Garmin: International Marketing Strategy

International Marketing Strategy: the Marketing Mix Policies (Individual Written Report- Referral) 18.08.2014 Martina Kutkova 1209183 Seminar Tutor: Petya Koleva MAR003-2 International Business MAR003-2 International Business Table of Content International Marketing Strategy: the Marketing Mix Policies .................................................................... 1 Executive Summary ....................................................................................................................................... 4 Company Description .................................................................................................................................... 4 SWOT Analysis............................................................................................................................................... 5 Host country: Slovakia .................................................................................................................................. 5 Consumers power, preferences and habits ........................................................................................... 5 Marketing Mix Strategies in Home Country ................................................................................................. 6 Product:......................................................................................................................................................... 6 Price .............................................................................................................................................................. 8 vívofit®, Black ..................................................................................................................................... 8 Place: ............................................................................................................................................................. 9 Promotion: .................................................................................................................................................... 9 Marketing Mix for the Host Country:.......................................................................................................... 10 Product ........................................................................................................................................................ 10 Promotion: .................................................................................................................................................. 10 Advertising .......................................................................................................................................... 11 Place ............................................................................................................................................................ 11 Price ............................................................................................................................................................ 12 References .................................................................................................................................................. 13 MAR003-2 International Business Executive Summary Fitness and healthy lifestyle are the key words in current society. From every direction consumers are targeted by companies promoting active lifestyle. Being active is not privilege of young anymore, everyone can’t do sport, everyone can do something for health. VivoFit is the youngest member of Garmin devices, but it is also the most versatile member. It is in use 24/7, it’s there before the user open eyes in the morning and it is with user long after he or she goes to the bed. It is the true active life monitor without necessity to keep it update; putting information manually in-it does everything for you! VivoFit brings everything what Garmin is famous for: user-friendly gadget, highly attractive design, wearable and durable in any condition, mixture of innovative technology combined together in easy to understand language, and… if this somehow doesn’t work out, the customer service to die for. Company Description The company first started to form in George Town, Cayman Island in 1989. Co-founders Gary Burrell and Dr. Min Kao (the name Garmin was formed from the first three characters of their names, “Gar” and “Min”) built their firm on the principles of innovations, convenience and performance, value and service. Garmin provides products in various fields, such as aviation, automotive, marine, and outdoor and fitness recreations. The company’s headquarter is in Olathe, Kansas, United States. The Garmin’s operations expanded from North America to globally to Europe (UK and Switzerland) , Taiwan, Middle East and Africa. The company employs 9777 employees. The revenue (2012) was 2, 715, 700,000 USD. (Garmin.com) Garmin’s devices are well-known for their easy-to-use menu, and sensitive (intuitive) features that make their products user-friendly and frequently updated. MAR003-2 International Business SWOT Analysis STRENGHT WEAKNESSES Strong brand equity Offers GPS and Fast company growth rises problems with WAAS navigation devices finding skilled staff and experienced Shares activity across different markets( management aviation, fitness, automotive, marine, Products sales life-time (quickly outdated) outdoor) Persistent innovation to maintain and Revenue (2.7 billion USD) increase market share Qualified management and staff Expenses (cost of labor) Products (users friendly, attractive design) OPPORTUNITIES THREATS Demand for GPS navigation devices Competitors can make cheaper products Strong brand equity, increasing positive with similar features reputation Financial crisis (consumers can’t afford to New technologies spend on leisure time gadgets) Fitness and Health market growth by 20% Generations X &Y have high expectations (2006), and needs for new technology Host country: Slovakia