1.0 Introduction:
International Marketing and business expansion on a global basis has become increasingly common in every sector of business. This is essentially due to the increase in competition and the potential in the new markets that can be harnessed for achieving continuous business development and growth achieving competitive advantage in the market. The economy of Ireland has grown tremendously in the past few decades with numerous organizations becoming leaders and potential competitors in the global market. Organizations like Ryan Air have established themselves in their competing market segment as a strong competitor with appreciable market share. This essay is focused on the analysis of the International marketing strategy of Waterford Crystal: a publicly quoted Irish company. The essay presents a brief overview of the company and its international position followed by the analysis of its International marketing strategy. The key issues addressed are
1. Internationalisations strategy of Waterford Crystal.
2. 4Ps analysis of the company’s International marketing strategy.
1.1 Overview of Waterford Crystal
Waterford Crystal is a primary brand of the Waterford Wedgwood Plc, UK. Established in 1783, the company specializes in the design, manufacture and marketing of luxury lifestyle products including ceramic, crystal products and premium cookware. The company was first established in the port of Waterford in Ireland. Since its establishment the company has gone through tremendous growth through innovation and quality of the products manufactured. Currently the Waterford Wedgwood group operates in Ireland, UK, Germany and United States of America.
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2.0 Internationalisation Strategy of Waterford Crystal
The innovation in technology, and globalisation of businesses in the Information age has provided the company with vast opportunity to expand their business in the international market. It is interesting to note that the company manufactures two thirds of its products (crystal, glass, cookware and others) in its owned manufacturing facility in Ireland, UK and Germany alone but generates almost 51% of the revenue from the market in north America. This apparently proves that the company has strong bard name and brand identity in the global market. Alongside the company also generates revenue (nearly 10%) from the Far East in Japan while the rest of the revenue comes from the European market. These further justify that the company is internationally active and has gained a strategic position in the international market for luxury lifestyle products under crystal, ceramic and glass categories.
The industry profile for the global house wares and specialities (2004) shows a steady growth rate for the industry up to the year 2008. This is essentially because of he globalisation and the expansion of the business by the leaders in the industry through mergers and acquisitions. This is primarily because of the increased demand for the lifestyle products and gift articles across the globe. Philip Kotler (1988) says that an organization can grow in its business when it strives to identify new markets in geographical locations other than its normal location of operation. Even though it involves numerous risk factors including loss of investment, a strategic approach to the internationalisation of the business will be highly profitable. The strategies adopted by the company under debate (i.e.) Waterford and Crystal are discussed below.
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2.1 Merger and Acquisition
The company first made its merger in 1986 with Wedgwood to become Waterford Wedgwood Plc was the first big step by the company towards globalisation and international business. The merger resulted in the combined efforts expanding the product range from crystal products to ceramics, glassware and other luxury lifestyle products. The acquisition of Rosenthal AG in Germany and All-Clad in the United States of America further expanded not only the markets for the company but also its product range to cookware and other speciality lifestyle products on top of the existing product range.
It must be noted that the merger and acquisition not only provides scope for expansion into new markets but also international trading and legal issues that needs to be addressed effectively in order to establish the presence in new markets. Alongside, the company successfully overcame the barrier of competition and initial hurdles faced by a business in new markets through the acquisition of the popular and established brands in their target markets. This is evident from the acquisition of All-Clad in the United States as the company has established itself as a strong brand in the US markets.
2.2 Co-branding:
Frances Brassington and Stephen Pettitt (2003) say “Co-branding is the way in which an organization establishes itself as a brand under the shadow of a more popular or stronger brand from another area of business”. This strategy is highly profitable in those businesses where crossing selling or products is possible. Apparently, Waterford crystal has undisputed reputation for innovation in design of its range of products. Through co-branding with well known designers like Emeril Lagasse, Versace, John
Rocha and Vera Wang. This apparently leverages a stronger brand image for the products of Waterford Crystal by creating a positive impression on its products among the target markets thus generating potential sales to achieve competitive advantage and market share in the global market. This is a profitable approach because of the fact that the company when selling its products in an entirely new geographic location, co-branding with another popular brand that is relevant to the business will obviously attract the customers provide opportunity for the company to rapidly establish themselves as a strong brand.
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Apart from the aforementioned strategies, the company’s keen importance to quality, innovation and continuous creativity in its range of products has provided the vital ingredient for the rapid growth of the company in the market.
3.0 International Marketing Strategy of Waterford Crystal: 4Ps Analysis
The Four P analysis reveals the essential components of the marketing mix for an organization. With an international perspective, the Four Ps of the marketing mix are analysed for the Waterford Crystal in this section.
The four Ps of the marketing mix as identified by Philip Kotler (1988) are
3.1 Product:
The product forms the first and foremost ingredient for the marketing mix since without a product a company cannot proceed any further in its target market. Waterford Crystal prides itself with an extensive range of products under the categories of glass, crystal, ceramic and other lifestyle products. Alongside, the acquisition of the German company Rosenthal AG has added the cookware range of items to its existing range of products. Alongside, the company is well known for manufacturing its products with utmost quality that is second to none in the market. This along with the innovative range of designs obviously presents an extensive range of products that re of exceptional quality in the market.
