Essay: Automobile and motorcycle production

Chapter 1 Introduction of the Study

1.1 Introduction:

Since last decades, a rising number of key industries throughout the world such as automobile and motorcycle production, agricultural equipment, aerospace, military hardware, telecommunication, information technology, electronics and luxury consumer goods have become universal in scope. Organisations in these businesses originate, produce, compete, and market their products globally. In 1992, it was seems that more than 50% of total revenue came from overseas operations. For example, Nestle account nearly 80% of total revenue came from overseas sales (Camel, 1993). Products developed by international competitors have now penetrated almost every market in the free world and some of the examples are here: 39% of Japan’s total exports, 36% of Korea’s, 81% of Canada’s, and 87% of Mexico enter into the United States (Rider and Weinberg. 1998). Same ways, Multinational U.S. companies in various industries such as in aerospace, computer equipment, oil fields machinery, medical equipments, and chemicals, were exported to a significant percentage of their products into the overseas market worldwide the rest of the world (Camel, 1993).

To convert global challenges into new opportunities into the emerging international market, international organizations are realizing that the key to growth and survival is the continuous development and introduction of new products in the untouched market (Keegan, 1989). However, the challenge facing a multinational organization is to develop a new product policy and strategy that is sensitive to international market needs, competition in the particular market, and company resources on a global scale. Douglas and Craig (1992) noticed that many multinational corporations are already engaged in international markets and therefore for them just have to take decision of launch new product in the virgin market as they have an existing network of international operation. For small and medium size organizations those who have not yet entered in the global markets, entry decisions for new market is vital factors for development of way to globalization.

There are two main problems that might be face the organization in their decisions to launch the new product in the global market. The first problem is the degree of standardization of the product across different countries as they have different culture and economy level, markets growth rate and size and the other elements of the marketing mix (Jain, 1989; Cavusgil, Zou and Naidu, 1993; Harris, 1994). The second is mode of entry strategy choice in the new international market. According to Douglas and Craig (1992) “attention needs to be paid to the timing and sequencing of entry into international markets relative to competitor moves and the stage of market development. This should include assessment of factors impacting the choice of incremental vs. simultaneous entry into different country markets”. This problem regarding the mode of entry strategy as well selection of target market is most important. At a time, it is impossible to cover whole market of particular country and mass market so necessary to isolate the one potential geographic area and serve better compared to existing players. Simultaneously cover the market and increase the geographic area for marketing and reach to more customers (Agarwal and Ramaswami, 1992; Pan and Tse, 2000). Therefore, an entry strategy in international markets also part of market environment scanning and analysis.

Selection of the best countries to introduce the new product, the sequence of tactics and in which these countries should be approached. The timing and mode of entry into these markets is very important for any organization and success is depends on this factors (Douglas and Craig, 1992).

With growing demand for higher lifestyle category products and increased affordability, the Fast Moving Consumer Goods (FMCG) industry is poised to clock a 16 percent growth in sales during 2008-09 compared to 14.5 percent in the last fiscal. The survey conducted by Federation of Indian Chambers of Commerce and Industry (Ficci) predicts the value added and aspirational products that spurred the sector growth last year would drive the growth further in fiscal 2008-09 (Nielsen, 2008).

The hair care market in India is estimated at around Rs. 3,800 Cr. The hair care market can be segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels as well as hair spray. Marico is the leader in Hair care segment with market share of ~ 33 per cent; Dabur stands at second position with 17 per cent of market share (Euromonitor, 2009). The sectors projected to achieve excellent growth of 20 percent and above during 2008-09 are shaving cream (23%), skin care & cosmetics (20%), skin/fairness cream (22%), tooth powder (22%), shampoos (21.3%), anti-dandruff shampoos (23%), hair dyes (30 %),

hair care (30),

cleaners/repellants (25.2%), deodorant (40%) and dish wash (21%) (Economics, 2009).

Hair care market segment is at a primary stage and not many local brands are available in India. Hair gels/creams as well as hair spray are mainly used for hair grooming by men and is used as a fashion accessory. The market penetration of hair spray is very low, and is limited to a small section of the urban market.

Consumers’ preferences are shifting towards higher lifestyle categories like skin care, shampoos, deodorants, anti-ageing solutions, fairness products and men’s products in particular. The sector has witnessed the launch of 251 new products last year. With the entry of new brands, this sector is expected to register a 25% growth next year, predict industry analysts. Today, consumers are ready to experiment with new hair care brands in order to look good. The penetration level of hair care products has increased in the last two years (Bhattacharya, 2008).

The hair care market in India is going through a major paradigm shift, and the change is evident by consumer behavior and the speed at which marketers are introducing new product categories and services. Since 2000, the hair care usage patterns have been changing, resulting in an impressive growth rate for the hair care industry. There is increased awareness among all levels of consumers, and mate consumers also have evolved as a category (Economics, 2009).

What was once considered to be an occasion-linked beauty regimen has now become a consumer way of life. The traditional hair care and hair styling methods are changing, which means that buyers are now ready to accept newer product categories. With globalization and greater purchasing power, consumers are willing to pick up higher-priced brands (Euromonitor, 2009).

The food and drink retail sector represents the largest industry in the UK, providing employment for over three million people in primary production, manufacturing and retailing. In 2003 retail accounted for 9% of gross domestic product. In recent years UK supermarkets have come under increased scrutiny over their treatment of suppliers, particularly of own-label products, yet the development of strategic supply networks has been an integral part of most supermarket strategies for the past decade (Datamonitor, 2003).

Tesco is the third largest grocery retailer in the world, operates in 13 markets with 3,728 worldwide stores employing over 440,000 people and reported group sales of £51.8 billion for 2008. Tesco is listed on the London Stock Exchange and the majority of revenue is currently UK based hence why this paper focuses on UK data sources. The UK is the company’s largest market, where it operates under four banners of Extra, Superstore, Metro and Express (Tesco plc, 2008d). The company sells almost 40,000 food products, including clothing and other non-food lines. The company’s own-label products (50 percent of sales) are at three levels, value, normal and finest. As well as convenience produce, many stores have gas stations, becoming one of Britain’s largest independent petrol retailers (Tesco Plc, 2008c).

1.2 Historical background:

Tesco was founded by Jack Cohen in 1919 when he began to sell surplus groceries from a stall in the East End of London (Tesco Plc, 2005). The Tesco brand first appeared in 1924. The name came about after Jack Cohen bought a shipment of tea. He made new labels using the first three letters of the supplier’s name (TES), and the first two letters of his surname (CO), forming the word "TESCO" (Tesco Plc, 2006). The first Tesco store was opened in 1929 in Burnt Oak, Edgware, Middlesex. Tesco floated on the London Stock Exchange in 1947 as

Tesco Stores (Holdings) Limited

(Wikipedia 2008). The first self service store opened in St Albans in 1951 (still operational in 2008 as a Metro), and the first supermarket in Maldon in 1956 (Tesco Plc, 2007). During the 1950s and the 1960s Tesco grew organically, but also through acquisitions until it owned more than 800 stores. The company purchased 70 Williamsons stores (1957), 200 Harrow Stores outlets (1959), 212 Irwins stores (1960), 97 Charles Phillips stores (1964) and the Victor Value chain (1968) (Tesco Plc, 2003). In 1977 Tesco launched "Operation Checkout" with the abandonment of Green Shield stamps, price reductions and centralised buying for all stores. The result was a rise in market share of 4% in two months (Hogan 1998). In 1987, Tesco completed its hostile takeover of the Hillards chain of 40 supermarkets in the North of England for £220 million (Tesco Plc, 2008b).

The company took over the supermarket chain William Low, successfully fighting off Sainsbury’s for control of the Dundee-based firm which operated 57 stores in 1994. In July 2001. it became involved in internet grocery retailing in the USA and in October 2003 it launched a UK telecoms division, comprising mobile and home phone services, to complement its existing Internet service provider business. On 14 July 2007, fourteen Tesco stores across the UK were temporarily closed after a ‘bomb scare’ and a criminal investigation launched after threats were made (Tesco Plc, 2008).