Consumers power, preferences and habits Slovakia became a member of Eurozone in January 2009, and since that the consumers drive for wide range and affordable products and services increased. Recent economic downturn caused income level per capita decreased, and this situation had a big impact on spending. According to OECD report the average household income is MAR003-2 International Business 17 228 USD a year. (It is a less than average; the OECD average of $23 938 a year. (OECD Statistical profile of SR.2013) Purchasing Power Parity (GDP) of the country is $ 132.3 billion, which ranks country on 66th position. (CIA, World fact library, Slovakia.2013) Slovak consumers and their behavior towards popular brands can be explained as: consumers are interested in country of origin and are willing to search this information, or the consumers are loyal to their favourite brand and the country where the product was made does not affect the country of origin. So the two major group of customer are brand orientated and country of origin orientated. Brands have significant position in Slovak market, however, the consumers itself are sometimes confused with the large selection of brands. (Vilcekova, 2014) Marketing Mix Strategies in Home Country Product: In Garmin’s family of product the VivoFit is hitting the target customers what are most likely not familiar with this type of products, some potential buyers already using some other Garmin devices, but since there is no similar product like VivoFit, the product has to earn its very own customers regardless of other tracking devices. Therefore, there is a open space for products like VivoFit on the market, and this might rise competition among other Garmin’s competitors. This product is very new and it is still in the introductory stage of the product life cycle. It is very important for the company to create awareness of the product. Garmin’s reputation is very good among consumers, and the latest strategy is not overspending on advertising. However, this is totally different type of product as the consumers were aware, and the wrong marketing could be a serious hazard with future of VivoFit. There are few similar products on market at this moment, although none of them uses MAR003-2 International Business combinations of technologies and such a unique system for tracking and analyzing data as Garmin’s VivoFit does. Garmin Connects is well known for users of another Garmin tracking/fitness device, such as large family of Garmin ForeRunners watches, and this whole system works similar for VivoFit as well. Although the system is similar, it is not the exact same program as when tracking and evaluating with, for example ForeRunner. Because of that, person using both devices-ForeRunner and VivoFit, information from both devices are evaluated in two separate programs under one Garmin Connect account. This helps to not misuse the evaluation information for users and in the same time it is like using the same program, so the user is already familiar with how to use the program/product. Vivofit is activity tracker (activity monitor) what comes in two sizes (wrist band are different in length for more comfortable wearing) and five colors (black, purple, teal, blue, slate) MAR003-2 International Business Price The table bellow describes the current prices of VivoFit in USA. The prices are for each color wristband the same, and the product is available in bundle with Heart rate monitor strap. The heart rate monitor accessory is the same type like is operation for other Garmin fitness products, so some of the customers are already familiar with it. vívofit®, Black Part Number Product List Price 010-01225-00 vívofit®, Black $129.99 USD 010-01225-02 vívofit®, Purple $129.99 USD 010-01225-03 vívofit®, Teal $129.99 USD 010-01225-04 vívofit®, Blue $129.99 USD 010-01225-05 vívofit®, Slate $129.99 USD 010-01225-08 vívofit®, Red $129.99 USD 010-01225-30 vívofit®, Black, With $169.99 USD Heart Rate Monitor 010-01225-32 vívofit®, Purple, With $169.99 USD Heart Rate Monitor 010-01225-33 vívofit®, Teal, With Heart Rate Monitor $169.99 USD MAR003-2 International Business Part Number Product List Price 010-01225-34 vívofit®, Blue, With Heart $169.99 USD Rate Monitor 010-01225-35 vívofit®, Slate, With $169.99 USD Heart Rate Monitor Place: VivoFit is now available in any larger online or retail place, including Amazon, BestBuy or Walmart, however, the primary retail place is still Garmin.com. The problem with distribution might happen for buyers out of the North America, since there is only one Worldwide Garmin store (online store). Promotion: Garmin is young, but very well established brand, especially in USA and Canada. The consumers show high loyalty to the brand, so any heavily aggressive marketing in unnecessary in this case. However, this is now type of product what Garmin came with, and consumers might not be aware of. What Garmin did at the beginning was promoted the VivoFit among own employees and encouraged them to basically test the product for them. The company has several employee health programs and health benefitsand this new product was one of them. It also was a strategically made point to see how well the product will be received from wider publics, and also because it was tested by own employees first (mainly engineers and technician already familiar with Garmin products) it was an excellent step to catch all software bugs before larger publics will become aware of the product. MAR003-2 International Business Marketing Mix for the Host Country(Slovakia): Garmin VivoFit is a new product from not so established company in Slovak and European Market so far. The brand is popular in North America, but not in Europe. Because of that, marketing plan has to be well set but frequently updated, so the company will be able to customize more for the new market, and also prevent loses and poor reputation for the future investments. (The Entrepeneur, 2014) The customers in USA have different habits and their