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At this point we affirm that accepting challenges companies grows and expands both vertically and horizontally thus becoming a multiplier In the chain that needs constant changes and from this world ;s point of view the globalization is forcing us to readjust in the new rules to survive in the current situation. Internationalization is first of all have entrepreneurial vision and from there plan, build, manage, put into practice and constantly monitors to constantly better achieve what Is planned.
In this port we point our eyes to a market with good chances of ascension, the Latvia market. During this study, questions were raised both positive and negative to reach a consensus or not to explore the Latvia market by the products of Pander’s Group. Latvia Is a country that gained Its Independence In 1991 and has faced Inflation, bank Interventions, the high Interest rates, high unemployment rate, political Instability and population lose credibility regarding their government among other disparities.
But today the Laotians impressive progress (WTFO and World Bank statements 2010) wows Laotians capacity to cope with competitive pressure. Participating in the WTFO since 2004, Latvia has significant numbers in the current economy. With a GAP pop of U. S. $ 14. 700 (2010) and a real GAP growth rate increased from – 16. 74% (2009) to 1. 38% (2010), which is composed of 4% agriculture, 21 . 7% from industry and 74. 4% accounts for trade and services (Index Mind data released in 2010) that means a plus to Pander’s business.
Both economic and political aspects as the turn of events in relation to changes in consumer habits, income, a significant increase in the economically active population and the commitment to become part of the Euro zone are Just some of the positive aspects in Latvia market mentioned now that contributed to give strong base to this work and led us to formulate our problem statement. But the question that follows is for sure: “Why nobody did it yet? ” We can say today that developing markets are potentially those who will be the feeders of developed economies.
Today it is a fact that we can no longer ignore. Due to this new reality is that we apply the Blue Ocean strategy where companies reinvent their industries by creating unique value for its customers and therefore sustainable value for its shareholders, employees, suppliers and society, in other words, instead of the bloody struggle in “red ocean” of the competition they must create innovative strategies to clear “blue oceans” of untapped market space (W. Chain Kim and Renee Membrane – The Blue Ocean Strategy).
Marketers are innovative and accept challenges and this statement led us to open the doors of the market in question with entrepreneurial vision and at the same time with a solid basis for continued placement of Pandora Group, reaffirming the strength of its brand in the same way they come walking in all these years of existence. Table of Content 1. Introduction Pandora is known around the world for its designed, manufactured and marketing hand-finished and modern Jewelry made from genuine materials at affordable prices.
Middle class is booming worldwide and with prosperity comes consumers’ desire to show that they are doing well, therefore super brands like Danish Pandora and British Signet also called “category killers”, has stormed the global Jewelry market where there is money to fight for. Pandora competes in affordable luxury segment, which in 2009 totaled 83 billion USED, equivalent to proxy. 57% of the total market for fine Jewelry. Affordable luxury still gives consumers the feel of stardust. In the recent time Just a few Danish companies have managed to grow from being nothing to become a big export business within a few years.
Pandora has got extreme media attention within the last year for having done exactly that. The company has grown from a small Danish Jewelry company without sales abroad to be one of Denmark largest twenty stock’s companies with 5. 00 employers around the world and sale on six continents through over 10,000 points of sale, including close to 500 Company was founded in 1982 and now sells their products in 55 countries, including many countries in Europe, North- and South America, China and Asia. Pandora has listed markets, where they operate on their website.
What kind of design, what price and much more. That can help for making the production line in the future. 3. 2. Geographical area We are going to focus on the capital city of Latvia, because Riga is located in the centre of the country and is very easy to reach from every other city in Latvia. The entry is not big – only 64,600 square kilometers – because of that people from other cities are visiting Riga very often, for example, in connection with Job questions, vacation etc. Latvia in total has 2,2 million inhabitants – but over one third of the population lives in the capital Riga.
Riga is the largest city in the three Baltic countries, meaning a high activity and buying availability. Latvia is a tourist country with visitors from all across Europe, also caused by its Freedom statue. There is a big flow of tourists who are visiting Riga during the summer months and this amount is rising in time. In February 2010 the average load in hotels in Riga was 32, 37%, but in February 2011 it was 37, 34%. 2 3. 3. Time Frame The remaining timeshare will include all three planning levels which are corporate, business and the functional level.
