Gaillie's market entry strategy for Japan

Cosmetics Exports to Japan

Cosmetics Export to Japan

Gaillie's is an American producer of cosmetics for both men and women, but specialized in the women's cosmetics segment. The company produces and sells a wide variety of high quality products to American and European consumers. Their future strategic focus is that of expanding the business onto the Japanese market. The product palette they wish to launch in Japan is mainly formed of skin lotions and women's make-up products.

In order to identify the potential and outcome of entering the Japanese market, Gaillie's has to analyze its internal strengths and weaknesses and compare them with the opportunities and threats posed by the Asian market. In addition, they have to set the basis for the product, price, promotion and distribution strategies and then clearly state the implementation plan.

Company Description

Gaillie's is a middle size American company, founded in 1991 in New York. They possess two laboratories in which they manufacture their cosmetic products and five local stores. Aside from the stores held within the United States, Gaillie's has also opened two stores in Canada, one in Italy and one in France. The next step is that of opening two additional stores in Japan.

Gaillie's currently functions with a total of 450 employees and registers an annual income of $67 million, following a continuously ascendant trend since its foundation. They went public in 2002, eleven years after their foundation, and their shares are quoted at $35 per share on NASDAQ.

Gaillie's mission statement is that of offering their clients increased satisfaction and integrating their diverse employees into the corporation's family, while in the same time following the goal of registering profits.

Great numbers of potential customers

Market liberalization. "In the mid-80's the Japanese market was often characterized as being excessively regulated and a difficult market to penetrate. Several factors have contributed to the easing of these regulations and to a more open economy. Changes brought through technology and the Internet, restructuring within the Japanese economy and bilateral negotiations, have opened the Japanese market in many sectors where U.S. companies are globally competitive"

The Japanese market welcomes American businesses and investors

Strong relationships between Japan and the United States of America. U.S. is Japan's main purveyor of foreign products and it is also Japan's main destination of their local products.

External threats posed by the Japanese market

The liberalization of the market has generated fierce competition among the actors on the Japanese market

U.S. And Japan are characterized by different cultures and the differences might pose cultural barriers for Gaillie's

However barriers and regulations have been reduced, the imports of foods, cosmetics and medical supplies are still intensively controlled

Strict regulation of the Pharmaceutical Affairs Law - the Drugs, Cosmetics and Medical Instruments Act. "The objective of this law is to regulate matters necessary for securing the quality, efficacy and safety of pharmaceuticals, quasi-drugs, cosmetics and medical devices, while taking necessary steps to promote research and development of pharmaceuticals and medical devices in high necessity and thereby encourage better health and hygiene."

4. Marketing Program

The marketing program or the marketing mix is formed of the future strategies and decisions that will be made in regard to the four marketing Ps: product, price, promotion and place (distribution).

Product

The product palette will be formed of skin lotions and women's make-up products. All items are manufactured and sold by Gaillie's, under the company's brand name, which represents the promise of high quality. The specified functionality is that body care and beautifying. The Gaillie's employees will assist all customers in choosing the right product category based on the clients' age, their priorities, desires and affordable price range. The skin lotions and make-up products have varying warranties, based on their compositions and unique features. All products will be sold in plastic or glass container, wrapped in boxes which have encrypted the product features, such as name, composition and warranty. On purchase, the boxes will be placed in hand bags encrypted with the manufacturer's contact data and their logo.

Price

The prices for the Gaillie's products will vary based on their composition and the difficulties posed by the manufacturing and logistics processes. Prices will have to cover the entire amount of production and other expenditures and also insure the company with profits. In this order of ideas, Gaillie's products will be placed on the market at prices starting with $20 and ending with prices up to $350. Discounts will be offered during promotional campaigns and for customers who purchase increased quantities of skin lotions or make-up products.

Place

Gaillie's skin lotions and make-up products will be sold through the manufacturer's own stores. The company intends to open two stores in Japan. Both shops will be located in highly populated areas, which are easy to access. All products will be preserved in Gaillie's own warehousing facilities within the two shops. Shipments from the United States will be handled by a tertiary company, hired by the producer to supervise the logistics process.

Promotion

Prior to its official launch on the Japanese market, Gaillie's will develop and implement an advertising campaign to familiarize the target market with the products and to capture their interest. The advertisements will be aired on television, radio and the internet and will emphasize the high quality and benefits of using Gaillie's skin lotions and make-up products. Once the stores have opened, promotions will attract new customers by presenting them with several special offers (such as free products or other prizes).

Target Market

The target market is basically formed of women of ages between 25 and 55 who register above medium income. The limitations are imposed by the belief that women younger than 25 require less make-up products and that women older that 55 tend to loose interest in make-up products. The income basis is set in the sense that Gaillie's products are high quality and imply several costs, therefore their retail price is rather high and people registering below medium incomes might not afford to buy the products on regular basis.

5. Implementation Plan

In order to successfully penetrate the Japanese market, Gaillie's has to follow the next steps:

1. Improve the quality of the regulations forwarded by the Human Resource department and reduce personnel fluctuations

2. Conduct market analysis to identify the features of the Japanese market, such as demand for cosmetic products and competition

3. Hire marketing specialists with expertise in penetrating foreign markets, especially Asian markets

4. Purchase or rent two facilities where to open the Gaillie's stores

5. Develop and implement a strong advertising campaign

6. Contract a logistics company and deliver the skin lotions and make-up products to Japan

7. Commence sells with a promotional period.

6. Recommendations and conclusions

Gaillie's is an American cosmetics company based in New York, the core of international fashion trends. They own stores in both United States and European markets and they are currently focused on penetrating the Japanese market. The company produces and sells high quality cosmetic products for both men and women, but are more specialized in the women's segment. The products they desire to launch onto the Asian market are skin care lotions and make-up products for women.

The American company has to take several internal as well as external measures to insure a successful outcome. The internal measures refer to improving the quality of the human resource management, hiring specialized workforce and developing and implementing marketing strategies, such as advertising, logistics and promotional strategies. Measures related to the Japanese market environment refer to Gaillie's compliance with the import laws and acts and getting passed the cultural barriers.

A useful recommendation regards the particular features of the Asian market. As such, the American exporters have to conduct extensive studies in order to identify, understand and relate to the forces that drive the Japanese market and the demand for American cosmetic products.