When entering into international marketing, Canon will have many both advantages and disadvantages. When expand the business, company can enlarge their operation areas, but Canon must faces with the new market that have many competitors such as HP, Brother, Lexmark, etc. What’s more, Canon can sell the product with cheaper, because there are more raw material such as glasses, metal, plastic, etc in the other countries, and they can buy it very easy, besides the human resources in the growing country is very cheap.
Therefore, Canon can reduce the cost that they must include in the product. Furthermore, the negative is necessary adaptations to the product will diminish the effects of economies of scale. The adaptations is very important, it will decide the success of Canon in this country. For example, with the market that people with high income, Canon should introduce the newest and best product like SELPHY. However, with people who have average income, Canon should give the product like LBP 3250, besides company must control the price to suit with the demand of customers to have more profits.
The differences in International marketing environment Canon continued to step up sales promotions in countries and regions recording strong growth, such as China, India and Vietnam (scenario). Cultural: Although India is a traditional society, but business activities in India is compliance with international trade practices. The vast majority of Indians have the necessary skills such as language (English is widely used in communication such as speaking and writing), management skills, the technical and the presentation skills. The on time is not the most powerful of Indian. By contrast, Chinese are very serious in the on time. They are never waiting if people are not on time. The main language of China is Chinese, and the secondary is English. When people want to give the card name, they should have both languages in two sides of the card.
Economic: India and China has the stronger economic process than Vietnam. India’s gross domestic product (GDP) grew by 7.9 per cent during July-September 2009, up from 6.1 per cent in the previous quarter, as per data released by the Central Statistical Organisation (CSO). Overseas investors have infused US$ 816.69 million into the stock market in the first trading week of 2010 (Government of India, 2009).
The Chinese economy is one of the fastest growing economies in the world. China’s gross domestic product (GDP) is projected to reach $2.3 trillion and $4.7 trillion by the end of 2010 and 2020 respectively. FDI in the Chinese economy have increased from $40.7 billion in 2001 to $70.3 billion in 2007 with investments primarily in the manufacturing sector (chinastockdigest, n.d.). In the table 1, the average growth of real GDP over fifty years of India generally increase about services and decrease about agriculture. However, in the table 2, the GDP of India is higher than Vietnam and ranking six positions. China is still the strongest economic in the Asian. On the other hand, the economic of these countries are also impacted by world economic crisis such as inflation, unemployment, etc.
Political: In 2001, China become the member of WTO, the Government of China has given many policies for business such as decreasing the tax of import and export. In 2006, the import tax is smaller than 10%. However, in 2001, this tax is 15% (mquiz, 2006). On the other hand, India has been a WTO member since 1 January 1995. The WTO Secretariat report, along with the policy statement by the Government of India, will serve as a basis for the third Trade Policy Review (TPR) of India by the Trade Policy Review Body of the WTO on 19 and 21 June 2002. Policy in the agriculture sector has been guided by domestic supply and self-sufficiency considerations. Thus, the sector is shielded through import and export controls, including tariffs, state trading, and export restrictions and, until recently, imports restrictions. The result of this policy has been a substantial increase in stocks to unsustainable levels and the costs associated with maintaining these stocks (WTO, 2002).
Technological: India has 13% of internet users in Asia and 7.36% that of the world. But the sorrowful fact is only 5.3% of people in India use internet. The reason of this is most of the people in India don’t know computer. 70% of people who know computer have used internet which is a healthy sign. 85% of internet users in India are male which not a very good sign is. Among working women, only 11% use internet. Mumbai has the maximum number of internet users (3.24 million) in India followed by Delhi (2.66 million) (Rameshjeee, 2008).
By contrast, there are now an estimated 137 million Internet users in China, China to overtake US in number of Internet users in 2009 (Reimer, 2007). Therefore, Canon India bets on new technology and range expansion to gain leadership in Printing Industry. Company launches 24 new products, expands range to 67 IT peripheral products from its printing division, increases market share of laser printers to 41% and registers growth of over 58% in 2009 for its printer division, introduces the new ISO international standard of “Images Per Minute ” for India, deepens foray in the growing surveillance and security space (Canon, 2009)
Competitive: China’s potential market is large, but its actual domestic market is quite limited. Foreign investors entering China soon realize that local competition can be tough and that there are many barriers to expanding market share. With China’s accession to the WTO almost certain, market access should improve in the future (Dorn, 1999). Besides, the competition in India is the problem. However, Canon India Private Limited, India’s No.1 Complete Digital Imaging Company today announced its leadership in the Laser Printer category in India.
