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XCELLON INSTITUTE - SCHOOL OF BUSINESS

A Project Report onInternational Marketing

Plan of LaunchingProducts of Godrej in

ItalyA Simulation Project

Manish AsnaniM_000_44

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Italy

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A. Country Analysis

1. Economic Environment

Italy had experienced a lower growth than the European average, and it was severely

affected by the global crisis, its economy reduced to -5% in 2009. However, it benefitedfrom the revival in global demand and the return of confidence. The exports andinvestments recovered in 2010, providing a growth rate evaluated at 1% of the GDP.According to the forecast, the growth rate should remain weak in 2011.

The government has launched different social measures in order to try to help thosewho are in the most unfavorable conditions, which had a direct consequence onincreasing dramatically the public expenditures of a country that has one of the highestpublic debts in the world (more than 100% of the GDP). The government has, then,adopted a rigorous plan of EUR 24 billion in three years; it has frozen salaries andincreased taxes with the purpose of attempting to bring the public deficit to 2.7% in 2012

and reducing its debt/GDP ratio. The priority is also given to the fight against taxavoidance in this country where the black economy is very significant.

The unemployment rate has risen to about 8.7%. Regional inequity is very pronounced,especially between the north, which is very industrialized and dynamic, and the ruraland poor regions of Mezzogiorno in the south.

(http://www.globaltrade.net/international-trade-import-exports/m/c/Italy.html )

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1.1. Balance of Payments

Current Account -163

Balance on goods 15,862

Balance on services 203

Balance on income -10,280

Current transfers -5,949

Capital Account 846

Financial Account - 3,211

Direct investment abroad -21,758

Direct investment in Italy 14,874

Portfolio investment assets -36,167

Portfolio investment liabilities 29,329

Other investment assets 717

Other investment liabilities 10,233

Net Errors and Omissions 1,940

Reserves and Related Items 588

1.2. Export – Import basket

The export basket includes:

• Engineering products

• Textiles and clothing

• Production machinery

• Motor vehicles

• Transport equipment

• Chemicals

• Food

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• Beverages and tobacco

• Minerals and nonferrous metals

Italy’s main export partners are:

• Germany

• France

• Spain

• US

• UK

The Import basket includes:

• Engineering products

• Chemicals

• Transport equipment

• Energy products

• Minerals and nonferrous metals

• Textiles and clothing

• Food and Beverages

• Tobacco

Italy’s main imports partners are:

• Germany

• France

• China

• Netherlands

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• Libya

• Russia

(http://www.economywatch.com/world_economy/italy/export-import.html)

1.3.Foreign Exchange Value

Currency Rates Per 1.00 US Dollar 

CountryCurrency ISO 11/29/11 11/30/11 % Change

ITALY Euro EUR 0.749726 0.744799 -0.6572%

1 Euros = 69.9648 Rupees

(http://www.exchangerate.com)1.4.GDP

2. History of Italy

Italy became a nation-state in 1861 when the regional states of the peninsula, alongwith Sardinia and Sicily, were united under King Victor EMMANUEL II. An era of parliamentary government came to a close in the early 1920s when Benito MUSSOLINIestablished a Fascist dictatorship. His alliance with Nazi Germany led to Italy's defeat inWorld War II. A democratic republic replaced the monarchy in 1946 and economic

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revival followed. Italy was a charter member of NATO and the European EconomicCommunity (EEC). It has been at the forefront of European economic and politicalunification, joining the Economic and Monetary Union in 1999. Persistent problemsinclude illegal immigration, organized crime, corruption, high unemployment, sluggisheconomic growth, and the low incomes and technical standards of southern Italy

compared with the prosperous north.

Natural hazards: regional risks include landslides, mudflows, avalanches, earthquakes,volcanic eruptions, flooding; land subsidence in Venice

volcanism: Italy experiences significant volcanic activity; Etna (elev. 3,330 m), which isin eruption as of 2010, is Europe's most active volcano; flank eruptions pose a threat tonearby Sicilian villages; Etna, along with the famous Vesuvius, which remains a threatto the millions of nearby residents in the Bay of Naples area, have both been deemed"Decade Volcanoes" by the International Association of Volcanology and Chemistry of the Earth's Interior, worthy of study due to their explosive history and close proximity to

human populations; Stromboli, on its namesake island, has also been continuouslyactive with moderate volcanic activity; other historically active volcanoes include CampiFlegrei, Ischia, Larderello, Pantelleria, Vulcano, and Vulsini

Environment - current issues: air pollution from industrial emissions such as sulfur dioxide; coastal and inland rivers polluted from industrial and agricultural effluents; acidrain damaging lakes; inadequate industrial waste treatment and disposal facilities

Environment - international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulfur 94, Air Pollution-Volatile Organic Compounds, Antarctic-EnvironmentalProtocol, Antarctic-Marine Living Resources, Antarctic Seals, Antarctic Treaty,Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification,Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea,Marine Dumping, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, TropicalTimber 94, Wetlands, Whaling signed, but not ratified: none of the selectedagreement

3. Geography

Location: Southern Europe, a peninsula extending into the central Mediterranean Sea,northeast of Tunisia

Map references: Europe

Area: total: 301,340 sq kmland: 294,140 sq kmwater: 7,200 sq kmnote: includes Sardinia and Sicily

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Land boundaries: total: 1,899.2 kmborder countries: Austria 430 km, France 488 km, Holy See (Vatican City) 3.2 km, SanMarino 39 km, Slovenia 199 km, Switzerland 740 km

Coastline: 7,600 km

3.1. Climate Predominantly MediterraneanAlpine in far northHot, dry in south

3.2. Topography

Three quarters of Italy is hilly and mountainous. The two mountain ranges that cover Italy are the Alps, which continue into France and Yugoslavia, and the Apennines,which follow the Alps along to the southern tip of Italy

4. Population & Demographic related information:

Population: 61,016,804 (July 2011 est.)