TESCO: GROWTH IN TOUGH TIMES (Tesco Plc, 2009)

53 weeks ended 28 February 2009	2008/9	Growth vs 2007/8
		53-week basis*	52-week basis*
Group sales (inc. VAT)	£59.4bn	15.1%	13.5%
Group revenue (ex. VAT)	£54.3bn	15.1%	13.4%
Group trading profit	£3,090m	12.4%	10.9%
Underlying profit before tax	£3,128m	10.0%	8.8%
Group profit before tax	£2,954m	5.5%	4.3%
Underlying diluted earnings per share+	28.92p	11.0%	9.7%
Diluted earnings per share	27.31p	2.6%	1.5%
Dividend per share	11.96p	9.7%	9.7%

This research is designed to answer the questions, what are the main problems to be face by Tesco to launch a hair spray in India. Tesco PLC has entered into an exclusive franchise agreement with Tata’s Trent and it intends to develop a wholesale cash-and-carry business in India, with an initial investment up to £60m in the first two years(UK India Business council).Tesco already sources over £170m worth of Indian products each year, with sourcing offices in Delhi, Bangalore and Tripura. It also employs nearly 3000 Indian staff at its Hindustan service centre in Bangalore, providing IT, Financial and Business service to the entire Tesco Group (YouGov, 2008).

As the manager of the Tesco our company always try to create a new product in a new place to expand their business. So at the time the target is given to the researcher to launch the hair spray in India. There are number of Tesco branches in India. So we always try to launch a new product in that place. And it is also a big population country. So there is a much scope of the new product in that area.

Now it’s a very modern world .everyone is very conscious about their health and beauty. And the hair spray is the part of the skin care .and it’s highly demand in the whole world. And it’s a big market in whole world. And it is a huge margin of the profit in that field as well. Now a day’s lot of people are worried about their hair. So if we launch this product it will be more beneficial for our company. Especially in the last decade the demand of the skin cares very high. People spend a lot of money on the skin care. For product development, the company can create new product in its own laboratories or it can contract with independent researchers or new-product development firms to develop specific new products or provide new technology (Stephen, 2007).

As we know India is the big population country. Its population is nearly 1.5 billion. India is a young country with 11 crore people in the age group of 15-19 years. Another 10 crore are in the 20-24 year age group, whilst a whopping 72 per cent of our massive population is below the age of 35 (Euromonitor, 2007). So, the obvious inference is that a marketer ignores this huge potential at one’s own peril. But neither can we ignore the nuances of this not so homogeneous mass and its preferences. The world over, marketers are grappling with the tremendous challenge and opportunity that is simultaneously being provided by this generation. Automakers in the West, for example, are targeting youth aggressively. What should we do here in India to harness the enormous potential of youth? What works and what not?”( Steenkamp , 1999). India with its large population and significant bias to the younger age groups has the largest child and youth market in the world. In 2000 there are 340 million under theage of 15 years and is projected to increase to 335 million by 2020. This compares with the next largest such market (China) where the numbers are 298 million and 242 million respectively (Euromonitor, 2007).

So as a big population country its big scope of the new product launch .it’s good economy and the good market as well. In this recession period only few countries are not much affected by the recession and India is the one of the country. So our investment is much save then the other places. As a big population country our selling will be more that make a good profit as well for our company. Tesco is the already part of the Indian market and it make a good business there so try to maintain the level we have to introduced the new item all the times. Indian environment is very favorable for this product. As an international marketing managers, the importance of such decisions are increasing because the time it takes decision to bring the new products to international markets, various factors affects on the success of the business in the future as it becomes more critical due to the globalization of markets and competition. Therefore, the present study was planned to investigate the market situation and business environment in India for the hair spray product in India. This is also cover the competitors, its activity and their presence and market share of the hair care products in the present market.

1.3 Research objectives:

The aim of this research is to understand the characteristics of the firms and their product which determine the success of different type of strategy in sharing and using knowledge. Good marketers want insights to help them interpret past performance as well as plan future activities they need timely, accurate, and actionable information about consumer, competition, and their brand. They also need to make the best possible tactical decision in the long run (Kotler 2009).

The present research was planned with following objectives:

• To understand the awareness about Tesco brand,
• To scanning the environment for hair care products
• To understand the demand of the customer as well they are willing to buy a product from Tesco not
• To get the information the environment is suitable and fever able for this product.
• To studies the strategic issues regarding new product launch in the Indian market

.

1.4 Research questions:

Designing of the research questions is very important in the planning of any research. Questions should reflect on what the researchers going to find out and what is the purpose of the research. Answers of the questions are finding of the research. So good research questions is sign of quality of research. Kerlinger and Lee (2000) reinforce definition by noting that the purpose of examining relationship between two or more variables is to explain and predict the relationship between research questions and finding of the research. Gill and Johnson (1997) neatly tie these purposes of theory to their definition and it cover the proper research questions. All the questions are directly relevant to planned research. Questions are not very lengthy to make confusion, it should be simple and easy to understand. It is advisable to avoid the emotional questions during the planning of the research. And the research question is how Tesco launch a new product in India? The primary focus of the study will present how many people are interested to buy our product? And the secondary purpose will be examined how many competitor we have?

1.5 Research ethics:

The qualitative and quantitative survey if participants give a clear idea and written description of the purpose and intended outcomes of the research. During the collection of information the intended statement clearly mentioned that includes the purpose of the research and its importance. The research was carried out in very confidentially manner and no personal data declared to third party. The information gathered are used for this research and dissertation purpose and results expressed in the result part of this dissertation. Makes a small number of observations about what can be gleaned, overall from these studies and which areas might usefully benefit from the future research (Vitell, 2003). A social norm indicates the type of behaviour that person ought to adopt in a particular situation (Robson, 2002). The appropriateness or acceptability of our behaviour as researchers will be affected by broader social norms of behaviour (Zikmund , 2000).

1.6 Limitations of the Study:

The study was limited to a review of literature pertaining to new market entry into foreign market, strategic issue, market environment of retails industries as well as existing customers. The results of this study are representative of only randomly selected respondents and contacted them through internet. Due to time and cost constraints, the study was confined to very small of sample as primary data collection and mostly depends on the secondary data available as books, journals, research articles and internet etc. It’s an assumption of the researchers that the target population has some awareness about the haircare products and they are currently using one of the products available in the market. The randomly selected sample considered that they were interested in the hair care products as well as to know their awareness towards the brand Tesco. Public mind-set toward hair care products is complex and varies according to demographics within a country or outside the country (Jacob 1994). It is observed that Method used and small sample size, put restrictions on the confidence level regarding validity and reliability of the data collected. The design and content of the questionnaire may manipulate results. Public view research has shown that differences in terminology can source, different approach by maximum 20 percent (Hoban, 2004). The questionnaire in this study assessed awareness towards tesco’s products and their willingness to buy such products.

DETAIL OF THE CHAPTERS

This study is done in 5 parts. Details are given below.

1. Chapter-1: Introduction of the study including the rational, research questions, aims and objectives, ethical consideration as well as limitation of the research.
2. Chapter-2 Theory frame work on the strategic issue and marketing environment as well as Literature review.
3. Chapter-3: Research methodology. This chapter gives an insight of the research methods used in the study. To find out the result of the willingness to buy the haircare products.
4. Chapter-4 Data analysis and Interpretation. In this chapter analysis of the data is done, which are collected through questionnaire. Statistical analysis and graphical presentation gives further idea about the consumer willingness to shift to new products.

5) Chapter-5 Conclusion and Recommendations. This chapter provides a conclusion of the research. A theoretical representation of factors influencing consumer as well as possible solution of strategic issues on the basis of theory frame work.

