US Clothing Retailer Into Central America - Paper Example

Introduction

The importance of this paper is to provide the reader with the process of conducting market entry analysis. Market entry analysis refers to the process of studying the dynamics of a market. It can also be defined as the situation where a particular market appears attractive in an industry. Marketing analysis plays a critical role in providing information about a market in which to operate.

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Furthermore, conducting market analysis is essential in the strategy formulation process. The content in this document comprises the review of a US clothing retailer entering into Central America. The study consists of several steps involved in the process. Below is a discussion of the steps of market entry analysis.

Problem Definition

Central America is known as a clothing region. In 2018, Central America was the largest market for the clothing industry. About $335 million was spent in Central America for clothing and accessories. Therefore, Central America is the best market for the clothing business. Selling clothes and offering glooming services would be a noble idea for the retailer. The clothes will be a significant commodity compared to services.

Marketing of the commodity would require capital. There are several essential requirements in the clothing industry. For example, window shops are needed for displaying clothes to outsiders. Also, the business would require hiring some workforce to operate the stores. Hence, funding the company with $ 10 would be a good start in the industry. However, the financing process will increase accordingly.

Generally, conducting a customer survey is vital in market analysis. The study helps in gathering information about the preferences and tastes of the buyers (Armstrong, Kotler, Buchwitz, Trifts, & Gaudet, 2015). Also, the customers provide an insight into the current players in the industry. Therefore, the customer survey would help in the positioning of the organization in the industry.

The clothes to offer are of unique design and pocket-friendly prices. Central America especially Panama and Costa Rica provide an excellent market for fashion. Residents have a taste for varying configurations and thus best markets for trendy wears. The two nations lead in cloth importation. In 2018, Panama spent about $ 112 million while Costa Rica spent approximately $ 67 million in clothing.

Situation Analysis

Conducting primary and secondary research is essential in marketing analysis. Even though the first review is quite challenging than the secondary study, it is the best way to get first-hand information about the industry (Mairesse & Mohnen, 2010). For example, calling customers and asking their views on the designs and fabric would help in determining their preferences. Also, Visiting other stores such as Parismar S.A and Alpemusa will assist in identifying layouts and stock control methods.

Nevertheless, it is equally important to consider secondary research. There are various sources of secondary information. Periodicals provide information about competitors in the industry. Also, the use of journals, i.e., Washington post helps would give facts on the economic status and thus know how much resources to commit to business. Further, the internet is a good source of information. It would provide information about every company in the industry, its products, and services and the overall performance in the industry.

Obtaining Data

Data collecting requires both qualitative and quantitative research. Qualitative research involves conducting open-ended questions to provide an in-depth view from the buyers (Grbich, 2012). Some of the open issues to ask include; which design is favorite to many? What other models do you think should be added to the fashion industry? How do you think we can improve our services? Which is location is convenient for customers to visit?

On the other hand, quantitative research comprises close-ended questions that require yes or no answers. The questions would help in measuring the overall performance by analyzing empirical data. The results findings would then dictate whether the business stands a chance in the market or not. The quantitative research focuses on issues that mostly require ratings by the customers. For example, buyers can rate the fabric used to manufacture clothes, i.e., 2,3,4 and 5. The research would take the structure of the questionnaires as shown below.

The questionnaires will consist of both papers and mail questionnaires. The hard copies will be issued to the nearby customers who are easily accessible. Also, mail questionnaires will be performed to get responses from long-distance customers. The surveys will give the customers enough time to respond to issues of concern. Therefore, the reviews from the polls will provide highly valuable information.

Additionally, organizing phone calls will help in collecting the buyers' thoughts on the designs, methods of serving and materials to use. For example, calling a buyer and asking for the person's taste would help in getting answers which are more specific. Moreover, carrying out personal interviews will assist in gathering more information about the industry. Customer selection would be made randomly. For example, interviewing several customers from Guatemala, Costa Rica and Panama will give different views on the market. The findings will help in determining whether to expand chain stores or diversify investments.

Moreover, conducting observation will help to identify the behavior of customers in the industry. The inspection will be done both in the stores of other companies and in the general market. For example, representatives can visit some of the well-established stores like Prismar and observe the type of services, the stores layout, the management, etc. Observation is quite challenging since it must be done carefully without the object knowing.

