International Marketing Final Project PDF

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Professeur : Eugenia Ruiz
Projet Final...

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International Marketing Final Project INTRODUCTION

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INTERNAL ANALYSIS A. General description of the company : mission, vision, history B. Structure C. Resources and capabilities

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Finance Producing resources

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Marketing and commercial resources International experience

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II. EXTERNAL ANALYSIS 1. Analysis and market selection A. The characteristics needed for a country to be a potential market B. The most suitable countries for Green People C. Threats and opportunities of the three countries D. Final table 2. Sector  analysis

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III. ENTRY STRATEGY AND PRODUCT TO BE EXPORTED 1.Selection of entry mode

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2.Product decisions 3.Pricing decisions

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4.Distribution decisions 5.Communication decisions and promotion strategies

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CONCLUSION

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REFERENCES

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INTRODUCTION Green People seems to be the brand that is most suited for an internalization plan. Indeed, Green People shops are mostly UK-based, but they could be successful in other markets. Although their expansion is limited, it has been very successful thus far. Choosing an organic brand was a strategic choice for the internalization plan because the ecological and organic skincare market has grown dramatically in the last decade, and it is said to continue in that direction. As the market grows, there are lots of opportunities for organic brands globally, as people become more and more aware of the benefits their products have to offer. I.

INTERNAL ANALYSIS A. General description of the company : mission, vision, history

Green People is a UK based hygiene cosmetics company that was founded in 1997 by Charlotte Vohtz. The company supplies cosmetic products that do not contain any synthetic chemicals or aggressive ingredients whilst also obtaining high ethical standards which prohibit animal testing. The inspiration for the brand came from years of searching for natural, organic skin care products that could be used on sensitive skin without causing further harm and inflammation. The first stockist for Green People was in Sussex and due to the founder’s high ethical standards, leading pharmacies and big businesses were, and still are, unable to obtain Green People’s products. Green People products are sold both online and in multiple authorised independent health stores such as Revital, Whole Foods Market and selected Waitrose stores. Some of the first Green People products were gentle salves designed to treat sensitive and eczema prone skin. However, Green People now makes over 100 products which are certified to be natural and organic, and cater for consumers of different ages. The company has received over 150 awards for its products and as well as stocking multiple national retailers shelves, also has a reputation overseas. The company’s international success stems from the individuality of their products and brand. After spending years on extensive researching and ingredient sourcing, Green People came up with their reliable and effective product range. Unlike most companies, Green People refuses to put prioritise profit over the company’s morality and personal values; an example of this being creating cruelty free products so without animal testing, and producing authentic organic and natural products which are proven to be good for skin.

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B. Structure The incorporated company Green People´s official full name is “The Green People Company Limited”. It is a private limited company, which is only possible to be held by 50 or fewer shareholders. In addition to that, the shares are not allowed to be publicly traded and the liability of the firm is limited to its shares. The official registered address is “The Green People Company Limited; Pondtail Farm, Coolham Road, West Grinstead, West Sussex, RH13 8LN United Kingdom”. Since the founding, Ms. Charlotte Vohtz has been directing the company with the help of Ms. Sue Losson. Including both of them, the average monthly number of persons employed in 2018 was 28, from 37 in 2017. (Green People company,2019) C. Resources and capabilities Finance A very important aspect for a well thought internationalization is to know how much resources there are to work with in a foreign market. That combined with the degree of risk aversion, the control we want to keep in hands and the desired flexibility, tells us which mode of entrance we should use. In the following table, we can see the total asset, the equity, both with change in percentage to the year before, and the equity ratio of The Green People Company. Table 1. Development of the company over five years

Source: Orbis, Information about the company The trend for the total asset over the five years shows one outlier in 2015, besides that it seems stable.

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Table 2. Development of the total assets over five years

Source: Orbis, Information about the company The equity development shows a clear growth trend over the five years, which matches the rising equity ratio of the company. Table 3. Development of the equity over five years

Source: Orbis, Information about the company Producing resources All Green People products are made either in the UK, or in a Scandinavian manufacturing facility. Most products are made with fairly-traded ingredients and over 100 products are certified organic by the Soil Association (2002), the Organic Food Federation (2003) and EcoCert (2009). As for raw materials, they are sourced in several countries. Roses are grown in an area of Bulgaria known as the Valley of the Roses. Shea Butter comes from a rural women’s collective based in Northern Ghana and myrrh from an ancient Himba tribe in Namibia. Once the Myrrh resin is harvested in Namibia’s soil, it is then brought to Europe where the oil is extracted

