Task 1 – Marketing – C212

Glopaper Market Report
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Abstract
Companies are increasingly exploring markets located beyond their home county’s borders. This is because of an expansion strategy that seeks to identify new potential products which are on demand in foreign markets. The company has to carry out comprehensive market research to identify the actual market needs and establish whether the company will make profits by introducing new products to these markets. There are several factors to be considered for appropriate decision to be made. The first is the decision regarding the specific products or services to be introduced. These products or services have to be really in demand and that the company will make sales which will sustain the business regarding all the associated costs. Customer relationship management is critical in determining and managing the customer’s needs, interests, demographics and purchasing power among other characteristics. Other factors include distribution mechanisms, pricing strategy, and promotional strategies. This paper examines Glopaper’s introduction of toilet tissue and facial tissue in the Kenyan market.
Glopaper
Glopaper is a retail company headquartered in Los Angeles. It has branches and administrative units in Texas, Alaska, and New Jersey with warehouses in most cities across the US. The company stocks and supply paper-based products to consumers directly in the United States using its retail outlets across the country’s major cities.

These products include wrapping bags, cartons, duplicating papers, egg trays, gift bags, and travel bags. These products are in demand both within and outside the United States as demand for environmentally friendly products soars. Most countries are moving away from plastic materials and embracing paper-based products which are mostly distributed by Glopapaper and other paper-based retailers. These are biodegradable materials that are encouraged by different environmental stakeholders, regulatory bodies, and advocacy groups.
The company recently commissioned research on potential products to be included in its portfolio. Independent research and marketing firms were tasked with this project, and in conjunction with the company’s marketing, finance, and human resource department arrived at several options. After a comprehensive review and study of the findings, the management narrowed down the options to paper-based products in hygiene and sanitation. It is against this background that a decision was reached to introduce toilet tissue paper and facial tissue paper to Glopaper’s portfolio. ‘Glowtissue’ and ‘GlowFacial’ are the specific brand names for the two products. There is potential for success in Hygiene and sanitation across the world as people become more health conscious in not only what they eat but also what they use for sanitation purposes. Paper-based hygiene products are increasingly being used as opposed to clothing products in most washrooms. These products include paper-based hand towels as opposed to electric dryers, facial tissues as opposed to cloth handkerchiefs among others. In less developed countries, most of this hygiene and sanitation products are still out of reach for many people. This contributes to sanitation problems in these countries which is costing their economies enormous resources in treatment and prevention of diseases that would otherwise have been prevented if proper sanitation measures have been ensured.
Kenya has an estimated population of 50 million people. The country is strategically placed in the East African region and can be accessed through both sea and air. The country’s capital has a modern international airport while her coastal city of Mombasa is an entry point to the entire East African region through the Indian Ocean. As a developing country, the majority of the population is jobless and relies on casual labor for survival. A majority of the population practices subsistence farming which does not adequately gather for all the household needs as it only provides little food barely enough for consumption in most families. This means a majority of the population have not fully embraced the use of some hygiene and sanitation products such as tissue paper and other paper-based hygiene products. Glopaper will use Kenya has a launching ground for its two products as it prepares to venture into other markets. Kenya is strategically chosen because it has the potential to open up the market for the entire African region. A developed country cannot be chosen for these products as it requires a different approach since the company is still testing rolling out the new products. Developed countries require the production of premium products and aggressive marketing that Glopaper will not sustain for the initial period it wants to introduce the products.
There are several methods of identifying the existence or potential of a market. These methods include surveys, focus groups, and interviews. To evaluate the potential of the market for toilet tissue paper and facial tissue in Kenya, Glopapar used Surveys, Focus groups, and interviews. Researchers were dispatched to Kenya to collect key information related to demand and viability of the market. Among the critical information that was sought are included characteristics of the customers such as income, education level, age distribution, purchasing power and knowledge of a range of tissue and hygiene products.
Focus groups were conducted by Glopaper marketing team in collaboration with hired professional moderators from Kenya. The moderators used the collected data about key characteristics of Kenyan consumers. The moderators proceeded by identifying and locating consumers of different ages and income distribution. A few people who do not form part of the target market were also involved in the focus groups, but these people used similar products. The participants in the focus groups were actively engaged in a constructive debate about the various features and expectations concerning toilet tissue and facial tissue to be introduced by Glopaper. The moderators engaged the participants on the concept of the product where they were free to contribute by suggesting features, designs, pricing and possible distribution channels. The focus groups involved 10-12 people per session in different settings, and the activity was carried out across the countries five major towns of Nairobi, Kisumu, Eldoret, Mombasa, and Nakuru.
A survey is the second market research technique that was used to collect data about the Kenyan Market. Since the focused groups target consumers in the urban setting survey was largely targeted on consumers in rural settings by use of phone interview. A few random rural areas where participants had no phones were selected and researchers hired to visit those areas to collect data through the use of a questionnaire. These were local people who are familiar with participants hence they could open up about the features they wanted most and other product characteristics including the price they will afford as compared to existing similar products. Some of the questions directed at participants in both phone and physical surveys include rating the importance of toilet tissue and facial tissue features and sizes including packaging. People were also asked what will be their buying decisions if additional features, sizes, and packaging designs were introduced. The researchers while conducting these surveys were keen on all relevant details and the demographic information such as ethnicity, occupation, income level, age and gender among others were recorded carefully. The participants were asked the frequency with which they normally purchase toilet tissue paper and facial tissues and the frequency with which they frequented shopping facilities both in urban and rural areas. Other information that was of interest to professionals carrying out the survey included the customer’s interests, opinions, and activities they like. These factors are always important in determining how the market can best be segmented and targeted with different products (Ishak, 2008). After the survey was done, the researchers retreated to analyze the results and present the information about the specific demographic segments. The results are used to tweak the products and add the desired features appealing to most customers or respondents. Better advertising and promotional methods will be detected using the customer’s interests and favorite activities.
