International marketing analyze for Nissan international expansion.docx

International marketing analyze for Nissan international expansion.docx

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InternationalmarketinganalyzeforNissaninternationalexpansion

InternationalmarketinganalyzeforNissaninternationalexpansion

Content

Introduction1

Nissan`sInternationalExpansionandstrategychoice1

EnvironmentalandcompetitionanalysisforNissan4

EnvironmentalDifferencebetweenJapanandChina---PESTanalysis6

Political6

Economic6

Socialandculture7

Technologicalenvironment7

RiskanalysisofNissan7

Political/LegalRisk7

CulturalRisk8

TechnicalRisk8

CompetingandbusinessstrategyofNissan（Porter’sFiveForces）9

Competitivestrategies10

FormulatinganoverallmarketingstrategyforNissan12

Productstrategy13

Pricingstrategy13

Placestrategy14

Promotionstrategy14

PublicRelations14

Thesuccessfuloflocalization15

Conclusion16

Reference17

Introduction

NissanMotorCompanywasfoundedin1933,isthesecondlargestcarcompanyinJapan,oneofJapan'sthreemajorcarmanufacturers,andworld'stoptencarcompany.Itsmainproductsisvarioustypesofvehicles,butalsoinvolvedinotherfields,suchasmachinetools,constructionmachinery,shipbuildingandspacetechnology.HeadquarteredinJapan,itoperatesapproximatelyincludingJapan,16productionbasesformorethan160countriesandregionsprovidegoodsandrelatedservices.Thetotalnumberofemployeesaremorethan17millionallovertheworld,isalargemultinationalgroupcompany.Thecompanycanproduce3.2millioncarsperyear.Today,entrysegmentsaccountformorethan25%oftheglobaltotalindustryvolumeof64millionunits,andthissegmentisgrowing.（NissanHomepage,2009）

Asafamousinternationalcarmaker,NissanfoundChinahasasteadypoliticenvironmentanditseconomicdevelopingstrongly,especiallyundertheeconomiccrisis,GDPofchinastillkeepsincreasingat8%.SoitfeelsitisnecessaryforthemtoobtainthecorrespondingmarketingexpansionaimingatChina.TheaimofthispaperisusedtheChinesemarketasanexampletoanalyze,examineandevaluatethekeyissueinvolvedduringtheprocessofthedevelopmentandimplementationoftheinternationalmarketingstrategyoftheNissanCompany.（Carlos,2000）

Nissan’sInternationalExpansionandstrategychoice

Nissangrouphasgainedagreatsuccessfulinthedomesticmarket.HoweverNissanhastakenacriticalattitudetowardsshort-termprofits.Inordertothelong-termdevelopment,CarlosGhosn（CEO）clearlymadethefollowingstrategicdirection:

“itislimitedtodependonassembledandexportcars.Forthefuture,Nissanmanufactureisnecessarytogoabroad.”（Carlos,2000）Therefore,since1980Nissanputforwardtodevelopitsinternationalmarkets.Amongthem,inthe20thcentury,developmentofChinesemarketisanimportantissueofNissanCompany.Whenthestrategyexecutedsuccessfully,thecontestpressureofNissanintheinternationalmarketwouldbegreatlyreleased.Furthermore,thesuccessofthestrategywillenlargetheshareofthemarketofNissanandhelpthecompanygraspmoredevelopingchance.

"Manycompaniesemploymultiplestrategies.Onewouldbenaïvetobelievethatasingleentrystrategyissuitableforinallcountries."（Onkvisit,2004,p315）Therefore,duringtheinternationalmarketexpansionNissanhasemployedstrategiesrangingfromexporting,acquisition，jointventure,andmanagementcontractetc.

Chinamarketentrymodel－managementcontractandjointventure

After"Duke"firstexportedtoChina1972,NissanhasbeenworkingtoexpandproductionandsalesoperationsinChina.Currently,somemodelsofproducthavebeenproducedbyChinesepartners,andNissan'scustomerbaseinChinaisalsogrowing.（Nissan）

August2000NissanandFengshenMotorsignedthe"Bluebird"technologyuseagreementproductioninChina.（Nissan）BecausethisisthefirsttimeNissaninvestmentinChina,consideraboutexperiencelessandbigrisk,theGroupdecidedusedmanagementcontractmodewhichdonotparticipationanddonotputanyassets.ThetechnologytransfertoChinaandcollectassignmentfeeandmanagementfees.

"Themainadvantagesofmanagementcontract:

Theriskofsupplierparticipatinginaninternationalventureissubstantiallyloweredbecausenoequitycapitalisatstake.Atthesametime,asignificantamountofoperationalcontrolcanbeexercised.Beingontheinsiderepresentsastrategicadvantageininfluencingdecisions."（Michael,2007,p302）

Theresultisunexpectedsuccess,until2009,thelocalproduction"Bluebird"hasreached18,505unitsperyear,salesreached19,383units.（Jeffrey,2009）Thesuccessof"FengshenBluebird"greatlyenhancedtheconfidenceofNissantoexpandtheChinesemarket.Meanwhile,Nissanhasfoundthatalthoughtheriskcanbereducedbythroughthewayoftechnologytransfertomultinationaloperation,theprofitislimited.