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and incorporated into the formulas. Green People makes sure that the growers in these countries work for fair wages and can improve their living conditions. However, this multiple vendor sourcing strategy leads to heavy transportation, fuel consumption and carbon dioxide emission.They started to use plant-based packaging made from Sugar Cane for the range of sun lotions. Marketing and commercial resources Green People products quality is very good. The company has spent years on extensive researching and ingredient sourcing in order to come up with their reliable and effective products. Unlike most companies, Green People refuses to put profit above the company’s morality and personal values, an example of this being their strict rules on creating cruelty free products, and producing authentic organic and natural products which are proven to be good for skin. Concerning their price strategy, Green People’s production line costs more because they’re 100% organic, but since they claim to never put profits first, consumers know that they are getting the best possible products at the best possible prices. It often means sacrificing larger profits. Prices range from 4.50 £  for a toothpaste, and the most expensive products are from the Agedefy+ range, around 33 £  . As for their brand awareness, the organic cosmetic product market is said to reach $54bn by 2027 as its popularity is increasing annually which is part of the reason why Green People have had so much success in being noticed. Since Green People has a large target audience, it has been easy for them to be noticed worldwide. One of the main reasons for the company’s success has been the reasons for which the brand was first created. Charlotte Vohtz started Green People because her daughter had sensitive, eczema prone skin and reacted badly to leading cosmetic products which claimed to be natural. They also grow brand awareness by being regular partners to yearly events such as The Allergy and Free From show (London, Glasgow, Liverpool), Spirit of Summer (London), Veg Fest UK (London), Pub in the Park (UK 8 cities tour), Paddle around the Pier (Hove), Country File Live (Oxford), Bournemouth Air Festival (Bournemouth). The distribution strategy chosen is mainly online, although Green People stock their products internationally in selected retailers which allows global consumers to enjoy their products, whilst still standing by what they believe and only retailing in shops worldwide that hold the same or similar ethical values. Only the website has all the products available. However, some ranges, for instance the Organic Baby range, is available in selected Waitrose stores. Other products can be found in Revital, Whole 5

Foods Market as well as Planet Organic and most Independent UK Health Stores. Overseas, they are stocking their products in international retailers such as Botanica Herbs (Greece), Pure Source Ltd (Barbados), Organic Times (Hong Kong), Biocare (Holland) and many more. They choose, however, to be exclusively available online for other countries. They only dedicate employees to sell in events listed above, they do not hire people as they do not have their own stores and they do not have corners with dedicated employees in their partnership with retailers. The target customers of Green people is very large. Firstly, parents and carers especially have been consistent, loyal customers to the brand wanting the best possible skin care for both themselves and their children due to the reasons why the brand was created. Moreover, there has been a 600% increase in veganism in the US, and groups worldwide have become aware of the necessity for organic and natural products when purchasing cosmetic products used on the skin. The company audience has grown drastically as well as their sales. As a result, they have been introducing new tailored products for a specific audience. The Organic Young range for instance is dedicated to teenagers, Age Defy+ by Charlotte Vohtz dedicated to mature skins and Organic babies & Organic children which was created for babies and children. Green People’s portfolio has grown over the years. Over the time, the company was able to build a big portfolio of products to offer to their customers, all with the focus on being natural, well tolerated and environmentally friendly. Their product assortment includes skin care, body care, hair care, sun care, make-up, care for men and even toothpaste. As they have a lot of products, they choose to create specific range name and separate branding for some of the ranges : Organic Young (Oy!) packaging features bright colors and colorful animal patterns targeting teenagers with acne-prone skin. Figure 1. Organic Young (Oy!) range for teenagers

Source : Green People UK 2019

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Age defy+ has a black and white packaging and looks more like a luxury. The logo is more abstract. The products seem to feature advanced ingredients but still natural, due to the flowers on the packaging. Figure 2.Age defy + range

Source : Green people UK 2019 Figure 3.New Born collection by Green People

Source : Green people UK 2019 The Organic Baby range is featuring soft colors (blue, green and orange), and round typo. It conveys the message that the brand uses simple ingredients, well-tolerated and calming for the delicate skin of babies. Figure 4. Bath and shower “citrus crush” for the Organic children range

Source : Green people UK 2019

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There is a clear continuity for the Organic children range, the typo is the same, the leave is slightly bigger to reflect that it is for children and not for babies, the previously green name of the product is now orange. Parents that were using the organic babies range are invited to continue using their products when their baby becomes a child. Figure 5. Green people men range

Source : Green people UK 2019 The range for men is featuring black packaging, a more masculine color, which have numbers on them to inform which product is to be used first in the routine. Men tend to want simple things when it comes to skincare.

International experience For a company such as Green People, there are many factors which could hinder international trajectory. Since the company has strong, unchangeable beliefs, Green People has already limited itself to selected retailers both in the UK and worldwide even though popular demand for their stock has been evident. This is an example of a barrier preventing them from reaching their full potential as a multinational company. Consumers will find that it’s a lot more difficult to obtain the products that they want as although there are selected international retailers, there is often only a couple in each country and depending on delivery costs worldwide, it may mean that the products are not worth the extra expenses.