Chapter 2 History and Theory Frame work

2.1 History of the Tesco and Indian Retail Market

2.1.1 Introduction (Indian Retail Market)

Retailing is one of the largest sectors in world. The nature of sector is dynamic and It is in a permanent position of change, and the pace of this change has been go faster compare to the last decade. In the concept of marketing retailing is closely related to the consumers rather than manufacturers. Retailers are the key point between consumers and manufacturers So from this point of view retailers are playing vital role in this sector (Fournier, 1998).

Retailing involves long buying decisions as its focuses on the product collection. Due to increase in the competition in the retail sector it is necessary for the retailers to have good relationship with each and every consumer. They have to maintain personal and customized relation with consumers. Retail sector become more customer oriented and different CRM strategies helps them. Detail information of the consumers, their behavior, preferences helps retailer in maintaining better relationship with the customers. What was once a simple way of doing business is transforming into a highly sophisticated form of management and marketing. Retail marketing consistently features more efficient, more meaningful and more profitable marketing practices (Myers, 2004).

Growth of the retail sector is high in the countries like India and china because of their immense population. There was a time when population was the weakness of India but now it becomes strength. Today retail, which is derived into organized and unorganized, is emerging rapidly as a big industry all over the world and hence, India is also not unaffected with this. So it is a necessary to know the current and the future trends of retail in India. For the third year in a row, India has topped AT Kearney’s annual Global Retail Development Index (GRDI). The Indian retail market is expected to grow from the current US$ 350 billion to US$ 427 billion by 2010 (Esomer, 2005).

This study will be stand on the latest retail trends being adopted by the companies, why the big brands are interested in this sector particularly. Of the current size, organized retail – or modern retail – constitutes only 3 to 4 percent i.e. US $8 billion (36,000 crore INR approx). The rest of the retail pie is crowded with unorganized retail – or the traditional shops. India’s retail market which is seen as THE GOLDMINE by global players, has grabbed attention of the most developed nations (Graiser and Scott, 2004).

Definition of the retailing can be summarized as under, “Retailing includes all activities involved in selling goods or services directly to final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing.” (Reynolds & Cuthbertson, 2004).

Retail is India’s largest industry, accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market (

Wright and Sparks, 1999)

The concept of shopping is changed in India now. It is not only traditional shopping. Purchasing pattern of the customers is become modern. Modern retail has entered India as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. India has one retail outlet per 90 people, one of the highest densities in the industry in the world. India is the 9th largest retail market, with annual sales in the organized segment at Rs. 35,000 crore in 2005 – with revenues doubling every year Reynolds & Cuthbertson, 2004).

Food, groceries and general merchandise, apparel, consumer durables, food services and home improvement are the top categories in the organized sector. Overall revenue, including those of small shops, is expected to grow 5.5% a year to Rs. 28, 70,000 crore by 2015 at current prices. The organized segment is expected to grow faster, at 21.8%, to touch Rs. 420,000 crore by 2015 (Euromonitor 2009).

The future of Indian retailing may even witness the concept of 24 hour retailing. Gurgaon, Delhi and Bangalore have already started operations up to 11 p.m. However this concept has been in existence in few retail segments like pharmaceuticals and fuel, it still not exists in other segments like food and groceries, apparel etc to adopt this trend. Even though the controlled retailing in India is coming up on a large scale it cannot just ignore the competition from the conventional stores because of various factors like reach, extending credit facility and other intangible factors like the human touch which are provided only by the conventional stores Clarke et al, 1994).

The major change came in the urban market is the mall culture and now a days it become trend for the retailers. The trends in the rural market also have been changing from the old Haats and Melas to the rural malls like ‘Chaupal Sagar’ launched by ITC, DCM Shriram Groups one-stop shopping destination called ‘Hariyali Bazaar’, Godrej groups agri-store ‘Adhar’ etc.

2.1.2 Tesco History

Tesco was originated in the markets of London’s East End, where in 1914, war veteran Jack Cohen began to sell groceries. The brand name of Tesco first appeared on packets of tea in the 1920s.Tesco PLC is the British based largest retailer in the international market and domestic market. This retail chain possesses the 3rd position in the world’s retail market just behind Wal-Mart and Carrefour. Tesco now controls over 30 % of the grocery market in the UK, approximating the combined market share of its closest rivals, Asda and Sainsbury’s (Tesco Plc, 2006).

In 2007, the supermarket chain announced over £ 2.55 billion (approximately Rs 196 billion) in profits. Initially it came with the concept of the food and had specialization in food segment. Then it has diversified in to the electronics, cloths, telecom, music download and discs, internet, health insurance, budget software, and consumer dental plan (Tesco Plc, 2007).

The first Tesco store was opened in 1929 in Burnt Oak, Edgeware, and Middlesex. The first self-service store was opened in St Albans in 1947 (still operational in 2007 as a Metro) and the first supermarket in Maldon in 1956. The Tesco brand first appeared in 1924 and the founder is JackCohen. Tesco’s UK stores are divided into five formats, differentiated by size and the range of products sold: Tesco Extra, Tesco superstores, Tesco Metro stores, Tesco Express stores and One stop. Britain’s biggest retailer, the supermarket group Tesco, has announced record annual profits of more than $ 3.5 billion (approximately Rs 140 billion), 13 per cent higher than previous year’s. Tesco now operates in 13 nations, with over three thousand stores and employs nearly half a million people (Tesco Plc, 2007b).

Success of self service stores in the US, Mr. Cohen started the first Tesco self-service store in St. Albans in 1948. Progressively the business extended from stores to supermarkets, and by the early 1960s, Tesco had become a familiar household name, selling household goods and clothing. Tesco started selling of fuel at competitive prices in 1974 and its annual turnover reached £1 billion for the first time. All over the 1990s, Tesco extended further in the international market. In response to a growing Eastern European market, Tesco opened stores in Poland, Hungary, Slovakia and the Czech Republic. Tesco also expanded into Taiwan, Thailand and South Korea. The company purchased the UK-based T&S, a convenience retailer, while in Poland it bought HIT, a hypermarket operator, in 2002 (So-eu, 2008).

The company purchased the small Turkish hypermarket chain, Kipa In November 2003. The chain operated five hypermarkets in the Aegean region with reported sales in 2002 of £124 million, pre tax profit of £4.7 million and over 1,500 employees. In early 2004, the company announced that it was purchasing the family-run chain, Adminstore, which operates the Europa, Harts and Cullens grocery outlets in the London area, for £53.7 million (Tesco Plc, 2008f).

In April 2004, Tesco faced a hurdle in its acquisition of Adminstore, even though the Office of Fair Trading (OFT) cleared its bid, as the Federation of Wholesale Distributors (FWD) attempted to block the deal. The FWD argue that the OFT’s decision was flawed since the acquisition would make it virtually impossible for independent retailers to open new shops in central London.

2.1.3 Tesco profile:

Tesco is one of the largest food retailers in the world, operating around 2,318 stores and employing over 326,000 people. They are operating in the UK; it has stores in the rest of Europe and Asia. It also provides online services through its subsidiary, Tesco.com. The UK is the company’s major market functioning under four banners: Extra, Superstore, Metro and Express. Tesco sells around 40,000 food merchandise in its superstores, as well as clothing and other non-food lines. The company’s own-label products are at three levels, value, normal and finest. Own brand contributes for around 50% of sales. As well as convenience produce, many stores have gas stations. The company has become one of Britain’s prime petrol self-governing retailers. Other retailing services offered in the UK include Tesco Personal Finance and Tesco.com. Tesco Personal Finance is a joint venture with the Royal Bank of Scotland. It has over 3.4 million customers, and provides various financial products and services (The Daily Mail, 2008a).