Age structure:0-14 years: 13.8% (male 4,315,292/female 4,124,624)15-64 years: 65.9% (male 19,888,901/female 20,330,495)65 years and over: 20.3% (male 5,248,418/female 7,109,074)(2011 est.)

Median age: total: 43.5 years

male: 42.4 yearsfemale: 44.7 years(2011 est.)

Population growth rate: 0.42% (2011 est.)

Birth rate: 9.18 births/1,000 population (2011 est.)

Death rate: 9.84 deaths/1,000 population (July 2011 est.)

Sex ratio: at birth: 1.059 male(s)/femaleunder 15 years: 1.06 male(s)/female15-64 years: 1.03 male(s)/female65 years and over: 0.72 male(s)/femaletotal population: 0.96 male(s)/female(2011 est.)

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Literacy: definition: age 15 and over can read and writetotal population: 98.4%male: 98.8%female: 98%(2001 census)

Electricity - production: 269.6 billion kWh (2009 est.)

Electricity - consumption: 314.5 billion kWh (2008 est.)

Electricity - exports: 2.121 billion kWh (2009 est.)Electricity - imports: 44.45 billion kWh (2009 est.)

Electricity - production by source: fossil fuel: 78.6%hydro: 18.4%nuclear: 0%

other: 3% (2001)

Telephones - main lines in use: 21.3 million (2009)

Telephones - mobile cellular: 90.613 million (2009)

Broadcast media: two Italian media giants - the publicly-owned RadiotelevisioneItaliana (RAI) with 3 national terrestrial stations and privately-owned Mediaset with 3national terrestrial stations - dominate; additional broadcasts by a large number of private stations and Sky Italia - a satellite TV network; RAI operates 3 AM/FMnationwide radio stations; some 1,300 commercial radio stations (2007)

Internet users: 29.235 million (2009)

(http://www.indexmundi.com/italy/)

Transportation of goods

By road

The Italian road network extends over 300,000 km, among which 6,200 km arehighways, 66% of the cargo traffic transits by road. Despite important gaps in terms of infrastructure, new projects are currently under study to improve road axis, such as theconstruction of the new East-West highway in the northern region of Italy.

By rail

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The network extends over 20,000 km. 99% of goods transport is carried out by thepublic company Ferrovie dello Stato (FS). The rest being shared between 26 agenciesmanaged by the Italian Ministry of Transport (Ministero dei Trasporti e della Navigazione - MTN). In August, 1992 the state-owned company was split into twoindependent companies: Trenitalia Spa which ensures the transportation (it was created

in June 1st, 2000) and Reteilia Spa, which is in charge of the infrastructure, waiting for constitution. "FS's Divisione Cargo" is the main Italian operator of railway freight, andranks third in Europe. Thanks to a very developed network of partnerships at theEuropean level, the FS ensures the railway and multimodal transportation of goodsalmost on the whole continent.The priority of the government remains the completion of the 900 km high speed trainsrailroads project in order to increase the traffic on the most used lines (Milan - Naples;Turin - Venice).

By sea

The main Italian ports are: Gioia Tauro, Gene, Spezia, Livourne and Naples, on theMediteranean coast and Ancona, Bari, Brindisi, on the Adriatic rim.The specialised harbour sector (containers) is sharply expanding and reaches a recordrate of 22 million TEU (Twenty Feet equivalent Unites) in 2000. This represents a thirdof the container traffic in the Mediterranean Sea, this rate is forecasted to reach 30million Teu in 2015. The strategic position of these main ports urges big world operatorsto take position on the terminals containing the country's ports of call (the Singaporeangroup PSA, German Eurogate-Eurokai and the Dutch-Hong-Kong owned company Ect),

and therefore to increase their activities. New plans are under study to increase theaccommodation facilities of the Italian calls.

By air 

The national airline is Alitalia. The main international airports are located in Turin, Milan,Genoa,Venice, Pisa, Roma, Naples and Palermo. To get the list of all the Italiannational and international airports, please , click here. In 1999 , 250.531 tons of freightpassed in transit via the airport of Milan, that is an increase of a 47 % in relation to theprevious year. 

5. Cultural Variable

Italian culture

INTRODUCTIONCulture (from the Latin cultura stemming from colere, meaning "to cultivate") is a termthat has various meanings.

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• Excellence of taste in the fine arts and humanities, also known as high culture

• An integrated pattern of human knowledge, belief, and behavior that dependsupon the capacity for symbolic thought and social learning.

• The set of shared attitudes, values, goals, and practices that characterizes aninstitution, organization or group

Italian culture:“Italia”, a word which conjures up a harmonious bond between body, spirit and soul.

“Italia” a word which means international haute couture, design, architecture and, evenmore so, a unique way of life.

Italian Art

The Last Supper  by Leonardo da Vinci: equally to Mona Lisa, it is the most famous;

most reproduced and most parodied portrait and religious painting of all time.Over the centuries, Italian art has gone through many stylistic changes. Italian paintingis traditionally characterized by a warmth of colour and light, as exemplified in the worksof Caravaggio and Titian, and a preoccupation with religious figures and motifs. Italianpainting enjoyed preeminence in Europe for hundreds of years, from the Romanesque and Gothic periods, and through the Renaissance and Baroque periods, the latter two of which saw fruition in Italy. Notable artists who fall within these periods includeMichelangelo, Leonardo da Vinci, Donatello, Botticelli, Fra Angelico, Tintoretto,Caravaggio, Bernini, Titian and Raphael.Thereafter, Italy was to experience a continual subjection to foreign powers whichcaused a shift of focus to political matters, leading to its decline as the artistic authority

in Europe.Not until 20th century Futurism, primarily through the works of  Umberto Boccioni andGiacomo Balla, would Italy recapture any of its former prestige as a seminal place of artistic evolution. Futurism was succeeded by the metaphysical paintings of  Giorgio de Chirico, who exerted a strong influence on the Surrealists and generations of artists tofollow.