The IDC Report pertains to the Third Quarter of the Calendar Year 2009 which specifies that Canon holds No. 1 position in the laser printer category across the nation. The latest IDC report of September 2009 pegs Canon’s market share at 41% in the single function laser printer category. Over the last 18 months Canon’s laser printer business has steadily grown and expanded its reach across the nation with its 18 products which has resulted into this milestone figure. Canon’s focus on this category resulted in the growth in this category from 13% in 2008 to 41% in 2009 (Canon, 2009)
The differences in elements of Marketing mix in International marketing Product: In China and India, Canon still standardizes the product according to the total quality management. Besides, Canon tries to adapt the suitable product for each country. Canon’s laser printers enjoy 41% market share in India as on July 2009. Laser printers have contributed significantly to the 58% growth of Canon’s printer business (Canon, 2009). What’s more, Canon India uses straight extension (no significant change is made) in approaches of adaptation. Because, set up in 1997, Canon India markets have over 140 comprehensive range of sophisticated contemporary digital imaging.
Furthermore, Ever since Canon Malaysia was established in 1987, it has become a major corporate player in Malaysia. Focused on the objective of providing excellent products and support to Malaysian users, Canon invested considerable time and effort in developing channels to access the market. Obviously, Canon succeeded extremely well and after celebrating its 20th anniversary in 2007, Canon in Malaysia has now more than 20 years of success, 20 years of non-stop product launches, 20 years of commitment from employees, 20 years of support from customers, 20 years of passion and drive from business partners. Canon is committed and will continue to strive to become a household name and a leading brand, sought after for its quality and reliability in products and services (Canon, 2009).
Place: Canon has many international distribution systems and retailers. Canon today has offices in 7 cities, warehouses in 11 cities across India. Canon products are available in over 300 towns in India. Overall Canon’s presence is expected to increase to 4000 outlets by December 2009 (Canon, 2009). Moreover, Established since 1987, Canon employs more than 500 staff who deliver products and service support to Malaysian users directly and through its nationwide network of channel partners. Its parent company, Canon Inc., a Fortune 500 Global company, is dedicated to the advancement in technology and innovation and commits 10% of its total revenue each year to R & D. Canon’s operations globally (Canon, 2009)
Pricing: The price of Canon product gets the price right to suitable with the location and the income of people in there. In India, the price of LASER SHOT LBP5050 is INR 21,995.00, by contrast, in Malaysia the price of LASER SHOT LBP5050 is RM 1,199.00, and LASER SHOT LBP3250 is RM 1,100.00. However, the price of LASER SHOT LBP5050 in Vietnam is VND 8,170,000.00. Compared the prices, Canon tries to control to unite the price. Because of the exchange rate, the transportation and other expenses, so the price of product in countries has different but a little bit. What’s more, Canon India closed 2008 with revenue of Rs. 665 crores, which marked 31% growth over 2007. Overall, Canon expects to touch revenue of more than 800 crores in 2009 (Canon, 2009).
Promotion: Canon has the traditional philosophy is kyosei. Every policy and decision made in Canon is highly influenced by its corporate philosophy of kyosei. Simply put, kyosei means living and working together for the common good. It also encompasses Canon’s desire to develop a society in which everyone can enjoy happiness and fulfillment, regardless of differences in culture, customs, language or race.
Canon aims to contribute to the prosperity of the world and the happiness of humanity, which will lead to continuing growth and bring the world closer to achieving kyosei (Canon, 2009). What’s more, the slogan “Delighting you always” of Canon always appearances in the advertising of Canon in many countries. Canon has applied sales promotion and sponsorship not only in Vietnam, India, and China, but also company want to bring the Japan technology to customers in the world.
In conclusion, marketing mix play an important role in the marketing process of business. The success of marketing cannot without marketing mix. Normally, marketing mix has four elements includes: Product, place, price and promotion. However, because of the economic development, there are many competitors in the market. Therefore, Canon not only uses four basic elements, but also the three additional elements were added to make extended marketing mix (7 Ps) includes: People, process and physical evidence. What’s more, there are many differences between consumer market and business to business market that Canon must know to segment suitable product for each market. On the other hand, the international marketing has differed from domestic marketing. But business must follow the standard of Canon, and adapt to the location.
1. tutor2u, no date. Strategy – competitive advantage. Available from: http://tutor2u.net/business/strategy/competitive_advantage.htm [Accessed February 6, 2010] 2. R. Duermyer, (2010). Competitive Advantage. Available from: http://homebusiness.about.com/od/homebusinessglossar1/g/competitive_adv.htm [Accessed February 6, 2010]