Example Of Case Study On Hayat Kimya Case Study – Marketing
1. In 5 years time Hayat Kimya aims to be the market leader. What should be the market entry strategy?
The choice of entry mode of the company to the market depends on external factors such as cost, risk and degree of control over the process. As of December 2014, Hayat Kimya exports its products to 69 countries in five continents reaching consumers around the world. It has operations in Turkey, Iran and Russia and plans to invest in Egypt, Kazakhstan, Algeria in 2016, and Nigeria in 2017. The company has also been conducting feasibility studies for entering markets in South Asia, such as India and Pakistan in five years. Investments in Iraq are on the agenda as well.
Currently, Hayat Kimya uses glocalization strategy adapting to local needs and cultures, while moving parallel to the global branding strategies.
In order to become the market leader, the company is recommended to use foreign direct investment entry mode, which provides the highest level of control that the company can have when entering a foreign market. There are two methods of FDI. Firstly, the company can create a new company in a foreign market. This method requires the greatest cost, because the company needs to create new contacts and sales channels, select a location for the new company, hire employees and purchase equipment. Secondly, the company may acquire existing foreign companies. In this case, the company only needs to make a change in the organizational structure of a foreign company. Bearing in mind a number of advantages over other methods of entering foreign markets, the company can fully determine the marketing and sales policy. This can be especially important, because Hayat Kimya should start to apply standardized approach – from limited standardization (often only a standard element in this case is the logo) to limited unification of key elements and standard version with some modifications. FDI entry mode also enables more effective price competition, as if the goods produced in the country of sale, it is not necessary to bear transport costs as well as costs associated with tariffs. Finally, the company has direct contact with their customers in the foreign market, and hence, can better meet their needs, which increases its competitiveness.
2. What should Papia and Familia do to increase “Per capita tissue consumption” in Egypt?
Research reveals that in Muslim countries because of beliefs, people do not use toilet paper. Instead they use water. Some use water first and then use toilet paper for drying up. The differences affect per capita usage amounts. However, in order to increase per capita tissue consumption in Egypt Hayat Kimya should remind its consumers the historical fact that first tissues appear in Egypt and were fig leaves. Also, it is necessary to stress on the functionality of product. One advantage of using tissues is their diversity. Tissues can be in a variety of colors, with different patterns, tinted, embossed, one, two and three-layers, with different number of sheets (or pieces) in a pack of different sizes. Original tissues help secure individual or corporate style and emphasize the exquisite taste of the hostess. Tissues are very useful, for example, as make-up remover or dry hands. Tissues are needed at home, in the office, on the road, in the city, etc. They will be used everywhere. In addition, Papia and Familia are recommended to use complex sales in stores. The task is through common efforts to create a business, a project, a kind of solution that will be acceptable in this situation for the buyer. The thing is that this decision should come mutually by both seller and buyer, applying equally to this effort. Finally, due to the increase in e-commerce it is necessary to inform customers about different company’s modifications and promotions.
3. How can you segment the tissue market in Egypt for Toilet papers, Facial tissue / handkerchief and the rest? On which segment should Hayat Kimya focus?
Toilet paper and kitchen towel products are mainly evaluated on performance based benefits such as softness and absorption. Consumer expects better absorbency, resistance and softness. Contrarily, facial tissue products (polyethylene, box) are preferred for use & throw occasions.
Thus, Hayat Kimya should use differentiated marketing, the decision to enter several market segments and break for each individual proposal. Due to strengthening positions in several market segments, it will be able to identify in the minds of consumers the company with this product category. It is known that the overall quality of life in Egypt is quite low; and economic resources of the country are limited. Egypt’s population is growing steadily every year. The average income per capita is about $1000 a year; however, this does not exclude the presence of a large number of people whose incomes are average or even below average. Today, the Egyptian authorities are trying in every way to help the poor but, in practice, most of the benefits accrue to the middle class. In addition, it should be noted that here for the past few years, Egypt has no stable currency, which would bring confidence to States. That’s why the target audience for all company’s products can be Premium (in case of cooperation, for example, with luxury hotels, where customers prefer to use the products of high quality) and middle class, because poor people cannot afford to buy expensive goods.
4. Do you think Papia’s brand strategy, positioning, and identity in the Turkish market can be extended to Egypt? Why or why not? Can you answer this question by using a framework (an approach, guideline) you learned in class. Please explain your reasons in detail.
The creation of the concept of brand is affected by different factors. From a psychological portrait of the target audience to the possible prospects of development of competitive brands, including pricing, rational benefits (or lack thereof), and all that affects the state of the market in which the product will be presented. An important factor of successful brand strategy is to understand the specific strengths and features of a separate area to create an emotional attachment to the target markets (investors, residents and tourists). The concept of positioning is closely related to market segmentation and target market. In general, brand positioning is influenced by attractiveness of the brand, pricing, features of the market or the product itself. Hayat Kimya uses glocalization strategy. That’s why, despite the fact that both countries are Muslim countries, they have dissimilarities in the culture of consumption. Papia is positioned in Turkey as a Premium brand. Its brand promise is to make people, particularly its target market of highly demanding, always seeking quality, strong, successful, high income women, feel special. With a huge trade deficit and export with limited resources, Egypt has a policy to protect the domestic market and import restrictions. Limiting imports and encouraging foreign investment, the Egyptian government has a policy of localization of created industries. Investment and expanding production capacities in the African market shall increase the market share significantly. The target is to act as a local supplier and to directly serve the demand in this important market. The demand in domestic market in Egypt increased after the country’s population growth.
