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lexi pens international businessTRANSCRIPT
International Marketing
Africa
Rahul AvasthyFor Lexi Pens Pvt Ltd
Vision
To be a global leader in business of writing instruments by 2020 - heightened sensitivity to consumer needs and aspirations, setting new standards in quality products and capitalizing on new business opportunities in our Industry.
Global pens/markers market is estimated at USD 12.3 billion
•China has a market share of 10 per cent * approx global writing instruments industry•China exports Rs 5,000 crore * worth pens every year, India barely exports pens worth Rs 200 crore *
•Entry of Reynolds through GM Pens India in 1990 •1500 cr growing at the rate of slightly above the GDP•Organized sector accounts for more than 60 per cent., •Gel pens in India estimated Market size 350 cr•Ink market where the unorganized sector has largely been wiped out – Major players : Chelpark, Camel and Parker•Terms of quality of pens, India ranks amongst the best in the world, well ahead of even China.
* Figure as of Dec 2007
Profit Margins Advertisement spend • Luxor plans to have an outlay of between 15 per cent to 20 per cent
of sales.• Linc's ad-spend is about eight per cent of its sales turnover and this
year would see a shift in marketing to more above-the-line activity
ObjectiveEnhance customer baseIncrease market penetrationEvoke market potentialStrengthen product promotion
Large continent, 53 countries
Internet is not very widely used.
Increase in the number of educational institutions as well as commercial organizations -> Demand for stationery products has registered a two-fold increase in most East African countries
Average South African household income R5 633,51 per month - Survey 2007
6/10 have cell phone
Cash CustomersRepeat orders
Buy in bulk from suppliers retail selling in their own countries
The liberalization of the Kenyan economy
Many non-government organizations and UN offices operating from within Africa, greater emphasis on education and vocational training, demand for stationery and related products has witnessed a substantial rise
27% increase – stationary
Environmental influences oninternational marketing
Socio/Cultural PoliticalLegal
TechnologicalEconomic
Africa - Socio/Cultural
• Region : World's second-largest and second most populous continent, 61
territories, 53 countries• Population :Over a billion : 14.8% of the World's human populationSome states with more than half of the population under 25 years of
age• Climate : tropical to subarctic on its highest peak• Language :4 major language, English & French• Sports : Football & Cricket• Religion : Islam, Christianity, Hindu• Afropolitan ; Black Proud ;
Africa - Economic– Economy • World's poorest and most
Underdeveloped continent• Rate of economic growth
increased averaging 5% since 2005 • Human rights violations, • Lack of central planning, • high levels of illiteracy,• Liberalization• Lack of access to foreign capital,• Rich in Natural resources• Bottom 25 ranked nations (151st
to 175th) were all Africa• Chinese companies invested a
total of US$1 billion in Africa
•Per Capita Income
South Africa $10,270Central African Republic $1,080Sub-Saharan Africa $1,770Middle east&North Africa $5,700
*South Africa, Tanzania, Tunisia, Algeria, Kenya, Morocco, Egypt, Mauritius, Zambia, Ghana
Internet36 countries – active capitals11 countries – active online43 countries – reach
Competition
• Dubai- Already developed extensive network of retailers- Geographical proximity to the East African coast ,low freight- Well developed warehousing and stocking facility and, of
course, a reputation for reliability- Low import duties and direct supplies form manufacturers in
the Far East and China- Excellent shipping connections- UAE’s trade with Africa has more than doubled in the
past two years.- Jebel Ali Free Zone - of Rwanda, Congo and Tanzania Low
prices, easy availability.
METAL CORPORATE
Lexi Pens : Quality for a good priceAffordability and ease of writing
Entry barriers
• Cartels on transport prices• Low transport quality (breakages) across country borders• New players(Transport) not entering the market • Customs regulations• Market access restrictions• Restrictions through freight sharing schemes• Corruption• Restrictive practices, such as air transport agreements• Supplier agreement• Freight Sharing Schemes• Queuing system for delayed transport
BTL Activities• School Lexi play programs• Direct Mail• Consumer Competitions• Promotions• Sponsorships• In-Store Displays
Brochures• Trade Marketing• Public Relations
•Sales aids and presentations•Promotional gifts and corporate clothing•Loyalty programs•Interactive devices; scratch cards, mystery discounts, keys etc.• 'product amplifier'.•B2B Corporate Segment – For gift and customized writing instruments purposes becoming attractive•Seasonal demand drivers - Schools and examinations, Gifting Occasions
•Visible commitment from senior company management and the board
of directors.
•Initial launch and communication campaign of the products.
•Ongoing and appropriate awareness and marketing initiatives.
•Conformity to delivery time (10 Days)
•Commitment to follow up and investigate tip-off reports as well as to
conduct appropriate follow up and corrective action.
•Quality of the product
•Balance between conformity and creativity
•Aligning the initiative with the values and ethos of Lexi Pens.
Critical Success Factors
Winning Strategy
Linear model of the negotiation process for African Continent
Non-task sounding
Task-related exchange of information
Persuasion
Concession and agreement
• Non-tariff barriers exists in spite of liberalized economy in few countries
– Tariff information - (SAFTO),– Import tariffs? South Africa’s import tariffs range from 0-45%– Import surcharges are assessed on the customs value– Import permit is required– Certificate of Origin required to export product– Customs and entry procedures
• Basic documents required for shipments to South Africa include: 1) A commercial invoice which shows the price charged to the importer in addition to the cost of placing goods on board ship for export; 2) Bill of Lading; 3) insurance documents; and 4) Packing list.
• An agent is highly recommended, but not required
Tariff/Non Tariff Barriers
Stakeholders of Lexi pens
ShareholdersHome country government
Individual politicians and civil servants
Host country government
Local workers and their organisations
Expatriate staff
Suppliers
Distributors & retailers
Customers
Local competitors Competitor
MNEs
Pressure groups
Social Media in Africa
• Mobile Penetration : The average is 30.4% and there are 280 million subscribers in total.
• Afrigator (a South African aggregator of African blogs and news)• Zoopy (a YouTube/Flickr like service also out of South Africa)• Ushahidi (an SMS crisis reporting and mapping engine from Kenya)• Muti.co.za (a Digg-like South African news site)• Sokwanele.com (an SMS/mapping application similar to Ushahidi)• Amatomou (a South African news and social media aggregator)• BlogSpirit (a Ugandan blog aggregator based on the open source
Gregarious)• Mzalendo (portal for tracking the actions of Kenya's Parliament)
• Outdoor: 25 capital cities, 300+ sites• Outdoor: 200 banner boys, kiosks• Credit card loyalty Bonus pens • On Ground - Coffee shops – discounted coupons exclusive
pens• Signature Analysis Kiosks• Frequent flyer – Mileage points premium pens• Youtube Virals• Online Promotions – Orkut, Facebook• Radio Promotions• ON Air Promotions – Kids show, News channels
Thank You
Company
Microenvironment
Macroenvironment
Legal
Physical
Technological
Social
Economic
Suppliers Customers
DistributorsCompetitors