2.1.4 Major Products& Services

Tesco is the largest food retailer in UK, operating around 2,318 stores worldwide. Its services include (Tesco Plc 2008e):

Store types:

• Superstore
• Metro
• Express

Store offerings:

• Food Retail
• Non-Food Retail
• Petrol Stations
• Home Living Range

Service offering

• Tesco Personal Finance:
• Life Insurance
• Pet Insurance
• Home Insurance
• Travel Insurance
• Motor Insurance
• Savings Accounts
• Personal Loans
• Secure Investment Bonds
• Online Mortgage Finder

2.1.5 SWOT Analysis of Tesco

(Datamonitor, 2007):

Strength	Weakness
1. Increasing market share in food and non food items. 2. Aggressive strategies for capturing new markets. 3. Innovative ways of improving customer satisfaction. 4. Strong Brand building strategies. 5. Leadership reinforcement in UK market.	1. Dependency on UK market. 2. Debt Reduction. 3. Less availability of operating cash. 4. Serial Acquisitions in one UK’s Market.
Opportunity	Threats
1. Geographical Spread. 2. Diversification in Non food items. 3. Telecom venture. 4. Health and Beauty. 5. International Expansion.	1. Structural changes can lead to Price war. 2. UK’s Business model may be fail in other countries. 3. May not get adequate Return from investments. 4. Wal-mart/Asda Challenge in UK market. 5. International Brands in other market.

2.1.6 Revenue Analysis

For the year ended February 2004 Tesco PLC achieved revenues that totaled £33,557 million ($59,307.9 million), an increase of 18.7% against the previous year’s revenues that were £28,280 million. The company’s revenues are derived from three major geographical areas: the UK, Rest of Europe and Asia, which accounted for 73.8%, 10.1% and 8% of fiscal 2003 revenues respectively. Other revenues accounted for 8.1% of Tesco PLC’s 2003 revenues (Tesco Plc, 2005).

UK

Full year sales in the UK totaled £24,760 million, an increase of 16.2% against the previous year’s revenues that were £21,309 million. This year in the UK Tesco opened 21 Extras, eight new builds and 13 extensions giving the company 83 in total, devoting more space than ever to non-food. Tesco has also opened 20 Superstores, four Metros and converted 138 T&S Stores to the Express convenience format (The Daily Record, 2008).

REST OF EUROPE

Full year sales in the UK totaled £3,385 million, an increase of 27.1% against the previous year’s revenues that were £2,664 million. Tesco is the leading hypermarket retailer in four out of five European markets, serving three million customers a week and employing 41,000 people (The Daily Record, 2008). In fiscal 2003 Tesco opened 22 stores in Central Europe.

ASIA

Full year sales in the UK totaled £2,669 million, an increase of 31.4% against the previous year’s revenues that were £2,031 million. In Asia, Tesco has over 50 hypermarkets, employing more than 24,000 people. Its largest market is Thailand, where it is the market leader with 35 stores. In fiscal 2003 Tesco have opened 22 stores in Asia.

2.1.7 TopCompetitors

The following companies are the major competitors of Tesco PLC (Wrigley, 2000):

1. ASDA Group Limited
2. BP Plc
3. Carrefour S.A.
4. ExxonMobil Corporation
5. The Big Food Group Plc
6. J Sainsbury plc
7. Marks and Spencer Group plc
8. Royal Dutch/Shell Group
9. Safeway Inc.
10. Safeway plc
11. Somerfield
12. SPAR Handels-Aktiengesellschaft
13. The Boots Group PLC
14. Wm Morrison Supermarkets PLC
15. Booker Cash & Carry Limited
16. ALDI Group
17. The Carphone Warehouse Group PLC
18. John Lewis Partnership plc

2.1.8 Indian Market Analysis:

India can be a good destination for the Tesco to operate. Modern Indian culture will accept Tesco as a brand. Tesco is looking for Indian partner who already have good brand name in the Indian market so that the entry risk can be minimized by it.

It is believed that the company is busy in exploration for talent in the top B-schools in the country and also seeking for manpower with retail background. Well, the official line is ‘it is scouting for talent for its Tesco Hindustan Service Centre’ but the unofficial talk is ‘the latest round of manpower scouting is for its retail foray’. Tesco and Tata are in talks to create a joint venture in India (Shankar, 1999).

2.1.9 Most Powerful Brands in Retail

Big Bazaar

Big Bazaar is a retail venture of Future Group, one stop shopping solution for all. It is not just another hypermarket. It caters to every need of the family. Big Bazaar scores over other stores by its value-for-money proposition for Indian customers. They have tagline of “ISSE SASTA AUR ACHCHA KAHI NAHI!” It has opened the doors into the world if fashion and general merchandise including home furnishings, utensils, crockery, cutlery, sports goods and much more at prices that will surprise consumers. The company is now looking at opening a total of 300 Big Bazaar stores. It has introduced the neighborhood concept of retail by opening stores in residential areas. It will also introduce new business segments such as health and wellness (Riesenbeck and Freeling, 1991).

Current Stores: 80

Upcoming Stores: 300

Reliance Fresh

Reliance Retail, wholly subsidiary of Reliance Industries, launched Reliance Fresh, the first of its multi-format retail forays involving an investment of Rs 25,000 crore in Hyderabad in October 2006. The focus is on fresh fruits and vegetables and staple products that consumers buy very frequently. As of now, there are 453 Reliance Fresh stores operational across India. Reliance Fresh sells vegetables and fruits sourced from farmers through the company’s agri hubs (Riesenbeck and Freeling, 1991).

Current Stores: 489

Upcoming Stores: 1,000

More

Aditya Birla Group started with a simple mission, ‘to change the way Indian shops’. And, to achieve this goal, the team started with the understanding of consumer needs, expectations and areas of dissatisfaction. Striving to fulfill this growing need of the Indian consumer by offering a solution to the inconvenience, inconsistency and lack of variety she experiences in her everyday shopping ritual, the retail promise of the Aditya Birla Group is aptly called ‘more’. The retail offering is focused on fresh vegetables, fruits and other grocery items (Riesenbeck and Freeling, 1991).

2.2 Theory Frame work

2.2.1 Introduction:

Successful New product launch in the dynamic and highly competitive market can be a key of business growth and high profitability. To develop successful new product is not difficult in the world but Problem is that to produce and market it without the guarantee of success. This is a main hurdle for manufacturer (Cannon, 2000)

The following steps are necessary for the new product launch. Analysis and interpretation of these steps will help in to finalizing the market entry strategy for the Tesco (Westwood, 1999).

1. Who is your target customer? (Target Segment).
2. Entry strategy for the market.
3. Find out the resources.
4. Market Research:
5. Research size and Target audience
6. Opinions of the retailers, wholesalers and End users.
7. Analysis of research and Development of marketing plan.
8. Competitive Analysis: Deciding 4Ps for Tesco and other competitors.
9. SWOT Analysis
10. SMART Plan for Tesco.
11. Execution of the Plan.

Focus on the international trade is very less when companies have strong and teeming domestic market. For every company domestic market is much safer and cheaper compare to international market. While dealing with the international market companies have to pass thorough long procedure because of the language, currencies, political and cultural differences. And all of the above customer expectations and demands are different in different countries. This has been the attitude of many western companies, which saw little need to sell in overseas markets because their domestic market alone seemed to offer attractive opportunities for growth (Putsis, 1997).

In today’s business environment companies can not afford to avoid international market. Dependency of the nations on each other’s good and services ignite the awareness in the companies for more international approach. International markets are important because the majority companies are geared towards growth and so must search for new opportunities in foreign countries as their domestic markets mature. As international trade becomes more liberalized, firms are facing tougher foreign competition in the domestic market. They must build up the ability to struggle off competitors on their own home position, or to make use of business opportunities in foreign markets. The importance of internationalization is also reflected by the fact that most governments run an export promotion program, which tries to influence local companies to export (Pan et al, 1999).

2.2.2 Risks in International Marketing

1. High Foreign Country Debt
2. Exchange Rate Volatility
3. Foreign Government Entry Requirements
4. Costs of Marketing Mix Adaptation
5. Other Problems

2.2.3 Analysis of International Market Opportunity

Deciding Whether or Not to Go Abroad(Mascarenhas, 1997).