power is much stronger than buyer power in Slovakia at this moment. We also have to consider the size of the market- the population of USA is almost 319 million (4th largest country), the population of Slovakia 5.4 million (117th). The GDP per capita in USA is $52.800, (country comparison to the world is 14); while in Slovakia is $ 24.700 (country comparison to the world is 61). Product The product VivoFit is the same like is already mentioned in section Product in Marketing mix used in Home Country section. This gadget features from the unique and when marketing it should be emphasizes: 1. Helps set and achieve personal health and fitness goals, 2. Tell you the ti e to o e , sho s you ho uch acti ity you do duri g day, 3. Helps to stay active, always on: attractive watch, invisible personal monitor, 4. Connection very simple using Smartphone and Bluetooth technology. Promotion: In this specific case the promotion is not just related to the product itself, but absolutely necessary is to promote Garmin as a company too. The marketing campaign should be really visible, in large format (for example: sponsorship), however, the market is small and compare to North America, Europe is more local orientated than centralized. If the company will decide to go on market in different countries not just Slovakia, each MAR003-2 International Business country will need own promotion and advertising plan carefully created by people aware of the region targeted. This product has a lot of features and technical parameters- and it is still user-friendly and easy to operate. Garmin introduced the product with “Say Hello to the activity tracker that knows your potential.” This is an excellent introductory of the product when customers are familiar with brand, and they know what they can expect. If we will try to use the same introduction for Slovak customers, they might be confused and not interested, since Garmin isn’t that well known on Slovakian and European market. Because of that, I would recommend to carefully choose company ambassador(s) among popular celebrities. Because of the product features it would be somebody with good reputation and known that is involved fitness/health activities. It could also be a sponsoring of national team (football, volleyball, etc.) individual athletes (Olympic athletes, tennis players, water sports)- mainly focus on popular sports discipline where Slovak athletes are more successful, which means those sports disciplines gain always more publicity and attentions from press, media, readers, and that means they could help create awareness among potential buyers. Advertising should be the key- TV ads, online advertising, trade shows, and press releases. I would recommend creating interactive communication using social networks, blog, forum, which are very popular among Slovakians, and can be used for communication between company and users. Satisfied customers are more likely to promote the products to their relatives and the sales will grow. Place Because there is only one worldwide Garmin store, located in USA, it would be beneficial if the company will create another online store for the Europe; this would fast-forward the expenditure and establish sales in Europe. Otherwise the sale place will follow the model used in USA, where each larger electronic retailer will be able to provide the product for customers. The largest MAR003-2 International Business consumer electronics retailers in Slovakia are Planeo Electro (26 stores), Okey Spotrebice (35 stores), Nay Elektrodom(31), Euronics( 47), Electro World, Datart(23), Expert Electro(6). Price Proper pricing is the key if it comes to market share and profit. If the price is set too high or too low, the product either doesn’t sell or oversells, in both cases it will not make enough money. Proper pricing control increases in profit and also in market share. VivoFit is available online for Slovak customers, but like mentioned above it is all without any additional marketing or introducing the company/product to publics. Current product price on Garmin.com store is 119.9 Euro. Comparing prices for US market and Slovak market, the second one has higher price for the same product. This fact could easily be the reason why the profit and sales are so low; higher price, more anonymous brand, and almost no marketing. If the pricing will be set for the market in Slovakia, the company will invest in marketing for the target audience, the sales might increase. MAR003-2 International Business References Do You Still Need a Marketing Plan? Yes, But Constant Updating Is Key. | Entrepreneur.com . 2014. Do You Still Need a Marketing Plan? Yes, But Constant Updating Is Key. | Entrepreneur.com . [ONLINE] Available at:http://www.entrepreneur.com/article/235930. [Accessed 10 August 2014]. Dealer Resource Center. 2014. Dealer Resource Center. [ONLINE] Available at: https://dealers.garmin.com/drc/productInformation?partNumber=010-0122500&subNav=productDetails. [Accessed 10 August 2014]. Dealer Resource Center. 2014. Dealer Resource Center. [ONLINE] Available at: https://dealers.garmin.com/drc/productInformation?partNumber=010-0122500&subNav=productDetails&imageBasePath=https%3A%2F%2Fstatic.garmincdn.com. [Accessed 10 August 2014]. The Library Catalogue | University of Bedfordshire. 2014. The Library Catalogue | University of Bedfordshire. [ONLINE] Available at: http://0eds.b.ebscohost.com.brum.beds.ac.uk/ehost/external?sid=0919689c-d3df-4e7e-870b02252ddf7941%40sessionmgr113&vid=1&hid=109. [Accessed 10 August 2014]. The World Factbook. 2014. The World Factbook. [ONLINE] Available at:https://www.cia.gov/library/publications/the-world-factbook/geos/us.html. [Accessed 10 August 2014]. Vilcekova, L. 2014. Comparison of Brand Buying Behavior of Slovak Consumers at the Beginning of Economic Crisis and at Its End. Journal of Advanced Management Science Vol. 2, No. 4, December 2014. Available : http://www.joams.com/uploadfile/2014/0326/20140326054220886.pdf MAR003-2 International Business