Thereport presents a foreign investment discussion of Aquaguard in theIndonesian market. Aquaguard is a product of the Indian Eureka ForbesLtd that focuses on consumer commodities. Found back in the year1982, Eureka Forbes has seen tremendous growth in the waterpurification industry across the world. The product has penetratedmany countries as a trustable and quality product. The parent companyhas also invested heavily abroad, in regions such as Asia and Africa.However, the growing level of competition from other businesses isgrowing very fast. The condition, therefore, prompts the company toseek more space outside the Indian market. An investment in theIndonesian market would see the company’s customer base increase.This paper will present a detailed analysis of the effective andefficient marketing strategies that can be of great significance inthe quest to enter the Indonesian market as below.
of Indonesian market
Indonesiais an Asian country with a total area of 1,904,569 kilometerssquared, which is the fourteenth largest in the world. The countryhas more than 17,000 islands, a third of which has no inhabitance.The total population was more than 260 million as of 2015, a figurethat places the country’s population as the fourth highest in theworld. The country’s people make up about 3.5 percent of the totalglobal population (Banchit, 2013). The country’s politicalenvironment is democratic, with the president being the leadingpolitical figure. There are presidential elections after every fiveyears, a move that has since seen the country undergo commendablepolitical transformations since the late 1990s. The growing politicalstability has since gained fruit in areas such as among othersinfrastructure. The country has since proceeds assist in developmentactivities such as the construction of a railway station that joinsJapan and the Republic of China. Among other vital improvementsarising from the country’s political stability are the freedom ofthe press together with increased tourism. However, corruption andnepotism still present a major setback in the Indonesian economy. Thecountry’s overall well-being is highly conducive for foreigninvestors, with tax rates of 10 percent on foreign businesses. With ahigh GDP and low unemployment rates, Indonesia is a country of choicefor investors all across the world. The country also has relativelylower interest rates than the other countries in the South-East Asiaregion. There is also a growing adoption of the internet inIndonesia, with more Facebook frequent users than the United Kingdom.More than 75 percent of the Indonesian population has gone to highschool, levels that are quite high about neighboring nations.
Importanceof launching the product in the new market
Aforeign investment would be necessary for Aquaguard because it wouldenable the firm to avoid some of the taxes it will be faced with uponimporting products in India. There are raw materials used in themanufacture of water purifiers that are present in Indonesia. Thus,the move would enable the country to avoid extra charges that itwould, in essence, have to pay. The move would also ensure stabilityin the sense that without ocean transport, customers of Indonesiawould still be able to get the products locally (Cairncross,2015).The launch of the product of would also enable more customization ofthe product to fit the Indonesian people. The move to introduceAquaguard into the Malaysian market seeks would also expand its salesin the quest to increase the company’s profits. Aquaguard attemptsto find new customers in the quest to broaden its market (Addis,2016). Aquaguard has continued to provide stellar services not onlyto the people of India but also worldwide. The company currentlyboasts of an adamant brand name that has since become the standard ofwater purifiers. The company boasts a history of pioneering spiritand continues to exert maximum efforts in the quest to provide bestresults to its customers. Thus, an introduction to a country with atotal population of more than 260 million people would inevitablyincrease the total sales. The increased sales would eventually resultin more profits for the company. The move would provide capital forother sections in the business such as information technology. Themoney would also make it possible to expand the company’s marketingportfolio. The introduction of Aquaguard would also seek to improvethe country’s general health in an era of increased waterpollution. The move would thus increase the access to clean water("FiveReasons Why There Is A Worldwide Need For Water Purifier Systems |Portable UV Purifier").Besides, the move would benefit the overall economy since it woulddevelop extensively. The foreign investment would also create moreemployment opportunities in the target country while boosting itseconomy. The overall productivity of the company would eventuallyimprove.
Marketaudit and competitor analysis
Indonesiais a very promising market with a very high population growth rate(“Ten Reasons to Invest in Indonesia, n.d”). The countrycurrently is home to over 260 million people, which becomes thefourth most populous country in the world. The rising number ofindividuals gives a better opportunity for a business to expand andmarket its products. The high population not only increases thenumber of target customers but also gives a company a largerworkforce in the quest to provide quality service. The conditionwould, therefore, help Aquaguard to increase its workforce. TheIndonesian market also has a very wide variety of ethnic groups thatcould present an opportunity to focus on any segment. A company cantarget a particular section of the market and integrate the essentialtechniques to offer the best product and service suitable for thegroup.
Besides,the country has a very broad variety of commodities that it not onlyconsumes but also exports. The country exports more than 60 percentof its products abroad, a condition that significantly improves theoverall economic well-being of the country. The condition, therefore,creates a market that is not only stable but also healthy. Indonesiais also a state that has significant pieces of land, most of whichcan be productive either agriculturally or industrially. Thecondition, therefore, renders the country to be a suitabledestination for an industrial settlement. However, the country’sinfrastructure is still developing, a condition that would present anobstacle for any company that seeks to invest in the region. However,the state has currently carried out numerous attempts in its quest toprovide robust and adequate roads and ocean ways. The wide variety ofcommodities in Indonesia results in a very high gross domesticproduct in the wake of improved technological advances. The countryhas seen a major improvement in the overall production and economy,producing more than $3 trillion regarding purchasing power parityback in the year 2015. The figures place the country in positioneight in the list of highest GDPs in the world. In fact, Indonesia’sGDP is the largest in the whole of the South-Eastern Asia region. Thecondition, therefore, means that an investment in the country wouldbe not only productive but also profitable.
