Contents

EXECUTIVE SUMMARY ...................................................................................................................................................... 2

MERCURY: WEAR THE ATTITUDE ..................................................................................................................................... 3
PRODUCT GROUPS ............................................................................................................................................................ 4
MARKET OUTLOOK ............................................................................................................................................................ 6
MARKET TRENDS ............................................................................................................................................................... 6
OPPORTUNITIES AND THREATS ........................................................................................................................................ 7
RETAIL TRADE .................................................................................................................................................................... 8
TOP 15 REASONS WHY INVESTING IN THE UK IS PROFITABLE IN COMPARISON TO OTHER COUNTRIES ...................... 9
ABOUT THE PRODUCT ..................................................................................................................................................... 11
MATERIAL USED IN MAKING OF FRAGRANCE PAD AND ACUPRESSURE POINT ........................................................... 12
PRODUCT ATTRIBUTES .................................................................................................................................................... 13
SEGMENTATION .............................................................................................................................................................. 13
TARGETING ...................................................................................................................................................................... 14
POSITIONING ................................................................................................................................................................... 15
PRICING ............................................................................................................................................................................ 15
SELECTING THE PRICE OBJECTIVE ................................................................................................................................... 16
DETERMINING THE DEMAND .......................................................................................................................................... 16
COMPARISON OF DIFFERENT BRANDS ........................................................................................................................... 17
ADDITIONAL MATERIALS USED:...................................................................................................................................... 18
PROMOTION .................................................................................................................................................................... 19
INTEGRATED MARKETING COMMUNICATION PLANNING ............................................................................................ 20
SALES PROMOTION ......................................................................................................................................................... 21
PROMOTIONAL ACTIVITY USES A MIX OF ABOVE-THE-LINE AND BELOW- THE-LINE PROMOTIONS. ITS ABOVE-THELINE ACTIVITIES INCLUDE: ............................................................................................................................................... 23
DIRECT MARKETING PUBLIC RELATION: ......................................................................................................................... 23
ENTRY AND EXPANSION STRATEGIES - INDUSTRY ENTRY AND EXIT BARRIERS ........................................................... 24
JOINT VENTURE ................................................................................................................................................................ 25
COMPETITIVE ANALYSIS AND STRATEGY ....................................................................................................................... 26
PORTERS FIVE FORCES:................................................................................................................................................... 26
REFERENCES ..................................................................................................................................................................... 28

EXECUTIVE SUMMARY
We are a 10 year old shoe manufacturing and retailing company in India. We export to
many countries one of our major export customer is UK. We retail by the brand Mercury in
India and we have successfully reached 200 stores in India at this point we are planning to
expand the business, our first step is to enter the UK market in a joint venture with the JD
Sports Fashion PLC Group of companies.
Founded in 1981 in Mossley, in Manchester, with a single shop, JD today is a well recognised
brand. With 335 stores JD is the UKs leading retailer of fashionable sports and casual wear.
For 20 years JD expanded through organic growth.
We know that a person can be best described with his shoes. We have come up with a
unique and simple product Mercury Shoes .These days in our hectic lives, we face a
general problem of bad odor from a pair of shoes worn by us for long duration .People
sitting close to us or in our nearby surrounding start getting irritated as well as they get
bad smell that is more than difficult to bear up. So, to overcome this problem we have
come up with a solution for you Mercury Shoes. Mercury shoes avid range of
fragrance pad gives the consumers a varied range to choose from. (The inner part of
fragrance pad is so designed that it will fit only to Mercury shoes) our shoes have
acupressure will not only seek to health problems but also dilutes problems of leg
sprains and muscle strains. Additional materials like KELVAR has been used to enhance
the quality.
As this is a new product with new additional features of fragrance pad and acu pressure
points in the sports shoes for the first time, so reasonable Price is set based largely on
competitors price, by comparing quality, and features. Our product is compared with
products in upper middle and lower middle category i.e. with Adidas, Nike, Action,
Reebok etc also As the product has special feature like acupressure points and
2

fragrance pad it will be characterized by high level of perceived quality and features with
price just high enough but not out of customers reach. Determining all these factors
Advertising, Sales promotion, direct marketing and public relation are used to build a
brand image and increase the sales volume. Distribution channels like zero-level, 1level
and 2 level has been selected for the product to reach all the targeted segment.

