International Marketing. Theory of capturing Japans market

Table of Contents

1. Executive Summary

2. Proposal

3. Country Analysis
3.1 Political Environment
3.2 Legal Environment
3.3 Economy Environment
3.4 General Competitive Environment
3.4.1 Japan’s Developing Technology-Innovation
3.4.2 Environmental Protection Equipments
3.4.3 Other plating companies
3.5 Cultural Environment

4. Target Market

5. SWOT Analysis
5.1 Strengths:
5.2 Weaknesses:
5.3 Opportunities:
5.4 Threats:

6. Marketing Mix
6.1 Product
6.1.1Branding:
6.1.2 Innovativeness
6.1.3 Adaptations Required
6.2 Price
6.3 Promotion
6.4 Distribution

7. Marketing Plan
7.1 Situation Analysis:
7.2 Objectives and Goals:
7.3 Strategy and Tactics:
7.4 Select the mode of entry
7.5 Implementing the Strategy within the Marketing Mix
7.6 Measurement of results

Sources

1. Executive Summary

Presented here is Carbondale Consulting Crew’s analysis of opening a new market for Arlington Plating Company’s service in the country of Japan. Included in the analysis is a very concise marketing plan, which will assist Arlington Plating Company in making the decision of whether or not they should proceed. In this marketing plan, many factors that could affect the company’s success are reviewed; such as the legal environment of Japan, the cultural and political environment, as well as the economic environment. Along with those factors is the competitive environment. We not only looked at the general competitive environment of other chroming services, but specific competition as well. In general terms, we concluded that Arlington Plating Company’s toughest competition would most likely be Japan’s quickly developing country. The continuous updating of the company’s plating technology will potentially be exhausting and a difficult hurdle to overcome. When speaking in specifics, there are a few other plating and chroming companies that will be competing in unison with our service. To name a few competitors, there is Mekki Chrome Plating, Koka Chrome Industry, and Kiyokawa Plating Industry Co. Furthermore, Carbondale Consulting Crew went very in-depth when carefully choosing a target market. With Japan being one of the top leaders in car and motorcycle manufacturing, it was decided it would be tactful to target the three leading car manufacturers, as well as the three leading motorcycle manufacturers: Toyota, Nissan, Honda, Yamaha, and Suzuki (Honda I a leader in both the motorcycle and car manufacturing industry). Other things to consider were strengths, weaknesses, opportunities, and threats. Strengths and Weaknesses included would be APC’s unique technique and sustainable competitive advantages such as patents (strength) and unawareness of doing business internationally (weakness). Opportunities and threats include the fact that Japan is one of the top vehicle manufacturers in the world (opportunity), and competition (threat). It was decided by the Carbondale Consulting Crew that Arlington Plating Company’s mode of entry would be licensing, due to the fact that contractual agreements are normally the most successful modes for business-to-business industries. Projected profits were hypothesized as well in our analysis. Finally, a plan for promotion, product, price, and physical distribution was implemented. Promotion included involving the company in trade shows, since trade shows seem to be the most primary vehicle for doing business in foreign countries. When it came to physical distribution, it was decided that using ships and ship ports to export the products would be the most effective route. Price is to be determined by the time to and amount of materials used to create the service. Product will include but not stopping at plating, polishing, buffing, and finishing brakes, hubcaps, grilles, and many, many other car and motorcycle parts. As one can see, many aspects were researched and analyzed before making a decision on expanding APC’s business to Japan. However, it was finally determined that Japan, in fact, proves to be a very potentially prosperous country for APC to expand into. With our suggested marketing plan, it is possible for Arlington Plating Company to enter the country of Japan within the next year.

2. Proposal

The company in which our group chose is called Arlington Plating Company. This company is located in a northwest suburb called Palatine, Illinois, which is a suburb of Chicago. This company has about 150 employees who work at this facility. The company estimates to bring in an annual amount of 20 to 30 million dollars a year just with American investments alone. Arlington Plating Company specializes in a service of plating thin layers of chrome, nickel, brass, copper and silver over metal objects such as exhaust pipes, grills, gas pipes, rims, car handles, and many other things that later are domestically installed onto cars and even motorcycles. The purpose of plating products is to create a smooth decorative finish over rough, un-buffed metal objects. Plating, when done right, offers protection from causes by the weather such as rust. Arlington Plating insures the plated product to have a nice smooth looking color for a long period of time.

Items in which they plate range from Harley Davidson exhaust pipes to Dodge Challenger gas caps. This company also offers a variety of services that can only be performed in this location. One patented service they offer here is the ability to plate on Magnesium. The patented services that are offered at Arlington Plating Company give the company a niche in the market. Many services offered at this location are of very few in the world. A few respectable companies that continue to use these services are: Brembo Brakes, Harley Davidson, and Jeep. This company has been staying and growing in business with these business partners for over twenty years.

Along with American-based companies, a very small percentage of car distributors overseas such as Toyota go through the trouble of sending their car parts to our company in Palatine to have them plated. They are in turn sent back to the company and further installed onto the cars. With almost every American-based car and motorcycle coming to us to do their plating, we have virtually maximized our profits in the Unites States. However, with companies overseas wanting to conduct business with us (Toyota being a prime example), we believe we show strong potential in being successful in other countries.