At the corporate level the long-term goals are determined and are to be realized. These include internationalization decisions, choice of distribution channels and pricing policies. At business level, work is more concrete and the focus is concentrate here on the specific plan of the individual action parameters. And finally is the functional level when working with a shorter orison plan can vary between days, weeks or months. In order to prepare a well-argued internal analysis, it will be necessary to obtain the relevant strengths and weaknesses facts about the Danish company Pandora.
To do that it will be appropriate to analyze the company’s value chain in order to identify the activity that creates value for customers and thereby discover the company’s core competencies and competitive advantage. This is significant because it will reveal what strong points the company possesses – and the competitors do not, which can be used in contrast to the competition and provide an edge for Pandora. This information will be based on secondary data collected from the internet, such as firm annual reports and the Company’s home website etc.
Furthermore it will be relevant to analyses Pander’s product line and evaluate its product portfolio, by using the PLY curve. This will give us a picture of how their products have developed over the time, and also determine where the company’s product lies in the PLY cycle. With this information, this will make it possible to analyze and evaluate the products’ future growth or decline, since this has an impact on competition and choice of marketing ix. Hence, we can evaluate which products to invest further into when entering the Latvia market.
Further interior aspects will be to analyses the organization, it’s mission and vision, financial resources, internationalization, growth strategies and export motivation. All the mentioned is important in order to uncover the company’s internal resources and competences. This will verify the company’s abilities when moving into a new market and also paint a picture of the company’s capability status, but then again identify factors that could indicate weaknesses in the company. The ATA will be based on already existing information resources that are available on the internet.
Everything above mentioned will be combined in a SW-analysis, so we can be able to form a strategy for Pandora when entering the Latvia market. Succeeding to analyze the internal situation we will make an external analysis, and therefore uncover both the macro and micro conditions in Latvia. This is important so better decisions can be made henceforward, and besides to discover if this market has good potential for Pander’s products. It will include relevant aspects such as the macro- environments four most important factors, such as political, economic, socio-cultural and technological.
This is relevant, for the reason that it will illuminate the factors and type of changes Pandora may have to adapt to when entering the Latvia market. This information can be collected as secondary data from the internet, such as Remuneration for Country rapports, Rheostat, Transport, country statistics etc. While the macro conditions are mainly dealing with the overall situations, the micro analysis will therefore focus on competitors, consumers, distribution and media habits as well as media opportunities’. This will reveal if Pandora has selling opportunities on this new market.
Accordingly it is important to understand Latvia customer behavior since they will be the ones buying Pander’s products. For this we can use the SORT model to analyze the customer buying behavior, and increase some understanding about the consumers’ needs, motivation and influences when buying. Here we can use secondary data but also primary data in qualitative form. Moreover, it is also important to achieve a differential advantage over their competitors, and therefore analyses the competitive environment, by describing the form of the owe big the threats Pandora can cross paths with when entering the Latvia market.
Both the internal and the external analyses will be placed in appendix. The relevance of all the above external analysis will outline an TO- analysis, and reveal opportunities and threats that the company may face. By summarizing all the data we have collected, both internal and external, we can transfer the in-formation and put it to use for marketing strategies for the marketing plan. The SOOT is an effective tool that can provide and support the company when making conclusions based on elected data.
The external factors will represent new and improved market opportunities for the company. In order of being able to enter the Latvia market successfully, it is important to have an overall guideline to provide an overview and therefore make a marketing plan, which will include information about: objectives- both economics and marketing, the choice of target market, entry modes strategies and positioning. This plan will be based on internal and external analysis, and therefore result in an attractive possibility to penetrate this new market, Latvia.
Then the process will include determining the company’s marketing strategy where we can use the STEP model (SMS) and in so doing define segmentation, target group and positioning. Then we can conclude and decide by choosing the right marketing mix for the company. This is very important when exporting to a new and unknown market, so the company will not make any miss-calculated decisions. All of this together suggests a plan for Pandora to enter the Latvia market, in the best possible way.
Estimated budgets and a Giant plan shall bring us closer to the operational faze ND make it possible to effectively manage our marketing activities and importantly be able to determine how successful they have been. And lastly the conclusion will be made to give a clear answer to the problem statement. 5. The marketing plan The marketing plan creates an overview and helps to address the marketing coordination’s, based on information from the analyses and applied to make the right decisions before entering the new market.