MERCURY: WEAR THE ATTITUDE

If your feet is in your shoes,You can steer yourself IN ANY DIRECTION You
choose,You are on your own, and You know what you know,you are the guy who ll
decide where to go.
And as we know that a person can be best described wih his shoes we have come up
with a unique and simple product Mercury SHOES .These days in our hectic lives, we
face a general problem of bad odor from a pair of shoes worn by us for long duration
.People sitting close to us or in our nearby surrounding start getting irritated as well as
they get bad smell that is more than difficult to bear up. So, to overcome this problem
we have come up with a solution for you Mercury SHOES with a special fragrance
oriented pads, so as to secrete a pleasing odor all the while schedule without being
embarrassed.
Using this once will make a you a loyal believer of its advantages, which industry has
never witnessed before.

Since our pads are replaceable, we are also providing two extra pads with our shoes
free. Each pad can be used regularly for six months.as well as these can be purchased
from our shops.
Since we are also targeting health and as it is said that health is wealth so we have
come up with and added feature of our shoe that is there will be acupressure points,
so that customer will be relieved from major health problems which come up due to
stress and over exertion.Our shoe will also be available with different fragrances (mild
& strong) accordingly.
Growth in the UK was particularly strong up to 2007. However, 2008 was a difficult year
as consumers stopped spending in the second half of that year due to the impact of the
global economic recession that affected the UK quite badly. In addition, retailers faced
difficulties in keeping low prices due to the devaluation of the Pound. In 2008, the
Pound has declined by 30% against the US$.
Different consumers are responding in different ways to the economic downturn. Some
are buying less expensive footwear. Others are buying less but choosing to buy
something that is comfortable, fits well and will last longer. Despite this, fashion
continues to be an increasingly important aspect of buying footwear. British women
regard footwear important, expressing their femininity and keenly follow the latest
fashion trends.

PRODUCT GROUPS
Casual footwear continues to increase in UK footwear sales and accounted in 2012
for 44% of the market, or 3.5 billion. The trend to more casual dress styles has seen a
great increase in the sales of casual footwear.
Sports footwear, which has increased since 2006, now accounting for 43% of the
market, or 3.9 billion.
4

 Formal footwear, with a decreasing share of the market, now accounting for 25% of
the market, or 2.0 billion.
Evening footwear, an increasing segment, now accounting for 7.7% of the market, or
612 million. Recent signs in the UK are of a fashion change to smarter types of dress
clothing. This will result in increased demand for more formal or evening footwear.
According to Keynote, the UK market by volume was roughly sub-divided in 2012 as
follows:
Boots (from above the ankle) - 20% (used to be 15% in the past)
Sports footwear - 48%
Specialist footwear - 12%
(flip-flops, indoor slippers, safety, waterproof footwear)
Town shoes - 50%
(Casual and formal footwear sometimes referred to as Trotteurs)
Unbranded footwear is still well represented in the UK market. However, the
International designer brands have been successful in the UK, as well as brands of UK
designers (LK Bennet, Dune) that approach the fine segment with less expensive
ranges.
In casual footwear, the following brands are the most prevalent brands in footwear
stores: Clarks, Kickers, Geox, Converse/Allstars, Red or Dead, Bronx, Base London,
Blundstone, Boxfresh, Fred Perry, Fly London, Ikon, Kangaroos, Rockport, Crogs, Uggs,
Diesel, Camper, Sketchers, Dr Martin, eFlag, Vans, Timberland, CAT, Nike, Adidas,
Reebok and New Balance.

MARKET OUTLOOK
As unemployment is expected to rise and the recession continues, 2009 probably
shows continued falling market values. The UK footwear market will contract by around
1% in value to 7,883 million with volumes decreasing by a lesser extent to 328 million
pairs. The great diversity in footwear being available in different retail outlets may
encourage impulse buying. On the other hand, the attitude towards the throw away
fashion has changed and people tend to buy quality footwear that lasts longer.
The economic recovery in the UK is very fragile in 2010. Growth in 2011 is likely to be
very modest. Areas for further growth beyond 2010/2011 will be in young fashionable
footwear at competitive prices and comfortable footwear for people of 50 years and
older. They are expected to make up a larger proportion of the British population.
Another impulse to the UK market is a further development of market niches such as
footwear for pre-teens, ethnic groups, well-designed green footwear, ethical footwear
and functional or wellness footwear.

