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10Продолжение таблицы 3
. |*. | . | . | 13 0.092 0.034 20.911 0.075
. | . | 14 0.012 0.229 20.922 0.104
. | . | 15 0.029 -0.215 20.990 0.137
В результате исследования автором были проанализированы и определены факторы, оказывающие влияние на темп роста ИПЦ Республики Беларусь, на основе эконо-метрической модели делается прогноз ИПЦ на 2016 год. Таким образом, проведенное автором исследование показало влияние курсов Евро, Доллара США и Российского Рубля на потребительские цены в Республики Беларусь. Однако это не означает, что необходимо сдерживать рост валютного курса либо сглаживать его колебания. Проведенное научное исследование закладывает основу для дальнейших как теоретических, так и эмпирических исследований в области оптимальной денежно-кредитной и валютной политики, а также макроэкономического прогнозирования.
Список использованных источников
1. Доугерти К. - Введение в эконометрику: Учебник, 3-е изд. М.: ИНФРА-М, 2009. - 465 с.
2. Choudhri E.U., Hakura D.S. Exchange rate pass-through to domestic prices: does the inflationary environment matter? IMF working paper, 2001
3. Национальный банк Республики Беларусь http:// www.nbrb.by/
4. Национальный статистический комитет Республики Беларусь http://www.belstat.gov.by/
5. Федеральная служба государственной статистики http://www.gks.ru/
6. Центральный банк РФ http://www.cbr.ru/
MARKETING RESEARCH OF THE COMPANYS ENTRY INTO THE FOREIGN MARKET
TO JUSTIFY DEVELOPMENT STRATEGY
Shatskaya E.Yu.,
North-Caucasus Federal University, candidate of economic scince
Voloshina A.,
North-Caucasus Federal University, student
Pankova E.,
North-Caucasus Federal University, student
ABSTRACT
In this article it is described the perspectives of Colorificio San Marco to entry the Sub-Sahara market Key words: international project, market, Sub-Sahara Africa, San Marco Group
Colorificio San Marco, a firm producing paints and varnishes for the building sector with headquarters in Marcon (VE) and more than 200 employees. Its products can be targeted as medium/high quality range, and customers are mainly retailers and professionals.
Colorificio San Marco S.p.A. is the parent company of the San Marco Group, which overall has 6 production units in Europe, three commercial companies and 7 brands in Europe (EuroBeton, ABC, Tjaeralin, San Marco Adriatica, Novacolor, Disegno and Farby).
Colorificio San Marco was officially founded in 1962, and after just a few years the capital increased by 500% thanks to the enormous activity growth. In 1982 the company launched the Unimarc system, which represented the beginning of the firm R&D function [1].
Nowadays, San Marco Group is among the best companies in the provision of paints and varnishes for the professional building sector. Its products can be classified in four main categories, namely Solvent - free system, Thermal isolation system, Professional system, Decorative finishes. These products are mainly sold to professional users, so painters, applicators, and so on. Only in marginal measure, paints are available to final users (DIY channel).
The case under analysis in this report refers to the intention of Colorificio San Marco to enter and build a consolidated
presence in the Sub - Saharan African market, especially in the decorative paints business.
The Sub-Saharan African market is now being considered as one of the promising markets of the next decades, because of the revenues generated by the oil industry which is leading to the growth of the middle class (from 18 million families of year 2000 to the expected 45 million of 2020). In this new environment there is plenty of room for the expansion of Italian firms even in the construction sector, since the "Made in Italy" seems to be very much appreciated because it can be considered a synonym of the Italian taste and high quality products. Being able to enter this market and build customer loyalty could bring significant revenues in the future [2].
Based on the information gathered it was combined the data from the different macro sections of the analysis to determine which countries could overall be interesting to analyze further. It was chosen the countries which seem to score well in almost all sections, and countries which had good scores in areas which it was thought could be interesting to investigate deeper. It was tried to avoid really small countries especially small islands even though they might score really well in some of the indexes because of the very limited size of the market. Hence, it was selected:
1. South Africa - this country has low country risk, meaning that the institutional environment is rather good and
scores well in the corruption index. It has a strong infrastructure. South Africa also seems to be one of the countries expecting a stable growth of the population, and in absolute terms the number of people living in urban areas is one of the highest.
