J&K Internatural Company a Thai SME's company is considering to enter in UK market with its product the Milky Thai Jasmine Rice Soap to increase its sales volume in overseas countries. The current market of UK Soap bath and shower (SBS) industry will be investigated here in order to understand the problem and opportunities in the targeted market. The challenging issues that the company has to encounter are the saturated market of bar soap, the high competition and the product innovation towards the liquid soap. To successfully entering UK market with an appropriate entry mode along with the marketing strategies which will applicable for the firm resources and capabilities, the marketing research will be conducted to have a clear picture of the UK market needs and the product response.
Therefore in this study, the consumers' criteria towards the product soap marketing mix from the British in Leeds, UK will be investigated in both exploratory and conclusive research design. The marketing strategies will be critically developed and prepared base on the marketing research findings for the company which is expected to reduce the risk of entering, avoid the market needs misunderstanding and enhance the possibilities to enter successfully in UK market with a suitable marketing and strategies for a market development in UK.
Background of the Company
J & K Internatural Company is established in 1998 by the entrepreneur's name Kunya and Sorawit Prayoonrapat. The company main focus is particularly in the soap industry. This SME Company act as two vital roles in Thailand which are the producer (factory) and the distributer through the traditional and modern distribution channel. With the competitive advantage of having their own factory has assisted their increasing power of price controlling from their suppliers and manage to have the profit from their economy of scale. Domestically, the company emphasis its' positioning on selling Thai herbal bar soap in many brands with a modern style package for their Thai customers. Its' revenue is about £ 2,400 K per annum (B 5o: £1) according to the interview with the entrepreneur.
Currently, the company has some products' appearance in their own brand "K. BROTHERS Spa soap "in Kuwait and UAE through the assistance of their distributor agent. However, the company is considering expanding its products into Europe by entering UK market as the first place to test the market and gained feedback of Milky Jasmine Rice Soap (Appendix A). The underlying initiating factors for the company is to seek new markets and new opportunities outside Thailand in order to increase its sales, attract new consumers and searching for focused profit opportunities by selling the soap as an exotic product that might have the country of origin affect to the product more than selling in its' home country. Nevertheless, the company undeniably confront with challenging issues since the UK's £680 million SBS market is saturated affecting the difficulties in UK market entries (Mintel, 2010). The market also has a high competition from the brand leaders (Appendix B) which obviously is showed from aggressive discounting products by supermarkets (Mintel, 2010). The other challenging issue is the changing trend of liquid soap in UK instead of bar soap (Appendix C,D ) along with many substitute products in the market.
Research Problem Definition and Objectives
Research Problem Definition
Research Problem Objectives
To carry out a comprehensive literature review on factors which consumers take into consideration while choosing a bar soap.
To identify the factors that British consumers would take into consideration in choosing the company's product.
To assess the importance of each factors influencing consumer's buying decision making.
To identify the preference of British consumers in each factor that would lead to product purchasing.
To identify the different factors that different gender takes into account while choosing product.
To assist preparing preliminary marketing strategies for product launch in UK.
According to Solomon (2009), consumers' responses are the ultimate test of whether a marketing strategy will succeed. In order to success in marketing strategies planning , the company therefore need to know the consumer preferences in each marketing mix( "the set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market consisting of product price place and promotion Kotler 2001p.67). The primary factors that consumer will consider when purchasing a bar soap are its product attributes (fragrance, brand, and functionality) and price with promotion related i.e., pack type (multipack etc) while the other product attribute (colour matching), added value (ingredients), packaging (easy to open/environmental issues) are included as secondary drivers" ( Millward Brown, 2002) In other words the marketing mix could influence the demand and purchasing of the product.
In this project Thai Jasmine Rice bar soap is a consumer goods and convenience product which reflects frequently purchasing, little planning with low customer involvement. According to Kotler (2001) p.300) Customer- driven quality is the potent strategic weapon creating customer satisfaction and value by consistently and profitably meeting customers' need and quality. Moreover Kardes (2002p.137) also indicated that bundles of attributes such as quality, features, style and design are needed to provide problem-solving benefits to consumers. .
Regarding to Wolfe and Busch research (1991) fragrance has been found to have a major impact on the purchase decision and to be a 'primary driver' for branded items in bath shower and bar soap. It could generate the impact on the brand as a clear point of difference or a unique selling point (Schroiff, 1991).
Country of Origin (COO) & Low Involvement Product
Bilkey and Nes (1982) defined COO as "the country of manufacture or assembly". According to Ahmed, the quality of the product will be evaluated and decided from the COO as an extrinsic cue. The COO will be relied on when the intrinsic cues (brand, price) are missing (Jacoby et al., 1977). Due partly to the product's low monetary risk and low hedonistic value, Li and Wyer (1994) indicated the low involvement product evaluation is expected to be weaker than in high involvement product in COO consideration.