2.2.4 Establishing Market Entry Mode

Mode of entry plays a major role while entering in to the foreign market. Company’s success depending on the strategy they adopt for the entry. Each succeeding strategy involves more commitment and risk but more potential profit (Anderson and Gatignon, 1999).

1. Importing: –

This is a simplest way to get in to a foreign market. Company can start exporting by utilizing its surplus capacity of production or it may make an active obligation to develop exports to a particular market. In any case, the company produces all its goods in its home country. It may or may not change them for the export market. Exporting engage the least change in the company’s product lines, product width, organization structure, objectives, investments or mission (Kalish et al, 1995).

1. Indirect Exporting: – International marketing intermediaries of the home country can help companies in indirect exporting. It entails lower investment and lower risk factor compare to other options because the firm does not require an overseas sales force or set of contacts. These home-based mediators – export merchants or agents, government export agencies, co-operative organizations and export-management consultant – take all the responsibilities of export and they utilized know-how and services to the relationship, so the seller normally makes fewer mistakes.

2. Direct Exporting: – In the direct exporting sellers finally move into direct exporting, whereby they handle their own exports. The investment and risk are to some extent bigger in this strategy, but so is the profit margin. Direct exporting can take place in several ways like it can set up a domestic export division that take out export activities. It may set up overseas sales branches that carry out sales, distribution and perhaps promotion. The sales division provides the seller more existence and control in the foreign market and often provide as a display centre and customer service centre. In some cases company can send home-based sales managers to abroad in order to hit upon business. As a final point, the company can do its exporting either through foreign-based distributors that buy and own the goods or through foreign-based agents that sell the goods on behalf of the company in exchange for an agreed fee or commission.

2. Joint venturing: –

Another method to enter in to a foreign market is joint venture. JV means joining with foreign companies to produce or market the products or services. It varies from exporting, in exporting the company joins with a collaborator to sell or market abroad. It changes with direct investment in that an organization is created with someone in the foreign country. There are major four types of joint venture: licensing, contract manufacturing, and management contracting and joint ownership (Kalish et al, 1995).

1. Licensing: -It is a straightforward way for a producer to enter in to international marketing. The companies penetrate into an agreement with a licensee in the foreign market. For a fee or royalty, the licensee buys the right to use the company’s industrialized process, trademark, patent, trade secret or other item of value. The company gets bigger entry into the market at little risk; the licensee grows production expertise or a well-known product or brand name without having to start from scratch. E.g. Coca-Cola markets internationally by licensing bottlers around the world and supplying them with the syrup needed to produce the product. Tokyo Disneyland is owned and operated by Oriental Land Company under license from the Walt Disney Company. Licensing has possible drawback, though. The firm has a lesser amount of control over the licensee than it would over its own production facilities. Additionally, if the licensee is very successful, the firm has given up these profits, and if and when the contract ends, it may find it has created a competitor (Kalish et al, 1995).

2. Contract manufacturing: -one more option is contract manufacturing. The company enters in to an agreement with manufacturers in the foreign market to produce its product or provide its service. A lot of western firms have used this mode for entering Taiwanese and South Korean markets. The shortcoming of contract manufacturing are the lessen control over the mechanized process and the loss of potential profits on manufacturing. The benefits are the chance to start faster, with less risk, and the later opportunity either to form a partnership with or to buy out the local manufacturer (Kalish et al, 1995).

3. Management Contracting: – In the method of management contracting, the domestic firm provides management expertise to a foreign company that supplies the resources. The domestic firm exports administration services rather than products. Management contracting is one of the low-risk methods of getting into a foreign market and it give in income from the beginning. The arrangement is more lucrative if the contracting firm has an opportunity to purchase a share in the managed company afterward. The arrangement is not reasonable, on the other hand, if the company can put its limited management talent to better uses or if it can make greater profits by undertaking the whole venture. Management contracting also prevents the company from setting up its own operations for a period of time (Kalish et al, 1995).

4. Joint Ownership: -It consists of one company joining forces with foreign investors to create a local business in which they contribute to joint ownership and control. A company might purchase an interest in a local firm, or the two parties may form a new business venture. Joint ownership may be required for economic or political reasons. A foreign government may require joint ownership as a condition for entry. Or the firm may lack the financial, physical or managerial resources to undertake the venture alone. Joint ownership has certain disadvantages. The partners may have conflicts in investment, marketing or other policies. To take pleasure of partnership, partners must clarify their expectations and objectives and work hard to secure a win-win outcome for all parties concerned (Kalish et al, 1995).

3. Direct Investment:

The leading contribution in a foreign market comes through direct investment, the expansion of foreign-based gathering or manufacturing facilities. If a company has gained know-how in exporting, and if the foreign market is huge enough, foreign manufacturing facilities offer many advantages (Kotler and Armstrong, 2006):

1. The company may have lower costs in term of cheaper labour or raw materials, foreign government investment incentives and freight savings.
2. The company can improve its image in the host country because of creation of job openings.
3. Normally, company can develop a deeper relationship with government, customers, and local suppliers. And distributors, allowing it to adapt its products better to the local market.
4. Lastly, the company may have full control over the investment and so it can develop manufacturing and marketing policies that serve its long-term international objectives.

The major drawback of direct investment is that the company may faces many risks, such as restricted or devalued currencies, declining markets or government takeovers. In some cases, a firm has no choice but to accept these risks if it wants to operate in the host country. There are therefore direct and indirect ways of entering a foreign market. The significant point is to note that entry mode decisions are dependent on market conditions and company’s product characteristics, objectives and capabilities (Kotler and Armstrong, 2006).

To summarize, there are three alternative routes for entering foreign markets. It is useful to note that these are not mutually exclusive options. Neither should a linear progression, from engaging in exporting, through setting up joint ventures to direct investment – be assumed. Firms seeking to market goods and services in a foreign market should evaluate the alternative modes of entry and decide upon the most cost-effective path that would ensure long-term performance in that market.

Chapter 3 Research Methodology

There is three purpose of academic study and there are exploratory, descriptive or explanatory. Exploratory studies are related to practical and clarify the understanding of the problem. Saunders et al (2006) explain that exploratory studies of method which help to find out : what is happening, to seek new insights, to ask questions and to asses phenomena in a new light”.

Descriptive studies are related when you wish to portray phenomenon such as events, situation or procedure. Again the descriptive research is also suitable when the problem is clearly defined and the intention is not to conduct the research in the relation to causes and symptoms (Eriksson and Weidershim, 2001).

Explanatory studies are useful when you are going to conduct research on well established formal relationship between variables. In this methods, emphasis more focused on the examination of situation or a problems in order to explain the relationship between the variable (Suanders et al, 2006).

This is the theory how to research does the make and how to work on it.According to Merriam in 1994 he proposed methodology as “the plan of collecting, organising and integrating collected data so that an end result can be reached”. In this part of the research I would throw some light on strategy of research, other research methods and how collected evidence was and analysed the data. At the end, I took into consideration the quality of research (Philip, 2007).

According to many scholars Research methodology is of two different kinds: “The first approach is the positivist approach, testing hypothesis generated from theory, mainly quantitative data and statistical analysis it decides result confirms or refutes theory”. According to (Anderson and Nylander in 1999) states that “the quantitative approach makes it possible to do statistical comparisons and compare series of data”.

And the other kind of research methodology is the phenomenological which is discussed further by the (Rott in 2000) that “It derives the conclusion based on investigation, qualitative data and lets the investigation guide the project. It can be helpful to understanding the case studied as it can go in deeper in to each case”.