Data Analysis and Interpretation

Data analysis and interpretation are essential in marketing analysis. The process of analyzing and interpreting data comes after collecting facts. The process involves concluding the primary and secondary research findings (Hair Jr & Lukas, 2014). For example, customers would give different responses to the question " What materials do you prefer most?" Some customers would choose the fabric; others will select cotton and others will answer silk. As a result, the analysis of such data would require grouping the answers such that the one chosen by many people will be the leading choice. The second most suggested would follow while the third would be the last choice.

Likewise, interpreting secondary data would require concluding statistical data analyzed. For example, the survey form requires the customers to rate the material according to demand and level of satisfaction. Each element has a rating ranging from 1-5. The lowest grade an element can acquire is one while the highest rating is 5. 2-4 would mean an average score. If a particular material, i.e., fabric receives most ratings as 5, that means the element has the highest score.

Therefore, it would be advisable to use fabric in designing clothes. However, in most cases, the rating will spread across the five figures. Thus, in such a case, the analysis would require adding the ratings and dividing by five to get the average score for that particular material. Afterward, a comparison would be made to determine the element with the highest score. Hence, the retailer can be able to choose the materials wisely.

Alternatively, the data collected can be expressed in a graphical representation way. The ratings can be conveyed into percentages, and after that, a graph of demand against materials can be drawn. From the chart, the retailer can tell the elements with high demand and the ones with low demand. Tables provide more useful data than ranking.

Fostering Ideas and Problem Solving

The process of fostering ideas and problem-solving is critical in market analysis. Generally, this step comes after data analysis and interpretation (Sonenshein, 2014). The stage involves determining the goals, objectives, setting management, identifying some employees and formulating policies govern the business operations in the industry.

Goals and objectives are derived from the conclusions drawn from data interpretation. For example, one target can be "to manufacture 1000 fabric wears, 500 cotton clothes and 300 silk clothes by the end of the first year." The retailer would derive the objective form the findings conducted on material selection. Another objective can be "to expand premises with two chain stores by the end of the year." The objective would come from the findings on the primary research question "What is the convenient location for customers to visit."

Setting the management would facilitate the leadership roles in the business. Studying the structure of competitors in the industry, i.e., Prismar who is a market leader in the clothing industry in Central America helps the retailer to select the best managers who will drive the company towards its targets. For example, the retailer needs to hire a creative marketing person who can come up with more aggressive means of marketing that can survive the rivalry.

The personnel should, for example, be able to understand the techniques used by the competitors, i.e., market leaders. The market leaders use intensive advertisements in the industry. Therefore, the retailer cannot fit in such a category since the business is young. As a result, the manager can adopt a cost leadership strategy to promote the products. The personnel can set prices to be relatively low compared to the Prismar.

Identifying employees is essential in this stage. The number of increasing stores determines the identification process. For example, the findings from the study conclude that one of the retailer's objective is to put up two more stores in the industry. As a result, the workload would increase accordingly. Therefore, the retailer would require to add more workers in the stores.

Marketing Plan

The final step in conducting marketing analysis is the marketing plan. A marketing plan outlines the strategies and tactics to apply in the industry. (Armstrong, Kotler, Buchwitz, Trifts & Gaudet, 2015). The clothing industry is a very competitive sector in Central America. As a result, a new retailer must come up with unique strategies to stand a chance to thrive in the industry.

The retailer will offer both products and gloomy services. However, products will be the best commodity to start with since they are accessible to the market. The products include all kinds of fashion from different countries in the World. The services can be incorporated later after the business grows.

Central America has well-established dealers in clothing such as Prismar and Alpemusa who have won the trust of many customers. As a result, it is difficult to win over the market from such market leaders. Also, the strategies used by the market leaders are very competitive and require a lot of funding, i.e., advertisements. Therefore, penetrating the market is the greatest challenge to face.

The target markets include young adults who love casual outfits. Also, the working class in the industry who require formal wear are an excellent market to consider. Moreso, some nations like Panama and Costa Rica have access to beaches where most people go to spend their weekends and holidays. Such people love outfits that reflect sea exploration, i.e., beach shirts and shorts. Therefore, the region serves as a good market for the business.

The marketing tactics would include the use of social media which can reach a larg...