2. Botswana - this country has a low country risk and scores the best in the corruption index. When considering the access to electricity it is one of the best African countries and because of the level of economic development forecasts of the increase of the population in the future seem to be stable.
3. Nigeria - this country is the most populous in the whole Sub-Saharan African region and will have one of the highest increases in population the next years. Because of the large population it has a large number of people living in urban areas and scores third when it comes to internet penetration.
4. Ghana - this country scores well in the corruption index and scores second in the CPIA business regulatory environment index behind South Africa. It is one of the countries with the best infrastructure and one of the most advanced with regard to the access to electricity [1].
5. Tanzania - this country has a high number of people living in urban areas and scores well in the literacy level index. It also considered that it is a country which gives a lot of importance to the environment and is concentrated on tourism.
Considering what has been said above it was discarded Botswana because of the small potential demand even if other indicators seemed to be quite favorable, but maybe it is not the best choice as the first country of the Sub-Saharan region to start with. For what concerns Ghana, potential demand is
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not incredibly high or low, but tariffs, the politicized business environment and the general conditions of doing business convinced us to look elsewhere to find the best country to choose to enter the region. Nigeria has the highest potential demand in absolute terms among the ones, but again the 20% import duties and the depreciation issues currently going on in the last period make the business environment a little difficult at the moment.
Tanzania has the highest import duty among these five countries and it wasn't considered the conditions of the market favorable enough to choose it over all the others. South Africa instead, scores as the 39th country in the world for ease of doing business and because of an agreement with the EU tariffs are equal to 0.
The potential demand is very large and people could be more easily reached as the English language is widespread. It must be taken into consideration that this is the most advanced country in the whole region so this makes also the availability of information much higher and often more complete than other states. Therefore it was decided to continue with the analysis of South Africa in this next section.
Investigating potential demand and distribution strategy of final income (high-income households) it was assumed that that final users of Colorificio San Marco paints are those who show to have a medium/high income, then it is needed to look for statistics about the distribution of households in the upper - income category (Chart 1).
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Chart 1 - Distribution of households in the upper - income category
It is noticeable that high - income households are mainly resident in Gauteng province, followed by Western Cape and KwaZulu-Natal.
Then, the same survey shows that, at national level, households being part of the upper - income group were 7.3% of the whole population, mostly living in urban areas (92.4%). Hence, in 2011, 3.76 million people were considered as wealthy, and approximately half of them lived in the Gauteng province (1.71 mln), 650 thousand In Western Cape and 503 thousand In KwaZulu - Natal province.
The same outcome is obtained when analyzing the geographic distribution of paints producers in the country. Indeed, despite the fact that most of them have several retail stores, more than half of those listed in the previous chapter have their headquarters in the Gauteng province. This confirms the idea that the paints industry is concentrated mainly in that part of South Africa, followed by Western Cape Province.
Investigating the situation with intermediate users, namely painters and paint contractors it is turned up that at first sight, there are three major provinces where the paints industry is
particularly developed, and where the is quite a large amount of paints like those produced by Colorificio San Marco (Picture people that is able to afford medium - high quality decorative 1) [1].
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Picture 1 - The map of South African Republic
Given this initial evidence, it is expected that a high number of paint contractors and painters are located in the same area to serve such consumers with painting and decorating services.
It is possible to notice that there are specific areas where paint contractors mostly operate - Johannesburg, Cape Town, Pretoria, Durban and Port Elizabeth. This is a confirmation of the hypothesis that firms providing painting services, like paint manufacturers, are located next to final users, who mostly live in biggest urban areas of the country.
Among the paint contractors being part of the South African Paint Manufacturers Association, the following are located in the three areas classified as interesting in terms of presence of high - income households who might afford Colorificio San Marco Decorative paintings. They are Gauteng and Western Cape.
According to various theories, firms engage in international activities with different levels of commitment depending on the level of knowledge of the foreign market. So, given that Colorificio San Marco has little experience in the Sub - Saharan African market, it may be necessary to adopt an entry strategy suitable to acquire knowledge of the market, such as exporting
[3].