3.1Methodological approach and design:

Based on a combination of literature research and in-depth interviews, the researcher explores leadership behaviour that stimulate employee’s ideas generation and application behaviour. The study was carried out in knowledge intensive service firms. E.g. consultants, engineers, researchers (Jeroen, 2007). The interpretation of research outcomes is subjective with emphasis placed on the underlying meaning and understanding phenomena (Easterby- smith et al 2008). The analysis of the research was largely qualitative; however quantitative analysis was also be used highlight the pattern which exists. An inductive approach will be used in order to develop theory as a result of the research finding, although there is an element of deduction in that the structure of the research was based on the academic literature (Saunders m et al 2006). The research was performed as a case study using the mixture of available literature and the structured questionnaire in which contains focused group and open and close questionnaires involved.

3.2 The research method:

The method selected is likely to be that of case study chosen through personnel networking and snowball sampling to find the number of people with required characteristics. Efforts was also made to select the range different people with the different characteristics such as focus the group of high standard , middle standard and low standard. Which group is more interested to buy our product? Thus the sample has a mixture of homogeneous and heterogeneous characteristics. The aim was to gain an understanding of how the knowledge strategies work and also the opinion and understanding the people. This is how the research is being conducted (Cohen, 1990).

3.3 Data collection and analysis:

There are several types of the data collection most common methods are:

1. Survey questions
2. Interviews
3. Mail surveys
4. E- Mail
5. Focus group

Researcher has to intend to perform the research in the specific area where we have launched our product. And therefore has been granted access to carry out the survey using the questionnaire. In the present research, situation analysis, selection of target geographic location, competitors activity etc was analysed on the secondary data available from various source such as national report, journals, books, online report as well as other sources. Particularly consumer behaviour was studied using the questionnaire by sending email to them. The questionnaire formed on the basis of the required information and accordingly questions designed. The questions were open or close ended. First questionnaire were pretested and made necessary correction and finalised before sent to the customers. The email IDs were selected randomly from the internet based groups related to lifestyle activity. Reminder mail was sent after 15 days of first mail sent. Minimum 40 respondents were considered for drawn the conclusions. After the getting the questionnaire the data entered into excel sheet and prepared the graph and represented in the results.

Validity and reliability:

The use of reliability and validity are common in quantitative research and now it is reconsidered in the qualitative research paradigm. Since reliability and validity are rooted in positivist perspective then they should be redefined for their use in a naturalistic approach.

In the research of design approach I have considered the following:

3.4 Validity:

ne of the most important criteria for the suitability of any data set is measurement validity. Secondary data that fail to provide you with the information that you need you to answer your questions or meet your objectives will be resulted in invalid answers (Kervin, 1999). Often when you are using secondary survey data, it was found that the measure used do not quite match those that you need (Jacob, 1994). Increased through use of multiple source of evidence, structured interviews and questionnaires (both closed and open questions). The design of questions and survey was used on base of understanding of the theory from the literature and pilot testing of the interview and questionnaire used to make sure questions are understood as intended (Saunders et al, 2006).

3.5 Reliability:

Structured questionnaire with questions derived from literature in order to examine the cases in same way. Survey is considered to back up the field survey and obtain view from a wider group. Questionnaires all administered at the same time and in controlled manner, explanation to ensure participants all understand research in same way and this was done by pre testing the questionnaire and found out any difficulty faced in filled the questionnaire was corrected (Saunders m et el 2006). To succeed, service businesses must offer their customer’s high-quality and reliable service. However, many of the characteristics that make services unique also make it difficult to ensure consistently correct performance (Jacob, 2004). The quality performance of a firm is often assessed by the reliability of the data that have collected from the population. Because the firm’s develop their service level on the data they gathered on the customers so it is vital important that the data should be reliable and used by experts to draw the conclusion. For all secondary data a detailed assessment of the validity and reliability involved in an assessment of the method or method used to collect the data (Dale et al, 1988). The authentic source of secondary data is most reliable.

Chapter 4 Result and Discussion

In this chapter gives insight of the detailed analysis of the data. It gives the idea about the findings of the study, with numerical and graphical presentation of the data and interpretation of the presentation. All the interpreted data taken from the questionnaires designed for the customers of the India. Hair spray in the Indian market is not new concept but the availability of the different brands for it is not in the market. Again there are certain myths in the market about hair spray and its usage.

The graphs presented in this section are extracted from Microsoft Excel to further clarify the findings.

4.1 Followings are the demographic information of the samples.

Gender Ratio of the Sample

Fig. 4 shows that, in hair care users 53% users are females and 47% users are males.

Age Groups of the Respondents

Fig.5 shows that major users are teen agers (<20 years). But age group of 20-35 also contributes 35%. Above 5o years consist only 12 % of the total. So while targeting the segment age factor can play an important role.

Highest Educational Qualification of the Respondents

Fig. 6 shows that Usage of hair care product is high in educated people. 33% respondents having masters or more degree, and 29% are having bachelor degree. 16% of

Employment Status of the Respondents

Fig. 7 shows that 37% of the respondents were part time employed, 35% were full time and 28% were not employed.

Income Group of the Respondents

Fig. 8 shows that, 28% of the respondents were earning above 30K per month, 36% were earning between 20-30K, 25% were between 10-20K and only 11% were earning between 0-11K.

4.2 Analysis of the Questionnaire

Use of hair Care products in samples

Fig. 9 shows that 58% respondents are using hair care products and 42% are not using it.

Awareness of the concept of the Hair Spray

Fig. 10 shows that 53% respondents were aware about the concept of hair spray whereas 47% were not aware.

Sources of Information about Hair Spray

Fig.11 shows that major source of information for the hair spray is TV advertisement followed by supermarket/convenience store, 33% and 24% respectively.

Perception of Hair Spray

Fig. 12 shows that 46% of the respondents think that it is effective and useful whereas 35% think that it is not effective. 19% were not sure.

Potential Benefits Required from Hair Spray

Fig. 13 Shows that Majority of the respondent wants a hair spray containing natural sources, lesser side effects, economical, and from a good company.

Properties not required in Hair Spray

Fig.14 shows that 26% respondents wanted hair spray that should not contain chemicals, 21% wanted lesser side effects.

Awareness of TESCO

Fig. 15 shows that 64% of the respondents were not aware about the TESCO.

Source of information about TESCO

Fig. 16 shows that majority of the respondents are aware about TESCO through websites.

Potential Acceptance of TESCO

Fig. 17 shows that 48% respondents are ready to accept TESCO as a brand in India. 24% are not ready and 28% are not sure.

From the above analysis it can be said that awareness of TESCO in India is low but the potential of hair spray market is high. Majority of the respondents use hair care products and they are aware about the hair spray. Females are the major users of the hair care products.

4.3 Strategic Issues & Mode of Entry

The various modes of entry for TESCO in Indian Cosmetic and Beauty industry are as follows:

1. Importing
2. Joint Venture
3. Direct Investments

Every strategic path as suggested above has potential risks and benefits involved therein. Hence, choosing the right measure is critical. Below given is the SWOT analysis of each of the Strategic measures keeping in mind TESCO as a company.

Importing: Fig.18 SWOT Analysis of Importing

Joint Venture: Fig 19 SWOT Analysis of JV

Direct Investment: Fig 20 SWOT Analysis of DI

Competitive Scenario in India

Indian Cosmetic and Beauty Industry is flooded by number of established players like Hindustan Unilever, Revlon, Loreal, Zydus Wellness, Himalaya Drugs, Johnson & Johnson etc.

The Indian Cosmetic market has mainly two type of players Established and Local Players. Established players have a strong corporate image and at least 5 brands from their portfolio are under the Maturity stage of product life cycle. The established players also have a presence across the map of India. The Local Players are basically varying in each geographical location and their major success comes from price wars and higher retail schemes.

The consumer behavior and buying habits are also mixed in India.

Hence, keeping in mind the above given facts and realities of India, Importing cannot be a good option for TESCO to enter as the import and custom duty structure are very high. The strategic measure of Importing will fail to give TESCO a competitive edge in market in terms of price advantage and hence initially gaining market share will be difficult.

