International Marketing Plan For Wesfarmers In Singapore’s Clothing Industry

Target Country and Market Selection

Expanding business is very much required for the sustainable growth and effective business strategies of the organization. It is analyzed that Wesfarmers could use the high return of the clothing industry by setting up new outlets in Malaysia for selling cloths and Jeans.

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It is retail business organization which has been running its business on international level. It is Australian conglomerate headquarter in Perth with interests predominantly in Australian and New Zealand retail, chemicals, fertilisers, coal mining and industrial and safety products. The total revenue of company is 6,844 billion AUD (2017) and share price of company is currently traded at WES (ASX) A$ 49.45 -0.21 (-0.41%).

It is analyzed that with the purchasing power of the people in Singapore, Wesfarmers could easily offer high quality clothes to its clients irrespective of prices and costing of clothes in market.

With the changes in economic condition of the Singapore, people in Singapore are more inclined towards the high quality fabrics and cloths in their wearing. The target market would be clothing business industry which will assist organization to grab the potential clients and increase its overall sales.

The primary and entry strategy of Wesfarmers could be to enter into Joint venture strategic alliance with other organization which will assist company to comply with the all the applicable rules and regulations in new Singapore market (Bocken,. de Pauw, Bakker, . and van der Grinten, 2016). 

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Wesfarmers could use the primary and secondary sources to manage its business. The primary data such as questionnaire, meeting and observation could be used by Wesfarmers to identify the potential demand and rival’s offering in market. However, journal articles, documents and official gazettes could be used by company to analysis the market share and technologies used by other companies in selling cloths such as t-shirt, jeans and other outfits.

This analysis is used to analysis the market factors and undertaken strategic program accompanied with the strength of company.

The selected market for Wesfarmers is Singapore which is tapped by Wesfarmers to sell its own brands T-shirt, Jeans and shirts to the people in Singapore through its outlets. In Singapore, textile and apparel industry comprises 4,818 establishments in which 4212 are the wholesalers and 606 are the retail sellers who sell the branded cloths such as T-shirt, Jeans and Shirt.

Brief History- People in Singapore are more inclined towards the high quality fabrics and cloths in their wearing and less worry for the cost and price charged for the same

Market Research and Analysis

Cultural analysis- People in Singapore are interested to buy only classy, trendy and quality cloths which are made of good quality stuffs. It shows that people in Singapore never compromise with the quality of the fabrics used in cloths irrespective of the charges.

Political

Economic

Social

Technological

Environmental

Legal

The political factor of the Singapore is stable which shows the positive part for the economic growth of the organization. (Bocken, de Pauw, Bakker, and van der Grinten, 2016).  

The GDP per capita of Singapore is 52,960.71 USD which is 2.2 % higher as compared to last two year data. It is analyzed that due to the low cost of capital, company would have higher return on capital employed if it starts its retail clothing business in Singapore (Burns, 2016).

It is accompanied with the social values, belief and culture factors of the people in Singapore. People in Singapore are more inclined towards buying quality fabrics and clothes irrespective of the cost of the same. Wesfarmers needs to offer high quality fabrics in its clothing if it wants to attract more clients in market. It could also be used by company to position itself in market with its customized high quality clothing products in market (Bocken, de Pauw, Bakker,. and van der Grinten, 2016).

With the changes in time, many organizations are using the advance online system process to sell its clothes through online modes. It will be easy for the Wesfarmers to set up strong competitive advantage in market due to its existing advance cyber computing system in its newly started up business in Singapore.

The regulatory environment has reflected that company needs to comply with the international environment protection acts. However, setting up retail clothing outlet will not have negative impact on the environment at large. (Burns, 2016).

The Legal factors of Singapore are highly stable. However, Wesfarmers could use its effective brand image to diversify its business in this clothing industry; Company might face issue related to remitting the capital from Australia to Singapore due to the complex legal compliance program

This factor assists in customization of the cloths such as T- shirt, Jeans and other stuffs for its clients in Singapore. It will assists in grabbing the potential data which could be used to customized cloths as per the client’s needs and demand. It will also be used by Wesfarmers to offer cloths as per the trend and fashion sense of the people.

It is related to the seasonal changes, People in Singapore are more prone to buy cloths in the winter season due to the arrivals of the fresh articles.