It is claimed that most of products exported to South Africa are shipped by sea. The most important ports are Durban, Cape Town, Port Elizabeth, Richards Bay, East London.
In particular, Durban and Cape Town are the busiest container ports of the country. It is argued that Durban port has a leading role in the country's economic development, basically because about 60% of all imports and exports pass through it going to Europe, USA, East Asia. It is directly connected with rail and road infrastructures allowing sending goods to South Africa major cities. Regarding Cape Town Port, it plays a key role in management of cargoes coming from Europe, Middle East and Australia, mainly containers. Like the Durban Port, the Cape Town one allows for transportation of goods to all
major cities thanks to its connection to rail and road networks.
The suggestion may be to focus on sea transport to send goods from Italy to South Africa, and then, once they have passed the border, it is possible to choose basically between two options, namely rail or road transport. The South African Rail transport network is well developed, about 20 000 kilometers extending also to foreign locations (such as Gaborone).
Transnet Ltd is the company in charge of managing the country's major transport infrastructure, and Transnet Freight Rail is a division devoted to the management of the rail network. Such company offers also various logistics services for many firms, operating also in the chemical industry, through the provision of freight trains with different types of wagon depending on the product transported.
Concerning road transport, there is a network of so - called national routes that connect South Africa major cities (also with other foreign locations in neighboring countries). To drive along these roads, a toll must be paid according to a tariff system that considers the weight of vehicles, the number of the route and the distance.
As a conclusion, it is possible to argue that the distribution infrastructure of the areas under analysis are well developed, therefore it should not be hard for Colorificio San Marco to initially arrange transportation of paints from production facilities to customers. Various international carriage companies such as DHL or UPS. UPS, for instance, makes three services available for expeditions toward South Africa, called UPS Express, UPS Express Saver and UPS Expedited. Moreover, specific cargo services are provided for worldwide shipments: UPS Air freight (either Direct or Consolidated, depending on the shipping time, airport - to - airport, available worldwide), UPS Ocean Freight (FCL, LCL or breakbulk in case of non -containerised cargo), UPS Preferred (multimodal solutions). Costs vary depending on the option chosen, features of the content to be shipped, and the distance between departure and
arrival [2].
DHL, together with more "traditional" services, offers so called "DHL LIFECONEX" service which allows to ship goods that are likely to perish because of changes in temperature. It is a customizable International Temperature Controlled Air Freight service, supported by a quality management system and distribution practices guidelines, and a system monitoring temperature data. Given the sensitivity of paints to changes in temperature, this might be a good solution for shipments that go to relatively distant countries (in general, it is argued that it takes three days to ship goods from Italy to South Africa).
Another important factor is promotion strategy. Promotional activities are fundamental to reach potential customers, establish a way to communicate with them and make products known to the market. Depending on the country, its cultural patterns, and the industry the firm operates in, there are promotional channels which can be more effective than other ones.
Concerning South Africa, it is perhaps the only country which gives large opportunities for the use of different promotional channels - from newspapers to Internet and modern social media, from ad diffusion through TV and Radio to participation to trade fairs and exhibitions of different sectors.
So, in the analysis of promotional channels Colorificio San Marco may consider to promote its paintings in the South African market. In addition to promotional channels already adopted by the company (i.e. website and social media) it was found some magazines about the housing sector addressed to high - income people where companies like Colorificio San Marco are allowed to advertise their products. Then, it was found a few events that took place in South Africa and which referred to the construction sector and also the coating industry, and that could represent a good chance to contact potential new customers [3].
South Africa is one of the African countries with the most developed Internet network, the use of Internet as a communication channel can be worthwhile. Colorificio San Marco developed a well - structured website, with lots of information regarding the company, its history, and of course, the product that are sold.
Regarding the promotion through social media, it may be useful to check what are the most popular in the country. According to a report from We Are Social, Facebook is the most popular social network, followed by Google+, Twitter, Linkedin, Pinterest and Instagram. Hence, Colorificio San Marco can take advantage of its presence on these social media to advertise its activities and products to final users [1].
Other promotional channels are magazines. There are the following ones which could be useful for the organization. Such as House and Leisure, ELLE DECORATION, HABITAT, Garden and Home and many others. All there magazines focusing on topics strictly related to the housing sector -houses, renovations, rooms, décor - and collaterals like green living, food, garden.
