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PROJECT

ON
INTERNATIONAL MARKETING
OF
SHARROW PRIVATE LIMITED

SUBMITTED BY-
SHRUTI PRIYA, SHAHELA PARWEEN, FALAK NAZ, SAQUIB
SAJJAD, SHEKHAR KAPOOR, SHUBHAM KUMAR SINGH
INTRODUCTION OF THE COMPANY
Sharrow is a blend of proven Ayurvedic therapies and 21st century
bio-technology. sharrow products are based on botanical extracts
of plants, herbs and trees and the protein content in their roots,
leaves, flowers and fruits. They are 100 % vegetarian,
environmentally friendly and biodegradable. All sharrow products
are Dermatologist Tested, Organically Pure and Preservative Free.

Sharrow products are made of 100% organically-pure,


preservative-free ingredients and renewable resources—cultivated,
gathered, blended and manufactured in the foothills of the
Himalayas.

At Sharrow, hybrid plant and plant extracts are combined with


biotechnology to produce highly effective products. We have a
special cold extraction process that preserves the active ingredient
of the plant so that the intelligence of the plant can interact with
the intelligence of the body to promote health and beauty.
Formulated from organically grown pure plant
extracts,sharrowproducts are made to EEC and FDA standards and
incorporate the principles of preventive medicine for everyday
use.Our products are designed, manufactured and packed by
qualified Ayurveda Doctors, Swiss Cosmetologists and
Dermatologists.

Basically, sharrow is a unique blend of the 5,000-year-old science


of ayurveda with 21st century biotechnology. We bring to the
consumer health, beauty and wellbeing products which are highly
efficacious and all based on the best of the East and the West. The
ancient science of ayurveda, yoga and meditation blended with
21st century biotechnology. So in that sense sharow is truly a
unique brand globally because it combines East and the West, the
ancient and the modern and brings to you a platform for total
health, well-being and beauty.

INTRODUCTION OF THE PRODUCT


Sharrow has recently launched a new herbal face wash known
as VEDICA which can be used for your daily use. VEDICA
herbal face wash is a mild herbal face wash with the strength
of Aloe Vera, Neem and Tulsi. It is a good solution for oily
and acne-prone skin. It removes excess oil and dirt from the
skin. It is good for oily skin and makes the skin glow. The
ingredients used in it are all herbal, so even sensitive skinned
beauties can use it without worrying about allergies. It helps
wash away all the dirt on face and keeps it clean and clear. It
also helps soften skin, improves skin tone and blood
circulation.
It has all the essentials that any ayurvedic or herbal skin care
product should have. This natural face wash cleanses your
skin effectively and leaves it absolutely clean and fresh.
GLOBAL MARKET ENTRY
STRATEGIES

1. Target market selection


2. Choosing the mode of entry
3. Exporting
4. Licensing
5. Franchising
6. Contract manufacturing
7. Joint ventures
8. Wholly owned subsidiaries
9. Strategic Alliances

MARKETING COUNTRY
Sharrow plans to enter the US healthcare market. It is
involved only in manufacturing and operates on a B2B model.
It wants to create its own brand in the US market. Looking at
the current growth trend of US countries (economies), and the
respective trends in inflation, consumer expenditure, retail
clothing sales volume and other factors, it can be concluded
that PUERTO RICO can be considered as the most suitable
market for sharrow products. Lack of international marketing
experience makes it difficult for sharrow to enter the market
independently. Thus, entering into a joint venture with one of
the local partners is the most suitable entry method for
sharrow. It can continue to leverage on its low production
costs in India and launch a new healthcare brand under the
new joint venture. Sharrow will also have to change its
marketing mix and adapt it as per the healthcare market. The
new joint venture in Puerto rico should adopt a penetration
pricing strategy and engage local influencers to recognize the
latest ads in health and make use of the existing manufacturing
facilities in India.

SELECTION OF MODE OF ENTRY


The selection of the mode of entry is influenced by several
internal and external factors relatingto the company and the
new target foreign market. here we are considering the case of
an Indian healthcare product company, sharrow .which has
recently decided to enter into the European market. For this
purpose, a careful analysis of the economies of the European
Union countries and also the apparel market in these countries
is necessary to determine the best market(country) to enter.
With certain statistics we will consider the different markets
that sharrow can enterand then study the external environment
of the market using PESTEL analysis. We will also lookat the
various options of entry methods and recommend the best
alternative that fits the capabilities and objectives of sharrow.
It cannot continue to operate in the new market with
itsexisting strategies. Thus we also recommend a new
marketing mix for the European market.
sharrow has enough experience in the Indian apparel market,
and now plans to launch its own brandin Europe. It will be
difficult for sharrow to mark a presence in the European
market as it does nothave enough experience in marketing its
own brand. Europe being a developed country, themarket
dynamics are different than in India. Also there exist many
established players in theEuropean healthcare brand like the
body shop which have a strong presence across the continent.
Assumption: Thewords ‘clothing’ and ‘apparels’ can be
used interchangeably.3. European MarketThe European
continent can be geographically divided into two parts –
Western and EasternEurope. The Western Europe of
comprises of 25 countries; including countries such as
Austria,Germany, Greece, Ireland, Italy, Turkey, United
Kingdom and others. In the last two years, thispart of
Europe has experienced the most intense recession since
1930. For the year 2009, theoverall GDP of Western Europe
fell by 4.2% over the GDP in 2008, and it is expected that it
willgrow only by 1.2% in real terms in 2010.