In Singapore, Wesfarmers has to invest more capital in setting up new retail stores and malls which will be used as medium to sell its own branded cloths and other wearing articles.. However, Company needs to hire more IT experts to strengthen its developed SEO engine to attract more clients (Burns, Mullet, and Bryant, 2016). 

It reflects the size, nature, demand and potential clients in market.

Target market profile- The Singapore’s population size remain stable at 5.61 million in which more than 30 % of the people falls between the age group of 18 years to 55 years. However, it is estimation dependents upon the collected hypothesis (Burns, 2016).

Primary target

Secondary

Number of consumers

Approximately 32 million  (Male and Female

Others

(Children and old people).

Age

18 years to 55

Below 18 and beyond 55 years old people.

Gender

Male and Female both

Male and Female both

Location

Raffles City Shopping Centre in Singapore

Other retail stores

Lifestyle

High Life style

Trendy cloths

Average usage/year

20 Million

11 Million

The newly clothing article such as T- shirt, Jeans and other stuffs will be introduced in the market. However, Wesfarmers would follow the product life cycle stage such as introduction, growth, maturity and decline..

Structure of the Industry

The newly set up clothing retail store will be incorporated as subsidiary company in market which will be having unlimited liabilities. However, structure of clothing industry is very complex and most of the rivals are selling its products and services (Byrne, and Shepherd, 2015).

The cost structure of the Retails cloth outlets would be related to the purchasing cost of the cloths, articles (Manufacturing cost) business related administration expenses, rental expenses, machines and tools used in the retail stores to sell the articles to clients in market. (Crane, and Matten, 2016). 

There are several competitive rivals of the organization who are selling the clothing and footwear through their self-owned retail stores such as Puma, Jack and Jones, Zara and Lacoste. These are the top most companies who have grabbed more than 40% of the Singapore market share. However, use of cyber computing enterprises resources planning will also assist Wesfarmers to attract clients through its online portal (Gattorna, 2016).

Market Entry Strategies

In addition to this, company also has to register itself as authorize cloth sellers on the Amazon portal to strengthen its turnover in the Singapore market (Hamilton, 2018).

Direct competitors

Company A

Company B

Company C

Company highlights

Company profile

Zara

Puma

Lacoste

Key competitive advantage

Cost leadership

Standardised high quality cloths

Unique cloths and strong brand image

Market information

Target market

Middle class people

Sport lovers

High income group people

Market share

12%

15%

13%

Marketing strategy

Product information

Product (goods and services

Formal shirt, T-Shirt, Jeans.

Sport T-shirts

Formal and informal shirts and T-shirt

Pricing

Average price

Low price

High pricing

Distribution channels

Use of retail stores and online channels

Use of retail stores and online channels

Use of retail stores and online channels

Communication

Loyalty card and social media

Seminars, TV advertisement and social media

Online and offline portals.

SWOT analysis

Strength

Strong brand image

Unique Sport wears

Stylish trendy cloths

Weaknesses

High legal compliance

Costing of its products

Highly complex process cycle to import stocks from other countries.

Opportunities

Increased GDP may pose good opportunity for market expansion

Diversifying the market with its new product development strategy

Setting strategic alliance to sell low costly cloths

Threats

Increased number of new entrants

High competition from the rivals

Loss of clients due to high clothing costing.

Trends

Highly trendy and unique cloths

Highly trendy and comfortable cloths

Highly trendy and unique cloths

Strength

Weaknesses

The main strength of company is related to its international brand image. It is analyzed that Wesfarmers Company has been offering retail business services to its clients on international level with a view to provide the best quality in Australian market.

The main weakness of Wesfarmers would be its compliance program. Company has faced high compliance issues and paid high penalties. In addition to this, while taping the new Singapore market will also be complex if company does not undertake proper strategic alliance (Hodges, et al. 2015).

Opportunities

Threats

With the changes in economic condition of the Singapore, people in Singapore are more inclined towards the high quality fabrics and cloths in their wearing.  It is analyzed that with the purchasing power of the people in Singapore, Wesfarmers could easily offer high quality clothes to its clients irrespective of prices and costing of clothes in market.

The high return on capital employed will attract more business organizations to tap this new clothing business in Singapore. Wesfarmers might have to face high threats from the rivals and may fail if it does not use the advance technologies and system process (Kim, and Min, 2015).