When considering countries to invest in, three countries were finalists: Italy, China, and Japan. First, Italy was thought to be a good candidate because they are shown to own more cars per person than many other countries. Italy’s production of cars is very high-end. Because of this, the production of cars is very low, so they will not be able to suffice the amount of business we need in order to prevail in their country.

China also was found to be very promising. In China, labor costs are extremely low and, in general, China is a very big emerging market. However, with China being a Marxist-socialist country provides a risk the company is not willing to take.

Our final decision rests on Japan. Car producers and motorcycle producers are our target market. Japan has a very large automotive industry. Unlike Italy’s only providing high-end vehicles, Japan produces cars anywhere from high-end to low-end quality. This creates more opportunity for Arlington Plating Company. While Japan shows high potential for our company to prosper, potential concerns include the fact that we are a U.S.-based company and Arlington Plating Company will have many differences to overcome. Some examples of these differences are adjusting our common law legal system to their code law legal system. With American being one of the most Individualistic countries in the world, adapting to Japan’s collectivist society may be difficult. When going into Japan, remaining open-minded to all the differences and staying tolerant is crucial to our success. Among other problems, there is always the threat that the Japanese market has tendency to sometimes be very bias against foreign companies. Along with that, Japan’s legal system is completely different from that of the United States. Although there will be many obstacles to overcome, Arlington Plating Company shows very strong potential of prospering in Japan.

3. Country Analysis

3.1 Political Environment

Within the last couple of decades, the relationship between Japan and the United States has been improving drastically. The United States has been Japan's largest economic partner, taking 31.5 percent of Japan’s exports, and supplying 22.3 percent of the United States’ imports. In the past, Japan’s government has been known for its regulations over companies. Japan also used to be notorious for favoring its domestic businesses over its foreign businesses, due to the fact that they see foreign companies as threats. However, within recent years, Japan has been working in order to improve these flaws in its governmental system. One specific example of these efforts would be the ACCJ, or the American Chamber of Commerce in Japan. “The mission of the ACCJ is to further develop commerce between the United States of America and Japan, promote the interests of U.S. companies and members, and improve the international business environment in Japan.” (About the ACCJ) The ACCJ has become a huge success due to the fact that it provides both American and Japanese members with information and tips on foreign investing opportunities. With political organizations such as the AACJ in existence, it has become more possible for American companies such as us to adapt in foreign environments. Another thing that may be beneficial to us in Japan’s attempt in weakening its bias opinion toward foreign companies is its visible attempts in strengthening its relationship with other organizations such as the World Trade Organization.

One potential problem is that economical risks stem from political risks. Recently, Japan has had some issues with its government. In fact, Japan has gone though 4 different Prime Ministers in the last 5 years. This proves that Japan is very politically instable. This political instability can be very dangerous to Japan’s economy. Investing in a politically instable country, and thus a very economically instable economy, can pose a huge threat to the whole existence to our company.

3.2 Legal Environment

The main challenge for Arlington Plating Company would be the adjusting to the different legal system in Japan. While the United States is based on the common law, where ownership is established by use, Japan is based on the code law system and ownership is established by registration. This means our company has to register the technology and ensure that the technology, service and product are secured against stealing and counterfeiting. Another huge difference between the legal system in USA and Japan is the performance of contracts. Because the USA is running under common law, the compliance of a contract is impossible if it is about an act of god (like natural disasters) and therefore impossible to comply. In a code law country like Japan are not limited by its own. But It will be seen as “unavoidable interference with performance, whether resulting from forces of nature or unforeseeable human acts”. This includes not only natural disasters but also strikes too. So our company has to be aware of these influences regarding, for example, the shipping of the product.

Furthermore, our company has to set an arbitration clause in any contracts referring to Japan. Because of the different legal systems, the probability that disputes can arise are high. To overcome these threats, our Company should set this in contracts before doing business in Japan.

Japan's trade policy priorities include strengthening the multilateral trading system, as embodied in the WTO. The Japan Trade Bureau had executed an integrated domestic and external economic policy which focuses on the establishment for a world free trade system. Furthermore this should create a better business environment in which Japans economy can grow steady. Most goods do not require an import license and can be imported freely.^[1] Japanese import licenses are required for certain goods, including hazardous materials, animals, plants, perishables, and in some cases articles of high value. Under the Uruguay Round Japan agreed to convert import quota and bans to tariffs.

Japan prohibits the import of products and services that violate intellectual property laws. In addition, Japan imposes restrictions on the sale or use of certain products including those related to health such as medical products, pharmaceuticals, agricultural products, and chemicals. Some imported goods may have a negative effect on Japan industry, economy, and hygiene, or on public safety and morals. Such goods fall under "import restrictions" as provided by various domestic laws and regulations. Import permit or prior approval for these goods is required for inspection or other requisites. The use of certain chemicals and other additives in foods and cosmetics is severely regulated and follow a "positive list" approach.

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^[1] http://www.hktdc.com/info/mi/a/sbr/en/1X006N03/1/Small-Business-Resources/Trade-Regulations-of-Japan.htm (03/01/2012 09:37 p.m)