With this plan, it will make it able to optimize its resources and achieve the best results when choosing between its activities. 5. 1 . The situation analysis The situation analysis is based on the internal and external analyses and gives a picture of how things stand with Pandora at the moment, based on both internal and external factors. These conclusions are to form the basis for decisions about which marketing activities the company need to implement. We have combined it in a SOOT analysis. 5. 1 . 1. Intern analysis (SW- analysis) 5. 1 . 1. 1.
Strengths Products: Pandora has created a strong brand which is valued at 1 billion DECK and the Goodwill is approximately 2 billion DECK. In addition, Pandora is the world’s third largest Jewelry company. Their strong brand and their successful Jewelry concept is Combine” concept allows the costumers to create their own unique combinations that are right for their particular lifestyle, situation and economy. This has proven to be an attractive way to penetrate the market, as customers are encouraged to buy individual products and product configurations to commemorate a very special moment in their lives.
Marketing: Pandora has good ability to establish itself in new markets and has good geographic presence. This will thus minimizes the risk of weakening its earning potential, and will as well spread the risk if there should be taxation in one region or continent. Expansion will continue in the future as this will reduce dependency on individual markets. Pander’s online sales platform increases for brand awareness and maximize customer segment and hence to promote earnings potential.
This way it can promote its brand and attract but also retain customers by creating customer loyalty through Pandora club and Faceable fan page. Pandora has ensured exclusive rights by registering their trademark in the ELI, the USA, Australia and Asia, and has been granted patent rights in connection with charm-bracelet functionality in the ELI, U. S. Australia, New Zealand, South Africa, China and Norway. Furthermore in 2010 they implemented a zero-tolerance policy on violations of Pander’s intellectual property rights on the Internet and the counterfeiting of products and brands.
Production: Pandora achieves a number of competitive advantages through their value chain. Pandora ;s production is cost- effective by being manufactured at four production plants in Thailand. The fact that production facilities are located in Thailand has the additional advantage achieving a number of tax exemptions, which is extended until 2019, and is also exempted from import duty on certain machinery and raw materials imported into Thailand. This reduces their costs and is considered as a competitive advantage.
Additional Pandora has achieved an efficient use of its capabilities through the use of AD technology that has enabled a strong collaboration between the design department in Denmark and the development and production departments in Thailand. Pandora ‘s optimizing of the production process has been ISO 9001 certified. Financing: Pandora has achieved a strong financial development through a significant growth in turnover in the last few years. The company has so far a good state of health, and this is estimated to continue evolve in a positive direction but only at a relatively much lower level than previously.
Organization: Pander’s strength is that the company has a close cooperation in its supply chain, and by operating in a vertically integrated business it ensures a high degree of control in its value chain. This way the company achieves economies of scale reduce costs and achieve a greater control in their supply chain. The dismissal of the former CEO Mike Olsen could bring the company back on its track and attempt to conquer the confidence back and as well as its consumers. 5. 1. 1. 2. Weaknesses Products: Pandora considers their brand to be the most important asset, as this reflects in their core values.
A reduction in brand value due to bad publicity or similar could result in a significant reduction in demand for their products and thus weakness, since 85% of their turnover generated of the charm bracelets and charms 1 . This dependence can make the company vulnerable if demand creation and customer preferences will change. Marketing: The impact of raising their product prices in the U. S stores has had a negative effect and brought disaster downgrade on the Pandora shares. It has scared the customers away and Pandora now is struggling with large stocks of Jewelry and a decrease in sales 2.
Production: By locating all production in Thailand, this may adversely affect the supply chain, due to political unrest in Thailand as well as natural disasters (tsunami) is considered to occur in the eastern continent. Financing: The Pandora shares declined by 60 % in August 2011, which means that many of its investors has chosen to drop their Pander’s shares, caused by the excessive uncertainty surrounding the Pander’s future combined with distrust in management but also Pander’s new business model 3. Organization: After restructuring in the management posts it leaves consideration to its stakeholders.
This makes the company look bleak and leaves room for skepticism. 5. 1. 2. External analysis (TO- analysis) 5. 1. 2. 1. Opportunities General market conditions: The quantity of internet users in Latvia represents almost 70 of the population, which is also reflected in the increasing amount of FaFaceableonsumers, and these are 304. 704 LaLatviaser memembers. This is pretty good figure for PaPander’snline sales platform and online advertising efforts. The trend in Latvia shows that people usually shop in large shopping malls such as Alfa, Spice, GaGalleriaentre etc.
