pandora entering latvia
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Anca, Davis, Elmira, Krista, Mabel, RichiProject CAP Degree in Marketing Management
Project C for Marketing Management Program 2011 Danish Academy of Business and Technology
Project Leader: Marianne Aardalsbakke (MAA)Classes: MA2-11 & MO2-11Group No.: 11Group Members:Anca Filote (MO2-11)Elmira Oumarova stergaard (MO2-11)Davis Vanags (MA2-11)Krista Rumba (MA2-11)Mabel Menezes Martins (MA2-11)Richards Tirums (MA2-11)Group member signatures:
Key strokes of characters including spaces: 47772
Executive summaryToday in the global business world we know that strategic changes are fundamental in order to become more competitive and flexible as the consumer behavior readapts itself into financial conditions, environmental and many other crucial factors.At this point we affirm thataccepting challenges companies grows and expands both vertically and horizontally thus becoming a multiplier in the chain that needs constant changes and from this world`s point of view the globalization is forcing us to readjust in the new rules to survive in the current situation.Internationalization is first of all have entrepreneurial vision and from there plan, build, manage, put into practice and constantly monitors to constantly better achieve what is planned.In this report we point our eyes to a market with good chances of ascension, the Latvian market.During this study, questions were raised both positive and negative to reach a consensus or not to explore the Latvian market by the products of Pandoras Group.Latvia is a country that gained its independence in 1991 and has faced inflation, bank interventions, the high interest rates, high unemployment rate, political instability and population lose credibility regarding their government among other disparities.But today the Latvians impressive progress (WTO and World Bank statements 2010) proves the success and effectiveness of long-term oriented economic reforms and shows Latvians capacity to cope with competitive pressure.Participating in the WTO since 2004, Latvia has significant numbers in the current economy.With a GDP ppp of U.S. $ 14.700 (2010) and a real GDP growth rate increased from - 16.74% (2009) to 1.38% (2010), which is composed of 4% agriculture, 21.7% from industry and 74.4% accounts for trade and services (Index Mundi data released in 2010) that means a plus to Pandora's business.Both economic and political aspects as the turn of events in relation to changes in consumer habits, income, a significant increase in the economically active population and the commitment to become part of the euro zone are just some of the positive aspects in Latvian market mentioned now that contributed to give strong base to this work and led us to formulate our problem statement.But the question that follows is for sure: "Why nobody did it yet?" We can say today that developing markets are potentially those who will be the feeders of developed economies. Today it is a fact that we can no longer ignore.Due to this new reality is that we apply the Blue Ocean strategy where companies reinvent their industries by creating unique value for its customers and therefore sustainable value for its shareholders, employees, suppliers and society, in other words, instead of the bloody struggle in "red ocean" of the competition they must create innovative strategies to clear "blue oceans" of untapped market space (W. Chan Kim and Renee Mauborgne - The Blue Ocean Strategy).Marketers are innovative and accept challenges and this statement led us to open the doors of the market in question with entrepreneurial vision and at the same time with a solid basis for continued development of Pandora Group, reaffirming the strength of its brand in the same way they come walking in all these years of existence.
Table of Content1.Introduction52.Problemformulation63.Delimitation63.1.Product area63.2.Geographical area63.3.Time Frame74.Methodology75.The marketing plan95.1.The situation analysis105.1.1.Intern analysis (SW- analysis)105.1.2.External analysis (OT- analysis)125.2.Marketing objectives155.3.Core strategy165.4.Positioning175.5.Marketing strategies185.5.1.The entry mode185.5.2.Generic strategy185.6.Marketing Mix195.6.1.Products195.6.2.Pricing195.6.3.Promotion215.6.4.Distribution215.6.5.The prospect215.6.6.The environment215.6.7.Considerations225.7.Conclusion225.8.Monitoring and control235.9.Budgets245.9.1.Profit budget245.9.2.Cash flow budget255.10.Gantt Map26
1. IntroductionPandora is known around the world for its designed, manufactured and marketing hand-finished and modern jewellery made from genuine materials at affordable prices. Middle class is booming worldwide and with prosperity comes consumers' desire to show that they are doing well, therefore super brands like Danish Pandora and British Signet also called category killers, has stormed the global jewellery market where there is money to fight for. Pandora competes in affordable luxury segment, which in 2009 totalled 83 billion USD, equivalent to approx. 57% of the total market for fine jewellery. Affordable luxury still gives consumers the feel of stardust.In the recent time just a few Danish companies have managed to grow from being nothing to become a big export business within a few years. Pandora has got extreme media attention within the last year for having done exactly that. The company has grown from a small Danish jewellery company without sales abroad to be one of Denmarks largest twenty stock`s companies with 5.000 employers around the world and sale on six continents through over 10,000 points of sale, including close to 500 PANDORA branded concept stores.
