Company X is having strong position and good market share
in Finland. They also have several partners (distributors) all around the world.
Also in United Arab Emirates (UAE), but as mentioned earlier, not in Qatar. The
company X's way to work earlier has been through distributors (partners) who
have been found when visiting exhibitions or they have contacted the Company X
directly and offered co-operation on their home region. When Company X is
thinking of approaching Qatar market, they can compare the good and bad
experiences from history and from different markets and entry models.
On domestic market, in Finland,
mainly direct sales to end customers are used. In this model, domestic based
sales representatives are in place and the manufacturer has own sales force.
The company X is well known and the big end customers are better served
directly. That is the case in bigger projects, for smaller quantities
wholesalers are used also in Finland. They are able to stock bins and different
end customers are served fast from their own stocks. In this model, wholesalers
are not focusing on contacting end customers and marketing is limited to "special
price" campaings. In this wholesaler model bigger projects are not found
and developed. Neither important target customers like archtitects are not
contacted. The good side is that also smaller end customer with small needs can
be served. If the company X wants for example architects to be interviewed,
they have to do it by themself.
When taking the co-operation in UAE
as an example, the company X has distributor in the area who are working mainly
with construction companies. The company X has been successful in many projects
in UAE and distributors has managed the local contacts. Goods are sold to the
distributor from Finland who has arranged installation and on-the-spot
deliveries. Final invoicing and contacting the end customer has been done by distributor.
This model can be called coalition with the Company X and the partner Y. The
Company X can be called "upstream specialist" and the Partner Y
"local downstream specialist". In this model the Company X is
responsible of R&D, manufacturing, customer services and sales to Partner
Y. Partner Y takes respobsibility of marketing, sales and services locally.
They are mainly contacting end decision makers in bigger construction projects
in UAE area. Customer relationship can be managed locally which deepends the
relationship between the end offerer and the end customer. From Company X's
point of view, it does not have enough information of market, about end
customers needs and about starting bigger projects. In this model the Company X
do not communicate directly for example with architects, who have important
role when something new is planned.
Based on out earlier discussion,
the company has several options to consider. What should be the final choice of
entry model to Qatarian market? What would be the plan to segment customers and
how? Is partner needed for that like in UAE? Or should it be done like the
company has done on domestic market? How the insight to the need of end
customers can be achieved?
It is obvious that deep marketing research is needed to make a right decision. Both options have their strengths and weaknesses. Domestic model focused on direct sales to end customer would help to build the long-term close relationships with customers, due to the more individual approach, which is highly appreciated in Middle East. But it will require more efforts from the Company X and could be rather costly (e.g. hiring and training sales people, local business culture specialists, etc.). Working through the distributors company doesn’t know much about end-customers and to this extend depends on distributors’ desire to share the information, based on which Company X will be able to enhance its marketing strategy.
ReplyDeleteIt would be interesting to know how the Qatar market looks like. Whether the competition is dense and who the main comnpetitors are? Specifically what is the situation in construction industry (as potential customers), who are the main players and their partners? How other companies offering bins work there? Do they provide any service solutions?
Thanks for the commment. This is very important issue to be covered.
DeleteBased on our research and knowledge, there are a big number of small and bigger construction companies present in Qatar and in a nearby region.
These construction companies are offering their services for different parts of construction and renowating projects. These projects are always planned by someone, so there is written plan to follow for construction company. Plans are very detailed or more flexible. Based on the level of details, plans can strictly name and style of public furnitures.
Architects and planners are including the type of their like in their plans and construction companies are ordering the bins based on written plan (description).
Most of competing waste bins models are exported to Qatar. We have not found locally manufactured models.
It should be kept in mind that normally the investment for public furnitures is considerably moderate when the total value of the project is taken in to the count. That does not mean that what ever price is accepted by construction company, but it means that company following their project plan do not want to use much time for finding needed bins.
B2C and B2B refers to business-to-consumer and business-to-business respectively. Their similarity lies in that both B2B and B2C Marketing, consumers and businesses are customers.
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