Global Marketing Managment

8/12/2019 Global Marketing Managment

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Imran Zihadi | Student ID:

GLOBAL MARKETING

MANAGEMENT



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Table of Contents:

Word counts

Introduction

Matalan's Profile

Why Bangladesh is one of the most potential marketplaces for Matalan

Task 1: Macro-environmental analysis of foreign market environment

The Proximate Macro Environment of Bangladesh

The supplier environment

The distributive environment

The competitive environment

Wider Macro Environment

PESTEL analysis

Political and legal factors

Government policies for Foreign Investments

Taxation policy

National wages policies in Bangladesh

Economic Environment

Corporate Tax Rates

Social factors including culture and rituals

Technological factors

Electricity Problem and solution

Internet and mobile Users

Environmental Factors

Lack of Corporate Social Responsibility (CSR) practices

Occupational Health and safety

Task2. Global marketing objectives for Matalan in Bangladesh



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Three objectives For Matalan in Bangladesh

1. Creating brand awareness

2. Increasing market share

3. Expansion & Stores opening

Matalan's corporate strategy

Developing Matalan’s market in Bangladesh and Justification

Business strategies for Matalan to support launch a brand in new market

Reason for Cost Focus approach and justification

Task3. Matalan's foreign Market Entry Methods

The justification of Joint venture selection

The business who already successful with Joint Venture in Bangladesh

Marketing tactics that will support Matalan in Bangladesh applying 4P's

Product Decision

Branding Name

Packaging and labelling

Advertising

Price skimming

Promotion

Place

Task 4: Matalan’s Organizational Implementation and planned marketing activities in

Bangladesh

Definition of Implementation

Financial performance of Matalan and Aarong marketing plan

Time

Money/Financial Budget

Expenditures

Selecting Ethnocentric Management Approach



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Choosing the functional Structure and justified

Conclusion

Bibliography

Introduction:

Matalan is a successful British brand offering a large selection of clothes to all age group

globally. With present international corporate branches, the company has a strong potential to

grow in more countries. According to the company’s objectives and goals, there is a high

possibility in Bangladesh to grow successfully with its products. However, the company needs

to understand the unknown market more in deep in order to find the possible market plans and

actions.

Though Bangladesh is a very potential business market for Matalan, it will be a challenge to

launce the brand and position new business. For leading to successful growth in Bangladesh,

the brand needs to understand the macro environmental factors within Bangladesh as a foreign

market. Moreover, the company needs to make plans for effective marketing objectives along

with the corporate and business strategies as well as appropriate market entry method for

Bangladesh and then to be successful in applying the right tactics with appropriate actions.



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Matalan's Profile:

Matalan is one of the most successful, leading and largest clothing as well as homeware

retailers in the UK. It provides a comprehensive solution of quality fashion for man, women and

children including home ware and footwear since 1985. The company mostly attracts the

potential customers with a less price as well as attractive quality in compare with other high

street clothing brands. The Brand proved its success by having more than 200 stores within

almost 5 million square feet today from just 1 store in the beginning.

Matalan is already an established brand around the UK and a growing global brand. After being

successful with its unique price strategy and compatible quality nationally, the company stared

its global mission with opening business in UAE, Abu Dhabi and in Jordan.

(Matalan.co.uk/corporate/history at 27th

April, 2014). In last few challenging years the

company was performing very well, with the economic downturn it was successful in delivering

a robust performance with a sales figure of £1,117.5m with a continues rising profits in 2014.

According to Matalan annual report, there were 17.8m investment was made by the company

in order to adapt itself with the new market demand which was on properties, in plans,

decorating existing stores as well as in IT.

http://www.matalan.co.uk/corporate/history

http://www.matalan.co.uk/corporate/history



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Why Bangladesh is one of the most potential marketplace for Matalan:

The potential new marketplace is one of the most important and largest suppliers of Matalan’s

products as well as the country has compatible political and legal factors which friendly and

inviting to the foreign business.

Moreover, there will be huge skilled and experienced human resources with the best affordable

cost. The company also can have very good corporate advantages by saving operational and

distribution cost as it will produce the products with available resources and will be selling the

products in same country.