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Another situation which could limit the company’s international trajectory is various beliefs which differ amongst international cultures and the culture within the UK. One significant difference being the policy which refuses to allow animal testing on products as this may not be considered important amongst many countries worldwide who do not consider animal testing an issue; therefore they won’t see the benefits of such policies meaning they won’t appreciate the brand for what it is. Human testing with products costs a lot more than animal testing, as does sourcing natural ingredients to make Green People’s products. If people don’t fully understand the benefits of the company, or are simply happy to settle for leading brand cosmetics, they won’t be inclined to purchase the products as although they’re affordable, they are more expensive than the average leading retailer’s products. Since the UK in the process of Brexit, the UK is likely to leave the EU, and this is another factor which hinders Green People’s international trajectory. Green People offers free UK shipping but due to the fact that the UK is now becoming independent, it costs a lot to export goods overseas as it is, and if the UK is to leave the EU without a deal then the prices of imports and exports is going to increase drastically. At the current international shipping costs, the products will already be being sold overseas at higher prices so that the retailers can make a profit, this extra cost may already be a factor causing international consumers to have a certain level of reluctancy when buying the products as there is only so much money people will be willing to spend on cosmetic products that they will inevitably have to replace multiple times throughout the year. With an inevitable Brexit increasing prices even further, international consumers of Green People may not financially see the products to be worth the prices they cost as there may be tariffs imposed which could make Green People’s cosmetic products simply unaffordable. Additionally, the UK has recently been experiencing conflict with Iran over oil prices. As oil is an essential element of the overseas shipping process, these increased prices will also make it difficult for Green People to grow as a multinational company. The strengths and weaknesses regarding the international expansion Strengths -

Green People is a truly ethical company with a large audience It has developed a lot of specific ranges meaning a lot of different customers It has a strong brand identity with a great business story (a mother creating

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a product to help her daughter and others with similar skin problems) Customers are loyal in the domestic country Multiple labels : some European labels (Ecocert), others worldwide (Cruelty free) The company has stable economic resources It has experience with shipping outside the UK The UK is associated with high production standards (that helps the international image of the brand)

Weaknesses -

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The distribution strategy (mostly online and in a very few stores) A lot of new ecological brands can compete with Green People The brand is UK-based: it means that the expansion to other countries could be hindered by the economic deals between the UK and other countries The brand awareness overseas is not good The brand’s make up range : one shade only for their concealer, 3 shades of pressed powder, no shades for black-skinned so they cannot export their product where there is a majority of black people

II. EXTERNAL ANALYSIS 1. Analysis and market selection A. The characteristics needed for a country to be a potential market In order to be taken into consideration, the countries we select should have an ecological awareness as Green people is an ethical company with the Ecocert label. They should also have a good economic situation (evaluated by the GDP per capita) as the products are mid-range to high-end for some ranges. The state of competition of organic products should also be a key criteria when it comes to choosing the countries. The organic cosmetics markets are emerging in some countries and almost saturated in others. We aim to choose a country in between. In the perspective of this criteria, we first selected : France, Germany, Switzerland, Luxembourg, USA, Canada, Italy, Australia, Brazil and Spain.

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The country that were not chosen were Germany, Switzerland, Spain, Italy and the USA : The biggest argument for choosing these countries, their predominantly ecological awareness, is also the biggest downside, because that is why they already have plenty of companies operating in that market. Resulting too much competition especially for organic and ecological products. Each of these countries has many firms with a similar focus and many more are in the coming. On the other side both culture and good economic situation would speak for all of them. One of the biggest reasons not to choose the USA as a market to expand to, are the stricter export restrictions in comparison to Europe. The same stated above for Germany for example applies to the US as well. The market is a lot bigger but so is the competition. The increasing demand for natural, ecological and fair-trade products reached the US as well as the other countries mentioned before, which lead to many new companies in that sector. B. The most suitable countries for Green People 1. France : ecological awareness and an emerging ecological cosmetics market, people are more sensitive to organic cosmetic products, european country with a high purchase power, good economic situation despite Brexit at the moment, a lot of competition but green people could compete with other brands. The “Made in France” when it comes to buying cosmetics things is not so relevant compared to other sectors. That is why being a british brand will not be a disadvantage compared to numerous french brands. 2. Canada : There is a strong ecological awareness and it is part of the commonwealth so it would facilitate trade. Moreover, the brand is implemented in Europe and Asia but not in North America so strategically it could be great. 3. Brazil : Skincare and cosmetics is being an emergent market. The brand is in europe and Asia and not in South American countries so it could be a great choice. There is a big population so large target consumers. C. Threats and opportunities of the three countries France Economic Opportunities -

The cosmetic industry creates many job opportunities for France, likely to create around 55,000 direct jobs, 64.7% of which likely to be female (Cosmetics europe, 2019) (Febea, 2019)

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Europe holds the leading market share for cosmetics, 77 billion euros worth and france hold 10 billion euros worth of that market. 14% of Europe’s market for cosmetic products actually belongs to France France exports 6.3 billion euros worth of cosmetics/ cosmetic products around Europe, and 13 billion euros worth towards the rest of the world (Febea, 2019) The vast majority of Europe’s consumers use cosmetic products every day which means there is always a high, continuous demand for cosmetic...