Elite Group Ltd.

EXPORT MARKETING PLAN FOR PLASMA TELEVISION

(A) COMPANY DETAIL:

My company name is ELITE GROUP PVT. LTD. This is a consumer electronic product company. Elite Group produces plasma television in India. The main office of Elite Group Company is at Mahalaxmi, Mumbai. Elite Group Company is good working in India and has one of its goals; it has one goal to participate in the global marketplace, taking advantage of the world's consumers that live outside of the India.

(B) PRODUCT DESCRIPTION:

Elite Group Company produces plasma television. It is producing television with the name PROVIEW HT-045. Proview- HT045 has following features as compare to other companies.

Panasonic TH-50PX60U 50 in. HDTV Plasma Television

Panasonic TH-50PX60U 50 in. HDTV Plasma Television Price range: Rs. 75,000- 1, 90,000

Philips 50PF7321D 50 in. HDTV Plasma Television

Philips 50PF7321D 50 in. HDTV Plasma Television Price range: RS. 1, 10,000-2, 35,000

Hitachi 55HDS69 55 in. Plasma Television

Hitachi 55HDS69 55 in. Plasma Television Price range:RS. 1,55,000-2,80,000

Samsung HP-S5053 50 in. HDTV Plasma Television

Samsung HP-S5053 50 in. HDTV Plasma Television Price range:Rs.80, 000- 2, 00,000

Pioneer PDP-5070HD 50 in. Plasma Television

Proview HT045 50 in. Plasma Television

Price range:

RS. 90,000-2,15,000

Key Features

Flat Panel Type

Plasma Television •

Plasma Television •

Plasma Television •

Plasma Television •

Plasma Television •

Screen Size

50 inch •

42 inch •

42 inch •

50 inch •

50 inch •

Contrast Ratio

10,000:1 •

10,000:1 •

3,000:1 •

3,000:1 •

10,000:1 •

Broadcast Format Displayed

720p (HDTV) • 480p (EDTV) • 480i (SDTV) •

720p (HDTV) • 480p (EDTV) • 480i (SDTV) •

720p (HDTV) • 480p (EDTV) • 480i (SDTV) •

720p (HDTV) • 480p (EDTV) • 480

720p (HDTV) • 480p (EDTV) • 480i (SDTV) •

Built-in Tuner

ATSC • NTSC •

ATSC • NTSC •

ATSC • NTSC •

ATSC • NTSC •

ATSC • NTSC •

Interpolated Aspect Ratio

4:3

4:3

4:3

5.0

Display Resolution

1366 x 768 pixels

1024 x 768 pixels

1024 x 768 pixels

1360 x 768

1366 x 768

Brightness

1300 cd/m² •

1000 cd/m² •

Output Color

29000 million colors •

29000 million colors •

29000 million colors •

20700 million colors •

Viewing Angle

175 •

160 •

Adjustable Color Temperature

Without Adjustable Color Temperature •

Without Adjustable Color Temperature •

With Adjustable Color Temperature •

Without Adjustable Color Temperature •

With Adjustable Color Temperature •

Remote Control

Standard •

Standard •

Multibrand •

Standard •

Multibrand •

Audio Type

Virtual Surround •

Surround •

Virtual Surround •

Virtual Surround •

Virtual

Surround •

MTS Stereo

SAP / MTS Stereo •

SAP / MTS Stereo •

Rear Input Connectors

S-Video x 2 • Component x 2 • Composite x 2 • HDMI x 1 •

S-Video x 2 • Component x 2 • Composite x 2 • HDMI x 1 • Audio (RCA) x 4 •

S-Video x 2 • Component x 2 • Composite x 2 • HDMI x 2 • Audio (RCA) x 5 • RF x 1 • 1 x D-Sub (RGB PC) • Audio (Mini Jack) x 1 •

S-Video x 1 • Component x 2 • HDMI x 2 • 1 x D-Sub (RGB PC) •

S-Video x 2 • Component x 2 • Composite x 3 • Audio (RCA) x 3 •

Number of Speakers

2 Speakers •

2 Speakers •

2 Speakers + Subwoofer •

2 Speakers •

4 Speakers •

Speaker Power

2 x 20 Watt •

2 x 20 Watt •

2 x 15 Watt •

2 x 10 Watt •

2 x 15 Watt •

Width

47.6 in. •

40.2 in. •

42.5 in. •

48.3 in. •

48.19 in. •

Depth

3.7 in. •

3.7 in. •

5.5 in. •

3.8 in. •

4.5 in. •

Height

32.2 in. •

27.8 in. •

27.2 in. •

31.6 in. •

28.25 in. •

Weight

89.5 lb. •

65 lb. •

71.7 lb. •

108 lb. •

75.1 lb. •

Overall Warranty

Yes

(C) NEW FOREIGN MARKET ANALYSIS

Elite Group Company selects Mexico as new foreign market. The Mexican economy rebounded from a financial crisis in 1995. After the necessary painful adjustment measures and with international assistance, the country has successfully dealt with a dangerous, short-term liquidity crunch. From a macroeconomic perspective, 1996 turned out to be a much better year than either the government or private sector analysts predicted. The services sector dominated by commerce grew 2.8 percent, as the domestic economy remained relatively weak. Nevertheless, there were signs of recovery. Private consumption increased 2.1 percent in the first half of 1996. Inflation in Mexico declined through most of 1996. During 1996, the annual consumer price inflation fell 51.7 percent in January, analyzed to 28 percent in November, and ended with 27 percent for the year. Producer price inflation was 59 percent in 1995 and only 26 percent in 1996.