TheIndonesian water purifiers market is bound to expand by more than 5percent in the next three years as the country experiences somechanges in the state’s water cycle. Some of the changes include thehigh degradation rates of resources such as trees. Back in the year1950, more than 87% of the country’s total land was under the coverof trees (Tsujinoetal., 2016).Since then, there has been a severe degradation at worrying levelswhere the forest cover makes up less than 50 percent of the totalland area (“Forest area, n.d”). The condition results in reducedlevels of clean water from rivers. Moreover, some of the country’sindustries have in the past released sewage into rivers, leading intoxification of plants, animals, and even people. Thus, the conditioncontinuously increases the need for water purification. Besides,there is a rising level of cold and fecal coliforms contamination inIndonesia. The above condition, therefore, renders water from riversto be highly toxic for human consumption.
Moreover,the country is experiencing a very fast industrial development. Someof the persons that ran the industries have less concern on safetymeasures of waste elimination. The more the industries grow, the morethe risks for water contamination. Currently, the Indonesiagovernment provides minimally treated water through pipes. The restof the population heavily consumes water either directly or throughtreatment with water purifiers. Thus, the increase in water pollutiontogether with the low rates of pipe water consumption makes the waterpurifiers market to grow. The country also experiences a relativelypoor management of domestic waste. Part of the domestic release findsits way into rivers, a condition that results in the contamination ofwater. Thus, the Indonesia water purifiers market will continue toexperience a constant growth. Indonesia’s economy is bound toincrease given the current efforts in place that seek to improve theoverall performance of the country’s economy. Among the measures inplace include among others the Indonesian Masterplan for Accelerationand Expansion of the country’s economic development. The conditionpresents a positive indicator of success in any investment whatsoever(Blonigenand Piger, 2014).
Someof the major water purifying companies currently in the Indonesiamarket include among others TOCLAS. The company boasts of moderntechnology in its service provision together with the high-qualityproducts that it offers to the Indonesian market. The company hassince seen a significant expansion in the recent years as it seeks toprovide quality service to the customers. The company also boasts ofa strong brand name in the region, which gives it a significant boostin the overall performance. However, the firm does not offer variety.Besides, the firm does not have a good customer relationshipmanagement. The above two conditions present a significant setback inthe company’s overall performance. TORAY is another Indonesiancompany that boasts of presence all over the country (Environment &Engineering, n.d). The company also integrates modern technologies inthe quest to achieve high productivity. The company also provides awider variety of products together with water purification services.The firm carries out continuous research and development in its questto provide service delivery in the Indonesian market. The companyalso carries out environmental engineering, a move that boosts theoverall trust by the people on the product. However, the company’sfailure to reorganize its financial structure and organization hassince seen it undergo losses and avoidable drawbacks.
Marketingplan and strategy
Thereare techniques of successful global marketing strategy, whichincludes among others direct exporting. Direct exporting involvesphysical presence in the Indonesian market where the company canemploy agents who will be responsible for selling the firm’sproducts and services to the target people (Turnbulland Valla, 2013).The actors will present the services and outputs that the companyprovides to the target people directly. Therefore, the agencies wouldbecome the face of the company in the quest to establish itself inthe Indonesian market. Secondly, buying a local company would be anadditional marketing strategy that can prove very productive.However, a target company that Aquaguard would seek to buy shouldalready have a positive reputation in the Indonesian market. Throughthis, Aquaguard would then use the available resources to establishitself as the Indonesian people. Besides, Aquaguard could integratethe piggybacking approach to international marketing (“Market EntryStrategies, n.d”). Here, the company could contact local businessesthat currently operate in the Indonesian market for inclusion intheir Indonesian inventory. After entry, the company would carry outthe traditional local marketing strategies such as among otherssocial media. The use of media such as television and newspaperswould also be appropriate only after its establishment in the targetcompany. Through this, Aquaguard would experience a stronginstitution in the Indonesian economy.
Aquaguardwill have to take into consideration the various interests, beliefs,and practices of the Indonesian people in the quest to carry out theproduct marketing mix. The Indonesian people treasure nature and thusappreciate natural water. However, the increased cases ofcontamination continue to force them to use purified water.Therefore, Aquaguard should seek to make its product as tasteless aspossible. The product should have no change when one applies toeither drinking or boiling water. The Indonesian consumers also spendconsiderably high amounts of money in comparison with its neighboringcountries. The users pay more than three-quarters of the country’sGDP (Budiman, Chhor and Razdan, 2013). Thus, Aquaguard should ensureaverage prices because they would eventually realize benefits.Aquaguard will, therefore, customize its products to fit the localmarkets. The Indonesian promotion marketing mix would also bedifferent from that in India. Aquaguard will also consider thepricing marketing mix in the quest to ensure penetration of itsproducts into the Indonesian market. Aquaguard will consider thecurrent cost of similar products in the country together withadditional factors such as among others the cost of transport(Czinkotaand Ronkainen, 2013).Thetotal cost of production of the water purifiers in Indonesia would bea significant aspect of consideration in the quest to ensure a fairand productive marketing mix. Moreover, Aquaguard will consider thepopulation distribution of the country in the search to provide abalance in the ease of disbursement across the country. The mostappropriate destination would, therefore, be the Java Island, in thecity of Jakarta where most people live.
Theabove discussion has shed enough light on the Indonesian market withregards to water purifiers. The report has shown that the Indonesianmarket is bound to experience a major growth owing to factors such asamong others increased industrialization. The devastation of forestlands also presents a major factor that results in the need for waterpurifiers. Therefore, Aquaguard’s move to invest in the Indonesianmarket is imperative. The move would reap considerable benefits giventhe Indonesian stable economic development.
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