The strategic measure of Joint Venture is the most effective and a step involving least risk. Building an alliance with an established player also builds several market and corporate level opportunity for both. By a joint venture exchange of brands and products across the international fronts is easily possible. An established player is already acceptable in front of consumer and hence chances of brand success are always doubled.

Chapter 5 Conclusion and Recommendations

5. 1. Conclusion

In last chapter, I have talked about the statistical data which is found out from the survey being carried out. Thorough discussion of the result is required. In this chapter detail discussion of the result will be discussed. And the future strategy for the Tesco will be given.

In this study I have tried to found out the awareness of the Tesco as a brand in India. In my result I came to know that Indian consumers are not much aware about the Tesco as a brand.

Indian consumers use hair care products. They have accepted some good brands in hair care. But when we talk about hair spray it is not regular product for customers. Availability of the brands is also a problem in the hair spray. There are very few brands in the hair spray.

Available brands are use advertisement as their marketing tool. There is a huge potential for hair spray market in India. Indian consumers are ready to adopt the foreign product which is a positive sign for the foreign manufacturers.

5.2 Recommended marketing plan

5.2.1 Company Profile:

Tesco plc is a British based international grocery and general merchandising retail chain. It is the largest British retailer by both global sales and domestic market share, with profits exceeding £3 billion, and the third largest global retailer based on revenue, behind Wal-Mart and Carrefour.

Tesco runs more than 2,300 supermarkets, hypermarkets, and convenience stores in the UK, where it is the market leader in food retail, Ireland, Central Europe, and Asia. Its operations comprise convenience and gasoline retailing (Tesco Express), small urban stores (Tesco Metro), hypermarkets (Tesco Extra), and financial services through Tesco Personal Finance. A global leader in online grocery sales, it owns a 35% stake in US grocery chain Safeway’s Grocery Works. It is the leading online grocery store and it is now expanding its business with a TV channel and a "retail based education institution. It also provides online services through its subsidiary, Tesco.com. The UK is the company’s major market functioning under four banners: Extra, Superstore, Metro and Express. Tesco sells around 40,000 food merchandise in its superstores, as well as clothing and other non-food lines. The company’s own-label products are at three levels, value, normal and finest. Own brand contributes for around 50% of sales. As well as convenience produce, many stores have gas stations. The company has become one of Britain’s prime petrol self-governing retailers. Other retailing services offered in the UK include Tesco Personal Finance and Tesco.com. Tesco Personal Finance is a joint venture with the Royal Bank of Scotland. It has over 3.4 million customers, and provides various financial products and services.

5.2.2 Tesco Strategy:

“Continuous innovation” is the core strategy of the Tesco. They have innovated concept of self service, use of cameras in the stores. (Tesco CIO Magazine)

5.2.3 International Marketing Strategy for Tesco

The company have unbeaten marketing network in UK, Europe, and Asia. Now company would like to develop their business and would like to enter into Indian cosmetic market with the Hair spray as their product. For that they have conducted systematic research on a preliminary screening, an overview of country indicators, a product marketing screening, and a market infrastructure analysis

Situation Analysis:

Demand for higher lifestyle category products are increased because of affordability. The Fast Moving Consumer Goods (FMCG) industry is showing 16% growth in sales during 2008-09 compared to 14.5% in the last financial year. The survey conducted by Federation of Indian Chambers of Commerce and Industry (Ficci) predicts the value added and aspiration of the products that stimulated the growth of the industry last year 2008-09 (Nielsen, 2008).

The hair care market in India is predicted at around Rs. 3,800 Cr. The hair care market can be segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels. Marico is the leader in Hair Oil segment with market share of ~ 33 per cent; Dabur occu-pies second position at ~17 per cent (Euromonitor, 2009). The sectors projected to achieve excellent growth of 20 percent and above during 2008-09 are shaving cream (23%), skin care & cosmetics (20%), skin/fairness cream (22%), tooth powder (22%), shampoos (21.3%), anti-dandruff shampoos (23%), hair dyes (30 %), hair care (30%), cleaners/repellants (25.2%), deodorant (40%) and dish wash (21%) (Economics, 2009).

Hair spray market segment is at a introduction stage and not many local brands are available in India. Hair spray is largely used to set up hair styles by majority women and is used as a fashion accessory. The market penetration of hair spray is very low, and is limited to a small section of the urban market.

Market Requirements:

Consumers’ inclination are changes from traditional way of life to superior lifestyle categories like skin care, shampoos, deodorants, anti-ageing solutions, fairness products in women’s products in particular. The sector has witnessed the launch of 251 new products last year. With the entry of new brands, this sector is estimated to record a 25% growth next year, predict by industry analysts. Today, consumers are ready to experiment with new hair care brands in order to look good. The penetration level of hair care products has increased in the last two years (Bhattacharya, 2008)

Market Trends

The hair care segment in India is showing trend setting shift and the change is marked by consumer behavior. The speed at which marketers are introducing new product categories and services it shows the trend change of the Indian consumers. Since 2000, the hair care usage patterns have been changing, resulting in an impressive growth rate for the hair care industry. There is increased awareness among all levels of consumers. (Economics, 2009).

Hair sprays were once considered to be an occasion-linked beauty regimen has now become a consumer way of life. The traditional hair care and hair styling methods are changing, which means that buyers are now ready to accept newer product categories. With globalization and greater purchasing power, consumers are willing to pick up higher-priced brands.

Competition:

The major players in hair care product category are Godrej, Garnier, L’Oreal, Lakme, HLL, Marico, Unilever, through its subsidiary, HLL, and Procter & Gamble, Dabur, Himalaya, Zydus wellness.

There are main three main brands in hair gel product i.e. brylcreem, Set wet, Park Avenue and others local brands. Brylcreem covers 75% market share, Set Wet covers 5%, park Avenue covers 2% while rest of other brands have 18% market share (Bhattacharya, 2008).

5.2.4 Market Entry strategy and Target customer

We use Ansoff’s product/market matrix to recognize information for Tesco’s strategic development. This matrix gives directions for strategic decision obtainable to Tesco in terms of products and market coverage, taking into account its strategic capability and also expectation of stakeholders.(Fig. 21 Ansoff’s matrix)

		Product
		Existing	New
M A R K E T	Existing	Protect/build Consolidation Market Penetration	Product development With Existing Capabilities With New capabilities Beyond current Expectation
	New	Market development New Segment New Territories New Users With New Capabilities Beyond Current Expectations	Diversification With Existing Capabilities With New capabilities Beyond current expectations

From the above Matrix, it is assumedthat Tesco’s launch of Hair spray in India will involve a market development strategy. Tesco is not selling hair care products anywhere in the worlds so its New Product and India will be a new market. Tesco will need to consider whether its existing products conform to India’s criteria to be made from herbal sources, or whether they will need to form an association with a strategic partner, as suggested following the SWOT analysis. Both capability and market consideration has driven Tesco into thedevelopment ofnew markets. In today’s Herbal atmosphere Hair Spray made from herbal sources is a new angle on a product that can be exploited in other market segments and countries.

Market segmentation is the significant strategy for the Tesco in India because form the target segment general marketing strategy will be determined. If they want to enter with low price than they should adopt cost leadership strategy. If they want to target premium market then they should go for the premium prices at the luxury high end product. Tesco should enter the high-end market with a differentiation strategy.

Segmentation:

Gender Segmentation:

Indian Cosmetic Market is dominated by Females and hence the 1st segment to target will be Females

Age Segmentation:

Cosmetics are famous amongst age groups of Teenagers (12 – 19 Years), Girls (20 – 26 Years) and Ladies (27 – 50 Years). To summarize, we should segment the brand for Ladies from age group of 12 – 50 Years.

Geographic:

Delhi, Mumbai, Kolkata, Chennai, Bangalore, Ahmedabad, Chandigarh, and Lucknow.

Psychographic:

Lifestyle- enjoys music, movies, parties and other such activities,

Behaviour Occasion:

Regular

Benefits:

Herbal, hence no damage to hair

Targeting:

Targeting the segment of Females from age group of 12 – 50 Years.