PESTLE ANALYSIS
A PESTEL analysis of Polish healthcare industry will give us
a better understanding of the external environment of Polish
healthcare and cosmetic market.
Political: i)Requires reforms as government systems are
weak.
ii)Tax system requires high social contribution.
iii)Increase in taxes in medium term because of
country’s building public debt.
iv) Poland - 70th (out of 183) easy country for
doing business.
v)Government sometimes slow in registering
new business.
Economic: i) Polish economy expected to grow at 3.4% in
2010 which is considerably high compared to average growth
of European Union.
ii) Inflation decreased to 3.8% in 2009 from
4.4% in 2008.
iii) Financial support from EU, in form of
cohesion funds, towards development of infrastructure,
innovation, human resources and other growth factors.
iv) Polish currency (grosz) strengthened itself
from 2004 to 2008; but weakened in 2009 to settle at
3.12 grosz/US$
Social: i)Large rural population directly/indirectly employed
in agricultural sector
ii) In 2009, 71.2% of population belonged to age
group 15 to 64 years
iii)Consumer expenditure in 2009-10 stood at
£5201milion and expected to grow at 5.1% in 2010-11.
iv) Fashion trends in menswear less significant than
those in women wear. Proportion of females (51.7%) is
marginally higher than proportion of males (48.3%).
v) Increase in disposable income and lesser in
number of children has propelled expenditure in child wear
segment.
vi) Clothing sales increased by approximately 9.3%
in 2008-09 and by 9.6% in 2009-10. Apparels retail sales
value expected to consolidate its fast growth over the past
years.
Technological: i) Needs to improve the transport network
(just 3% of roads meeting EU standards) to develop
distribution processes of businesses.
ii)Still operates on a 30year old power
generation facility which needs replacement. Easy access to
newer technologies as Poland is a member of EU.
Environmental: i) Growth of clothes made of organic (for
example: soya bean) materials.

Legal: i) High tax rates at 42.3%.


ii) High Labour tax % contributions at 22.1%.
iii) Importing in Poland is a long process and
involves 5 documents.
MARKETING STRATEGIES OF
SHARROW
Considering the PESTEL analysis of the Polish beauty and
healthcare market and the mode of entry that hasbeen
recommended to sharrow we can now design the marketing
mix , which will formthe base for the marketing strategy of the
joint venture (JV) formed by sharrow.
Price: The consumer expenditure at present is not very high,
but is expected to rise over the next 3 years .Thus, to gain
consumer confidence it would be appropriate to enter the
market with a low price. The new JV should adopt a
Penetration Pricing strategy where in products can be
launched at a lower rate and as we gain market share the
prices can be moved upsteadily. Also by then, other factors
like the consumer confidence, consumer expenditure andthe
overall market situation will turn better with increased retail
volumes turnover and sales.

Product: The new JV will engage local beauty and personnel


brands to come up new patterns of products that suit the
needs of the Polish customers. These products will be sent
to the manufacturing facility in India where they will be
manufactured. The new JV will notbe competing with
premium brands. To compete with premium brands either an
existing brandimage/heritage or large sum of investment in
marketing would be required. The new beauty products can
be launched in the medium range where the target group
will be the age group 15 to 35 yearsbelonging to the Polish
middle class.

Promotion: The JV being new to the market, it is necessary


to create awareness about the JV aswell as the new product
range that we offer. To promote the JV, advertisements can
be done intrade journals and other magazines. Also we can
sponsor initiatives that involve universities andcolleges; as
the target consumers are directly/indirectly associated with
universities and colleges.Apart from this,advertisements in
newspapers and other print media will help in getting
thevisibility and creating awareness about our brands at a
lower cost.

Place: All the products will be manufactured in India and


will be sent to the central warehouse of the JV in Poland.
The JV will then coordinate with local transport and
logistics agencies to makethe clothes available at outlets
situated in different parts of the Poland. Initially it will not
bepossible to open many retail outlets because of low capital
availability. Thus to maximize thereach of the JV,other
retail stores can be contacted for the sale of our beauty and
healthcare products on agreed terms
andconditions.ConclusionAfter studying the statistical data
of different European countries, we conclude that Poland is
themost appropriate market for sharrow to start its European
operations. Poland has asteadily growing market. It aims to
broaden its knowledge in international branding and also
capitalise on its existing manufacturing capabilities to
produce world class products. Thus we recommend sharrow
toenter into a JV with a retail outlet in Poland. This new JV
will control the marketing anddistribution operations of the
new brands, thus providing sharrow partial control and also
anopportunity to gain knowledge about the international
market. Sharrow will also have to change on the marketing
mix and we recommend changes in their approach towards
pricing, productdevelopment, promotional activities and the
distribution system.