MARKET TRENDS
Here are some major trends and characteristics that influence demand for footwear in
the UK:
Prices starting to increase despite the recession. The era of cheap fashion has gone
as far as it can go. Retailers have no more scope to reduce prices further. Other factors
such as the weakness of the Pound and price increases from suppliers mean that prices
have been cut by almost as much as they can. The trend to purchases from discount
retailers and supermarkets will continue but this will also result in a homogenisation of
the market and reduction of choice.
Interest in styling remains. This idea follows the popularity of the It Bag, which are
must-have items of an expensive designer brand (Jimmy Choo, Mulberry, D&G,
6

Louboutin, Fendi, Prada). Wearing these shoes give women a special look or
personality. Despite the recession, interest in footwear styling remains, especially in
the fine and luxury segments, for which younger working women are prepared to pay
a premium.
Back to functionality. Consumers have been moving more towards functional
footwear and away from quality brands for fashion, design or style reasons. This is
principally due to

OPPORTUNITIES AND THREATS

+ As UK consumers have become accustomed to such low prices for footwear, retailers
are always looking for new sources of supply in order to find comfortable footwear at
competitive prices of a good design. This is an opportunity for developing country
producers, provided sensible pricing strategies are used.
+ DC exporters can also benefit from the trend towards ethical fashion. Many
consumers are becoming cynical towards big business, particularly with publicity about
large retailers using companies that exploit workers in developing countries. If you can
prove that you are not doing so, and if you can offer a strong product range, and are
able to communicate this clearly, you will have a good opportunity.
+ The trend to online sales can provide opportunities. Online retailers do not have the
same issues as high street retailers in terms of stock holding and distribution. In many
cases their suppliers hold stock on their behalf. This enables an online retailer to
present a much wider range of products and will consequently be more receptive to
new suppliers.
+/- The importance of fashion continues to grow. This is both an opportunity and a
threat for exporters from developing countries. On the one hand, it creates a
continuing demand for new products. However, it also presents challenges. Unless a
7

DC exporter has a strong design capability and can produce new styles very quickly, he
will struggle to compete.
+/- Brands are playing a larger role in consumers purchasing decision when buying
clothing and footwear. This makes it difficult for unbranded footwear from exporters
of DCs to enter the UK market. However, some opportunities can be found in
outsourced production for UK brand manufacturers.
- As the UK is outside of the Euro zone, currency movements impact on the perceived
value of imports. The pound has been relatively weak since 2008. This will make UK
imports more expensive. Equally, any of these trends can be an opportunity for one
exporter, but a threat to another.
British buyers are not always loyal to particular overseas suppliers, so you may lose out
to a supplier from your own country or neighboring country.

RETAIL TRADE
According to Mintel, there were 9,764 retail outlets involved in the sale of footwear
and leather goods in 2007, down from over 10,000 in 2003. This indicates a reduction
in the number of small specialists and a growing preference for shopping in department
stores, the growing involvement of other non-specialists and the surge in online
purchasing.
The real impact of Internet retailing has only begun to be felt in 2006 with the wider
uptake of fashion online by consumers and the arrival of broad product ranges on
retailers sites. The Home Shopping share above has decreased, but this relates to
traditional mail order companies. Internet retailing relates both to the home shopping
sector, which is gradually moving online, and retailers own online websites. The most
notable example was the launch of Amazon into footwear in October 2007.

Nevertheless, the potential impact of the Internet on the footwear market should not
be overstated. It is forecast to not amount to more than a few percent of sales.
Finding a suitable trading partner there are a number of ways to look for a suitable
trading partner in the UK. The first place to look would be to contact the main trade
association(s), followed by trade fairs, which tend to feature a list of exhibitors, many
of which may be potential partners In addition to these sources, there are often a
number of general or specific information portals that will be useful.