Traditionally, the major factor affecting consumers' choice is price especially in households categories where the price information is searched particularly on low prices to reduce financial risk() which reflect the "value consciousness" (Diller, 2000,p.113) in consumers in three components; "Concern for price" (Zeithalm,1984), "Relevance of alternatives" (McAlister and Pessemier 1982 p.134) and "Price sensitivity" (Helming,1997).Price is the factor defining the product's market, competition and design or "Price- positioning strategies" (Kotler 2001) consequently affecting the other marketing mix design. Therefore, price is a crucial factor that could affect the positioning of the product brand, and signaled quality involving the consideration of willingness to pay (Werternbroch andSkiera, 2002), deal proneness (Blattberg and Neslin,1990) , and shopper 's expectation retail store price (Diller,2000,p.181).
Place or distribution channel is defined by Coughlan (1996) as "a set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user." The distribution channel should be well design to make the product available to cover area of target segment with the right positioning of the brand and at the right place leading to a factor that consumer takes into consideration. Turley and Chebat, (2002) stated the consumer purchase decision can have a strong impact and alter from created environment in the store which is an essential strategic variable by retail managers
Promotional Mix or Marketing communication mix
Promotional mix consists of the specific blend of advertising, personnel selling, sales promotion, public relations and direct- marketing tools that the company uses to pursue its advertising and marketing objectives (Kotler 2002 p.512). It is the primary communication activities of the company that should be well coordinate with other marketing mix to produce the greatest impact influencing the buying decision of the customers toward the products. During UK recession many manufacturers and retailers cut their marketing overheads in the SBS market by offering aggressive price promotions and shifting from above the line to below the line at point of sale as main promotional strategy (Mintel 2010).
- The Product attributes of Jasmine rice soap could influence product purchasing.
- The price related factors of Jasmine rice soap could influence the product purchasing.
- The place related factors of Jasmine rice soap could influence the product purchasing
- The promotional related factors of Jasmine rice soap could influence the product purchasing
- The most important marketing mix element is the products which influence the British consumer choice.
- There are some differences of factors that consumer take into consideration according to gender and age differences.
In order to assess the most important element of marketing mix whether there are any significant relationship that could influence consumer to purchase the product. The assumption is made;
The different gender and age of the consumers affect different feedback according to the needs of the product. Therefore the hypothesis is made that
Specification of Information Needs
- Needs of consumers in product attribute offering of the product and type of the currently SBS product.
- The product expected price
- The consumer preference distribution place and the position within the store of this particular product.
- The most effective promotional tools and communication media
- The effect of COO to consumer buying decision.
- The most important elements of marketing mix
- The response and opinion from different gender and standard demographic characteristics according to the products
Research Design and Methodology
5.1.1 Qualitative Interview
In order to have an insight individual perception of the product the exploratory research Focus group and in-depth interview will be conduct with 10-20 respondents. Interviews will be held personally face to face, which allow the interview to experience with the product and gained their product expectation of the marketing related factors.
5.1.2 Quantitative Research
A questionnaire survey will be undertaken for prospective target market in large sample size respondents which will be done after the qualitative interview as a conclusive research with descriptive research to determine the relationship among the marketing mix towards the purchasing decision with a cross-sectional design. (Appendix E).
5.2.1 Journals and Academic Texts
The journals and academic text will be used as an essential data to frame the customer perception towards marketing mix and developed as guidelines for conduct the research and appropriate company strategies as well.
5.2.2 Industry Report
Industry report will be used to assist the understanding of current UK market. The information will be used to structure the research and the results analysis.
Fieldwork and Data Collection
The research will be conduct in Leeds (UK) commence from July - August. In depth interview, focus group will be conducted face to face with target respondents (Age 20-44) at the agreed venue. The 400 questionnaires (Appendix F) will be distributed to respondents to fill in. The number of questionnaires might be 50 -70 % of ideal numbers due to time constraints.
The in depth interview and focus group results will be analyzed by the guideline of Boyce and Neale (2006). The univariate method will be used and the results in descriptive statistics will be analysed by SPSS program with Independent Sample T Test, Anova, Chi-quared test, Bivariate and Multiple Regressions at the significance level of 0.05 (Palihawanda ,2010) to prove the validity of hypothesis.
Reporting & Timescale
The final report will be submitted in 2nd September 2011 to LUBS and to the company while the oral presentation will be arranged according to the latter mutual agreement. The dissertation tasks and time scale is illustrated as a Three column table(Appendix G).