Trouble Penetrating New Markets
Penetrating new markets, especially on the global platform, is not an easy task for any company manager. The mission of sustaining in the worldwide market is, however, an even more demanding one that managers must take into account. Companies have gone global but failed to maintain their presence in these markets due to several factors. A different view of the situation frequently reveals there was a chance for the company to survive in that particular market. With the example of Wal-Mart, this discussion explores what, when done differently, can sustain a company globally.
Right from its entry into the South Korean market in 1988, Wal-Mart did not find solid grounds for an excellent performance. Notably, the company did make several mistakes, ranging from its product mix, as well as its marketing strategy. Walmart also failed to take into consideration the consumer culture in South Korea, which is an integral primer step for any company aiming for the global market (Keegan & Green, 2015). it was this overlook that led the company not to understand that south Koreans had a more prominent taste for food products, and fresh goods as opposed to the dry goods that Wal-Mart was offering Sang-Hun, 2006). The result was that most south Korean consumers who visited the stores were mostly intent on viewing different products and not necessarily purchasing them.
Secondly, the company failed to consider what product promotion strategies best suited to the new market. While in America, packaged goods raise no consumer concern, South Koreans prefer displays and products packaged at the purchase point. Consumers in this country also did appreciate exhibits and product samples as part of marketing (Kim, 2008). Wal-mart, on the contrary, focused more on offering price discounts to its consumers. The locals, however, did not find that strategy any appealing. Locals preferred to have even salespersons offering product descriptions to the consumers as the consumers went about their shopping. Wal-mart could not achieve this marketing strategy since it sold its goods in boxes (Kim, 2008).
Considering the two flaws with Wall-Mart, this paper suggests what Wal-Mart would have done differently. First, the company would have made good use of local distributors who had a better understanding of the local customer culture (Keegan & Green, 2015). During the market entry strategy formulation, the managers at Wal-Mart would have considered a strategy such as licensing and identify a local franchisee who would market the company locally (Keegan & Green, 2015). One significant advantage accruable from this strategy would have been that the local franchisee would understand and indeed follow the local consumer culture. The franchisee would be able to design the best product mix to keep Wal-Mart’s brand in the country longer.
Secondly, Wal-Mart would have chosen to employ a different packaging strategy or develop a new product following the needs-approach (Keegan & Green, 2015). While doing its product branding and packaging, Wal-Mart would have considered a different way of packaging, to have packaging booths in its Korean stores where consumers would witness their products packaged following their satisfaction (Kim, 2008). The aspect of packaging is, however, tied to Wal-Mart’s promotional strategy. On the same note, a new product all together would have favored the business. Developing a product based on the Korean consumer needs would increase sales as consumers would find what they desired in the stores (Keegan & Green, 2015).
Wal-mart, therefore, had a chance in the Korean market, had they followed a slightly different market entry strategy. The company would have better luck with the use of local partners, who would understand the local consumer needs better. The intellect from this local partner would inspire product design as well as promotional strategies essential to business survival.
References
Keegan, W. J., & Green, M. C. (2015). Global Marketing (8th ed.). Pearson.
Kim, R. B. (2008). Wal-Mart Korea: Challenges of entering a foreign market. Journal of Asia-Pacific Business, 9(4), 344-357. https://doi.org/10.1080/10599230802453604
Sang-Hun, C. (2006, May 23). Wal-Mart selling stores and leaving South Korea. The New York Times – Breaking News, World News & Multimedia. https://www.nytimes.com/2006/05/23/business/worldbusiness/walmart-selling-stores-and-leaving-south-korea.html