It is analyzed that company could easily grab the potential clients in Singapore if it follows the product differentiation strategy and advance cyber system. It will not only strengthen the visibility of its clothing products offered in market but also increases the overall business efficiency in determined approach. However, its weakness of the less effective legal compliance may result to increase cost of its business which will lower down the return on capital employed (Kozlowski, Searcy, and Bardecki, 2016).

The main international objective of company is to satisfy the clients with its quality products and services and create effective brand image on international level.

The main market objective of company is to strengthen the visibility of its products offered in market and satisfy clients to their optimum level with its offering (Li, and Leonas, 2019).

There are several marketing strategies which could be undertaken by organization to win over the rivals in Singapore. However, the main marketing strategy of Wesfarmers would be to use online system modes and cyber computing system to attract clients through online modes. This mode will give the filter method to its clients. The main target of company would be females and people fall between the age group of 17 to 50 years (Machmud, and Sidharta, 2016).

 It is analyzed that company should follow the product differentiation strategy while tapping Singapore market with its clothing products. The main Segmentation strategy of company is to bifurcate its products on the basis of choices trend and demand of the people. There would be segmentation of the market based on the sex, likeness, region and income of the people. It will assist in customization of its offering as per the client’s needs and demand market.

Company wants to position itself strongly in market with its advance technologies and high quality products in market. It has mission to position itself as strongest rival which could offer customized cloths as per the trend and demand of the people in Singapore (Schultz, and Schultz, 2015).

The market entry strategy which will be suitable for company is joint venture. It will allow company to easily comply with the applicable legal laws and regulations and also make easy to company to tap the new market.

Marketing Mix

Products- Wesfarmers will tap the Singapore market with its clothing products. It will assists in grabbing the potential clients who are more inclined towards buying the high quality cloths and fabrics in market. However, customized cloths will be offered to female clients in market (Tengblad, and Oudhuis, 2018).

Place- This new clothing business will be started near the Raffles City Shopping Centre in Singapore. This area is flooded with the visitors which will assist organization to attract more clients in market. It is analyzed that company will have high sales if it set up its show room in this particular area (Zamani, Sandin, and Peters, 2017).

Promotion-It is related to brand positioning and core competency of company in its offering. Wesfarmers has strong brand positioning and highly expert employees who could easily assist company to create core competency in clothing business of Singapore. Therefore,  in order to capture more clients company could develop online portal and less worried about setting up more stores in Singapore that will attract clients through virtual world. It will include promotional services like social media, digital marketing and monkey survey (Tengblad, and Oudhuis, 2018).

Price- It is the element which reflects that the price of the offered cloths will be matter of less concern. Company would focus on increasing the quality without worrying about the value or price of clothing products.  However, setting up price of its clothing products high may be negative indicator for the sustainable business functioning.

This planning budget is based on the expenses and costing of the newly set up business, action plan and expectation of the people from the new clothing business of Wesfarmers in Singapore (Jin, et al. 2017).

  • The political and government laws will be stable.
  • Easy availability of the capital and human resources.
  • Less economic changes and implementation of expected action plans.

Breakeven Analysis

[Wesfarmers Plc ]

Amounts shown in Malaysian Dollar

Sales

Average clothing Sales

2,000.00

Sales volume per period (units)

10,000

    Total Sales

20,000,000.00

Variable Costs

Commission per unit

2

Direct material imported per unit

2.5

Shipping per unit

1.1

Supplies per unit

0.8

Other variable costs per unit

1.2

Variable costs per unit

7.6

    Total Variable Costs

76,000.00

Unit contribution margin

1,992.40

    Gross Margin

19,924,000.00

Fixed Costs Per Period

Administrative costs

1,200.00

Insurance

500

Property tax

150

Rent

800

Other fixed costs

750

    Total Fixed Costs per period

3,400.00

    Net Profit (Loss)

19,920,600.00

This analysis shows that with the increase in the sales there will be following changes in the profit earned by company.

Average clothing Sales

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Sales price per unit

2,000.00

2,000.00

2,000.00

2,000.00

2,000.00

2,000.00

2,000.00

2,000.00

2,000.00

2,000.00

2,000.00

Fixed costs per period

3,400.00

3,400.00

3,400.00

3,400.00

3,400.00

3,400.00

3,400.00

3,400.00

3,400.00

3,400.00

3,400.00

Variable costs

0.00

7,600.00

15,200.00

22,800.00

30,400.00

38,000.00

45,600.00

53,200.00

60,800.00

68,400.00

76,000.00

Total costs

3,400.00

11,000.00

18,600.00

26,200.00

33,800.00

41,400.00

49,000.00

56,600.00

64,200.00

71,800.00

79,400.00

Total sales

0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

10,000,000.00

12,000,000.00

14,000,000.00

16,000,000.00

18,000,000.00

20,000,000.00

Net profit (loss)

-3,400.00

1,989,000.00

3,981,400.00

5,973,800.00

7,966,200.00

9,958,600.00

11,951,000.00

13,943,400.00

15,935,800.00

17,928,200.00

19,920,600.00

(Miller-Nobles, Mattison, and Matsumura, 2016).