Positioning:

To position the Brand as a Hair Style Expert

5.2.5 Marketing Objective

1. Profitability, in terms of operating margin (a 10% target)
2. Indian Market share (a 20% target)
3. Customer advocacy (the number of customers who recommend Tesco brand, repeat business)
4. Respected company/ brand awareness (the number of community stakeholders who respect Tesco)
5. Employee motivation (the number of employees who feel motivated to deliver Tesco’s goals)
6. Tesco must ensure that it sets ‘SMART’ marketing objectives that are specific to the needs of the audience, measurable, attainable, relevant, time limited,

5.2.6 MODE OF ENTRY

Initial Entry Market

After taking full insight of market research, we have selected the India as our target country. It is not only was it an eye-catching market across all side of our decision-making process, but it fits our positioning of bringing new herbal hair spray product to Indian market that has had very little exposure to such a product.

Joint venture is mode of entry for Indian Market for us. We have already held meeting with Paras pharma ltd. and made deal with them for joint venture to launch the product in Indian market. We have selected Paras pharma because they have already well-known brand of Livon in hair care. Livon is already established hair conditioner brand in India. There is huge market for hair spray product in India

Distribution

As Paras pharma has its product in the market and well established distribution channel. Our product will be distributed through an already-established distributor of Paras pharma with an objective of reaching most major supermarket chains and an special focus on the more up-market grocers such as Marks & Spencer, Reliance Mart, Big Bazar etc. We take advantage of an ultra-premium product designed for women use; we will be solely reliant on sales through grocery retailers, private saloon and chain hair dresser store such as Belleza, Arrow, and Metro. Our offering was specifically designed to various packaging size.

The benefit of this arrangement is that the already-established distributor has pre-existing relationships with the supermarkets, and we will be able to rely on their expertise and knowledge of market conditions to obtain the best retail placement (Kotler and Keller, 2006).

5.2.7 SWOT Analysis

STRENGTHS	WEAKNESSES
I. Herbal Product II. Brand Awareness III. Strong financial Position IV. Distribution	I. Lack of local knowledge II. Foreign Brand
OPPORTUNITIES	THREATS
I. Brand awareness globally II. Innovation and alliances	I. Existing Competition II. Scare Resources

5.2.8. PEST Analysis:

A PESTLE analysis of the industry was carry out to scrutinize the local, national and global influences of political, economic, social and technological factors to understand opportunities and threats well.

Most of these (political, economic, social, technical, legal and environmental) factors would, to some extent apply to the retail industry in India is an assumption

POLITICAL:

Government of India shown their support to the foreign players but they are taking care of the domestic companies as well.

ECONOMIC:

The Retail sector is fairly recession proof and also very sensitive to changes in interest rates. But GDP of the Indian economy is supporting the retail environment.

SOCIAL:

changes in consumer taste and lifestyle represent both opportunities and threats for the industry. Opportunities in terms of new market and consumers, however, there are added threats in terms of alternative established Swedish national retailers (foreign company bias).

TECHNICAL:

Changes in retailing methods such as the sales via the Internet is now a common place in retailing. A paperless operation, the management and administration of the company are undertaken on IT systems, which are accessed through secure servers; provide flexibility in the running of the business.

5.2.9MARKETING MIX:

PRODUCT

(Kotler and Armstrong, 2006)

Product formulated has following advantages:

• Differentiated on the basis of result, quality of the product
• This styling product helps to maintain the moisture in your hair which is necessary for their better growth.
• 100% natural
• Certified organic Aloe Vera as the number one ingredient.
• No artificial ingredients

PRICE

Price Strategy

(Kotler and Armstrong, 2006)

• ur pricing strategy will be very similar to other premium existing products. Product Cost for Company is 50 paise/gm.
• Sachet (3 gm)-Rs.3/-(1gm=1 Rs.) – Sachet Pack
• 15 gm tube- Rs. 15/- (1gm=1Rs.)- Small tubes
• 60 gm tube- Rs. 50/-(1gm=83 Paise) – Standard tubes
• 150 gm tube- Rs 100/-(1gm=67 Paise)- Large tubes

PROMOTION

The communication of the promotional activities will focus on the message that the product is made from all natural ingredients and has no side effects.

First, target is to create awareness for our product aimed at stimulating trial and purchase. In the establishment of brand personality we will face strong competition in our product segment, and we understand that a differentiated brand is essential to our growth and survival (Pickton and Broderick, 2001).

The following tools will be used for Promotion of the products:

• Event- Press Conference.
• Public Relation: Press Release
• Advertising.
• Online Marketing and Direct Marketing
• Hoardings.
• Print Ad in Newspaper and Magazines.
• Electronic Ad in Broad Cast Media.
• Free samples for free trials

Media Mix ( Varey, 2002):

Print Ads

Newpapers

• The Times of India
• Hindustan Times
• DNA

Magazines

1. India Today
2. Filmfare
3. Indian Fashion

Television Ads

1. Zee TV
2. Sony TV
3. Star Plus
4. Zoom TV
5. Color
6. NDTV Imagine

Hoardings

PLACE

Distribution Strategy divided into three parts

(Kotler and Armstrong, 2006):

Part 1: Focus on Small tubes and Standard Tubes will be high to gain benefit and market share.

Distribution Coverage: Cities -Delhi, Mumbai, Kolkata, Chennai, Bangalore, Ahmedabad, Chandigarh, and Lucknow.

Part 2: Intention of Large tubes will to create trustworthiness of product in the market.

Distribution coverage: All the above cities and other Tier 2 cities like Jaipur, Agra, Amritsar, Rajkkot, Nagpur etc.

Part 3: Sachet will be focus on the new segment of market.

Distribution coverage: Distribution in Tier 3 cities like Patna, Varanasi, Jamshedpur etc.

5.2.10BUDGET

The estimated budget will be required to cover marketing expenses is about 15 crores (Wells and Burnett, 1995).

Fig.23 Budget Table

	Media Mix	Cost in Crore (Rs.)
1	News paper	5
2	Magazine	1.2
3	TV	8
4	Hoardings	0.8

5.2.11. Evaluation and Control

Performance Standards and Financial Controls

In this area evaluation of the financial expenses with the marketing plan goals will be done. The following performance guidelines and financial controls are considered (Rao, 1998):

• Creation of the mission and vision statement with the help of brain storming
• The following percentages of the budget will be spent on the specified marketing activities:

a.

60% for plan implementation,

b.

10% for revisions in the marketing plan, and

c.

30% for the follow-up analysis.

Responsibilities of the marketing manager will be

a.

Reporting all expenditures related to the marketing plan implementation.

b.

Meeting the timeline requirements for each task. Responsibilities of the team members working with the marketing manager will be

a.

Keeping the director informed in a timely manner

b.

For the reporting of their expenditures related to the marketing plan implementation.

Monitoring Procedures

To ensure that the marketing plan is accomplishing the desired goals of the company, monitoring procedures have to be put into place and analyzed on a regular basis. The following procedures will be used starting at the beginning of the marketing plan and continue until the completion of the marketing plan (Westwood, 1990).

• The marketing manager will supervise all phase of the marketing plan implementation. Groups working under the marketing manager must seek the manager’s approval of all final plans. If there are any concerns, new ideas, or improvements, they must be brought before the marketing manager and the group as a whole will determine the feasibility of any alleged changes.
• The marketing manager is responsible for costs control and reporting any changes in the budget accordingly.
• The marketing manager, along with the group working directly on this project, will present their progress or lack thereof to the board at scheduled meetings.
• The final analysis of the marketing plans success must be ready to present to the board at the first meeting of the new fiscal year.

The above mention strategy could be a potential strategy to enter in to Indian cosmetic market. Indian consumers are ready to accept good foreign products. Hence chances of success are high for the Tesco if the product and its marketing strategy will be good.