Task 1: Macro-environmental analysis of foreign market environment:

The marketing strategy especially in pricing of Matalan is very effective in local as well as in

foreign growing market. It’s marketing strategy successfully making productive attraction andappeal to the target customers. However, a country likes Bangladesh where most of Matalan’s

supplier will need more concentration according to the county’s macro environment. The

brand needs to understand the macro-environment of Bangladesh as a potential foreign market

in order to set right objectives and action plan.



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According to Paul Reynolds and Geoff Lancaster (Routledge, 2005), there are two ways to

analyze a potential market which are the proximate macro-environment and the wider macro-

environment. The Proximate Macro Environment refers to a company’s suppliers, distributors,

competitors and other close external constituents as well as the PESTEL analysis refer to the

Wider Macro Environment.

The Proximate Macro Environment of Bangladesh:

The supplier environment:

The business organizations, whether they are producers, manufacturers or retailers will usually

rely on numbers of suppliers who provide the organizations with materials of goods, product

constituents, or services. Bangladesh is one of the World’s largest garments products suppliers

and supply the readymade clothes around the world including UK, USA, CANAD, EU and others

western countries.

According to Matalan’s recent (April 2014) web news update it has canceled the supply

contract with Angora Wool which is one of its suppliers in Bangladesh

(matalan.co.uk/corporate/Ethical-Sourcing-Policy) as well as increased the demand and supply

amount with BRACK which is one of the largest garments supplier through Arong Brand in

Bangladesh. There are lots of affordable suppliers in Bangladesh therefore the supplier

environment will be one of the most favorite environment for Matalan.

The distributive environment:

In order to lead a quality and successful brand an effective distribution channels are required.

The distribution channel is usually are intermediaries including garments factories, wholesalers,

selected agents as well as distributors, all these channels will be making sure that Matalan’s

http://www.matalan.co.uk/corporate/Ethical-Sourcing-Policy




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products reach the target customers. In Bangladesh Matalan’s distribution channel will be a

little daunting with the country’s poor road infrastructure and lack of power. However, the cost

will be very cheap and affordable as a result the company can use the distribution environment

effectively.

The competitive environment:

The Company’s management needs to understand the possible threat of other competitors

who are marketing similar and substitute clothes. Since Bangladesh is one of the largest

suppliers of the garments products there are some big brands operating importing business

from there. The big brands like Primark, Tesco, Mark and Spencsor , Disney and others world

brand importing clothes from Bangladesh.

And there are some local brands established with strong market position over the target

market. The Arong, Brack, Grameen check and others are already providing large selection for

the market with affordable price. Matalan needs to know exactly the competitors it is going to

compete with and being ready in order to compete effectively.

Wider Macro Environment:

PESTEL analysis:

PESTEL (Political, Economical, Social, Technological, Environmental and Legal factors) analysis is

a business analysis tools which can help the organization to know about the wider

macro/external environment situation of a specific industry in marketplace, below PESTEL

analysis for Matalan’s potential marketplace (Bangladesh).



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Political and legal factors:

Government policies for Foreign Investments:

The foreign policy of the Bangladesh government is friendly and inviting to foreign

investment as well as it has already enacted a good numbers of rules and policies to

attract the international business actively. Matalan can use this opportunity effectively.

For example there is no difference between international and national private investors

about investment incentives and in export and import policies. The country also offers

incentives for foreign investors include: 100% ownership in most sectors as well as duty-

free imports for 100% exporters along with tax exemptions.

Taxation policy:

In most of the sectors there is a value-added tax of 15% on any consumer goods. For the

2012-13 tax which start in 1 July and ends on 30 June. The government charged the

public trade companies a lower rate of 27.5% while the Banks, Financial Institutions and

Insurance Companies are 45% rate. In a justification, in Bangladesh’s taxation policy

vat, income taxes and corporate tax is 15% as a result Matalan will be able to make

target profit. Even though the government has increased the corporate tax recently,



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they will make it flexible for the foreign business to attract the investors from around

the world.

National wages policies in Bangladesh:

In accordance with Labour website’s data, the current minimum wage of industrial

worker is £15 monthly which is £77 less than monthly needs. Labour unions in

Bangladesh have already campaigning to increase the minimum wages to improve the

quality of the workers and finally in 2013 the Bangladeshi national wage board

recommended minimum £27 monthly. Matalan can use the skilled and quality human

recourse with by offering a little more wages then average within the local market

wages rate.