TOP 15 REASONS WHY INVESTING IN THE UK IS PROFITABLE IN COMPARISON TO

OTHER COUNTRIES
1. The easiest place to establish and run a business is Europe: According to a World
Bank study, it takes only 13 days to establish a business in the UK. The World Bank has
ranked the UK first in Europe and sixth in the world to operate business.
2. An internationally competitive tax environment for foreign investors: the UK has the
lowest corporate tax at 28 percent which is the lowest in the G7. The highest personal
tax bond at 40 percent is also the lowest in the EU.
3. Most Flexible market in Europe: According to a World Bank report, the UK stands at
second place to employ workers.
4. Least barriers to entrepreneurship: OECD has identified the UK as second in the
world for Product Market Regulation. It also ranks second for the least barriers to
entrepreneurship and third for the least barriers to trade investment in the world.
5. World leader in innovation: the UK is known for its quality research base and ranks
second on the list of most productive places for innovation.

6. Stable Political Environments: Transparency International rates the UK high on the

transparency list. The UK is the country with the least corruption in the world. It
achieves a higher rating in comparison to the US, Japan, Germany and France.
7. Stable Regulatory Environment: the UK follows a consultative approach for
formulation of regulation which is beneficial for a business environment.
8. Easy property registration: Registering property in the UK is easier in comparison to
Italy, Ireland, France and Germany.
9. International language for business: English being the operational language has
advantages when doing business globally.
10.Top Talent: the UK is home to the top six universities in Europe. Two of the top six
best schools in the UK figure in top three global universities.
11.Gateway to the EU market: The UK acts as an excellent gateway to the European
market which has 27 member states and an approximate population of 500 million.
12.Strong Communication Network: The UK has extensive broadband markets amongst
the G7 countries and also the strongest ICT infrastructure in the world.
13.Strong transport links: The UK is known for its world class transport links. The
government has taken steps to improve air facilities, rail network and rail freight
infrastructure.
14.Leading Financial Center: London which is world's largest financial center is situated
in the UK.
15.Rapid productivity growth: The UK has taken a major leap in terms of productivity
in comparison to its other core competitors.

10

The UK's diverse economy is the perfect location for businesses to explore their
international business potential. All these factors make it the hotspot for foreign direct
investment.

ABOUT THE PRODUCT

Mercury shoes behave like an extension of the foot, which is a complex structure of
bone, muscle and fatty tissues.
Mercury shoes provide the user with a comfortableness and uniqueness to the
maximum.
Mercury shoes avid range of fragrance pad gives the consumers a varied range to
choose from. (the inner part of fragrance pad is so designed that it will fit only to
MERCURY shoes)
The fragrance provided with the shoes will save the user from embarrassments
arising from bad odor.
The product is concerned with the function and features offered by a good or
service. Product also encompasses factors such as quality, design, after-sales service
and branding.
Mercury shoes feature of acupressure will not only seek to health problems but also
dilutes problems of leg sprains and muscle strains.
RAW MATERIALS USED IN SHOES
To enhance performance, sophisticated shoe structures are employed which make use of
viscous and elastic foam materials such as ethylene vinyl acetate (EVA) and polyurethane
(PU). The use of viscous plastics in the heel area serves to absorb the impact forces during
the initial ground contact, and provides the foot with a soft cushioning effect.

ADDITIONAL MATERIALS USED:

11

1.

KELVAR

(Used

to

enhance

the

quality):

The

Properties

of

KEVLAR.

KEVLAR is one of the most important manmade organic fibers ever developed.
Because of its unique combination of properties it is used today in a wide variety of
industrial applications. The fiber possesses a remarkable combination of properties
that has led to its use in a variety of commercial products since the 1970's
Fibers of KEVLAR consist of long, interconnecting molecular chains produced from polyparaphenylene terephthalamide.
GENERAL FEATURES OF KEVLAR:
High Tensile Strength at Low Weight
Low Elongation to Break High Modulus (Structural Rigidity)
Low Electrical Conductivity
High Chemical Resistance
Low Thermal Shrinkage
High Toughness (Work-To-Break)
Excellent Dimensional Stability
High Cut Resistance
Flame Resistant, Self-Extinguishing

MATERIAL USED IN MAKING OF FRAGRANCE PAD AND ACUPRESSURE POINT

Vegetable tanned sheepskin
Active carbon filter prevents odor
Slightly padded with latex foam
Fragrance
Breathable leather shoe liner protects the inside of shoes from dampness, bacteria
causing odor.