This is moreover, the favorite shopping place for all income categories and by all age lelevelsThe market situation today also shows that more women than previously have entered the labor market and this trend indicate a change of the roles of LaLatviaomen in sosocietiesThis ensures an improved financial security for the families and also boosts the income level, and thus increasing the allowance. Macro Conditions, Foreign relations of Latvia includes a membership in the ELI, UN and NANATHANand thereby makes it possible to implement The EURO I Latvia in the future, is estimated to happen around 2014.
This Baltic country is as well a member of the WTWATTSand both Latvia and Denmark have Joined the International Sale of Goods Agreement (SISICK0 and thereby undertakes to comply with its provisions. These rules apply to both parties and hence makes it easier to resolve conflicts if they arise. It is forecasted that the LaLatviaconomy will recover in the future, and that the GDGAPEDill evolve itself. This will bring Latvia back on a positive path as the disposable incomes will rise again and the consumer expenditure equally will increase.
Demand Conditions, The LaLatviaonsumers can easily be described as spontaneous shshopperswhich means that they will buy because its brand name or they have need for it. Pandora owns both, a niche and considerate prices, so the outcome could become a successes story. Generally companies in Latvia, by this mean including JeJewelryompanies, do not put too much effort in marketing initiatives to illuminate them self’s. So by doing this one can et a quick foothold in the LaLatviaarket, because costumers in Latvia are easy to convince and will definitely respond to advertisements especially older women.
This can create a competitive advantage. The LaLatviaemales are very fashion oriented, and do like to decorate themselves with accessories, like rings, earrings, necklaces etc. They are attracted by good prices and can easily switch between different brands. Supply conditions, As before mentioned about political instability or natural phphenomenonn Thailand. This is crucial for their production base. Distribution onnotationsSince Pandora is the third biggest Jewelry enterprise woworldwidethey don’t have to adapt its prices towards the LaLatviaarket leader’s prices, and can choose its own marketing mix.
This will make it easier for Pandora to operate. 5. 1. 2. 2. Threats General market conditions, LaLatviamall size of population on only 2. 2 million and its narrow target audience which focus exclusively on the women’s segment, makes it harder to achieve a high turnover on the LaLatviaarket. The target audience in Latvia amounts to 550,000 female but our potential target group is approximately 750,000 female in total (urban female population)24. Latvia emigration volume is quite high and estimated to be even right a statistical figures show.
This may be due to negative factors such as political discontent, high unemployment or Corruption in the country. 25 This is not good, mainly because the population figure is already low. Television commercials in Latvia are prolonged which can last up to 15 minutes in the hour. This may seem annoying to some viewers and are probably most of the younger spectators. That is why it is easier to flick through the commercials. Thereby, TV adverts have a negative effect and is not perceived as a trustworthy source.
Macro Conditions, Since the economic crisis originated, Latvia has experience an economic downturn, high unemployment, low wages, increased external debt which the LaLaotiansust pay for, government tax and VAT tax increases and much momortemThis indicates that consumer expenditure is lowered and results in a low purchasing power, because in times like these people are afraid to spend and would rather save money. That means the purchasing power majority exists at high-income LaLaotiansemales that can afford to buy prestigious fashion industry brands.
Demand Conditions, The lifestyle trend in Latvia can change. The spontaneous shopper can as well change its shopping behavior and price can become the main criterion when considering purchasing. Many LaLaotiansave decided to rely on second-hand clothing or to repair current clothing and thereby is purchasing less often. Likewise it may fall for sssubstitutedroducts which are copied or much cheaper merchandises instead of genuine JeJewelrySupply conditions, Prices of commodities like gold and silver has been rising for a period, and prices have nearly dodoubled/p>
Since these represent the largest portion of production costs, this can have economic onuniquenessor the company. Pandora has to define some marketing and economic objectives. The important factors to consider are: SMART approach meaning setting Specific, Measurable, Achievable, Realistic and Time specific objectives. Since we are going to do marketing activities in Latvia, as a new market for Pandora, the strategic thrust defining business future direction is market development according to the AnInsofaratrix for selling current product on a new geographic market.