Italian Design

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A Wedding dress by Valentino

Such masters of the Fifties and Sixties as Aulenti, Castiglioni and Magistretti did a verygood job indeed if we consider that during those years Italy became a crossroads for anew generation of creative minds on an international scale. For industrial, furniture andcar design, Italian style stands out for its blend of imagination and precision planning.

Italian Cuisine

Modern Italian cuisine has evolved through centuries of social and political changes,with its roots reaching back to the 4th century BC. Significant change occurred with thediscovery of the New World, when vegetables such as potatoes, tomatoes, bell peppers, and maize became available. However, these central ingredients of modernItalian cuisine were not introduced in scale before the 18th century.Ingredients and dishes vary by region. However, many dishes that were once regionalhave proliferated in different variations across the country. Cheese and wine are major parts of the cuisine, playing different roles both regionally and nationally with their manyvariations and Denominazione di origine controllata (regulated appellation) laws. Coffee,and more specifically espresso, has become highly important to the cultural cuisine of Italy. Some famous dishes and items include pasta, pizza, lasagna, focaccia, andgelato.

Authentic Neapolitan pizza

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Italian Wine

Brunello di Montalcino, a famous type of Tuscan wine.Wine as a product is almost as old as civilisation and has always been a part of Italy’s

farming production: indeed vine farming dates right back to Egyptian times. But how didwine come into being? In prehistoric times it seems that vines grew wild in forests andvery early on, primitive Man was enjoying fruit produced by the plant until one day bychance, someone left some grape juice in a container and noticed that it had undergonea strange transformation: if one drank this beverage it produced a pleasant effect. Butapart from the pleasures of wine, it was also important for religion and ritual: theDionysian rituals of Greece and Bacchan rites held in Ancient Rome are highlyrenowned. Here of course, wine was only permitted for men: women could not comeanywhere near this sacrificial liquid: for them it was impure.

Italian Literature and theatre:

The basis of the modern Italian language was established by the Florentine poet Dante Alighieri, whose greatest work, the Divine Comedy, is considered amongst the foremostliterary statements produced in Europe during the Middle Ages. There is no shortage of celebrated literary figures in Italy: Giovanni Boccaccio,  Giacomo Leopardi, Alessandro Manzoni, Torquato Tasso, Ludovico Ariosto, and Petrarch, whose best-known vehicle of expression, the sonnet, was invented in Italy.Prominent philosophers include Giordano Bruno, Marsilio Ficino, Niccolò Machiavelli,and Giambattista Vico. Modern literary figures and Nobel laureates are nationalist poetGiosuè Carducci in 1906, realist writer Grazia Deledda in 1926, modern theatre author Luigi Pirandello in 1936, poets Salvatore Quasimodo in 1959 and Eugenio Montale in1975, satirist and theatre author Dario Fo in 1997.Italian theatre can be traced back to the Roman tradition which was heavily influencedby the Greek; as with many other literary genres, Roman dramatists tended to adaptand translate from the Greek. For example, Seneca's Phaedra was based on that of 

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Euripides, and many of the comedies of Plautus were direct translations of works byMenander . During the 16th century and on into the 18th century, Commedia dell'arte was a form of improvisational theatre, and it is still performed today.Travelling troupes of players would set up an outdoor stage and provide amusement inthe form of  juggling, acrobatics, and, more typically, humorous plays based on a

repertoire of established characters with a rough storyline, called canovaccio.

Dante, poised between the mountain of purgatory and the city of Florence, displays thefamous incipit Nel mezzo del cammin di nostra vita in a detail of Domenico diMichelino's painting, Florence 1465.

Italian architecture:

The Leaning Tower of Pisa.Italy has a very broad and diverse architectural style, which cannot be simply classified

by period, but also by region, due to Italy's division into several city-states until 1861.However, this has created a highly diverse and eclectic range in architectural designs.Italy is known for its considerable architectural achievements.

Sport

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Felipe Massa driving a Ferrari at the 2010 Malaysian Grand Prix

Italy has a long sporting tradition. In numerous sports, both individual and team, Italyhas good representation and many successes. The most popular sport is by far  football.Basketball and volleyball are the next most popular/played, with Italy having a richtradition in both. Italy won the 2006 FIFA World Cup, and is currently the second mostsuccessful football team in the world, after Brazil, having won four  FIFA World Cups.Italy has also got strong traditions in cycling, tennis, athletics, fencing, winter sports andrugby. Italian Scuderia Ferrari is the oldest surviving team in Grand Prix racing, havingcompeted since 1948, and statistically the most successful Formula One team in history

with a record of 15 drivers' championships and 16 constructors' championships.

Religion

The Santa Maria del Fiore cathedral in Florence, which has the biggest brick dome inthe world, and is considered a masterpiece of Italian architecture.Roman Catholicism is by far the largest religion in the country, although the CatholicChurch is no longer officially the state religion. The proportion of Italians that identifythemselves as Roman Catholic is 87.8%, although only about one-third of thesedescribed themselves as active members (36.8%).Most Italians believe in God, or a form of a spiritual life force. According to the mostrecent Eurobarometer Poll 2005: 74% of Italian citizens responded that 'they believethere is a God', 16% answered that 'they believe there is some sort of spirit or life force'and 6% answered that 'they do not believe there is any sort of spirit, God, or life force'.

Italian Languages

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Italy's official language is Italian. Ethnologue has estimated that there are about55 million speakers of the language in Italy and a further 6.7 million outside of thecountry. However, between 120 and 150 million people use Italian as a second or cultural language, worldwide.

