to address this issue (Rahman et al., 2017). Tourists flock to Thailand to purchase the unique cosmetics and spa treatments that the country is renowned for (Shuhui, 2018). According to Taghipour and Loh (2018), brand loyalty in Thailand is impacted by the item’s natural and organic qualities. The company’s products are entirely natural and organic, which appeals to the strong desire of Thais for high-quality workmanship and to their common love of nature.

Opportunities

1) Thailand’s beauty goods industry is mostly comprised of visitors, thus the brand’s prospective consumer base will include both Thais and foreigners, hence expanding its market share.

2) The brand’s versatility allows for a variety of pricing methods.

3) The plant-based brand has a competitive edge since it is aligned with the movement in customer tastes.

Difficulties

• When interacting with industry stakeholders, a language barrier may be a stumbling block.
• The tastes of consumers might alter throughout time.
• The target market’s acceptance of the items may be hindered by prejudices based on the country of origin.

3.0 Market Audit and analysis

Diffusion of innovations theory

Relative advantage, complexity, tangibility, compatibility and trialability are all characteristics of successful inventions (Flight, D’Souza, and Allaway, 2011). Natural, organic, and skin-friendly goods are a big part of the brand’s USP, which corresponds with contemporary customer preferences. Unlike other Asian beauty products, this one does not include palm oil. Exotic beauty items from industrialized nations are regarded as high-quality in Thailand because of their compatibility. United Kingdom has invested much in beauty, personal, and skin care goods (Statista.com, 2020). Because of the industry’s complexity, not all companies are able to create items that are all-natural, safe, and of the highest possible quality. Beauty products, on the other hand, are really easy to use and don’t need a high level of technical expertise.

Trialability alludes to the simplicity with which consumers, particularly early adopters, may test-run the usage of the items. A good place to begin your marketing efforts is by offering free samples. In order to get into the market and overcome the language barrier, salespeople will be hired. Additionally, there will be pop-up spas where customers can learn about and test out the items. After utilizing the goods for a time, users will be able to provide true and authentic testimonies about how the products have improved their skin’s appearance. Aside from early investors and innovators, the classifications of adopters also range from early majority to laggards (Im, and Young, 2012). Accordingly, combining the product lifecycles of adopters with the features of successful innovations as defined above provides several possibilities for commercial viability for a brand (Trotta, 2010). These are called “dynamic equilibrium” in the context of Rogers’s 2003).

The Market

If there is a market for a commodity in Thailand, the demographics is the best evidence of it. “As per Jinachai et al. (2016), Thailand is the most important ASEAN. The state’s competitiveness in the business has also allowed it to gain a foothold in foreign markets, where it sells its goods.

Geographical Location

As Thailand’s capital and most popular tourist destination, Bangkok is the ideal location for the company’s flagship shop. 5,000,000,000,000 people call the city home. There has been an increase in number of beauty salons in the city as a consequence of an increase in the city’s middle class and an increase in tourism (Wongtada & Kraikit, 2017). The volume of spas and massage parlours in Thailand is on the increase, with Bangkok possessing the most in the country (Sangpikul, 2019). CosmeticY’s body oils and washes will have a large customer base thanks to them. Jones and Pimdee (2017) found that products that prosper in Thailand have an edge across the rest of Asia because of its location.

Market Size

According to the International Trade Administration, Thailand’s beauty business generated $ 6.6 billion in 2018 and is anticipated to grow to $ up 8 billion by 2022.

Government Participation

As a way of encouraging new and current companies to succeed, the government offers grants and other forms of financial assistance (Turner et al., 2016). By promoting open markets that self-regulate, the Thai government promotes a favorable climate for investors. Regulating the spa business has given customers more confidence in the safety of the services and goods they receive (Dales et al. 2019; Kalayasiri, 2019).

4.0 Marketing Plan

Mode of Entry

Joint ventures, licensing, leasing, shipping, and direct investments are only a few options for breaking into international markets, according to Grogaard et al. (2019). It’s better to engage with local distributors of cosmetics and beauty goods to secure entry into Thailand and at least protect yourself from the political uncertainty that works against foreigners. Because the supplier seems to have a foothold in the sector, it’s an efficient approach to access a larger market and prospective customers (Hsu, 2018). Because of the language barrier, a local distributor will be a great help in getting your message over to the people on the ground. In order to keep CosmeticY’s high-quality image intact, a factory-owned retail store will be located in a high-end shopping mall.

