You are on page 1of 23

TNC Limited

Mobile phone solution for


Children and old people
Purpose

I. The purpose of this report is to analyse the three


potential foreign markets that TNC would want to
invest in.
 India
 Thailand
 Japan

II. Recommend market entry strategy and marketing


mix strategy
overview
Part I
 Environment factors

Part II
 Market entry strategy

Part III
 Marketing mix strategy (4Ps)
Background-1
Product : Mobile phone
Origin : The US
Market target : 5-14 years old
65 years old and above
Unique feature : -non-toxic plastic

-simplify
-toy shape
-emergency programmed dialing
-big-sized button
-durable
Background-2

Why foreign market ?

 New arising competitor


 Saturated market
 Additional profit
Country

Thailand India Japan


Part I – Environment Factors

 Market size
 Labour market
 Market opportunity
 Consumer Behavior
 Competitor
 Economy
Market size

Source: www.fita.org (Federal International Trade Association)

 Market age group is total percentage combining 0-14 years old


age group and 65 years and older group.
 Urban area is where TNC launch the product; rural area is not
considered.
 India has significant potential population that would possibly
purchase the product.
 Therefore, India is the potential market in term of market size
comparison
Labour Market

Source: www.fita.org (Federal International Trade Association)

 India has very high working population


 India has low average salary
 The literacy rate of India is low; but the problem is overcome by
such big population
 India has very advance technology in the IT industry which allow
TNC to access to research with low cost
Market opportunity

Source: www.intracen.org (International Trade Statistic

 Thailand and India are smaller markets compared to Japan


 India has low domestic production with such population – there is
room for foreign company
 Japan has very big local market – with giant brands fighting over
a saturated market
Consumer behavior
 Thailand upper and middle classes
income are increasing
 Minimum wage has increased

 Major population of India still willing to


sacrifice quality concern for price reduction
 Minimum salary has also increased

 Japanese customer look for quality and durability in products


 As economic condition changed, price has became crucial factor
 Traditionally, Japanese customers are reluctant to foreign product

 Japanese is off the list; India and Thailand are more relevant as TNC is
mid tier product
 Indian consumers has better taste toward IT-based product
Competitor

 Only Japan has direct competitor.


 Bandai is the producer for children phone.
 There are many producer for old people phone
 India and Thailand are still fresh markets for this type of product
Economy

Source: CIA World Fact book


 Japan’s economy is very big
 India GDP look moderate as total but if divide per capita, Thailand is 4 times
high
 Thailand and India have moderate inflation rate -> low return on investment
 Japan economy look ideally but India economy is more suitable for TNC
because consumer in prosperous economy look for quality and expensive
good.
 When income of population is low, consumer tend to look for good that value
their money
 Product with reasonable price tend to sell well when inflation rate is high
Part II – Market Entry
Strategy
Environment for market entry
 Government laws and policies
 Tax payment

Market entries:
 Direct Exporting
 Joint Venture
 Greenfield Operation
Start Business in India
 Where is it easier to start a business—and where not?
 1 New Delhi, Delhi (easiest) 10 Chennai, Tamil Nadu
 2 Patna, Bihar 11 Kolkata, West Bengal
 3 Jaipur, Rajasthan 12 Mumbai, Maharashtra
 4 Hyderabad, Andhra Pradesh 13 Guwahati, Assam
 5 Bhubaneshwar, Orissa 14 Ahmedabad, Gujarat
 6 Noida, Uttar Pradesh 15 Ranchi, Jharkhand
 7 Ludhiana, Punjab 16 Kochi, Kerala
 8 Indore, Madhya Pradesh 17 Bengaluru, Karnataka
 9 Gurgaon, Haryana

Source: Database in “Doing Business 2009 in India


Subnational series”.
Time and cost

Source: Doing Business database.


http://www.doingbusiness.org/Documents/Subnational/DB09_Subnational_Report_India.pdf
Paying Tax

http://www.doingbusiness.org/Documents/Subnational/DB09_Subnational_Repor
Annual Household Income
New Delhi
 It has fewer days to prepare
 The cost is low and tax payment is convenient
 Most procedures and payment online
 Annual household income is highest.
Market entries

 Direct Exporting
 Joint Venture
 Greenfield Operation
Direct Exporting

We prefer direct exporting than indirect exporting


Keep the confidential technology and marketing strategy
Save money for agencies fee
Great control but more commitment
Joint Venture
Our partner is Subhiksha company
 Largest retail chain and mobile phone retailer
 Great experience in the market
 Growing rate 8-10 per cent per annual
 Have big share of the market and loyal customers
Greenfield Operation
 Set up a new factory in India
 Reduce cost of transportation from China to India
 India is quite good labor market in term of information technology

Issues to concern to set up


 Government requirement
 Building cost
 Labor, material