Italian Family Values

The family is the centre of the social structure and provides a stabilizing influence for itsmembers.

In the north, generally only the nuclear family lives together; while in the south, theextended family often resides together in one house.

The family provides both emotional and financial support to its members.

Italian Style

 Appearances matter in Italy.

The way you dress can indicate your social status, your family's background, and your education level.

First impressions are lasting impressions in Italy.

The concept of 'bella figura' or good image is important to Italians.

They unconsciously assess another person's age and social standing in the first fewseconds of meeting them, often before any words are exchanged.

Clothes are important to Italians.

They are extremely fashion conscious and judge people on their appearance.

You will be judged on your clothes, shoes, accessories and the way you carry yourself.(http://www.kwintessential.co.uk/resources/global-etiquette/italy-country-profile.html

Italian Lifestyle

Italians are warm, welcoming people who love to relax, celebrate and socialise withfamily and friends. And celebration and relaxation usually take place around the tableeither at home or in a restaurant, where they can enjoy the traditions of the Italiancuisine.

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Italians have a passion for eating but also for talking.

In Italy conversation is an art form. As you walk in the streets or stop at a café in one of the many squares, you will notice Italians of all ages engaged in intense and animateddiscussions on a wide variety of topics ranging from family, work, politics, gossip, food,

wine and sports, especially soccer.

From the largest cities to the most rural of villages, there is one place that remains thecentral meeting point of Italian culture – the piazza (square). No matter how big or smalla piazza may be, you can be sure there will always be a people sitting, strolling,walking, talking and interacting with one another. Piazzas are also the main focal pointsfor festivals, gatherings, celebrations and political events.

The only times during the day that the piazzas and streets around Italy may be desertedare around 12.30-14.00 and 19.30-21.30. These are the times when Italians are homeenjoying a meal.

To the real Italian, lunch is a 1 to 2 hour affair with traditionally a two to three coursemeal, which explains why most things halt for two hours during the day. Stores shutdown, banks close, and the streets are empty.

At around 2 o’clock people start to emerge from their houses and populate the streetsagain until around 19.30 when it is time for dinner.

After dinner, the streets come to life again as Italians stroll around the piazza to work off their meal or head off for their evening engagements.

Leisure and entertainment

More money is spent on soccer tickets than any other spectacle. Basketball is also apopular sport. Many Italians went to the cinema before TV; now they prefer to stayhome and watch videos. Theater and opera are very popular. Good concerts are soldout. After the Spanish, Italians buy fewer books and newspapers than any other Western Europeans, but everyone reads the many illustrated magazines available, andcomic books.

6. Business Culture

Management style:

o Italians prefer to do business with people they know and trust.

o A third party introduction will go a long way in providing an initial platform from

which to work.

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o Italians much prefer face-to-face contact, so it is important to spend time in Italy

developing the relationship.o Your business colleagues will be eager to know something about you as a

person before conducting business with you.o The way person behave to others is important as Italians judge people on

appearances and the first impression you make will be a lasting one.o Italians are intuitive. Therefore, make an effort to ensure that your Italians

colleagues like and trust you.o Networking can be an almost full-time occupation in Italy. Personal contacts

allow people to get ahead.o Take the time to ask questions about your business colleagues family and

personal interests, as this helps build the relationshipo Italians are extremely expressive communicators. They tend to be wordy,

eloquent, emotional, and demonstrative, often using facial and hand gestures toprove their point.

Business Negotiation

o In the north, people are direct, see time as money, and get down to business

after only a brief period of social talk.o In the south, people take a more leisurely approach to life and want to get to

know the people with whom they do business.o Allow your Italian business colleagues to set the pace for your negotiations.

Follow their lead as to when it is appropriate to move from social to businessdiscussions.

o Italians prefer to do business with high-ranking people.o Hierarchy is the cornerstone of Italian business. Italians respect power and age.

o Negotiations are often protracted.

o Never use high-pressure sales tactics.

o Always adhere to your verbal agreements. Failing to follow through on a

commitment will destroy a business relationship.o Heated debates and arguments often erupt in meetings. This is simply a function

of the free-flow of ideas.o Haggling over price and delivery date is common.

o Decisions are often based more on how you are viewed by the other party than

on concrete business objectives.

Dress Etiquette 

o Dressing well is a priority in Italy.

o Men should wear dark colored, conservative business suits.

o Women should wear either business suits or conservative dresses.

o Elegant accessories are equally important for men and women.

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7. Political Environment

Country name: Italian Republic

conventional short form: Italylocal long form: Repubblica Italianalocal short form: Italiaformer: Kingdom of Italy

Government type: Republic

Capital: Rome

The current President of Italy is Giorgio Napolitano and current Prime Minister of 

Italy is Mario MontiThe politics of Italy is conducted through a parliamentary, democratic republic with amulti-party system.

Executive power is exercised collectively by the Council of Ministers, which is led by thePresident of the Council of Ministers, referred to as "Presidente del Consiglio" in Italian.

Legislative power is vested in the two houses of parliament primarily, and secondarilyon the Council of Ministers.

The judiciary is independent of the executive and the legislative branches. Italy hasbeen a democratic republic since 2 June 1946, when the monarchy was abolished bypopular referendum (see birth of the Italian Republic). The constitution was promulgatedon 1 January 1948.

Import regulations and customs duties

Regulations

In accordance with its European Union membership, Italy applies the European Union(EU) rules that are in force in all European Union countries. While the EU has a rather liberal foreign trade policy, there is a certain number of restrictions, especially on farm

products, following the implementation of the CAP (Common Agricultural Policy): theapplication of compensations on import and export of farm products, aimed at favouringthe development of agriculture within the EU, implies a certain number of control andregulation systems for the goods entering the EU territory.Moreover, for sanitary reasons, regarding Genetically Modified Organisms (after beingallowed in the European territory), their presence should be systematically specified onpackaging. The beef cattle bred on hormones is also forbidden to import.The BSE crisis (often called the "mad cow disease") urged the European Authorities to

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strengthen the phytosanitary measures to make sure of the quality of meats enteringand circulating in the EU territory. The principle of precaution is now widespread: incase of doubt, the import is prohibited until proof is made of the non-harmfullness of products.