Economic Environment:

Bangladesh is characterized by mixed economic system where some certain sectors are left to

private ownership as well as to free market mechanism while others have important state

ownership within government’s planning.

The overall economical environment constituted by that of a developing country, for example

the per capita income in 2013 was est. US$1,550 considerably lower than some other

developing country like Pakistan and India who are in lower than the average world’s per capita

income. In compliance with the International Monetary Fund’s data, Bangladesh ranked as the

48th largest economy in the world in 2013, with a gross national product of US$244.889 billion

and it is constantly growing. So Matalan will be able to position it’s product with its unique and

affordable pricing strategy.



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Corporate Tax Rates:

The standard corporate tax rate in Bangladesh is 27.5% in 2012 - 2013 tax years. This is

the standard corporate tax rate applicable to publicly traded companies in Bangladesh,

a list including tax rates for other corporations are as follows:

1. Publicly Traded Company 27.5%

2. Non-publicly Traded Company 37.5%

3. Bank, Insurance & Financial Company 45%

4. Mobile Phone Operator Company 45%If any publicly traded company declares

more than 20% dividend, 10% rebate on total tax is allowed

Social factors including culture and rituals:

Companies are experiencing the challenges of adapting their business strategies with the demand

of environmental changes due to the globalization and specifically the garments sector are

affecting more in Bangladesh. Although Consumer Rights Movement, enforcement of

government rules and regulations as well as a structured view regarding the economic

importance of Social responsibility are not so widespread yet, business have gradually

attaching more importance to Social responsibility in the local market as well. They are

increasingly aware that Social responsibility can be of direct economic value.

Companies like Matalan can contribute to social and environmental objectives, through

integrating Social responsibility as a strategic investment into its business strategy,

management instruments and in operations. This is an investment, not a cost, much like

quality management. So, business organizations like Matalan can thereby have an inclusive

financial, commercial and social approach, leading to a long term strategy minimizing risks

linked to uncertainty.

Moreover, Bangladesh’s dominating religion is Islam with approximately 90% population is

Muslim. Most people are concerned about the dress they ware. Although in the UK Matalan



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sells all sort of clothes including short skirt, tight fittings clothing and lingerie items, selling such

items will not be usual in Muslim country like Bangladesh. Moreover Matalan needs to

concentrate some special clothing items for Bangladesh like Hijab for Muslim women’s, Jilbab

for men's and small male kids in order to attract all level consumers.

Technological factors:

In compliance with William and Green (2007), "Technological factors engage with the changes

in technology and advances in the process of production". Bangladesh is not a technology

advance country like UK, the country is more likely to depend on its direct workforce as states

by Sillitoe, 2000, but, the good news is that over 70% people have access to electric media like

television and so it will be easy for Matalan to achieve the brand awareness.

Electricity Problem and solution: There is a major problem with regular and continues

power supply in Bangladesh as the country having power cuts on a daily basis due to the

lack of energy development procedure. But there are alternative ways available which is

affordable. Matalan can use the alternative solutions like Generators and solar power.

Internet and mobile Users: The internet and mobile network covering the entire

country. Approximately 75% to 85% are covered by mobile networks and recently 3G

network has been introduced which made the internet faster (allience.com). Matalan's

"pick and click" has generated more money in the UK and they can apply similar strategy

in Bangladesh and in order to get more completive advantage over their competitors.

Environmental Factors:

Lack of Corporate Social Responsibility (CSR) practices:

Textile and Garment industry are the key exporting products in Bangladesh. However

there are no strong corporate social responsibilities for business in all level. Matalan can



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be proactive and practice the Corporate Social Responsibilities in order to have a good

attention from its target consumers.

Occupational Health and safety:

The safety and security standards in Bangladesh is also not strong as there are several

accidents in recent years like Rana Plaza tragedy causing death and permanent

disabilities. Matalan needs to carefully concentrate on Corporate Social Responsibilities

including health and safety issues and put them into a practice. By doing so they will

play a role of social welfare and their prestige and creditability will increase among the

consumers as well as they can achieve potential customer’s trust.