The main project plan for the implementation for the recommendation is based on the strategic business approach and action plan.

Monitoring of Action Plan

This action plan could be monitored by using the internal control program and implemented strategies.

This activities action plan could be monitored by analysing the Gantt chart.

 The formal contingency plan would be sell the cloths through the home delivery to clients. If Wesfarmers could not have appropriate sales then it could use television modes to sell its cloths by entering into strategic alliance with other media organization.

References

Bocken, N.M., de Pauw, I., Bakker, C. and van der Grinten, B., 2016. Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33(5), pp.308-320.

Burns, L.D., Mullet, K.K. and Bryant, N.O., 2016. The business of fashion: Designing, manufacturing, and marketing. Bloomsbury Publishing USA.

Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.

Byrne, O. and Shepherd, D.A., 2015. Different strokes for different folks: Entrepreneurial narratives of emotion, cognition, and making sense of business failure. Entrepreneurship Theory and Practice, 39(2), pp.375-405.

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Fowler, R., Gajewska-De Mattos, H. and Chapman, M., 2018. Adapting adaptation: Expanding adaptive strategy theory to account for the East Asian business context. Journal of World Business, 53(3), pp.323-336.

Gattorna, J., 2016. Dynamic supply chain alignment: a new business model for peak performance in enterprise supply chains across all geographies. CRC Press.

Hamilton, G.G., 2018. Culture and organization in Taiwan’s market economy. In Market Cultures (pp. 41-77). Routledge.

Hodges, N., Watchravesringkan, K., Yurchisin, J., Karpova, E., Marcketti, S., Hegland, J., Yan, R.N. and Childs, M., 2015. Women and apparel entrepreneurship: An exploration of small business challenges and strategies in three countries. International Journal of Gender and Entrepreneurship, 7(2), pp.191-213.

Jin, L., Madison, K., Kraiczy, N.D., Kellermanns, F.W., Crook, T.R. and Xi, J., 2017. Entrepreneurial Team Composition Characteristics and New Venture Performance: A Meta?Analysis. Entrepreneurship Theory and Practice, 41(5), pp.743-771.

Kim, S.K. and Min, S., 2015. Business model innovation performance: When does adding a new business model benefit an incumbent?. Strategic Entrepreneurship Journal, 9(1), pp.34-57.

Kozlowski, A., Searcy, C. and Bardecki, M., 2016. Innovation for a sustainable fashion industry: a design focused approach toward the development of new business models. In Green Fashion (pp. 151-169). Springer, Singapore.

Li, J. and Leonas, K.K., 2019. Trends of Sustainable Development Among Luxury Industry. In Sustainable Luxury(pp. 107-126). Springer, Singapore.

Machmud, S. and Sidharta, I., 2016. Entrepreneurial Motivation and Business Performance of SMEs in the SUCI Clothing Center, Bandung, Indonesia. DLSU Business & Economics Review, 25(2).

Miller-Nobles, T.L., Mattison, B. and Matsumura, E.M., 2016. Horngren’s Financial & Managerial Accounting: The Managerial Chapters. Pearson.

Schultz, D. and Schultz, S.E., 2015. Psychology and Work Today: Pearson New International Edition CourseSmart eTextbook. Routledge.

Tengblad, S. and Oudhuis, M., 2018. Organization Resilience: What Makes Companies and Organizations Sustainable?. In The Resilience Framework (pp. 3-17). Springer, Singapore.

Tengblad, S. and Oudhuis, M., 2018. Organization Resilience: What Makes Companies and Organizations Sustainable?. In The Resilience Framework (pp. 3-17). Springer, Singapore.

Zamani, B., Sandin, G. and Peters, G.M., 2017. Life cycle assessment of clothing libraries: can collaborative consumption reduce the environmental impact of fast fashion?. Journal of cleaner production, 162, pp.1368-1375.