Customs duties

Since the first of January 1993, the European Union, of which Italy is part, has been asingle market, without any customs barriers, which ensures free circulation of goods. OnMay, 1st of 2004, ten "candidate countries" became new members of the EuropeanUnion: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland,the Slovak Republic, and Slovenia. Trade within the European Union is totally free fromcustoms duties, provided that the country of origin of the goods is one of the 25European Union Member States. Nevertheless, when introducing merchandises intoItaly, exporters shall fill in an intrastat declaration.

When the country of origin of the merchandises which are exported to Italy is not part of the European Union, customs duties are calculated Ad valorem on the CIF value of thegoods, in accordance with the Common Customs Tariff (CCT).

The duties for non-European countries are relatively low, especially for manufacturedgoods (4.2% on average for the general rate), however textile, clothing items (highduties and quota system) and food-processing industry sectors (average duties of a17.3% and numerous tariff quotas, PAC) still know protective measures.In order to get exhaustive regulations and customs tariffs rates regarding their products,exporters shall refer to the TARIC code and its database, which includes all applicable

customs duties and all customs trade policy measures for all the goods.

Moreover, many bilateral and multilateral agreements have been signed by theEuropean Union, in order to define specific customs duties with the following countries:

- Customs agreements with Australia, Canada, United States, Mexico and South Korea.

- The EU-EFTA (European Free Trade Association) Agreement that was signed in 1972with Iceland, Liechtenstein, Norway and Switzerland.

- Free trade agreements with Bulgaria and Romania that hope joining the EuropeanUnion in 2007.

- Mediterranean Agreements, concerning: Turkey, Israel, Jordan, Morocco, PalestinianAuthority,Tunisia, Egypt, Lebanon and Syria.

- The ACP agreements, with 95% of the tariff lines with a 0% rate developing countriesin Africa, the Caribbean Islands and Pacific. The Cotonou Agreement , signed in year 

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2000, defines the new EU-ACP partnership.

- The Generalised System of Preferences (GSP): 54% of the tariff lines at 0% for developing countries outside the ACP framework.

To get an exhaustive list of the foreign trade agreements of the European Union,click here.

>> To get further information on customs policies in the European Union, please checkthe exhaustive report by the European Commission.

Import taxes

Excise duties are also levied on certain products, especially on spirit.

>> To get further information on VAT rates in Italy, please check the list of VAT ratesapplied within the European Union (October 2003), as well as the Ministry of Finances website.

>> To get further information on Excise duties, please check the European Union exciseduty tables(December 2003).

8. Legal Environment

The international legal framework is somewhat confused. Most controls or regulationsrevolve around export and import controls, transfer pricing, taxes, regulation of corruptpractices, embargoed nations, antitrust, expropriation and distribution of equity, patentsand trademarks. The following touches on a number of these issues and in particular the import/export regulations (terms of access).

Most issues in the legal/political environment centre around the following:-

i) "Institutional environment" - made up of political, social and legal ground rules within

which the global marketer must operate.

ii) Property rights - patents, trademarks.

iii) Taxation - what taxation schemes will be faced abroad?

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iv) Recourse - possibility and length of action with the possibility of image damagingnecessitating arbitration.

v) Movement of equity and expropriation threats - often necessitating protocols or thesigning of trade frame working agreements.

 

B. Company and Product Analysis

9. Product

Security Equipment & Solutions: (ISO 9001 / 14001) Strong RoomDoors, Safe Deposit Lockers, Cash Boxes and Coffers, Data/ATMSafes, FINGER SCANER

Justification for selecting the Security solution equipment asa product to export to Italy

1. Italy is a country whose import basket includes engineering products and securitysolution equipments are titled under engineering product

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2. Italy has very strong purchasing power and people earn good amount of moneythrough various sources; so security solution equipment will fill the gap of need inthe market.

3. There are so many institutions whom we can target for this product to satisfy their need by informing them to increase the safety by buying various security

equipments4. It is risky to keep the cash or gold at home so our product will ensure that theluxurious items are kept safe in our product.

5. According to the data of population I saw a huge market which is un covered6. For Italians safety comes first7. Italians invest much in insure safety, and safety equipments at Italy are too

Expensive8. Good amount of margin9. The product can be lasted for long time if not sold.10.Less Risk as Technological Instrument

10. Selection of company

 

About Godrej & Boyce Mfg. Co. Ltd

In 1897 a young man named Ardeshir Godrej gave up law and turned to lock-making.Ardeshir went on to make safes and security equipment of the highest order, and thenstunned the world by creating toilet soap from vegetable oil. His brother Pirojsha Godrejcarried Ardeshir's dream forward, leading Godrej towards becoming a vibrant, multi-business enterprise. Pirojsha laid the foundation for the sprawling industrial gardentownship now called Pirojshanagar in the suburbs of Mumbai, where the Godrej Grouphas its headquarters.

Godrej & Boyce Mfg. Co. Ltd., the holding company of the Godrej Group, started its journey with the manufacture of high quality locks in 1897. Today, we have 15 diversebusiness divisions offering consumer, office, and industrial products and services of thehighest quality to every corner of India and across the globe.