5. How should they position Papia and Familia brands in Egypt?
Brand strategy in Turkey is concentrated on the functional and emotional benefits, while Egyptian market requires utility. A prime concern for the home-care segment and positioning the product with such parameters as the comfort and quality requires Hayat Kimya to provide constant results on long term basis so that the company is able to build the brand equity and customer loyalty. If the positioning of the brand is well justified by the company with sincerity the increase in customer level is significant. In the world of similar products and services retaining customers is not easy and therefore Hayat Kimya as a brand has to strive harder to get to the top home-care positioning. Papia should be positioned as the perfect brand of softness and absorption of high quality, which is appropriate both for delicate consumption and everyday use. Familia should be positioned as the best option in “value for money” family segment.
6. How can the local culture affect the brand strategy and positioning?
Ceteris paribus brands identified with the local culture have a greater chance of success than their competitors. Despite the fact that the association with the local culture has less effect on the probability of purchase, than the perception of the brand as high quality or leading, nevertheless such identification is a positive factor in stimulating purchases for all brands – local and global. In this case, local brands are valued much higher than their global competitors in regard to membership of a national culture. And although local brands can come short of business acumen and strong financial support to transnational brands, their advantage is that they play “in their field”. The influence of local culture means that the combination of the product, its positioning, distribution and communication strategy that have made the brand a successful in one country may require adjustments to the alignment with consumers in new markets. Of all these elements, communication is probably more influenced by other cultures. Even countries with a common language and similar socio-economic conditions are separated by cultural reference points, humor and idioms.
With the growth of cultural diversity, marketers have to pay more attention to the local way of thinking, perception and actions. Companies, which have come too far in the uniformity of its global brands, may be ill-prepared for such a development. They may not have alternative proposals, and to hold the positions they can take advantage of their scale. However, such an advantage in scale to be really essential to beat the competition in emerging markets. Quality and price will not give such an advantage, but only effective innovation and marketing combined with a deep knowledge and understanding of local conditions.
7. How can toilet paper and kitchen towel share be increased in a market where polyethylene handkerchief segments are significant and dominant? How can polyethylene and box facial tissue products be differentiated?
First of all, an appropriate advertising campaign, which demonstrates advantages of toilet paper and kitchen towel, should be launched. Currently, polyethylene is the most familiar and convenient for most items. Strength, integrity, aesthetics, visual control of packaged goods through the transparent surface and the relative cheapness are the qualities that make the plastic bag practically indispensable in many areas. However, finished products made of polyethylene, being a long time in the state of stress, can crack. Also, the period of decay is about a hundred years. In nature there are no bacteria or animals able to handle this material. Tissue products are made from natural raw materials, easy to decompose under natural conditions, may be subjected to secondary treatment or recycling. If tissues products are made correctly, they can replace business cards! Consumers remember the information posted on them, on a subconscious level. Usual and customary hygienic cellulosic materials are transformed into an excellent tool of non-aggressive and subtle advertising. Towels can be used for drying hands, cleaning, packaging, cooking, drying meat, fish, fruit, vegetables before cooking or freezing, to remove the oil. Tissue products are perfect for serving and decorating the holiday table, as well as for everyday use.
8. What should be the product mix in Egypt? Please provide a detailed justification.
The goal of much of business strategy is to achieve a sustainable competitive advantage that allows the maintenance and improvement of enterprise’s competitive position in the market. By conducting product development operations around the world, manufacturers have the opportunity to reduce time-to-market and gain competitive advantage. This is reached by companies’ ability to balance their inputs and outputs effectively.
The product can be used as a competitive advantage when the company has well-known brand and strong positive reputation. In this case different goods provide the company with reliable sales and profit growth and ability to outrun the rivals. Hayat Kimya products are tissue napkin, paper towel and toilet paper categories for different socioeconomic segments.
Prices are always set in order for a company to be successful and reflect its objectives and market conditions. Businesses that are well established with easily recognizable names are often the ones to set the standard prices within the market. Businesses that are not as recognizable and can’t as easily gain new customers have to set lower prices in order to attract people to purchase their products. If businesses wish to increase sales and win customers from competitors, they have to produce good products and price their items lower than the competitor. This is just one of the many ways in which prices are set by an organization’s objectives and market conditions. Hayat Kimya pricing strategy in Egypt should be reasonable. It is recommended to reconsider some segment’s prices in order to make them cheaper. This will allow the company to attract additional customers, who will share experience by word of mouth. Testimonials are very effective service marketing tool, because they are practical and confirmative or disconfirmative. Also, the provision of discounts will give the company an opportunity to reach defined market segments.
The companies develop proper distribution system because accessibility of the customers enhances the potential sales for it. Depending on the nature of the product, marketing management decides to put into place an exclusive, selective, or intensive network of distribution, while selecting the appropriate dealers or wholesalers. The right choice of these factors can give a company some competitive advantage. Consumers would buy any substitutes that are more conveniently available. Hayat Kimya should carefully choose partners because Egypt has a policy to protect the domestic market and import restrictions.
The promotional activities have been considered as a significant contribution to convince customers to make a decision that benefits the marketer. One of the promotional activity campaigns is the advertising that is the quickest way to introduce new products to customers. Despite the fact that the company prefers TV commercials, it is recommended to concentrate its efforts on Internet-marketing. The Internet makes it possible not only to address the advertising message right to target group, but to see the real-time response to this message. Moreover, control this reaction, changing the advertising message for maximum effect.
Kotler, Philip and Armstrong, Gary. Principles of Marketing. New Jersey: Prentice Hall. 2013. Print.
Grewal, Dhruv. M: Marketing. New York: McGraw-Hill/Irwin. 2014. Print.
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