12

PRODUCT ATTRIBUTES
Provides freshness to feet by its pleasant smell.
Acupressure will act as a reliever of pain.
Replacable fragrance and acupressure pad(the inner part of fragrance pad is
so designed that it will fit only to MERCURY shoes)
Pioneered in comfort
Best for athletes
Provides firmness to feet
Style quotient also maintained
Available in varied range of price and size with a warranty of 1 year.
Distinctive Competency
Apart from the above product attributes, the brand positioning through the brand identity
prism can be understood as below.

SEGMENTATION
Geographic
13

City: More focus on metro cities because people believe in trying innovative, new and
better products.
Demographic:
Age: 14 years and above.
Gender: Male and female both.
Occupation: Students, Athletes, fitness freek.
Psychographic:
Socio-economic: Upper-middle. Lower-middle.
Life-style: Sport-oriented, outdoor oriented.
Behavioral:
Benefits: Quality, service, after sell service.
User status: Non user, potential user, first time user.

TARGETING
1. Measurable: Size ,purchasing power ,characteristics of the segments
2. Substantial: A segment should be largest possible homogeneous groups worth going
after with a tailored marketing program.
3. Accessible: Reach should be good.
4. Differentiation: People have different perception about different marketing mix. A
business man and a sports person will have different feel about MERCURY shoes.
5. Actionable: Effective programs can be formulated for attracting and serving the
segments.

14

POSITIONING
We plan to build Mercury Rising brand positioning based upon product benefits and by
creating values and beliefs attached to the products. As far as attaching values and beliefs,
we plan to provide with the motto Shoes for each Season, thus portraying Mercury
Rising ability to serve the styling demands in an environment where there is a constant
change in fashion trends.
Positioning through point of difference by presenting and highlighting the new attributes
of Mercury shoes.
Relevance
Feasibility
Distinctiveness
Believability
Communicability
Sustainability

PRICING
Pricing is the process of determining what a company will receive in exchange for its
products. Pricing factors are manufacturing cost, market place, competition, market
condition, Quality of product.
SETTING THE PRICE: As this is a new product with new additional features of fragrance pad
and acu pressure points launching for the first time, so reasonable price should be set
according to the following factor.
1. Selecting the price objective.
2. Determine demand.
3. Estimate cost.
15

4. Analyzing competitors cost price and offers.

5. Selecting price method.
6. Final price

SELECTING THE PRICE OBJECTIVE

Product quality leadership
As the product has special feature like acupressure points and fragrance pad it will be
characterized by high level of perceived quality and features with price just high enough
but not out of customers reach.

DETERMINING THE DEMAND

1. Product is distinctive because of its special feature in it (fragrance pad & acupressure),
which makes it different from others.
2. Buyers less aware of substitute since there is no other player in the market with such
features, so in respect of its features buyers will not get any substitute.
3. Expenditure is smaller part of the buyers total income .since the price of footwear is
small part of the total income.
4. The product has more quality and exclusiveness. So according to this market for the
product will be fewer prices sensitive and price can be kept a little higher than other
products.

Estimating cost
The total cost depends on fixed and variable cost. It is important to know how cost vary
with different levels of production, and accordingly cost are estimated.
16

Economies of scale are used to minimize the cost in long run.

COMPARISON OF DIFFERENT BRANDS

BRANDS

PRODUCT RANGE

Category(upper middle-lower
middle)
PUMA

RUNNING, CASUAL,SOCCER,CYCLE ,etc.

ADDIDAS

RUNNING, TENNIS,TRAINERS,
BASKET BALL, etc.

NIKE

TRAINERS, FOOTBALL, RUNNING, GOLF, BASKET

BALL etc

REEBOK

WALKING, AEROBICS, RUNNING, BAKET BALL,

etc.