Implementing this strategy we would need to find out about profitability and what kind of products from Pandora ‘s roreduceine fits to the trends on the LaLatviaarked as well as careful choice of the sales channel. Investigated customer behavior follow us to choose the shop in shop channel, placed in some of RiRaga’sost popular malls. Furthermore the product range that will be sold in Latvia will include typically earrings, rings and bracelets. By the process we need to understand the latest preferences of customers in the identified segments and appropriately target each item in product line to mamaximizeales volumes.
To provide a way to check our level of success, we are going to use market hare in percentage as a unit of measure. It will do our objectives measurable and easier to compare. We hope to achieve 10 % of the LaLatviaeJewelryarked during the first year on the market. To achieve those approaches we need some sufficient employees and resources, so we need to ensure competency and commitment of all personnel involved in the development and implementation of the strategy. This can range from having an experienced and knowledgeable marketing team to capable sales staff.
Access to funding is also necessary for the acquisition of extra stock to fufulfillncreased demand. Pandora ‘s LaLatviaepartment can in this case collaborate with The Lithuanian or Estonian department and fast fufulfillhe stock. Financial objectives: To sell to 10% of the females in the target country, aged between 25 years to 55 years. Approximately 5. 500 customers at an average price of 250 DKDECKbuys 4 times a year. It would make a turnover of 5. 500. 000 DKDISKShose are reasonable and realistic objectives, as consistent with the priorities of the ororganization/p>
That is another step towards rerealizingandora ‘s vision of becoming the world’s most rerecognizedeJewelryrand. 29 Our objectives should flow from the issessiontatement of Pandora ‘s business to offer “high quality, hand finished, modern and genuine Jewelry products at affordable prices “30, towards the financial objectives and to the rest of the marketing plan. A regular progress update will be taken every month to track level of success. 5. 3. Core strategy Target market The target market is Latvia, but the focus will be on its capital Riga.
PaPander’sarget audience is LaLatviaomen in the ages between 25 and 55 years old. The average income per month for this target group aged between 25 years to 55 years is approximately 204 LVLEVELwhich corresponds to 2131 DKDECKLatvia contains all together 1. 2 million women, but the size of the segment (population) only represents approximated 550. 000 women. Young people in Latvia do not work until they reach the age of 18, and are completely supported by their parents.
Thereby their decisions usually make their own decision on that as well (not always they would buy an expensive or mid-expensive piece of JeJewelrybut they would prefer to buy not that expensive but then again qualitative JeJewelry After reaching 18 years Just a very small per cent of youngsters start to search for a Job. It is attributable very simple – hey are not motivated to do that, because they still live with parents. At that age teens are still learning in high school. After graduating high school they are starting their studies in university, now living alone, but still supported by parents.
At age 20 most of LaLatviaoung people, (man as well as woman) have a Job. Then they start to live independently and make their own decisions. Statistics says that 1/2 from the young people (15 – 24) are still without a Job (April 2011)32. Women in their mid- twenties and who might have a status as a young family usually have a credit for the apartment or a house. Beside that they have to subtract the fixed costs such as kinder garden expenses, insurances, groceries and etc. After paying that they spend the rest of it for themselves.
Statistics prove that every 5th woman in Latvia after shopping (includes clothes, shoes and JeJewelryare indicating to their partners a lesser amount of money than they actually have spent. This data is gathered by NaNaiadslГnonanaseCentersMoney Planning Centre) and GE Money Bank. In the same survey they cleared up that 53% of LaLatviaoman are those who control the whole family budget as well they decide what to buy and where to spend vavacationIt means that in our target group is a lot of decision makers.
They do not need to discuss the purchase with someone else they can buy it spontaneous – gives Pandora better selling odds. The amount of working population (woman) is increasing. In 2011 in the first quarter the amount of woman who is working was 466. 5 thousand, but in the second quarter it was 480. 6 thousand. At the same time the amount of those women who are searching for a Job is decreasing. In the first quarter of 2011 it was 78. 9 thousand, but in the second quarter it was 75. 7 thousand. It is a positive tendency for PaPandora5. 4. Positioning
The purpose of positioning is whenever a consumer thinks of a products or service it is being associated with a specific brand. And in our case we want to say that whenever a consumer thinks of luxury Jewelry goods, the Pandora brand should be the one of the first brands that comes in their thoughts. Pandora is already positioning their products as luxury and at the same time affordable. Quote: “PANDORA designs, manufactures and markets hand-finished and modern Jewelry made from genuine materials at affordable prices”35, but to position it in the same way in the LaLatviaarket could be a challenge for Pandora.