Trade fairs and exhibitions are an integral part of advertising. According to information provided in the website, there are various reasons why a firm should participate to this exhibitions: cost effectiveness, business and knowledge development, chance to learn the latest techniques, and so on. The graph below provides additional information about who might be potentially interested in attending the event [2].
In the analysis of paint manufacturers and contractors it was noticed that almost all of them showed in their website home page the logo of the SAPMA, claiming that they are "proud members" of the association. Therefore, it is believed that to gain visibility and acceptance in the market, becoming a member of that association in the future might represent a good promotional investment, if the company will consider the idea of setting up a business there, either in the manufacturing or commercial sector.
Another key element that must be established when designing a marketing strategy is the price at which the pro duct/ser vice is going to be sold in the market. In the case of Colorificio San Marco it is evidently to use an active tool a static element in business decisions, when the role played by international expansion through exporting is only marginal.
Concerning the possible issue of price escalation (i.e. the extent to which the price of a product changes when exported in a foreign country), the choice of focusing on South African market can make this problem not too important. Indeed, it was adjusted that no tariff measures are levied on EU goods and channels of distribution may actually be quite short (because products manufactured by Colorificio San Marco can directly be sold to paint contractors). However, attention should be paid to aspects related to exchange rate fluctuations (because the EUR/ZAR exchange rate has been experiencing an upward trend) and inflation, because it is quite high compared to the Italian level.
To conclude the given marketing analysis, it is necessary to make some hypotheses regarding potential turnover and costs Colorificio San Marco is likely to incur when entering the South African market.
Initially, it is not expected the company to have a high turnover, even though the potential demand in the selected areas is quite important in numerical terms. The firm is new in the market, and the sector is already saturated by many and many competitors offering similar products, hence great efforts in promotional and advertising initiatives are required at the very beginning. If promotion and advertising investments are fruitful, there will not be the need to adapt the product to consumers' behavior and tastes.
To distinguish itself from other players, Colorificio San Marco should enter the South African market mainly with the "Dettagli dArte" product line - symbol of high quality, Italian style, in other words luxury. This is also a reason why, when advertising products, Colorificio San Marco should consider, together with demand coming from private households, also demand represented by luxury hotels and holiday resorts located in the country (Picture 2) [1].
Picture 2 - The presence of Five Star Alliance hotels in South Africa
In the map it is seen, for example, that there are Five Star Alliance hotels in South Africa - according to their website, among the 42 best luxury hotels in South Africa 19 of them are in Cape Town, then 8 in Johannesburg and 2 in Durban.
Identifying the kind of entry strategy that Colorificio San Marco could adopt for the South African market, it is necessary talk about a niche differentiation strategy. This might be so basically because the company will focus on a very specific market segment, with quality as the key source of competitive advantage, and not the affordability of its products and services. By doing so, the company might experience not great competitive pressure from other firms, because apparently not many paint producers place great emphasis on the high - quality level of their products without selling at affordable prices.
The suggestion is that in case the firm initially faces some degree of competition from other players that are similar in size and strategy, Colorificio San Marco could either look for different areas in the country where to focus on, or to face them by, for instance, structuring an alliance. However, this may be a move to implement once the company has been able to set up a rather stable presence, which makes the firm consider the idea to introduce new products in the market. Then, later on, if the situation in the new market turns out to be good, as already done in the past Colorificio San Marco could also consider either to own a commercial company or a manufacturer of paints for the market. In this way, stronger connections with local stakeholders become more feasible, and also a basis for the following step in the expansion process can be better envisaged.
To conclude, it was tried to provide a few advices on how can a company like Colorificio San Marco try to develop a marketing strategy to enter the Sub - Saharan African market.
It is expected that Colorificio San Marco to evolve the way it does business in the Sub - Saharan African market in the future, from exporting, licensing and franchising, to the creation of subsidiaries or commercial and production facilities. This cannot happen quickly for a variety of reasons, but in general it is possible to argue that cultural differences are among the greatest factors of complexity to be handled. In fact, only South Africa seemed to have a culture quite similar to the Italian and the European one.
BIBLIOGRAPHY
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