ACTION

CASUAL, SOCCER, CYCLE, RUNNING,etc

Since the product has added features and enhanced quality so the product will be
perceived similar to product in upper middle and in lower middle category so the price of
the product will be compared with Adidas, Nike and Reebok.
SELECTING A PRICE METHOD
GOING RATE PRICING
Our products price is based largely on competitors price, by comparing quality, and
features.

17

Our product is compared with products in upper middle and lower middle category i.e.
with Adidas, Nike, Action, Reebok etc
SELECTING FINAL PRICE
Finally selecting the price additional factors like the impact of other marketing activities,
company pricing policies, gain and risk sharing pricing are considered.
RAW MATERIALS USED IN SHOES
To enhance performance, sophisticated shoe structures are employed which make use of
viscous and elastic foam materials such as ethylene vinyl acetate (EVA) and polyurethane
(PU). The use of viscous plastics in the heel area serves to absorb the impact forces during
the initial ground contact, and provides the foot with a soft cushioning effect.

ADDITIONAL MATERIALS USED:

1. KELVAR (Used to enhance the quality)
2.Material used in making of fragrance pad and acupressure point
Vegetable tanned sheepskin
Active carbon filter prevents odor
Slightly padded with latex foam
Fragrance
Breatheable leather shoe liner protects the inside of shoes from dampness, bacteria
causing odor.
Fixed cost + variable

Cost incurred in

Low middle

Upper middle

cost

percentage

category

category

18

Cost of materials

65%

780.00

2080.00

Cost of labor

15%

180.00

480.00

Other expenses

20%

240.00

640.00

Total cost

100%

1200.00

3200.00

300

800.00

1500.00

4000.00

Desired profit (25% on

sales)
Required sale price

PRICE RANGE OF PRODUCT: 30 to 50 pounds UK

PROMOTION
Marketing activity used to communicate to consumer about the organization its
product, its activity and directly or indirectly expenditure.
Promotion mix
Advertising
Sales promotion
Direct marketing public relation
Advertising: A paid form of non-personal communication through media.
We are promoting our shoe as it provides.
-Nice fragrance
-acupressure point that help to control blood pressures.
19

As our logo & caption we did it which we have taken also suggest that we have created
a product which is beneficial for the customer ,because no such shoes has been
launched yet which have acupressure point and fragrance paid along with good quality.

INTEGRATED MARKETING COMMUNICATION PLANNING

Message appeal
The objectives of this IMC campaign are to promote the Mercury Rising brand to our target
market and communicate the following communication objectives: awareness,
knowledge, liking, preferences, conviction and finally purchase. The above table denotes
the tool to use to communicate each of the buyer readiness stages and the SMART
marketing objective to be achieved.

20

Buyer
readiness

IMC Tools

Objectives

Awareness

Teaser ads

Aim is to create awareness of

Mercury Rising to of customers
before launching.

Knowledge

Television
ads,
magazine ads, website
information

To give out as much information

about our products as possible
during
the
promotional
campaign.

Liking

Reviews in magazines
and buzz in social
network

To attach positive feeling with

the products thus achieving
likeness

Preferences

Public relation events

During this promotional period,

we will organize events where
we can engage with our
customer thus gaining their
preferences

Conviction

Through a mix of PR
events, viral ads,
reviews and buzz in
social media

Aim is to ensure the conviction

of our target customers as much
as possible.

Purchases

Promotional
discounts,
membership

Finally purchase of customers

are to be confirmed through
these tools.

brand

SALES PROMOTION
An activity or material that Offer a direct inducement to purchase.
We can do our sales promotion by:
1. Sport sponsorship
21

2. By sponsoring local sports events.

3. Event sponsorship
4. By sponsoring events like New Year eve.
5. Advertisement on wheels
6. Contests
7. Contest like marathon race can be organized to build brand image and increase
the sales volume.
Tying up with core companies having brand name and involved in making only sports
accessories or associating with brand companies producing health care gadgets to get the
benefits of their brand value and increase the sales volume.
1. Using print media
2. Sport magazines
3. Weekly magazines e.g. VOGUE,HARPERS BAZAR & FEW LOCAL SPORTS MAGAZINE
4. Health magazines
5. Newspaper
6. Electronic media
7. Adds on TV and internet
8. Radio
9. Bill boards.
10.Social Media
Mercury Rising will differ from other retail shoe stores because we will always be less
expensive than the competition, but we will still maintain the high quality of our
shoes.Also, we will offer a sales promotion on a monthly basis, such as:
buy one, get one half price
buy one, get one free
22

 half off on shoes from the previous season

"Mercury Rising " offers (for every 40 Pounds purchase, the consumer receives
an additional 20% off of their next purchase)