Task2. Global marketing objectives for Matalan in Bangladesh:

Matalan will be a brand new business organization in Bangladesh and in order to achieve the

long run goals the company needs to have an effective and appropriate marketing objective. In

the competitive and challenging market like Bangladesh the marketing objective should be

appropriate as well as with the SMART tools the object should be Specific, Measurable,

Achievable, Realistic as well as within a Time frame. Matalan's objectives would be

concentrating clothing and in future they can focus on some other related items like shoes,

sports ware etc.



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Three objectives For Matalan in Bangladesh:

4. Creating brand awareness:

Brand awareness linked with potential customers as well as associated with a particular

product which usually stands out as a percentage of target market. It will rely on how

Matalan's primary advertising goal will be meeting in the beginning of a product's

introduction.

5. Increasing market share:

For 2016 Matalan's projected sales target is 80m BDT (Bangladeshi Taka) which is £62,

0000.00 GBP as well as increasing around 7% market share by 2018.

6. Expansion & Stores opening:

Opening new stores and extending the branches would be very one of the most

significant steps within Matalan’s objects. In the beginning the company will focus on

Dhaka's two main areas in Uttara as well as in Gulashan. Both areas situated near to the

international airport where the most upper and middle class consumers will be found. In



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2019 company will expand three more branches across the Dhaka Including Mirpur,

Dhanmondi and Elephant Road.

Matalan's corporate strategy:

According to Ansoff's Matrix, the corporate strategies can be assessed by four components of

strategic evaluation. And it is a part of a marketing audit as well as helps the management for

evaluating the strategic position of the company in order to set objectives in advanced.

Moreover, the four components help the organizations to determine growth for long term.

Existing products New products,

Existing Market market penetration

(Not Fit in Bangladesh)

Product Development

(Not Fit in Bangladesh)

New Market Matalan is here in this box

because

Matalan is a new

company andlaunching in

Bangladesh for the

first time.

Matalan already has a

supplier in

Bangladesh.

Market development

is appropriate for

Matalan.

Diversification (Not fit in

Bangladesh),

(Figure: ANSOFF'S MATRIX)



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Developing Matalan’s market in Bangladesh and Justification:

Market development usually looks for new market as well as improving the existing products.

Matalan would be consumers are upper middle and middle class who have the ability to afford

the price of Matalan’s products. The company can also target to a different segment like

religious group with special clothing which can generate more revenue for the company.

The most age groups in the target marketplace are 20-35. With its target marketplace in Uttora

and Ghulsan it can target educational institute and some specific professionals as there are

numbers of college, universities and other professionals like Bankers, Doctors.

In accordance with Ansoff's Matrix, the company can attract their target and maintain a smooth

strategy in the long term and can establish the brand as a successful Retailer in Bangladesh as

like as in the UK.

Business strategies for Matalan to support launch a brand in new market:

Reason for Cost Focus approach and justification:

According to Bangladesh’s overall domestic garments market cost base introducing and leading

would not be an appropriate as there are a good numbers of small investors occupied the local



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market all over the country. Hence, for Matalan cost based has been chosen rightly as the

target areas are Uttara and Gulshan which are the richest part of the country.

Those consumers have been targeted as a result of their better financial ability and would have

disposable incomes to pay their daily needs as well as would be able to spend on their luxury

goods. In the local market of Matalan it is still not established it brand as a very loyal brand but,

in Bangladesh it has a very strong chance to make its brand as a loyal brand. Therefore the cost

based method is appropriate.

Task 3. Matalan's foreign Market Entry Methods:

In compliance with Paliwood (1993), there are six main entry methods by which a brand can

enter in a foreign market. Therefore before entering in to an international market the six

factors need to be taking in to account which are Speed, Cost, Flexibility, Risk factor, Payback

period, Long-term objectives. Although acquisition is one of the most popular and effective way

to enter international market and the nature of acquisition allows enter very quickly and gain

profit quickly. However, it would not be the number one priority for Matalan in Bangladesh.

