This essay will be discussing the marketing mix elements e.g. the four P's (Product, Price, Place, Promotion) and how it is standardized or adapted when a company decides to internationalise and expand into new markets. This essay first presents a PEST analysis of the Chinese and Indian markets; it then goes on to a Porter's Five Force Analysis of Subway sandwiches and Louis Vuitton products. The last part of the essay will be specifically looking at the marketing mix of Subway in the USA the domestic market in comparison to the marketing mix they use in the Indian market. It will also look at the marketing mix Louis Vuitton uses in the domestic market of France in comparison to the marketing mix used in the Chinese market.
The Competitive environment
The two tables below are PEST analyses of the Chinese market and the Indian market. PEST analysis is a tool used to assess the macro economic environment that a business operates in.
* Tariff and excises policy affect on the development of luxury goods market
Protectionist policies restricted trade especially on imported goods but when china joined the WTO this opened up gradually, due to excise prices of the goods can be severely effected meaning access to such goods will be easier for some consumers than offers
* Tourism policy effecting the luxury good consumption in China
These policies encourage their citizens to go travelling out-bound of china. This is an issue in that if people are travelling abroad they are more likely to purchase their luxury goods there because they are more likely to be real as china has a big problem with counterfeit goods and they wont have to pay extra due to excise taxes that are enforced in China.
* Fight against counterfeit purifies the environment for development of luxury goods
Even with China joining the WTO, protections for intellectual property are not consistently enforced which means that luxury goods companies could be losing out on millions due to counterfeit goods. Economical
* Rapid economic growth
China has seen rapid growth over the years due to its manufacturing and industrial sectors. As a result of this GDP has seen rapid growth.
* High GDP
This factor is the main attraction for luxury goods companies coming to china along with the size of the market in terms of the population size there. This high GDP indicates there is potentially a lot of money to made
* Risk of Inflation
This could potentially be a problem for luxury goods companies because it will mean that consumers have less disposable income to spend; however on the other hand it is also important note that China's GDP is very high and is still rising.
* Becoming more western
Due to the global media, the internet and government policy encouraging Chinese people to travel they are beginning to pick up western customs such as owning luxury goods that traditionally in Chinese culture would be frowned on.