Our Businesses:

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AppliancesAV Solutions (Prima)ConstructionElectricals & ElectronicsFurniture (Interio)

Lawkim MotorsLocksMaterial HandlingPrecision EngineeringPrecision SystemsProcess EquipmentSecurity SolutionsStorage SolutionsToolingVending (Prima)We value integrity, trust, service and respect for individuals and for the environment. We

pride ourselves for being one of India’s most respected corporate houses known for our philanthropy and initiation of labour reforms besides being recognized for our fair,transparent and ethical dealings. Our people are our assets who are groomed to deliver their best. What makes us special? At Godrej, it’s more than a career. It’s an opportunityto live your dreams and be part of a culture that nurtures ambition, challenges andprovides freedom to operate and express your ideas.

The Godrej Group touches the lives of 400 million Indians who use at least one of our products every single day. Our commitment to quality, attention to detail and customer centricity has helped us earn the trust of generations of Indians.

Key Success factor 

o Godrej Defender safes withstood a 24-hour fire assault in 2005 when an entire

mall in Dubai burnt down

o ATM safes were developed by Godrej Security Solutions for the world's leading

ATM manufacturers

o The company manufactures high-pressure doors for nuclear reactors and marine

applications

o Godrej Security Solutions is amongst a handful of manufacturers to be ISO

9001:2000, ISO 14001:2004 and OHSAS 18001:1999 approved

o The confidence in the company's products can be gauged from the fact that they

are certified by and listed at the Underwriters Laboratory, USA; SP Laboratories,Sweden; BRE of the UK; VdS Laboratorie of Germany; ECBS from Germany; the

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Bureau of Indian Standards, the Central Building Research Institute and theElectronic Regional Testing Laboratory in India

o Godrej Security Solutions is the first brand in the Indian security industry to be

awarded the Superbrands status

o Godrej Security Solutions has also recently won at the Times of India Smart

Living Awards 2007

Mission:

o Godrej Mission is to operate in existing and new businesses which capitalize on

the Godrej brand and corporate image of reliability and integrity.

o Godrej objective is to delight it’s customer both in India and abroad.

o Godrej shall strive for excellence by nurturing, developing and empowering it’s

employees and suppliers.

o Godrej encourages an open atmosphere, conducive to learning and team work

o Accelerate the growth of Indian household insecticides market.

o To globalize the business rapidly.

o Enriching Quality of Life Everyday Everywhere.

Vision:

Godrej in Every Home and Work place

Motto:

We care the quality of your life.

Hierarchy:

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Personal department comprises of four employees- one deputy and 3 seniors under him. Over all there are 19 plants make all different products like security systems, locks,doors, etc. Each of this plant is considered as a separate profit making center. Profits

made by each of the plants are accounted for separately in its Annual report also.

Management:

Different levels of management are as follows:A - Base level of management

In this level, new-entrants are trained about the various levels of the department.O - OperationP - Promotion of productT - TechnicalS - Sales

E - This level consists of owners and M.D.

Each of this level consists of three sub-sections, through which each employee has topass to reach a higher level. An employee, before moving into the next level, he has tobe in each sub section for at least two years.

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The marketing 4 P’s

A. Product

Physical Security Equipment:-

o Defender Plus Safes

o Record Room Door 

o

Popular Safes

Electronics Security Equipment:-

o CCTV

o E Laptop Safe

o Video Door Phone

Doors:-

o

Flush Doorso Molded Panel

o Royal Teak Doors

B. Price

There exists different Pricing strategy for each Product.

C. Place

The Company has a network of:

o 38 Company-owned Showrooms

o More than 2,200 Wholesale Dealers, and more than 18,000 Retail Outlets.

o The Company has Representative Offices in Sharjah (UAE), Nairobi (Kenya),

Colombo (Sri Lanka) and Riyadh (Saudi Arabia).

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D. Promotion

The audience for specialized products manufactured by Godrej Security Solutions is avery narrow band of professionals. As a result, the company focuses itscommunications energies in reaching out to them through direct marketing. This mediavehicle helps the company drive preference for the brand by communicating thebenefits of its hi-end security solutions, even as it creates opportunities to cast itself asa young, vibrant and innovative organization. It expects that between these twoplatforms of technology and vibrancy the company will continue to win support and trustfor its products and services.

Amongst its many positioning initiatives is its quarterly security magazine – FIR (FirstInformation Report). Published to give insights into the banking industry, FIR isdesigned to build desired brand imagery and help the brand maintain its leadershipposition.

The newsletter covers a vast array of subjects such as trivia on security, the latestproducts and technological breakthroughs, security threats and solutions, thematicfeatures, sci-fi films, testimonials and interviews with industry leaders. Focusing itsenergies on an integrated communication approach the Godrej Security Solutions brandcovers several touch points.

'Break in Challenge' was a unique initiative to ensure a two-way interaction withcustomers on the company's products. The main objective of this activity was to turnpassive exposure into active engagement. It focused on home security solutions likehome safes, video door phones, alarm systems, home doors, and closed circuit

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SWOT ANALYSIS

STRENGTHS:-

1. The Company has got wide range of branches within the country.

2. The Company has wide range of product line.

3. Godrej is having better Sales after services.

4. The Company has there respectable and believable brand name.

5. Company is having large number of customer with higher satisfaction in India.6. The management is trained and efficient & the network of service centers is good

in all states.

WEAKNESS:-

1. The Company does not go for advertising, which is one of the biggest

disadvantages of Godrej, at least in Italy they would have to communicate their 

presence.

2. Its emphasis more on the advertising of office automation & prima division.3. The company is focusing many security products at a same time.

4. The effective selling schemes are not available which attracts the international

consumer.

OPPORTUNITY:-

1. Godrej has more opportunities to grow as it has earned good name in security

sector in India and other countries.

2. Technical up gradation time to time is also one of the opportunities.3. Godrej can focus on big project like construction. Where there is a great demand

of security equipments

Threat:

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1. The growing competition in the security sector is threat for all manufacturing

companies so it is also threat for Godrej to stand in the international market with

the higher position.