In accordance with the macro environmental factors including the PESTLE analysis of

Bangladesh, it is more effective way to take Joint venture (JV) as many foreign direct

investment companies in Bangladesh has chosen joint venture and in case of Matalan this is

also appropriate in Bangladesh to gain sustainability and to be seen as a profitable clothing

retailer in Bangladesh.

The justification of Joint venture selection:

According to the market macro environment and Matalan’s business objects and strategies

Joint Venture is effective for Matalan due to the very nature of joint venture in Bangladesh. In

Bangladesh the readymade garments industry is powerful which is in the second world list after



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china (bbc.co.uk). Therefore, Bangladeshi market has got strength in producing clothing and

Matalan has great IT skills as well as the right management style which can work together in

order to build a sustainable partner based business.

The business who already successful with Joint Venture in Bangladesh:

One of the most dominating clothing brands in Bangladesh is Aarong and most of the local

customers believe that the brand is made with local (deshi) handicraft including Nakshikhata,

Jamdani Patterns which remains Bangladeshi craft heritage. Their clothing is mixers with

tradition with contemporary designs. On the other hand Matalan has got completely different

textures and design within their clothing range which will give two company a great

competitive advantage in local market and two company combined name would be "Matalan &

Aarong" (slogan would be " Deshi cloths in world quality and tastes".)

Nature of Joint Ventures:

A Joint Venture(JV) can be ideal for doing business in an international market, while Matalan

and Aarong will share start-up and operating risks and profits, the JV will be as profitable and

reliable as a wholly –owned subsidiary in Bangladesh. Although there are some negative

impacts like some perceptions that JV will not be profitable or easy to manage, the study

indicates that many companies have demonstrated that these adverse can be managed

effectively. (Paul W. Beamish ,2010)



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Marketing tactics that will support Matalan in Bangladesh applying 4P's:

Based on macro environmental factors it is seen that product, price, promotion and place are

most significant components to take in to consideration to approach globally. (Source:

xero.com,(2012)

Global Marketing mix factors are Product, Price, Place and Promotion, these components will

play a role in Bangladesh and will be analyzed the components with justification.

Product Decision:

Product selection is the most important part of a business in any country. In Bangladesh, it can

be seen from the macro analysis that there are 90% of total populations are Muslims, therefore

the business norm should be focused on Muslim style clothing, for Muslims people it is very

important in choosing clothes, although the nature of Muslims clothing's are covered and

baggy, Matalan should concentrate to these factors. For women, including regular fashiones

there should be loose fitting such as Burkha, Nikab too.



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In addition, Bangladesh is tropical country with 6 official seasons due to the adverse weather

pattern. It is mostly summer for some months as well as the temperatures hit up to 40-45

degree, but there are months that are rainy with mild winters. So Matalan main focus would be

summer t-shirts, 100% cotton, suits, sports t-shirts etc. for men's and for women, cotton Salwar

Kamiz (long sleeves) , and consolidating with Aarong they may launch traditional dresses like

Kurta, Panjabi etc.

Branding Name:

Branding name remain same and would be Matalan and Aarong made in

Bangladesh.

Packaging and labelling:

For packaging it is important that if company put any picture on their labelling it

need to be decent and no indecent images or any animal pictures would not be

attracting to most of the target customers due to the religious and social

customs. In addition, Bangladesh government banned plastic bags in Bangladesh

for the concerns of environment and so Matalan has to use eco-friendly bags

such as paper bags or jute bags. On the labelling of cloths two languages will be

relevant Bengali and English.

Advertising:

Advertising is another key to the business and to attract the customers Matalan

needs to create right awareness about the products and to offer the right details

to reach the target customer and give a positive impression about Matalan and

Aarong.

As internet is the most growing sector in IT, it will be appropriate to advertise

the brand in online and TV's.



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Price skimming:

Pricing strategies are significant role for the company because it depends on company's profit

and market shares. For Matalan cost based or price penetration pricing will be best appropriate

because the target places are suitable for this target. Matalan and Aarong would gain more

market shares and will reach their target by 2018.

Promotion:

The objective of promotion tends to follow DRIPE framework which means Differentiate,

Remind, Inform, Persuade and Engage. There are several tools that Matalan can choose and

remain successful in Bangladesh. Initially taking sponsorship tool will be very expensive for

Matalan but using this Matalan will be seen a very successful high street retailer in Bangladesh.

