Don Quijote is among the leading companies in Japan. The company has more than 160 stores in the country with customers from various parts of the world. Apart from Japan, Don Quijote has other locations in other places such as Hawaii. Don Quijote produces and sells a wide range of products mainly groceries, electronics and clothes. The company is intending to expand its business by establishing more locations in other countries. United Kingdom is among the countries that Don Quijote is targeting to extend establishing its business locations. Research has shown that, there is a high demand for Japanese goods and services in the United Kingdom and so the company is intending to take that advantage of this fact in pursuing its growth. However, it is required for the company to conduct a market analysis before establishing the business in the United Kingdom (Wood, 2003). This paper contains an analysis of the United Kingdom market in three main perspectives; cultural, economic and market audit and competitive market analysis.
Contents
Introduction
Cultural and Economic Analysis
Cultural analysis
History of the United Kingdom
Geographical setting
Political system
Legal system
Social organizations
Business customs and practices
Religion
Living conditions
Executive summary
Economic analysis
Population
Economic statistics and activities
Working conditions
Channels of distribution
Executive summary
Market audit and competitive market analysis
Introduction
The product
The product as an innovation as it is perceived in the United Kingdom
Trialability
The market
The market in which the product is to be sold (United Kingdom)
Pricing strategy
Comparison of the Don Quijote Company’s products and those of the grocery companies in the United Kingdom
Executive summary
Preliminary market planning
The market plan
Marketing objectives
Product adoption
Promotion mix
Distribution
Channels of distribution
Price determination
Conclusion
References
Introduction
Don Quijote is among the leading companies in Japan. The company has more than 160 stores in the country with customers from various parts of the world. Apart from Japan, Don Quijote has other locations in other places such as Hawaii. Don Quijote produces and sells a wide range of products mainly groceries, electronics and clothes. The company is intending to expand its business by establishing more locations in other countries. United Kingdom is among the countries that Don Quijote is targeting to extend establishing its business locations. Research has shown that, there is a high demand for Japanese goods and services in the United Kingdom and so the company is intending to take that advantage of this fact in pursuing its growth. However, it is required for the company to conduct a market analysis before establishing the business in the United Kingdom (Wood, 2003). This paper contains an analysis of the United Kingdom market in three main perspectives; cultural, economic and market audit and competitive market analysis.
Cultural and Economic Analysis
Cultural analysis
History of the United Kingdom
Up to the early 19th century, the United Kingdom was among the leading countries in the world due to its large economy. The country was the major innovator in machinery such as, textile equipments, steam engines and tool making. However, the country’s economy started to shrink during the late 19th century after they abandoned mercantilism and began practicing free trade (Wiedemann, 2007). This practice really affected the country to an extent of being the fourth highest in 1914 from being the second highest country in the year 1870 in times of its total output. However, the country started to recover from the year 2000 and it is now among the leading countries in the world.
Geographical setting
The United States is located off the north-western coast of continental Europe. Its geographical area is approximately 243,610 square kilometers. Major areas of the country lie between longitudes 8oW to 2oE and latitudes 49°N and 59°N. The Atlantic Ocean and latitudes affects the climatic conditions of most of the areas in the United Kingdom (Westwood, 2011).
Social institutions
Most of the people in the United Kingdom live in nuclear families mostly the two generation family which is composed of parents and children. However, some studies have shown that almost 23% of the individuals live alone which is known as one person family. At the same time, about 1.9 million of the total population families are consisted of a single parent family contributing to increasing levels of poverty. Education wise, all the United Kingdom countries have five stages of education; early years education, primary education, secondary education, further education and higher education (Walby, 2004). Early years, primary and secondary education is compulsory in the United Kingdom where as only further education is optional.
Political system
United Kingdom is a democratic government where the head of state is the Monarch while the head of governance is the prime minister. UK has two main political parties known as the labor party and the conservative party. The Supreme Court is the highest court of the United Kingdom (Wagner, 2011).
Legal system
There are four main sources of legal laws in the United Kingdom which are; common law, legislation, European Convention on Human Rights and the European Union law.
Social organizations
The United Kingdom currently has seven main social classes. These classes are; premarital, traditional working class, emergent service workers, technical middle class, new affluent workers, established middle class and the elite class ( Tobin, 2004).
Business customs and practices
While conducting business in the United Kingdom, there are some important issues that one should know. Those aspects are; acting corporate socially responsible, being punctual, giving gifts where necessary, decent dressing for both men and women and avoiding bribery and corruption (Thomas, 2008).