C. Industry and Competitor Analysis

Industry Analysis

Trend

Imports show a one percent increase across the board, with imports from the Americas

holding a four percent share, down 3.2 percent over the previous year.

CURRENT MARKET TRENDS

o

Italian consumers are extremely attached to the value of the brands and have asignificant quality culture for products / materials

o With large-scale distribution developing, Italian consumers are starting to look for 

'good value for money' offers

o Expenditure linked to the fashion sector is more important in Italy than in any

other European country

 

o To be successful, one would have to if possible :

- to position oneself as a foreign manufacturer 

- not to try to copy Italian products

Demand and Supply

Demand for security equipment and services continue to be significant and remain a

primary area of focus for the Italian Government. In Italy and across Europe major 

challenges include enhancing homeland security, and combating illegal immigration and

crime. Opportunities may be found in the aviation, maritime, supply chain and rail

security areas. Italian end-users are generally receptive to U.S. technology.

Equipment with the greatest sales potential includes airport passenger and baggage

screening equipment, cargo/container scanning equipment, access control systems(including CCTV systems), perimeter protection systems, fire-fighting equipment and

systems, personal protection equipment, anti-intrusion systems, burglar alarms, and

automated home protection solutions.

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The Indian Electronic Security Protection Systems Industry

The Indian market for electronic security equipment is categorized into the electronic

sector and non-electronic sectors and organized and informal sectors. While the total

number of players in the organized electronic sector is around 50, the unorganized

sector accounts for about 800 units. Many Indian companies have collaborated with

foreign manufacturers and are marketing foreign products in India.

The Italy Electronic Security Protection Systems Industry

Italy has a fairly strong domestic safety and security industry with a reputation for highquality products. Italian production is well distributed across the various security

equipment product categories. The industry is comprised of a sizable number of small

and mid-sized locally based concerns.

The access control sector comprises 40 percent of the security market and represents

one of the most promising areas in both the public and private sectors. Many

government organizations and private sector firms are enhancing their facility security

by implementing access control measures.

Competitor of Godrej in Security Equipment:-

Physical Security:-

Gunnebo India pvt

Methodex

Syntax

Electronic Security:-

Panasonic

Zicom

Banking automation

Doors:-

Kalsi Automatic Door Sys tem (P) Ltd

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Tasido Wooden Door Co Ltd

Furntech Interiors Private Ltd

Jindal Overseas

The Competitor 4 P’s (marketing mix)

Product

The competitors have specific segment products and are targeting specific target

market. But Godrej has all the products under one roof to satisfy the customer need of 

all segments.

Price

Different competitors have different pricing strategy for specific segment.

Place

All competitors do have national presence and give a challenging competition at every

region

Promotion

Competitors do take many efforts to make feel the presence in the market but Godrejbeing a trust worthy brand in the market does not have to make much more promotions

rather than using internal sources for promotion

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Porter’s 5 Force Model

Barriers to Entry

o Economies of Scale

o Product Differentiation

o Capital Requirements

o Customer Switching Costs

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o Access to Distribution Channels

o Government Policy

o Expected Retaliation

Bargaining Power of Suppliers

Suppliers are likely to be powerful if:

o Supplier industry is dominated by a few firms

o Suppliers’ products have few substitutes

o Buyer is not an important customer to supplier 

o Suppliers’ product is an important input to buyers’ product

o Suppliers’ products are differentiated

o Suppliers’ products have high switching costs

Bargaining Power of Buyers

Buyer groups are likely to be powerful if:

o Buyers are concentratedo Purchase accounts for a significant fraction of supplier’s sales

o Products are undifferentiated

o Buyers face few switching costs

o Buyer presents a credible threat of backward integration

o Buyer has full information

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Marketing Plan

MARKETING MIX

1. Product

Introduction of the Product in Italy market

 

1. 3rd Eye Fake Note Detectors 2. Finger scan with Proximity Readers

 

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3. Mantrap 4. Defender Pro Safes

Detail About the product

1. 3rd Eye Fake Note Detectors

Features

Ultra Violet (UV) light based unit.

Detects most of the Gandhi series currencies, valid credit cards and passport.

Most credit cards,currency and passports are manufactured with special security features

incorporated in it, which are not visible to the naked eye. For e.g, in a Rs 500 note, there are a

lot of small fibres and numbers placed randomly and the security thread glows when the note is

placed under UV light.

Incorporates high quality UV tubes of reputed makes.

Checks Security features built in a currency note, that can be used to detect whether the notes

are genuine: Security Threads. Invisible fibres. Fluorescent Inks. UV Dull and UV Bright paper quality.

Usage

Banks, Financial Institutions, Offices, Shops, Post offices, etc

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2. Finger scan with Proximity Readers

F-smart is an elegant and compact “Access & Time Attendance System”. It is absolutely user 

friendly and supports the latest smart card technology. It has the unique capability to work on

standalone as well as network mode.

Features

Stores two templates per finger i.e. 1- master and 1- Slave template

Real Time auto update of Finger Templates to monitor change in the fingerprint

Stores up to 4700 Templates & 30,000 event buffers

High Quality Optical Sensor / Capacitive Chip Sensor (Award winning Fingerprint algorithm)

Fast Verification Time (less than 1 sec., 2 sec. for Identification)

Output Formats: Wiegand / RS232 / RS485 / TCP/ IP made available

High Protection from Scratch and ESD (Electro Static Discharge)

Various Operating Modes - Smart Card / PIN and Fingerprint Verification

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3. Mantrap

A security device that monitors and controls entry to secure area from non-secure area

through two or more interlocking doors

An advanced screening system designed to identify and automatically deny entry to

unauthorized people carrying weapons into secure areas.