PROMOTIONAL ACTIVITY USES A MIX OF ABOVE-THE-LINE AND BELOW- THE-LINE

PROMOTIONS. ITS ABOVE-THE-LINE ACTIVITIES INCLUDE:
Paid advertising in newspapers and magazines. JD advertise in high circulation titles,
such as the mens lifestyle magazine FHM and the music magazine NME
product placements in a range of publications are used to promote the different brands
TV and radio advertising. Radio advertising in particular will allows to target its key 1320 year old audience quickly and in a way that young people find relevant.
Although these types of media reach a wide audience, they can be costly. It is also
difficult to measure response rates. We will also make significant use of other forms of
paid-for advertising.
ambient marketing, this uses outdoor advertising such as poster sites and t-sides on
public transport and around key stores in areas of high footfall. JD positions itself
alongside professional football clubs such as Blackpool FC and has made kit deals under
the Carbrini brand, supplying kits for the field of play and training wear. The company
also advertises on television backdrops, in club shops and around the grounds. This
approach helps to target the young, largely male audience which is typical of its
customer profile. It also establishes the brand within local communities.

DIRECT MARKETING PUBLIC RELATION:

Public relation will be used to explain the benefits of Mercury shoes (like benefits of
pleasant fragrance and acupressure points in shoes ).Direct marketing like internet and
catalogs will be used to inform the targeted segments about the feature of the product
and various models of the product.

23

ENTRY AND EXPANSION STRATEGIES - INDUSTRY ENTRY AND EXIT BARRIERS

ENTRY BARRIERS
The athletic footwear industry is a very competitive and mature market. The leaders of
this industry are very well established. Leaders like Nike and Reebok have made the
industry what it is today. Consequently, long-time competitors like Saucony and K-Swiss
have been struggling for years just to keep their brands alive. This cutthroat
environment has hindered the entry of new competitors.
Economies of scale also contribute to the lack of newcomers into this market. In order
to have an edge over the leaders, companies must be able to compete at all levels such
as reasonable pricing, efficient production, and high product quality. These things are
difficult to achieve without the resources of an established manufacturer.
Another key barrier to entry is the access of traditional distribution channels. When
combing the shelves at stores like Sports Authority and FootLocker, it is evident that the
leaders dominate the shelves. Lesser-known brands are viewed by retailers as being too
risky to replace an established brand name like Nike or Reebok on the shelf.
These walls seem to be breaking down with the help of the Internet. The costs of
overhead that come along with traditional brick and mortar retail distributors are being
significantly diminished. New entrants are now able to slide into markets without these
high startup costs, making it more profitable to begin production.
EXIT BARRIERS
When a company decides to exit from this industry it must be aware of things such as
indebtedness and its ability to meet those obligations. A company must also be cognizant
of lawsuits filed by its stakeholders and claims made on any residual assets.
ENTRY STRATEGY
24

With the above entry barriers stated, it is evident that internet is one of the major tools
that would be of great help to enter into international markets. Also, we would need good
amount of funds. Extensive marketing and promotions would do the trick for enabling
smooth entry in the market.
Sourcing for the international markets would be from our Indian manufacturers i.e.
exporting from India to the destination country/ market would be done.
As far as Investment and Control is considered, we would opt for a Joint Venture with the
JD Sports Company. The strategy is explained in detail below.