Religion
The major practiced type of religion in the United Kingdom is Christianity. Most of the citizens identify themselves as Christians though the number of church attendance has been reported to be reducing as time goes by (Spencer, 2004).
Living conditions
Living conditions in the United Kingdom are better compared to all the other countries in the world. Most of the individuals are capable of achieving their daily balanced diet meals. In all the UK countries, the standard of housing is a bit high. The largest percentage of the population owns their own houses leaving a small number of people who live under rental houses (Team, 2010).
Executive summary
The United Kingdom is among the leading countries in the world. Its geographical area is approximately 243,610 square kilometers. Most of the people in the United Kingdom live in nuclear families. Education is divided into five main stages; early years’ education, primary education, secondary education, further education and hire education. UK has two main political parties known as the labor party and the conservative party with four main sources of legal laws known as; common law, legislation, European Convention on Human Rights and the European Union law. Christianity is the major type of religion and people have higher standards of living.
Economic analysis
Population
As at the year 2014, UK was reported to have total population of 63,489,234 people. The largest proportion of the country’s population lives around the urban areas.
Economic statistics and activities
Up to the year 2013, the UK GDP was reported to be US$ 2522 Billion where it grew by 0.5% in the year 2014. The gross national product was US$ 438428 by the year 2014. In December 2014, the GDP per capita was US$ 37955. The rate of unemployment as at December 2014 was 5.7%. As at January 2015, inflation was reported to be at 0.3%. The main mineral resources found in the United Kingdom are; gas, oil and copper. Public transportation in the United Kingdom is quite expensive. However, trains and long distance busses are the most effective and affordable means of transport in the country (Smith, 2001). Text messaging is now the most popular method of communication in the United Kingdom.
Working conditions
United Kingdom people believe in fairness and so workers are mainly subjected to pleasant working conditions. The key industries in the country are; finance and banking, transport equipments, steel, tourism, oil and gas and it is where most of the foreign investment activities takes place (Simons, 2006).
Channels of distribution
Distribution channels in the United Kingdom consist of retailers and whole sale middlemen. For purposes of minimizing the rate of inflation, the government minimizes the supply of liquid cash in the country and so business transactions are mainly done through credit cards mostly by check. Many people operate their businesses in large scales so as to reduce the total cost associated with the production processes. Also, there are a large number of imports and exports agents who directs people on how to export or import goods in and outside the country as well as there are a large number of warehouses which also facilitates trade in the country. People are free to sell their goods or services in various places of the country both in the rural or urban markets (Saavedra & Rico, 2004). The United Kingdom has variety types of media. Some of them are; television, radio, the social media, prints, cinemas among others. With the current developments in the country, almost 99% of the population is able to access one or two of the types of media.
Executive summary
The United Kingdom holds a population of approximately 63,489,234 people. Its economic statistics indicates that the country among the developed countries in the world with most of the people with high standards of living. Distribution channels in the United Kingdom consist of retailers and whole sale middlemen. Transactions are mainly done by check and people are free to conduct their business activities in the various areas of the country. Television, radio, the social media, prints, social media and cinemas are the main types of media in the country and almost every individual is able to at least access one of them.
Market audit and competitive market analysis
Introduction
The sole aim of Don Quijote is to maximize profit at the highest level possible. Apart from the cultural and economic environment of the country in which a business is located, several other factors determine the business performance. Among them is the market in which the business operates. The market is influenced by several factors both internal and external. In the market in which Don Quijote operates, there are other many companies that also produce and sell in the same market. Even in the United Kingdom where Don Quijote is intended to establish more locations so as a way of pursuing its growth, there are more other companies doing the same business in the country (Saavedra & Alpern, 1999). This presents a challenge to Don Quijote Company and so a need to conduct a thorough marketing audit and competitive analysis.
The product
The product as an innovation as it is perceived in the United Kingdom
Relative advantage
Don Quijote main sells groceries where it is known to have the lowest prices compared to all the other grocery stores in Japan. Apart from groceries, there are other products that the company offers some of which are; electronics, toys and clothing. Don Quijote’s products have got a high demand in the market than all the other grocery business in Japan. Apart from the Japan people, Don Quijote is well known of its high quality products and services in many other countries among them being the United Kingdom. The company, therefore, has an expectation that the business will succeed in the target country (Patterson & Heravi, 2008).