Therefore,thesecondstepintotheChinesemarketwasusejoint-ventureapproach.June,2003NissanMotorandDongfengMotorCorporation（China）jointventure,investedcapital16.7billionRMB,theDongfengNissanAutomobilecompanywasfound.Thecompanyhasdesignedmanyothertypesofproductswhichbasedondomesticconsumerdemand.TEANA,TIIDA,SYLPHY,GENISS,LIVINAandQASHQAIareNissangood-sellingmodelsinchina.December,2007,DongfengNissanCompanygainedtheChinanationalcarsalestopten.（Jeffrey,2009）

Overall,NissansettleonChinawhichisthebiggestemergingmarketintheworld,whichbigdemandandlowbarriers.SothatNissanexpandtheChinesemarketstepbystep.Thefirststep,testthemarketifissuitable.Theyusedinvestmentmanagementcontractmodeandenterthemarketsteadily.Thisstepseeksforasmoothtransitionandalsocantestreactionofthemarket.Thesecondstep,afterbuildupthebrandreputationandmarketpositionthenfurtherexpandthemarket,thistimeNissanusedjointventuresmode.Themainadvantageofjointventuresisthepartnerwillcontributethelocalknowledgeandmarketingskills.（Onkvsit,2004,p302）Thethirdstepisfirmingthemarket.ByUsingthepartnercompany'sbrandreputation,resources,localknowledgeandmarketskills,developmentandinnovativeproducts.Nissan’ssuccessesinChinaarenotonlyteachesusexpansioninternationalmarketneedtostepbystepbutalsoimplementthestrategywithdifferentmode.

However,"Thereareseveralfactorsthatmaydeterminewhetheracompanywantstotakeequityownershipininternationaljointventures.Thesesourcecountryfactorsareexchangerate,costofborrowing,exportcapability,andmanagementorientation."（Onkvsit,2004,p304）Inotherwords,environmentalanalysisisalsoveryimportantpartofdeveloptheinternationalmarket.

EnvironmentalandcompetitionanalysisforNissan

AccordingtoBrassington&Pettitt（2003）,basicfactorsofthemarketingenvironmentcanbegroupedunderfourbroadheadings:

socio-cultural,technological,economicandcompetitive,andpoliticalandlegalinfluences.Figure1clearlyshowstheelementsoftheexternalenvironment:

Figure1Elementsofthemarketingenvironment

Source:

adaptfromBrassington&Pettitt（2004）,PrinciplesofMarketing,3rded.,p.45

Figure1categorizestheelementsofmarketingenvironmentintofourgroups,whichisknownastheacronymSTEP,andfurtherexplanationsfromBrassington&Pettitt（2004）arepresentedasfollows:

1）Thesociocultureenvironmentisofparticularconcerntomarketersasithasadirecteffectontheirunderstandingofcustomersandwhatdrivesthem.However,Brigitte（2002）makesastatementthatculturalissue,languageissueaswellasreligiousissueshouldbeconsiderseriousasithasagreateffectonmarketselection.

2）Technologicalenvironmentincludestechnologicalinnovationandimprovement,whichhavehadaprofoundeffectinallareasofmarketing.

3）Theeconomicandcompetitiveenvironmentcoversbothmacro-andmicro-economicconditionswhichaffectthestructureofcompetitioninamarket.Morrison（2004）pointsoutthatnationaleconomyaswellasindustryeconomyshouldbeconsidered.Thomas（2004）makesasupplementarystatementthatinternationaltradeisanotherissueshouldbeexaminationunderglobalization.

4）Thepoliticalandlegalenvironmentcoverstheexternalforcescontrolledbygovernments,bothnationalandAsian,localauthorities,orothertradeoractivityorientedregulatorybodies.

EnvironmentalDifferencebetweenJapanandChinamarket---PESTanalysis

Political

AfterChinaaccededtoWTO,thegovernmentalsoexpectedtheexternalcompetitiontopromotenativeindustrycompeting.Thatistosayforeigncorporationsandtheirsubsidiariesarewelcome.Tobecritical,itisanopportunityforforeigncompaniesespeciallylocalgovernmentmakesurethatasteadyandcomfortableinvestingenvironmentcanbeprovidedforalltransnationalfirms.

Economic

1）GDP:

DataonGDPindicatesthatsince2009ChineseGDPincreased9.4%,whichwasjustthesamefiguretheformertwoquarters（Solecollector,2009）,thepersistentincreasingonChineseeconomiesrecentyearsindicatesbenignmarketingcircumstances,whichreflectspeoplearewillingtocostmoretobuytheircar.

2）Marketdemand:

WhentheJapanesedomesticmarketbecomesmature,thedemandreducinggradually.However,Chineseautomarketisinshortsupply.WhentheJapanesedomesticmarket,profitonlyhas2-3%,carmanufacturersinChinahavegainedhighprofits（morethan20-30%）.StrongdemandandhighprofitsareattractingmoreandmoreforeigncompaniestoinvestintheChinesemarket.ThereforeNissanhasstressofmarketcompetition.（NissanDongfeng）

Socialandculture

1）Culturaldifferences:

CIMA,Questandothervarietyofhot-sellingcarmodelsinJapanwereexportedtoChinahavebeencold-shouldered.