Certain demographic factors will continue to place Mexico at the top of the list for exporters of consumer electronic products into the next century. These factors are:

* Increased purchasing power.

* A growing population expected to reach 100 million by the year 2000.

* Half of the population under 21 years of age.

Mexico's population was estimated at 98.6 in 1998 million with 80 percent under the age of 40 years, and 50 percent under the age of 25. Nearly 73 percent of the population lives in urban areas: Mexico City (18 million); Guadalajara (3.2 million); Monterrey (2.9 million); Puebla (1.5 million); Leon (1.2 million); and in some 70 other cities with a population ranging between 100,000 and 900,000.

The Mexican consumers include:

* The upper class (two percent of the population), characterized by a high level of education, luxury housing, multiple vehicles, and international travel.

* The upper middle class (20 percent of the population), who are university-educated, serve as professionals or company managers, own homes, autos, and a wide range of household appliances, and occasionally travel.

* The lower middle class (about 49 percent of the population), comprised of those living in smaller homes and spending most of their income on basic necessities.

* The rural, the underemployed, or the unemployed.

Some statistical information of Mexico: ò General economic indicators

Indicators

2003

2004

2005

GDP (USD billion) (1)

638.7

683.5

768.4

GDP (constants prices, annual % change) (1)

1.4

4.2

3

GPD per capita (USD) (1)

6244.4

6585.6

7297.6

Inflation (consumer prices, annual % change) (1)

4.5

4.7

4

Unemployment rate (%) (2)

2.5

3

..

External debt (USD billion) (3)

141.6

138.7

..

Official exchange rate per USD (period average) (3)

10.479

11.236

11.157

GDP per activity sector

2003

2004

2005

Agriculture and fishing (%)

3.9

3.9

3.8

Industry and mining (%)

25.8

26.3

25.9

Services (%)

70.3

69.8

70.2 ò Foreign Trade

Indicators (USD billion)

2003

2004

2005

Imports of goods

178.5

206.1

231.7

Exports of goods

165.4

188

213.7

Trade balance

-10.5

-14

-12.3

Current account

-8.6

-7.2

-5.7

ò Trade in goods/services by major category

2004

Imports

Exports

Total Trade in Goods (USD billion):

206.1

188

Agricultural raw materials

1.5

0.5

Food products

6.3

5.4

Hydrocarbons

3.9

12.4

Manufactured products (chemicals, machines,...)

84.7

79.9

Ores and metals

2.6

1.6

òLegal forms of companies

Form

Number of partners/shareholders

Minimum and/or maximum capital

Liability

Registration fee

Release of financial documents

Sociedad a Responsabilidad Limitada is a Private Limited Company

Minimum 2. Maximum 50

Minimum MXN 3,000. Each partner must bring in at least 50% at the constitution.

Liability is limited to the amount contributed.

Yes, if the company is quoted on the stock-exchange.

Sociedad en nombre Colectivo is a general partnership

No minimum One of the partners must be appointed as a manager of the company.

No minimum capital.

Liability is unlimited.

No

Sociedades en Comandita is a limited partnership.

No minimum

No minimum capital.

Liability is limited to the amount contributed for certain partners and unlimited for others.

No

Sole Proprietorships is a sole proprietorship.

1 person

No minimum capital.

Liability is unlimited.

No

Sociedad Anonima de Capital variable (S.A. de C.V) is Public Limited Company with variable capital.

Minimum 2, one of them should be the administrator. No maximum.

Maximum MXN 50,000. 20% released at the constitution.

Liability is limited to the amount contributed.

Yes

Sociedad Anonima is a Public Limited Company.

Minimum 2, one of them should be the administrator. No maximum.

Maximum MXN 50,000. 20% released at the constitution.

Liability is limited to the amount contributed.

Yes Economic Structure

GDP by sector

agriculture: 4% industry: 27.2% services: 67.9%

Key Imports

metalworking machines, steel mill products, agricultural machinery, electrical equipment

Major industries

food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles

Major export destinations

US 81%, Canada 5.9%, Japan 1.1% (2004)

Key Exports

manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cotton

Major import sources

US 65.8%, Germany 3.8%, China 3.7% (2004) Economic Policies Foreign direct investment

Mexico's continued macroeconomic stability over the past several years is in large part the result of sound monetary and fiscal policies. Mexico's economy remains strong and sound. Inflation is moderate and there is an important inflow of foreign currency. Mexico has a moderate external account deficit which has strengthened the peso relative to the US dollar.

