Marketing management: Quality Kraft Carpets Ltd.

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1.Introduction

Quality Kraft Carpets Ltd is a British company specialising in good quality woven Axminister carpets. It was founded in 1989 by William Jackson and John Turner. The company has not got high production capacity and they prefer to sale their products the contract customers such as hotels, restaurants, offices, large stores and loyal customers. After the changing market conditions they decided to enter foreign markets. However they hadn't got any experience in international business.

In this assignment, first it will be generally discussed how Quality Kraft Carpets can enter the US market and which strategies it should be choose. Second, it will be tried to answer the question "after the initial success in the US Market what would need to be made to realize business in the Middle East and in Japan?" Finally, it will be given recommendations further market media.

2.Short/Medium/Long Term Issues

2.1 Short-Term Issue

The company doesn't want to venture too much money in the new market. In the short term strategy, the company needs to get experience in the market which might be helpful to obtain the target market's size structure, behaviour and profit goals sought in the first few years.

2.2 Medium-Term Issue

The company should obtain their marketing budget and try to enhance their market share.

2.3 Long-Term Issue

The company should commit more resources to get stronger in the market and describe long-run sales and profit goals.

3. Representation Issues

Once a company decide to target a particular country, it has to determine the best mode of entry. Its broad choices are indirect exporting, direct exporting licensing, joint ventures and direct investment. Each succeeding strategy involves more commitment, risk, control and profit potential.

According to the P. Kotler, indirect export has two advantages. First, it involves less investment; the firm does not have to develop an export department, overseas sales force or a set of foreign contacts. Second, it involves less risk; because international-marketing intermediaries bring know-how and services to the relationship, the seller will normally make fewer mistakes.

The company does not want to venture too much money, at the beginning. Moreover indirect exporting will be reduced the risk although profit margins would be low. In this regard, it is reasonable to recommend that the company can choose the indirect export for short-term.

On the other hand, the company can be carry on direct exporting in several way for the mid term and/or long term; Domestic-based export department or division, overseas sales branch or subsidiary, Travelling export sales representatives (Home-based sales representatives are sent abroad to find business.) Foreign-based distributors or agents.

3.1 Agents

As mentioned above choosing a proper agent might eliminate prior disadvantages when the company try to enter a new market. According to D. Jobber and G. Lancaster, companies' overseas operations and overseas successes depend on their agents' ability and commitment. Furthermore, once the correct agent has found, the right kind of working relation must be nurtured. Also the company should keep in touch with its agents. It will lead to a better understanding of the dynamics of the overseas market and an improvement in the overall sales strategy.

3.2 Manufacturing Subsidiary

Manufacturing subsidiaries will be helpful in the long-term strategy to reduce risks. Otherwise the company have to expose a large investment to risks such as worsening market. If the market appears large enough, and company is already gained experience, foreign production facilities offer distinct advantages. First, the company cost economies in the form of cheaper labour and freight savings. Especially it is important for the company to have a manufacturing subsidiary in the USA in the case of the company decides to get into Japan market. Second, the company can hire...
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