JOINT VENTURE
Joint ventures are a particular form of partnership that involves the creation of a third
independently managed company. It is the 1+1=3 process. Two companies agree to work
together in a particular market, either geographic or product, and create a third company
to undertake this. Risks and profits are normally shared equally. In our case, we go for a
joint venture with the JD Sports Company to sell our product in global markets starting
with the U.K.
This type of agreement gives the international firm better control over operations and
also access to local market knowledge. The international firm has access to the network
of relationships of the franchisee and is less exposed to the risk expropriation thanks to
the partnership with the local firm. This type of agreement is very popular in international
management. Its popularity stems from the fact that it permits the avoidance of control
problems of the other types of foreign market entry strategies. In addition, the presence
of the local firm facilitates the integration of the international firm in a foreign
environment

Advantages of Joint Ventures:

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 Pooling of resources
Better relationships with local organizations
Knowledge the partner brings of the local market
Minimizing exposure risk of long-term capital
Maximizing leverage of invested capital
With these advantages of opting for a joint venture, we plan to enter market with this
strategy.

COMPETITIVE ANALYSIS AND STRATEGY

A useful way of gaining insight into the nature of competition is through industry analysis.
We proceed with the Michael Porters Five Forces analysis.

Porters Five Forces:

Porter developed these five forces to be a framework in where a business strategic
manager can gain that competitive edge over its rival firms. Even though it may be viewed
as simplistic, it is a powerful tool in understanding where power lies in any given business
situation. With such understanding, you can see where your strengths and weakness are
and how you can avoid taking the wrong steps.
1) Threat of New Entrants.
2) Bargaining power of suppliers
3) Bargaining Power of Customers
4) Competitive Rivalry between existing players
5) Threat of Substitutes

Competitive Rivalry among Existing Players.

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Competition among existing rival firms is said to be very HIGH. They want to dominate
the market, so therefore there prices are considered to be Price elastic. If they dont
follow the law of supply and demand, they can lose out on market share.
Threat of New Entrants
To enter into such a market should be relatively easy. There aren't much Barriers, such as
law and regulations. Hence to enter in such a market is LOW. However, we must take into
account that there are brand preferences that customers would prefer. Every firm wants
to be in fashion and if a firm takes and innovative approach, they can dominate the
marketing coming periods. With regards to start-up capital, it may be little costly because
start up is labour and capital intensive.
Threat of Substitutes.
A customer can easily deviate and switch to a new footwear just as quick, depending on
if the price is right, its uniqueness and its quality. With so much resources available it is
very easy to replicate a firms own product. Hence threat of substitutes are HIGH.
Bargaining Power of Suppliers.
In this industry, Suppliers may have very little power. Suppliers have MEDIUM control.
For example, with the seasons winter, summer , fall and spring, firms can choose to
outsource or manufacture their own products.
Bargaining Power of Consumers.
Consumers have very HIGH control in this market. Because of so much substitutes and
competitors, consumers have a lot of options in where to purchase their products.
Competitive Strategy Followed
Differentiation focus
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In the differentiation focus strategy, a business aims to differentiate within just one or a
small number of target market segments. The special customer needs of the segment
mean that there are opportunities to provide products that are clearly different from
competitors who may be targeting a broader group of customers.
The important issue for any business adopting this strategy is to ensure that customers
really do have different needs and wants - in other words that there is a valid basis for
differentiation - and that existing competitor products are not meeting those needs and
wants.
Differentiation focus is the classic niche marketing strategy. Many small businesses are
able to establish themselves in a niche market segment using this strategy, achieving
higher prices than un-differentiated products through specialist expertise or other ways
to add value for customers.
In our case, the special fragrance element in the shoe along with the health benefit from
acupressure feature would differentiate our product from the regular athletic shoes.
Moreover, we target a particular customer segment who are not just sports loving but
also care about their health as well as personal hygiene (in alignment with the
acupressure and fragrance features). Thus differentiation focus is the competitive
strategy used by our company.

REFERENCES
Keegan W. J. (2005; 7th Edition), Global Marketing Management, Prentice Hall of
India Pvt. Ltd.
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 The Global Footwear Market: Athletic and non-Athletic Shoes. Retrieved

November 19, 2014 from http://wulibraries.typepad.com/files/footwear.pdf
Global

factors

and

strategy.

Retrieved

November

19,

2014

from

http://www.essay.uk.com/business-environments/global-factorsstrategy.php#ixzz3E3uI8ld4

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