MODE OF ENTRY (JOINT VENTURE)

Joint venture (JV) is another option which results in


theformation of a new entity in partnership with a local
partner.All investments and responsibilitiesare shared with
the local partner. It enables the company to understand the
dynamics of the localmarket. JVs also help in overcoming the
trade, political and other governmental barriers formarket
entry, due to involvement of local partner. It is difficult to
identify an appropriate partnerfor a successful JV . As
sharrow wants to enter into a market for a longer period and
also control the marketing operationsit should employ an
equity based entry mode. JV would be most suitable method
for sharrow. Sharrowcan form a JV with a beauty and
healthcare retail chain in Poland. It can continue to leverage
on the lowmanufacturing costs by producing in India and
have a partial control over the branding,marketing and
distribution operations through the new JV which will
support the marketingoperations with the local market
knowledge.
Broadly, there can be two methods to enter into a new
market:-
Non-Equity mode: Contractual agreements,direct/indirect
exporting,licensing and affiliations totrading companies are
non-equity based entry modes . In a non-equity entry mode,
establishment of a new organisation is not required and does
not involve much financial investment. The two parties
arebound by a contract, and thus would eliminate the scope
to handle the volatile environment. This type of entry does
not give control to thehome country over its operations in
the new foreign market. All the activities are either
carriedout by the other party. This kind of approach is
beneficial for a company to cover large scale ofeconomies
in the new market but limits the opportunity to understand
the local market.

Equity mode: Joint ventures, wholly owned subsidiaries &


acquisitions are equity based modes.The investment involved
in this kind of approach is very substantial as it involves the
establishment of a new company or acquiringanother.The
company can gain control over the operations in the new
foreign market. Whollyowned subsidiary allows a company
to have full control over its operations in the foreign
market,but insufficient knowledge of the market might come
up as a disadvantage for the company. Thisapproach is
generally adopted by companies that are more experienced in
the internationalmarkets. Acquisitions provide thecompany
an easy access to market, technology, and local know-how.
However there can beperformance issues in streamlining the
processes with the parent company due to culturaldifferences,
existing management processes in the acquired company.

BESTHERBS INC.
Bestherb Inc. is a USA based trading company which trades
herbs from across all over the world.
We service wholesalers, distributors, and manufacturers of
botanic services and products. We pride ourselves on offering
a superior product at anaccommodating price with excellent
customer service.
Flowers, Plants & trees-silk, Dried, Chinese grocery stores,
Food processing & manufacturing, Natural Foods, Health and
diet food products, health and wellness products, Alternative
medicine & health practitioner, flavoring extracts. Herbal
Extracts, Herbal Extract, Herbs, Herb, Chinese Medicine
Herb, Chinese Medicine, Alternative medicine, Chinese
Herbal Extracts, Chinese Extracts, Herbal Extracts, Raw
material, Traditional Chinese Medicine, (TCM), Bulk Raw
Material, Botanicals, Botanical, Herbal material, Ayruvedic
herbs, standardized herbs, condensed, organic herbs,
Herbalist, pharmaceutical extraction, pure, Pharmaceutical
raw material, vegetation, nutraceuticals, planetary herbs,
extractor, whole herb, powdered herb, Chinese herbal
remedies, nutritionals, Natural health ingredients, herbal
supplement manufacturer, herb manufacturer, herb mfg,
Distributors, Distributor, Tribulus, Epimedium, Icarin,
Icarins, Ginkgo Biloba, Ginkgo, Milk Thistle, Polygonum
Caspid, Polygonum, Rhodiola Crenulata, Rhodiola Rosea,
Rhodiola, Rosea, Rosavins, St John’s Wort, St John, St
John’s, St John Wort, Wort, Tribulus, Saponins, White
Willow, Willow, White, Organic, Organic extracts, Organic
herbs, herb supplier, organic supplier.

JOINT VENTURE WITH BESTHERB


INC.

Sharrow in going to establish joint venture with bestherb


inc.
Bestherb inc. is involved in trading herbs and now it will
also trade the sharrow products from india and diretly
sell it in puerto rico market.
Bestherb inc will help sharrow to enter puerto rico in all
legal formalities
Bestherb inc. has a good market knowledge of puerto
rico so it is beneficial for sharoow to increase the sale.
The profit sharing is 49-51 i.e 49% of the profit will be
of bestherb inc. and 51% of profil will be of sharrow.