The system can be designed with bullet resistant walls and doors

Product details :

Partition / Wall

Door (each 2 nos.)

Door accessories (continuous hinge, Door closer, etc.

Electro-magnetic Lock

DFMD system

Access Control System

Modular construction which gives flexibility to increase the number of chambers as per requirement by simply adding the partition to the existing chamber 

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Special type of DFMD for Static metal bypass system.

Features

Interlocking doors : Doors that are interlocked cannot be open at the same time. Also When

Metal is detected both the doors will get locked with person trapped inside.

Access control system : Access control system identifies user and allows or denies entry door 

lock opening.

Control system to integrate ACS, DFMD and Lock : The overall control, logic and program

Red / Green lights to indicate lock status at all the doors

Intercom for communication with security personals. (Optional)

Complete bullet resistant structure as per required level (NIJ or UL)

Individual door control

Control panel with emergency override and reset buttons

Defined throughput per person per chamber.

Functions:

Deters & prevents armed robbery

Ensures employee & customer safety

Traps criminals / threats

Options:

• Customizable configurations

• Dedicated Entry and Exit chambers

• Bidirectional Entry cum Exit

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• Bullet Proof Glass and Frames

• Level I / II / III/ IIIA

4. Defender Pro Safes

Big, heavy, bulky- the typical description of a safe is fast changing. Godrej presents to

you the range of Fire and Burglary Resistant VdS certified and listed Defender Pro

safes, the lightest in the category.

Designed & engineered to the very latest standards, the Defender Pro collection of 

safes combine great looks with the outstanding levels of security, reliable operation and

modern day requirements.

Features

Robust range  : Range of sizes with varying storage capacities is available to meet

virtually every storage need.

The strong Seamless Construction: Fully welded multi-corner bend construction with

seamless body. All five sides and the door are armored with a specially formulated

Godrej TDR Matrix that is encased between strong outer and inner steel bodies. Thisprovides massive resistance to attacks of sledgehammers, power drills, electric- arc,

Oxy- Acetylene torch, Grinders, sledgehammers, thermic lance etc. and also helps

withstand the impact of a fall from higher levels.

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Light Weight & Smart Looks: The overall body thickness is only 65 mm for grade

I/II/III & 90 mm for Grade V safes. These safes are one of the lightest in their respective

categories. Slimmer walls give the safes a smart contemporary look.

Bolt-work Mechanism: Depending on the size & grades, the safes have a varying

number of retraceable & fixed bolts.. Special protection is provided to the bolts by the

body jamb on either side of the safe, to resist any form of torch & tool attack.

Automatic relocking devices : An array of live relockers, 7 glass plate relockers which

are interlinked & connected to the locks as well as the bolt-work resists all attempts of a

forced entry into the safe through the door. The sensitive mechanism resists all forms of 

attacks either by liquid explosives or by higher categories of tools & torches- like thermic

lance, oxyacetylene torch or a high powered Diamond Core Drill etc.

Fire Resistance: In addition to offering massive resistance against all forms of burglaryattacks, the Defender Pro range of safes offers protection to its contents against raging

fire. These safes have successfully withstood the fire Endurance test carried out by SP

laboratories, Sweden as per Nt-017 standards for document protection upto 60 Minutes.

Choice of locking arrangements

Grades I/II./III come with one factory fitted VDS approved mechanical key/

Combination / Electronic lock. Built –in provision for fitting in second lock & alarm

sensors.(optional)

Grade V safes come with two factory fitted VDS approved mechanical key/ Combination

/ Electronic lock. Built –in provision for fitting in second lock & alarm sensors (optional)

Choice of accessories:

Adjustable shelves

Sliding Pull-out Trays

Drawers for keeping small sized valuables

File Holders

2. Price

• Cost- based pricing

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• According to competitor’s Price

3. Promotion

• Print media like ads in newspaper and magazines

•

Audio-visual media like advertisements on television.• The company has hired few celebrities of television as the brand ambassador.

• Commercial ads, hoardings, ads in newspaper etc.

• Personal selling of the product can also be taken up

4. Place

• Each and every franchise,

• Tie up with company having chains of stores

Target Market

Specifically Targeting Northern Italy as the highest density of people lives in Northern

India are very strong in Purchasing Power.

NORTH

8 regions

44.6% of the population

49.4% of economic activity

Customers

Banks

Financial Institutions

Offices

Shops

Post offices

Home (Individuals)

 ENTRY STRATEGIES

• Strategic alliance with any of the Italian Company who is also into distribution

and logistics of foreign products in the domestic market

• Regularly taking part in an international exhibitions to showcase the Products

• Full-fledged set up & systematic Italian marketing strategies

• Set up a Demo at all franchises and store tie-ups

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Branding Decisions

The products will be branded as per Italian taste to attract the targeted audience in one

way or another and to give them a domestic touch. 

Distribution channel

DISTRIBUTION SYSTEM

• MAJOR DISTRIBUTION PARTIES 

CHAIN STORES

DEPARTMENT STORES

HYPERMARKETS/SUPERMARKETS

OTHER

• RETAIL TRADE

Franchises

Door to Door 

Company Shop

Organizational Structure

One International Business head Manager 

Five Italian Manager (Business Development Team)

One Warehouse Manager 

Budget (Financial plan)

The products are divided into 4 categories and cost structure of the products is between

the ranges of Rs. 12000 to 2500000 (EUR 174 to EUR 3624)

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Profit

20 % Profit will be added to each product in General on the price after calculating cost

to company.

Expense

5 % will be duty applicable to import the product under ECEG scheme.

Fixed cost

Salary +Warehouse

 

Estimated 3 Year Plan

• Penetrating into West and East Zone

• Introducing more range of product according the need of Italians

• Maintain the quality and Premium image of the Brand

• Expected growth of the sales 15% in 2nd year and 30% in 3rd year