Marketing Objectives

The brand’s target audience is the well-off and visitors. Thais aged 18 to 60 comprise 58 percent of Thailand’s population, making them an ideal target market for the business (CIA.Gov, 2019). Lixandru (2017) asserts that young people are more prone to experiment with and purchase beauty products, particularly skincare. As a result of the low income inequality, the middle class is growing as well. According to Lixandru (2017), this group prefers expensive, high-end beauty goods from other countries. Target market marketing goals are as follows:

• In the first year of growth, the company aims to gain a foothold in the high-end beauty product industry.
• In the first six months of operation, a standard pricing for the items should be established.
• Three years after the company’s launch, it will expand by opening more locations.
• Aim for the lower and middle classes as well as the well-to-do.

Product Adaptations

The product’s packaging will need to be tweaked somewhat to accommodate the Thai market by including both English and Thai ingredients and use instructions. The rest of the composition will not change. To demonstrate how successfully a product may be tailored to a growing product, the product component model divides its characteristics into the core, advertising, and support service components (Asseraf & Shoham, 2019).

Core component

Beauty brand Cosmetic Y uses only natural and organic components in its products, which nurture the skin. Bath, face and body scrubs are just some of the products that will be available in the main market.

Marketing Component

• The high pricing indicates a high-end product.
• The goods’ components are thought to be good for the skin.
• Moreover, the materials used in their manufacture are non-toxic.
• In addition, they are made from natural ingredients.

Support Service Constituent

• Referrals and purchases above a certain value are eligible for discounts.
• Customers are pleased with the level of service provided by this company.
• Well-trained employees who are knowledgeable about the brand
• A web-based customer service system

Distribution Strategy

Product variety and distinctiveness in comparable items are reasons why the brand would distribute and sell its products in Thailand. Some clients choose to use a whole range of skincare and grooming products in the beauty sector (Shuhui, 2018). Thailand will get all of the items made in the United Kingdom. To avoid the various logistical, labor and licensing issues that come with entering new markets, this is the best alternative. Shipping is a lower-cost option than air transport because of the complexity involved, the nature of the items, and the predicted profit margins.Customers will be able to buy straight from the company and via a distributor. Initially, the brand had just one retail location in a mall with strong foot traffic from both residents and visitors, as well as one major distributor. For the brand to preserve its high-end image, the direct sales strategy will provide it more control over how its products are presented to consumers (Kobayashi et al., 2017; Kotler et al., 2018). Helping the firm become established in local markets will be easier if a well-known distributor is working with the company (Garnesan & Durgamani, 2018). Local distributors avoid the disadvantages associated with grey markets, since distributors are compensated on a sales commission basis, which encourages more intense distribution. Direct sales and local distributors are combined in this hybrid approach.

Pricing Strategy

Price-skimming is the ideal method for beauty items that are entering new markets.. Price skipping is defined by Du & Chen (2017) as setting the price higher while entering a new market and gradually decreasing it. Customers’ willingness to pay for a product will be shown, and if they are unwilling to pay a higher price, the price may be reduced (Gomes et al. 2019). There is a belief that the more costly a beauty product is, the better it is thought to be (Vogel,2018). Foreign-based cosmetic products, particularly those from industrialized nations, seem to be highly prized by the Thai public. Many individuals are prepared to spend a lot of money on skin-friendly cosmetics because they want to look good.

Business Model Summary

It’s an explanation of how the company intends to develop, deliver, and enjoy the rewards of all of its commercial activities. Consider it in terms of the Environment, Strategy, Structure, and Operations (ESSO) business model (Nair, and Boulton, 2008). The company’s value offer includes in-house product development, which is directed by environmental analysis, development, and R&D in the UK as well as other potential markets. All finished items are sent to Thailand using low-cost logistical methods. Quality production, price skimming and digital content marketing are all used together to get a footing in the market by making the firm more sustainable in the long run. ‘The majority of the company’s revenue comes from the sale of its goods.

5.0 Conclusion

The overall economic success, government engagement in the business, and tourism all point to a positive future for the Thailand market. However, inflation and the introduction of additional foreign items into the market pose certain hazards, but the rewards outweigh them. The benefits of entering the market seem to exceed the disadvantages, according to the debate. The rise of the middle class is helpful to the brand since it gives a large market share. Investing now, when circumstances are good and returns may be substantial, is a wise move, especially if the appropriate marketing and pricing techniques are used. Additionally, it has been discovered that the current competitors aren’t using social media and other owned media advertising strategies, which would be a low-cost and highly successful marketing channel for the company’s products.

6.0 References

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