Company was founded in 1982 and now sells their products in 55 countries, including many countries in Europe, North- and South America, China and Asia.Pandora has listed markets, where they operate on their website. To the east of the West Europe there are such countries as Lithuania and Estonia. Our natural curiosity points to Latvia, as the only Baltic State where Pandora is not presented yet. There is not so big physical distance between those countries and Latvia. People in Latvia and the three countries mentioned above have a similar taste of fashion and economy.
One analytic from Nordea bank says: The question is whether affordable luxury brands, as Pandora can pursue success right out of the booming but highly demanding new markets.We are going to find out what would be the best way for Pandora to expand in Latvia. 2. Problem formulationBased on above problem formulation for this rapport is going to be:
HOW CAN PANDORA BEST ENTER THE JEWELERY MARKET OF LATVIA?
3. Delimitation3.1. Product areaJewellery in Latvia is a popular thing to wear, but the irony of it is that the jewellery companies don`t advertise themselves that much. And even a small advertisement campaign could give the popularity to Pandora. It is always safer to start with just a few products than put in circulation all at the same time. And later it helps to understand what exactly people in Latvia prefer. What kind of design, what price and much more. That can help for making the production line in the future. 3.2. Geographical areaWe are going to focus on the capital city of Latvia, because Riga is located in the centre of the country and is very easy to reach from every other city in Latvia. The country is not big only 64,600 square kilometres because of that people from other cities are visiting Riga very often, for example, in connection with job questions, vacation etc. Latvia in total has 2, 2 million[footnoteRef:1] inhabitants but over one third of the population lives in the capital Riga. Riga is the largest city in the three Baltic countries, meaning a high activity and buying availability. Latvia is a touristic country with visitors from all across Europe, also caused by its Freedom statue. There is a big flow of tourists who are visiting Riga during the summer months and this amount is rising in time. In February 2010 the average load in hotels in Riga was 32, 37%, but in February 2011 it was 37, 34%. [footnoteRef:2] [1: http://ltvzinas.lv/?n=zinas&id=3288 (viewed on 07.09.2011; posted on 12.05.2011)] [2: http://www.pozitivaszinas.lv/posts/view/riga-aug-turistu-skaits (viewed on 07.09.2011; posted on 28.03.2011)]
3.3. Time FrameThe remaining timeframe will include all three planning levels which are corporate, business and the functional level. At the corporate level the long-term goals are determined and are to be realized. These include internationalization decisions, choice of distribution channels and pricing policies. At business level, work is more concrete and the focus is concentrate here on the specific plan of the individual action parameters. And finally is the functional level when working with a shorter horizon plan can vary between days, weeks or months.
4. MethodologyIn order to prepare a well-argued internal analysis, it will be necessary to obtain the relevant strengths and weaknesses facts about the Danish company Pandora. To do that it will be appropriate to analyze the companys value chain in order to identify the activity that creates value for customers and thereby discover the companys core competencies and competitive advantage. This is significant because it will reveal what strong points the company possesses and the competitors do not, which can be used in contrast to the competition and provide an edge for Pandora. This information will be based on secondary data collected from the internet, such as firm annual reports and the Companys home website etc.Furthermore it will be relevant to analyse Pandoras product line and evaluate its product portfolio, by using the PLC curve. This will give