Sponsoring in Bangladeshi cricket teams clothing, equipment or even venues will be very

beneficial and company will be known in a very effective way. People will want to buy the

jersey at any price and in that manner, those people wearing that jersey are advertising our

company throughout the nation.

Place:

The location of target areas (Uttara and Gulshan) is lucrative for business as the transportation

system is very easy. The consumers, suppliers all can easily communicate from there. Most of

the public transport available to be there in an average 20-25 minutes and the suppliers also

close from the location as the most garments factories are situated in Gazipur which is near to

Uttara.



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Task 4: Matalan’s Organizational Implementation and planned marketing

activities in Bangladesh:

Definition of Implementation:

Implementation is running the planned marketing activities according to the objectives. A

strategy is useless without being implemented at the right place at right time. A strategy

consists of three components basically time, people and money.

Financial performance of Matalan and Aarong marketing plan:

Money, people and time are very significant for Matalan in order to consider and take these

strategies to launch the brand new company in Bangladesh and joint venture partnership with

Aarong.

Time:

Matalan and Aarong are marching their orientation joint venture partner by

2014.

Money/Financial Budget:

In economic adverse condition Matalan proved the robust success by providing

successful performance and the company was doing very well against the

challenging market and economic condition. According to the financial report of

Matlan, there were £1,117.5m sales was made in 2012 which was around 1.9%

increases from 2011: £1,096.5m, this increases is really very positive outcome in

recent economic situations.(matalan.co.uk/financial/ Report). The financial

highlights EBITDA of £100.4m in 2012 it was £91.1m which is up 10.2% from last

year. The total revenue was £1,125.4m in 2012: £1,117.5m and strong closing

cash position was £120.7m in 2012: £96.2m.

(matalan.co.uk/financial/report/2013). The business ended in the year with

£120.7m in cash. Matalan’s strong cash position indicates that they generate



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their profit by £24.5m between 2013 and 2012. Therefore the company have a

good financial resource and capital in order to invest in Bangladesh, an invest of

£20m profit can be invested in Bangladesh with Joint venture company Aarong

to gain a huge market in Bangladesh and run their business smoothly.

Expenditures: In order to gain marching by Joint venture with Arrong, Matalan needs to

spend that money on the following sections:

In expanding the Braches in Dhanmondi as well as in Mirpur by 2016.

In renting and developing the properties and the shops including the electricity bills,

power alternative like generator bills, Staff as well as stuffs wages.

In buying new software to integrate the technology and to upgrade the overall system.

In obtaining markets via advertising including Social media, TVs and radios

Investing in computers system, IT development and in Human resource Management

In order to train and managing the Human resource, there are three approaches Matalan needs

to consider for new market in Bangladesh in order to train and manage the human resource

and choose one of them. The approaches are ethnocentric approach, the polycentric approach,

the geocentric approach (Dowling PJ, Festing M and Engle AD, 2008).

Selecting Ethnocentric Management Approach:

In Bangladesh Matalan need to consider the Ethnocentric management style in order to

introduce a brand and new systems including work patterns and the nature of the business

from lower level to top managements and employees.

Local stuffs need to be well trained and recruited from Bangladesh as they will be adapting with

the culture. After successfully train the management in Bangladesh and adopting the systems

the top executives within the management can back to the UK. The Ethnocentric management

approach will help both companies leading with long run success.



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Choosing the functional Structure and justified:

There are four specific strategies that a business organization can choose to support

implementing its strategies as an effective manner which are Functional structure, Product

Structure, Geographic and the Matrix.

Among them the functional structure is very effective as well as in this manner the company

can share their activities for example Aarong can take care of marketing, finance and staffs

while Matalan can take care of IT, Managements functions and training HR and others.

Conclusion:

In concluding, the macro-environmental factors of Matalan’s new market should be taken into

account and above marketing objectives, strategies, entry methods as well as the implementing

actions should be applied properly in order to lead the business to the success.

There are some points can be recommended which are:

Matalan should work actively with the above strategic factors and train the human capital

of lower cost.

Opportunities of new market should be converted to strength with the support of the

government’s foreign policies.



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