Compatibility
Don Quijote Company can conduct its business in the United Kingdom where it sells all the various types of products without experiencing many challenges. Grocery items are highly demanded in the United Kingdom and that they cannot lack demand. In addition, clothing and electronic items sold by the company products that are not sold in the other groceries are consumed by all people in the United Kingdom increasing the chances for the business to succeed (Rolls, 2006).
Complexity
Grocery business is not a complex business. It can work anywhere and succeed given quality management.
Trialability
Don Quijote Company can try to establish the business in the United Kingdom at a minimal risk due to the large market platform.
Observability
Grocery business performance is observed by the business itself and other businesses in the market. Don Quijote Company will, therefore, be able to observe the business performance right from the start up stage (Mcgrory, 2002).
Major problems and resistance towards the product acceptance
A number of problems are likely to affect the business in the United Kingdom. First, there are other many groceries in the United Kingdom. It will be, therefore, a challenge for Don Quijote to win customers in the country. Another challenge is how to determine the customers’ preferences, likes and dislikes (Luther, 2001). Don Quijote is a Japanese company and they may not be familiar with the cultural believes and practices of the United Kingdom people.
The market
The market in which the product is to be sold (United Kingdom)
Geographical region
The United Kingdom is among the largest countries with a larger geographical area of approximately 243,610 square meters. The country’s population is approximately 63,489,234 people translating to a higher demand for goods and services.
Forms of transportation and communication available in the United Kingdom
The major forms of transportation in the United Kingdom are; trains and long distance busses where as the major form of communication is text messaging. Text messaging is mainly done via cell phones or through the internet such as mail and social media like face book (Luengo-Fernandez, 2006).
Consumer buying habits
Families in the United Kingdom are mostly made of very few individuals; only father, mother and children. However, most of the families are single parented where as others made of only one person living alone. Therefore, most of them buy items such as foodstuffs in small quantities through frequently (Kornum, 2005). The most preferred grocery items in the United Kingdom are; meat, cheeses, fruits, vegetables and cereals and fish.
Distribution of the products
In the United Kingdom, grocery items are mainly distributed via retail shops. There are so many grocery stores in the country selling various types of grocery items.
Advertising and promotion
The main types of media used in advertising businesses in the United Kingdom are; television, radio, magazines and news papers. Most of the people are in a position to access at least one of these types of media which makes advertisement more effective through the various types. Consumers will, therefore, be in a position to access more information concerning Don Quijote Company as well as their business and the products offered. The company will also be able to convince customers and so a way of winning them (Kettell, 2005). On the other hand, sales and promotion is normally through; giving free gifts, money off coupons and point of sale material.
Pricing strategy
Pricing strategies are the ways in which businesses follow in setting up prices for their products. Grocery businesses fall under the perfect competitive businesses since there are many buyers and sellers selling grocery items. Price levels are; therefore, determined by the market forces of demand and supply. An increased demand leads to increase in price where as a reduction in demand leads to a reduction in prices. On the other hand, increase in supply leads to reduction in price where as a reduction in supply leads to an increase in the price levels (Holden, 2001). Items at the retail shops are usually sold at a slight higher price levels than those sold at the wholesale shops. However, the largest proportion of the consumers buys from the retail shops due to the small number of wholesale grocery shops in the country.
The available types of discounts in grocery businesses in the United Kingdom are; cash discounts and after sales discounts. Cash discounts are offered where a customer buys so many items from the businesses and at the same time and so the seller reduces the prices at a certain percentage. On the other hand, after sales discounts are offered where a customer buys some items and provided with some free packaging or transport to his or her destination (Cowan, 2001). The various types of discounts promote grocery businesses in the United Kingdom as well as maintaining customers while attracting new ones.
Comparison of the Don Quijote Company’s products and those of the grocery companies in the United Kingdom
Competitors’ products
Most of grocery businesses in the United Kingdom sell the products highly demanded in their country normally; meat mainly salted, smoked or salted, cheeses some of which are; Bonchester cheese, Buxton Blue, Dorset Blue cheese, Exmore Jersey Blue among others. Due to the stiff competition among the grocery businesses, sellers try to differentiate their products through various ways among them being offering quality packaging (Chivallon, 2003). This means that for Don Quijote to succeed in undertaking their business in the United Kingdom, they must offer high quality packaging as well as trying to sell the items consumed by most of the residence of the United Kingdom.
Competitors’ prices
As previously stated, there are many grocery businesses in the United Kingdom and so businesses tend to sell their items at low prices. However, due to the high demand for grocery items in the country as a result of the large population, some of the grocery businesses price their items high especially in the places with few grocery businesses where sellers tend to take advantage (Canter & Kelly, 2010). This means that Don Quijote Company will set its price levels depending on their business locations.