It is also interesting to note that the company markets its products under four major brands Waterford Crystal, Rosenthal, Wedgwood and All-clad in its target markets. This apparently provides the company a strong position in the market to introduce new products under the brand names thus reaching its customers efficiently with new products as well existing products.
Alongside, the products of the company are not only aimed to cater luxury lifestyle requirements but also as majority in the novelties and gifts industry which is continuously growing with the increasing demand for creativity and innovative gift articles by the customers across the globe.
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3.2 Place:
Waterford Crystal has stockists in every key locations of the geography where it sells its products. The company has partnership with numerous high street retailers in the USA to cater the huge demand in the US markets on top of its own retail outlets in UK and USA and Germany. The company also distributes its products through effective supply chain management system that is managed by the state-of-art IT infrastructure in the manufacturing facilities of the company. Apart from United States of America, the company also sells its products in Canada. The interactive website of the company that provides help to the customers in locating the nearest stockist is another advantage for the organization to strategically position itself in the global market. Also the company transports its products through air and sea to its target locations both in North America and Japan. The effective supply chain strategy of the company has apparently helped the organization achieve this.
3.3 Price:
From the previous sections, it is very clear that the company produces items for the luxury lifestyle products in the global market. It is thus evident that the company has positioned itself under the category of high-quality and high-price range of products. This apparently makes it evident that the prices of the products are relatively high in the market but come with exceptional quality for the price paid. This differentiation strategy was the main factor for categorising the company under luxury lifestyle products category in the market.
Alongside, the company offers a wide range of products that serve the various price categorisations of the customers thus meeting a wide range of customer needs in the market. Apart from the price promise it is also very clear that the company manufactures speciality products that are targeted upon niche markets in a given geographic location thus justifying its higher pricing for the products. Alongside, the continuous offering of the stemware products in the market when most of the competitors have discontinued gives the company a stronger position on its commitment to the price of the products eventually creating a positive impression among the target customers.
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3.4 Promotion
The promotion of the products is the critical factor for its success as identified by Frances Brassington and Stephen Pettitt (2003).
It is clear that only through effective communication of the products to the target customers, an organization can achieve potential sales thus leveraging competitive advantage. The company under debate, Waterford Crystal promotes its products through the following channels
Advertising: the company by placing advertisements in magazines that are specially dedicated to lifestyle and luxury like ‘Rich Guy’, ‘Luxury Lifestyle’, etc. The company reaches its customers who are interested in luxury lifestyle products. Alongside, by advertising in the mass media, the company reaches the broad market in the geography of interest.
E-commerce: The company has a well structured website that presents an exhaustive list of its products to its customers. This is a vital source of information for the customers who are increasingly using the Internet and electronic commerce service for shopping.
Apart from advertising, and strong web presence, the company also promotes its products by co-branding itself with many popular designers across the globe. This was discussed in detail in under the strategy of the company. Apparently the strong brand image of the company in the international market with the web presence and advertising leverages potential sales for the company gaining competitive advantage and market share.
4.0 Future International market Strategy
4.1 Effective Pricing strategy:
The products of the company are normally high priced and categorised under luxury products eventually not reaching a broader market in the countries where the company’s business is currently existing (either direct or through subsidiary).
Also, many authors have argued and proved that by adopting an effective pricing strategy an organization can reach a wide range of customers thus expanding its market. It is recommended that the company introduce a new range of products that are competitive in price and of admirable quality in the category under which it is released. This is essential for the company to reach more target markets in the Far East like India where there is a huge demand for lifestyle products. Thus by introducing a low-price range of products in such countries, the company can leverage huge sales by volume.
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4.2 Outsourcing:
The dawn of the twenty-first century has increased the outsourcing by many organizations to countries in Asia like china and India. The labour costs in these countries are very low when compared to the European labour market. With more than two thirds of its products manufactured in Ireland alone, the company faces very high labour costs. Through outsourcing some of its manufacture to countries like China and India that are renowned for art and architecture, the company can not only reduce its labour costs but also create innovative designs to cater the needs of its international customers.
5.0 Conclusion:
From the discussions so far, it is clear that the company, Waterford Crystal has indeed established itself as a strong entity in the luxury lifestyle products category in the global market. Through adopting effective pricing strategy and outsourcing strategies the company can further strengthen its position in the global market.
References
Books:
Frances Brassington and Stephen Pettitt, 2003, Principles of Marketing, Prentice Hall Financial Times, third edition.
Philip Kotler, 1988, Marketing Management Analysis, Planning, Implementation and Control, Prentice Hall Inc, New Jersey.
Journals:
Ananda Mukherji, Ben L. Kedia, Ronaldo Parente and Ned Kock, 2004, Strategies, Structures and Information Architectures: Toward International Gestalts, journal on Problems and Perspectives in Management, 2004, USA.
Company Profile, 2004, Waterford Wedgwood plc, Reference code 5213, Data monitor, UK.
Industry Profile, 2004, Global House wares and Specialities Reference Code: 0199-2081, Data monitor, UK.