"The current government had initially aimed to increase annual FDI inflows to USD 20 billion per year by the end of its term in December 2006. While FDI has been hindered by a lack of structural reform (energy, labour, fiscal), nevertheless relatively strong FDI inflows continue, particularly in the financial sector. For the January-June 2005 period, FDI was USD 7.4 billion, up 8 percent over the same period in 2004. Total accumulated FDI for the current administration thus far is USD 80.28 billion."

ò Corporate tax

Tax rate for resident companies

The rate of the Impuesto Sobre Renta de las Sociedades (IRS) has been reduced to 28% in 2007. Moreover, companies set up in Mexico also have to pay under certain conditions a tax on net assets (TNA) of 1.8% on assets value (amount deductible from the corporate income tax).

Tax rate on long-term capital gains

Capital gains are taxed in Mexico at the rate of 28%.

System governing groups of companies and dividends paid by subsidiaries to their parent companies

The dividends shared by Mexican companies to non-residents are not subjected to any deduction at the source.

Tax rate on branches

Branches of foreign companies have the same fiscal obligations as the Mexican companies. They are taxed at the rate of 28%.

ò VAT rates

Standard rates

15%

Reduced rates

The reduced tax rate is 10% and applies to supplies by residents of a frontier zone. Food, books and newspapers, fertilisers and medicines are exempted, such as construction of residential dwellings, certain financial and insurance services, teaching and medical services.

(D) MARKET ENTRY STRATEGY

Market entry strategy includes strategic alliance, target customer profile, new foreign market product description, pricing strategy, sales and promotion strategy and logistic and transportation.

1. Strategic Alliance:

Elite group is entering into Mexican market through strategic alliance with the GRUPO TELEVISA LIMITED COMPANY. It is used by Elite Group as strategic alliance has been becoming more and more popular in international business. Strategic alliance seeks to enhance competitive advantage of the firm by forming alliance with other firm, instead of competing with each other. Here, Elite group can use the sales promotion and distribution infrastructure of Grupo Televisa to sell its Plasma television in Mexico and Grupo Televisa can use same resources in India for them.

2. Target Consumer Profile:

Elite Group select the upper middle class (20 percent of the population), who are university-educated, serve as professionals or company managers, own homes, autos, and a wide range of household appliances, and occasionally travel as its target consumers.

3. New Foreign Market Product Description:

Elite company introduces the same featured product in Mexican market with language difference as Spanish is the main language of Mexico.

4. Pricing Strategy:

Elite Company use cost based pricing for setting pricing in Mexico. As Elite group Ltd select upper middle class people of Mexico whose are not more rice conscious but require better quality product, so it is easy for company to charge price with its profit margin in Mexico.

Our pricing strategy is premium quality, premium pricing.

Elite group company decides 45000 - 80000 Mexican Peso. This price includes all cost such as production cost, overhead cost, all duties, custom duties of both countries, marketing and sales promotion cost in Mexico and profit margin etc.

5. Sales and Promotion Strategy:

Elite group Ltd. Use the channel and other resources of Grupo Televisa Ltd. Of Mexico. Elite group promote its plasma HT045 through heavy promotional effort for making aware about its product. It gives advertisement in channels of Grupo Televisa Ltd.

Although our market research has indicated that Mexico is a good starting point for our export efforts, we will begin by advertising our product in the U.S. Department of Agriculture (USDA) Buyer Alert program, which is distributed in approximately 129 markets worldwide. Inquiries from this advertisement will help our company determine if our market assessment is accurate, or if we should also be focusing on other markets initially. The company will:

* Answer all inquiries from foreign markets quickly.

* Participate in a USDA tradeshow in Mexico

· Use the Agent/Distributor program offered by our state regional trade group.

· Work with EPC to apply for funds for marketing and promotional activities through the Branded Program.

Mexican consumers are greatly influenced by promotion and advertising, but personal contact is also important. Therefore, we will work with a Mexican distributor to conduct in-store promotions, handouts, and other forms of direct merchandising.

6. Logistic and Transportation:

Elite Group Ltd. Use maritime shipping for the export of its plasma television to Mexico. Elite Group Ltd. Contract with the Mumbai's one Shipping Company for one year to ship its consignment to Mexico. Elite group Ltd. has advantage that it is located at Mumbai which is a big port of India, so it becomes easy for Elite Ltd. to send its product to Mexico. Elite Group Ltd. use rental trucks for domestic and in Mexico transportation of goods.

(E) RISK MANAGEMENT

Risk management includes various types of risks such as country risk, commercial risk, currency risk, political risk and market risk. Here, Political and commercial risk intensity in Mexico for Elite Group Ltd. is represented in below diagrams:

Political and Commercial Risk

Political risk

Commercial risk

Low

High risks

Low

High risks

Market Risk

Mexico

Population (in millions)

103,8

Import of goods and services (in millions of USD)

188.462

GNP (in millions of USD)

703.080

Average real GDP growth (%)

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