Competitors’ promotion and advertising methods
Majority of the United Kingdom population are in a position to access the various available types of media such as; television, radio, magazine and news papers. Grocery businesses, therefore, mostly advertise their items through those types of media. However, the most popular type of media used in advertisement is the television (Bruce, 2011). Grocery companies in the United Kingdom mostly offer free gifts to their customers as a way of promoting their businesses.
Competitors’ distribution channels
Grocery businesses in the United Kingdom mostly distribute their items via small retailers and wholesale middlemen. Also, there are a large number of warehouses in the country that are used to store grocery items before taken to the various locations (Bruce, 2009).
Market size
For the planning year, the company sales are expected to contribute a larger portion of the industry sales approximately 15%. The company sales are expected to amount to US $ 20,000 during the planning year.
Government participation in the market place
In order for the business to succeed, government has to intervene in the market place. Among the government agencies that will help the company is the local government. The local government will protect the company from some insecurity issues such as theft among others (Bowden, 2003). Some of the regulations that the company must follow in the United Kingdom is to pay various types of taxation.
Executive summary
Don Quijote mainly sells groceries where it is known to have the highest quality and low priced grocery products as compared to all the other grocery stores in Japan. The company also offers other products such as; electronics, toys and clothing. Don Quijote grocery items are; relatively advantaged, compatible, less complex, triable and observable. Stiff competition is the major problem likely to affect the company in conducting the business in UK. The United Kingdom is among the largest countries with a larger geographical area of approximately 243,610 square meters.
Trains and long distance busses are the main forms of transportation used in the target market whereas; television, radio, magazine and news papers are the main forms of communication. Most of the consumers mainly buy items in small quantities but frequently. The distribution channels used in the United Kingdom are mainly retailers and middle men wholesalers. Advertising is mainly done via the television where as sales promotion is mainly done through giving free gifts. The company sales are expected to amount to US $ 20,000 during the planning year. The local government will protect the company from some insecurity issues such as theft among others.
Preliminary market planning
The market plan
Marketing objectives
The target market is the United Kingdom people from the various age groups both men and women. The company is expecting to make sales approximately to US$ 24, 000 during the first year with a profit of US $ 4900 during the first year. Don Quijote is expecting to do the business in various parts of China (Bonney, 2013).
Product adoption
In order to enhance adoptability of the product, Don Quijote Company’s grocery items will be of high quality together with quality services offered at a clean environment. In addition, customers will be offered with some other products such as clothes and electronics (A, 2011).
Promotion mix
In order to make consumers aware of the company existence and the products offered, Don Quijote will advertise itself through the; television, radio and social media. The main message will be; the company locations and what they offer. The television will be the most used since it is less costly and the large population can access the information (Bonney, 2013). Sells promotion will also be used to enhance awareness of the company.
Distribution
The company will have various locations where products are prepared and sold at the same time. The modes of transport that will be used to transport resources in the United Kingdom will mainly be trains and long distance busses. The advantage with the ship is that it can transport a large quantity of chicken and so Don Quijote will be able to obtain chicken from their mother country Japan (Bowden, 2003).
Channels of distribution
The major channel of distribution that will be used by the Don Quijote will be retailers. At the start up, 40 retail shops will be established in various regions of United Kingdom. Transaction will mainly be done by cash since products will be sold at low prices. Business operations in each of the retail shops will be done in large scale so as to minimize cost (A, 2011). A warehouse will be contracted at one of the country cities so as to store the imported chicken for safe purposes.
Price determination
Resources will be transported in large quantities so as to minimize cost. Insurance costs will be determined by the size of the business in each of the locations as well as the demand for grocery items (Canter, & Kelly, 2010). Import and value added tax will also be determined by the size of the business and the profit generated.
Conclusion
The United Kingdom is among the developed countries in the world. Most of the people have higher living standards. The population is very large with most of the people living around the urban areas. Grocery businesses are so many in the United Kingdom but there is a high demand for Japanese products. Don Quijote is a Japanese company selling grocery items and other types of products among them being; electronics and cloths. The company is intending to extend its business in the United Kingdom. According to the above analysis, Don Quijote should establish its business locations in the United Kingdom due to the higher likelihood of succeeding.
References
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- Citation du texte
- Enkai Zhang (Auteur), 2015, Don Quijote Company in the United Kingdom. A Marketing Plan, Munich, GRIN Verlag, https://www.grin.com/document/294258
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