Barneys New York range of products include Jewelry, beauty products, furniture, housewares, clothing, bedding, and footwear.Thailand continues to encourage investments from multinational companies as a way of promoting economic growth, creating employment, and promoting technological transfer. In the recent past, Thailand has been a favorite destination for most foreign companies, and hundreds of United States companies have successfully established operations in Thailand. According to PricewaterhouseCoopers report (2015), it is a middle-income country with a GDP of $393 billion and the 9th largest United States’ export destination in Asia. As the capital city and the largest city in Thailand, Bangkok is the most suitable market segment for consumer products due to its rapid retail growth. The retail market has grown steadily at the rate of 5% every year over the last ten years. Moreover, it is expected to continue growing rapidly by 10% for the next ten years. The rapid expansion of the retail industry is fueled by several factors both in the demand and supply-side. The most obvious supply-side factor is the increased population which increases the demand for retail products. Bangkok is a market where younger generation who are the target market for Barneys New York live (PricewaterhouseCoopers 33). Most of the young people spend their time shopping for retail products in departmental stores.Bangkok’s beauty and personal care market is estimated at $ 5.3 billion.Overall, Thailand’s beauty and the cosmetic markets are ranked 16th worldwide and 3rd in the Asian region. In brief, the current distributors of beauty products cannot satisfactorily meet the demand. If Barneys New York launches its products in Bangkok with unique features, it will eventually drive up its sales and become the market leader. In particular, the US clothing, and beauty products have attracted both male and female consumers in Bangkok. Furthermore, the grooming products, especially for men in Bangkok, hit its all-time high in 2016. Barneys New York’s men-specific products sales will go high as more men in Bangkok are slowly switching from standard grooming products to products specially designed for men.
Strategies for Reaching the Customers
Since the company will focus on customers mainly in the urban areas of Bangkok with relatively small residential space, the stores will be equipped with Jewelry, beauty products, footwear, housewares, clothing, bedding, and small furniture suitable for their apartments. For convenience, furniture items that are too bulky will not be provided in Bangkok stores. Initially, the company will focus on establishing physical stores before establishing the online presence to tap into online shoppers. To further attract the growing market for men-specific products, the company will introduce gender-specific grooming products (Segers 50). Moreover, the clothing products and other products will be tailored to meet the cultural and design needs of the Thailand community. There will be no service adaptation and the pack size as well as other standard measurements will remain unaltered.
Engaging the local distributors will be the most viable option to conquer the Bangkok market and to reach the target market easily. The existing distributors know the market dynamics well and have well established networks within the city. A partnership with them will be the most effective means of hitting the ground and bringing customers on board for our range of products (Segers 57). Moreover, Bangkok is not an easy playground, especially for foreign startups. Engaging local distributors will allow Barneys New York to overcome language and other barriers in the Bangkok market. Local distributors are also well versed with payment logistics as well as the infrastructure and other supportive information. In a nutshell, local agents will be much better to utilize in penetrating the Thai market instead of relying on the US model in a foreign land.We will seek distributorship information at the business development segment at the United States embassy in Bangkok which helps fresh US firms seeking to establish operations in Thailand. Moreover, the company will rely on published information both by the government and non-governmental organizations to link with reputable agents and distributors in Bangkok.
Barneys New York will adapt the penetration strategy in Bangkok. The company will set lower initial prices relative to the US retail prices for the range of products to capture high market share. The large market share will allow the company to enjoy greater economies of scale. This is because the cost of producing will go down with time and the company will reap greeter profit margins. The company anticipates that the target market will eventually adopt the products and ultimately accept them. Moreover, the lower prices will eliminate marginal competitors who cannot cope with the low prices, therefore, the company will face less competition in the future. In the long-run, the company will slowly increase the price for its products and ultimately generate more profits (Segers 61). Penetration strategy has worked for most multinational companies because most consumers are sensitive to the prices for retail products. Therefore, the company will use lower prices as a weapon to conquer the Bangkok retail market.
Barneys New York will position itself strategically in the minds of consumers in Bangkok through several promotional activities. To begin with, the company will offer to customers high-quality products at cost effective prices. To increase sales and store traffic, the company will offer coupons and free samples to new potential customers (Segers 77). The stores will have a robust customer service with outstanding customer service representatives who are well versed in the local language and who can answer to customer concerns in the most effective manner. The company will also leverage on professional endorsements and celebrities in its advertisements for various products to further attract more customers into its store chains. Other than the mainstream media including local radio stations, television, and print media, Barneys New York will also utilize digital marketing and social media marketing in the search for customers. In addition, the company will offer product giveaways especially the small household items to entice potential customers into trying the products. Finally, the company will conduct after-sale surveys by contacting customers through email and telephone to gather information about its products. The questions asked will revolve around customer satisfaction and how the customers feel after using the product. Customer surveys are excellent ways of promoting a new company as they paint a company as one that minds its customers and one that strives to provide the best product and service to customers. Finally, the company will participate in trade fairs held in Bangkok to further create awareness about its products. Trade fairs are excellent avenues through which businesses entice potential customers to try their products.
PricewaterhouseCoopers. Doing Business and Investing in Thailand. Bangkok: PricewaterhouseCoopers, 2015. Print.
Segers, Rien T. Multinational Management: A Casebook on Asia’s Global Market Leaders. , 2016. Print.