The nature of the product demands that the selection of international markets uses certain specific segmentation criteria to determine the potential of its targets. Though different from channel market strategies, these two subjects share similar concepts and approaches in determining the market, either locally or internationally. The difference is only marked by the number of players or actors at various levels. In this case, the preferred product, Sun Block Cream, SPF 70, is a beauty product whose cost and price vary greatly, impacting the expected returns. If it were to sell in Kenya, for example, the producers in the U.S. would have to identify a viable distribution channel that is relatively profitable and cost-effective.
By integrating foreign customers and physical evidence in the 4Ps of the market mix, the decision-making process of the SPF 70 in the U.S. would find it relatively easier to isolate specific targets in the international market through market segmentation and international channel strategies. Choosing Kenya is comparable to identifying a gateway to the entire region of East and Central Africa in addition to several other cities in the horn of Africa. In this essay, we examine the various dominant factors that are likely to affect international channels leading to these markets and the possible influence of local factors on the sale and use of Sun Block Cream.
Factors affecting foreign markets
Foreign market factors come into play as an asset to the marketing mix immediately after the product is developed, from the product launch in the foster nation (Kenya) to the pricing mechanism and strategies and ultimate fixing of SPF 70’s international retailing rates. Nonetheless, there is the need to conduct promotion featuring advertisement before venturing into the new market. This is important in order to assess the situation in the market. In addition, the manufacturers in the United States need to liaise closely with other international distributors in Kenya in terms of logistics and sales. A joint partnership in a cooperative framework is deemed appropriate at this stage in an attempt at developing channel and pricing strategies for SPF 70 product launch, including both your domestic and international markets (Newsom, 2004, p. 288).
We consider a number of factors that make Kenya the preferred international market. These factors include a function of the government regulations, tariffs, political pressure, import regulations, business policies, and quotas. To begin with, government regulations on both local and foreign businesses are flexible and are tailored to protect the respective businesses. Import regulations are less bureaucratic involving few legal requirements. Both existing and formulated policies are investor-friendly in the sense that they safeguard the interest of both the investor in his country and the foreign company. In view of the fact that the product considered for launch is a beauty product, the company (manufacturers of SPF 70) may consider opening a subsidiary of its parent producer cum distributor in Kenya (Export Processing Zones Authority, 2005, p. 34).
The company gets consolation from the fact that the government allows it to repatriate its post- taxed profit back to the U.S.A. Besides, the company can use the country’s free trade policies in the East Africa region and COMESA to expand its range of market share. Other existing policies and trade agreements signed between Kenya and the United States are also available to protect the interests of the company and protect its product in the Kenyan market from fraud and malpractices such as counterfeits (Kotler, 2007, p. 169)
The company will only be eligible for a 35.7% tax on its annual revenue while enjoying trade in a free market economy where the currency is equally controlled by market forces. In an emerging economy like that of Kenya, it is observed that a majority of the population has sought to embrace new trends of civilization in an attempt at conforming to new lifestyles. Out of the 40 members of the population in Kenya, a third of these people live in urban centers where their life is characterized by high consumption. This group of people also has high purchasing power. They can therefore afford to maintain the purchases of the product. In addition, the beauty and cosmetic industry in Kenya is still relatively young but rapidly developing. In its channel strategy, it can liaise with established companies such as Revlon in either an outsourcing or franchising arrangement to distribute its beauty products in Kenya and the neighboring states.
In the case of opening a subsidiary in Kenya, the manufacturer has to find its competitive edge in the market relative to the other foreign competitors. This could be achieved by way of identifying the needs of the target market and then supplying them with what they need. As part of its breakthrough strategy, the manufacturers of SPF 70 must consider liaison with as many as possible consultants who may equally serve as sales representatives in the ultimate end. The latter strategy is particularly important in ensuring the sustainability of SPF 70-sunscreen in Kenya and in the wider east and central Africa region, both in the short run and in the short-run (Newsom, 2004, p. 301).
As concerns the company’s objectives pertaining to APF 70-sunscreen in particular, it may consider alternative international market penetrative channels like causal exporting, cooperative (piggyback), and export management company. In Kenya, the already exists export management companies involving logistics companies such as DHL and MAESRK, among many others. The role of the chain manager in this respect is to frequently address the challenges of foreign distributors and agents while at the same time acting on changes in the international market in order to avert and avoid any crises from adversely affecting the firm in the course of its sale of SPF 70s.
Given the monetary and fiscal policy of Kenya comprising Insurance, Banking, and legal import requirements, there are a few legal entities, such as the Kenya Bureau of Standards (KEBS), which can influence the trade through Kenya’s foreign investment Policy act (FIPA). KEBS’s role in this channel is to confirm whether the SPF 70 Sunscreen quality matches both the international and national standards before it is finally allowed to sell in its market. While it might be exempted from such arbitrary inspection since it is a nonfood item, it risks intensive completion in the market of a small niche of clients who use such make-ups in Kenya. This means that without adequate and accurate advertisement coupled with suitable pricing mechanisms, it may be rejected in the market. However, their product can be pushed through the market by existing technology in the media and advertisement sector (Export Processing Zones Authority, 2005, p. 37).
The current lifestyles of consumers in the region are also changing and seem to reflect the trend in developed nations like the U.S. This is particularly true for middle-class urbanites. The company can take advantage of this growing trend in the rapidly urbanizing world to launch the product through a subsidiary that can help make huge sales out of this scenario. In Kenya, the beauty and cosmetics industry is estimated at approximately $500 million annual turnovers, and it employs some 4 million people who depend on it directly or indirectly. The populace value beauty and are flexible to integrate modern impression of beauty in their natural appearances’ (Kotler, 2006, p. 169).
Consequently, the company has immense opportunity in the people of Kenya and in the region as it can sell in the ready market. The cost of training new staff to take over its functions in foreign Kenya is minimized by the high level of literacy among the Kenyan population and most entrepreneurs. In addition, its profitability is almost guaranteed by the country’s policies which economic growth, and development by promoting investor-friendly policies in a politically peaceful environment.
Export Processing Zones Authority, (2005), Doing Business in Kenya. Web.
Kotler, P., & Keller, K. L. (2007). A framework for marketing management (3rd ed.). New Jersey: Pearson Prentice Hall.
Kotler, P., & Keller, K. L. (2006). Marketing management (12th ed.). New Jersey: Pearson Prentice Hall.
Newsom, D., Turk, J. V., & Kruckeberg, D. (2004). This is PR: The realities of public relations (8th Ed.). Belmont, CA: Thomson-Wadsworth.