An interview is another method used by Glopaper researchers to gather information about the Kenyan market. Probing questions were prepared beforehand, and they were intended to elicit responses that allowed interviewers gauge market trends, gather the true and accurate demographic information and opinions. In-depth interviews were used to question experts who gave their expert opinion and suggestions on the viability of the market.
One competitive advantage that will be attained by Glopaper as it enters the Kenyan market is the focus on only two products which are toilet tissue and facial tissue. By narrowing its portfolio to two products only, the company will be in a position to effectively focus on better product design, pricing, and customer relationship management. Most local players and international companies in the Kenyan tissue and hygiene industry offer a range of products that sometimes makes it difficult for them to effectively understand specific customer needs for their different products. Most Kenyan based companies such as Chandaria industries, KimFay East Africa, African Cotton and Suppliers of Hannan products focus on a whole range of hygiene and sanitation products which include toilet tissue, kitchen towels, cotton wool, wipes, aluminum foil, cling film and even toilet cleaners and photocopying papers.The products for these companies are stocked in retail outlets with other products. These outlets include supermarkets and shops. Customers will, therefore, have competing interests as they shop. Glopaper’s strategy to focus on only two hygiene products will give them market study advantage and focus that is needed to understand how to serve the customers better. Unlike their competitors’ mode of supply, Glopaper will focus on establishing small shops for selling their specific products only.
There are many risks associated with launching new products in a global market. Distribution risk is one of the risks whereby a company such as Glopaper which is new in the African market might not understand how distribution channels work or incur additional costs and other logistical challenges that might delay deliveries. To manage these risks, the company needs to invest in adequate logistical planning or establish their distribution networks as opposed to relying on the existing channels. Sustainability risk is another challenge that might be unforeseen in a global market. The Kenyan market can offer unexpected fortunes for Gloppaper, and the demand exceeds the initial expectation. This calls for a premeditated plan to manage supply and distribution if the massive products take off. Glopaper should have a plan to support unexpected growth while maintaining the required or promised quality.
Customer Relationship Management
Bpm’s online CRM is highly recommended for Glopaper since the software is developed for large corporations. This system integrates client’s data with business process management tools to help the specific users of the software coordinate a range of activities such as marketing, customer service and activities related to sales. The software features scalable features for any increased functions. It is designed based on BPM platform that supports automation and allows the software to be deployed on-premise or stored and used in the cloud (Ryals, Knox & Maklan, 2000). The app can be adapted for the mobile version that can be used in field operations and still maintains the same features and capability. It can also be used with other software such as MS Word, Outlook, and other Google features. The software enables the use of both BPM and CRM tools in a single platform in addition to supporting open configuration. It is flexible and comprehensive since a user can observe the entire customer journey (Ryals, Knox & Maklan, 2000).
Bpm’s online will help Glopaper gather all the customer information and organize this information in such a way that will be easy for the company to communicate and serve better these customers. This is made possible by the fact that the software can analyze, determine and predict customer’s behavior. Bpm will also analyze trends in tissue and hygiene industry in Kenya and suggest the best strategies for attracting, converting and even retaining customers who use Glopaper’s toilet tissue and facial tissue.
Retail offers the best channel for distributing Glopaper products in Kenya. The country has a vibrant retail sector, and the supermarkets are the most effective retail outlets for fast moving consumables in the country. There is a boom in shopping malls in Kenya which offers spaces for most supermarkets as their anchor tenants. There are both small and big supermarkets which provide a complimentary role to one another. Small supermarkets operate in areas not reached by big supermarkets. Glopaper has to partner with leading local supermarkets to list their products for distribution in major urban centers and also identify other small supermarkets operating in their potential rural areas. The company will also start small shops in strategic locations to attract customers. Once the products are listed, they had to be shipped from the company’s warehouses in the US and kept in a local warehouse before they are dispatched to retail outlets.
Many factors influence the entry of the global market. One of these factors is potential legal and regulatory barriers. Glopaper has to conduct due diligence with regards to how some of the legal factors will affect the distribution of its products to and within Kenya. Some of the possible legislation that might have some ramification on the distribution of Glopaper’s products include import and export laws, Trademark requirements, Custom laws, currency repatriation and Producer/distributor liability regulations among others. Another factor is environmental forces. The prevailing economic environment might render a distribution channel unproductive in future. It is important to analyze the trends in Kenya’s local retail sector to determine which supermarkets to list the products and the duration of the agreement.
Glopaper paper will acquire its toilet tissue and Facial tissue from manufacturers such as Georgia Pacific and Kimberley Clark, modify and store the products in its warehouses before being shipped to the Kenyan coast. Once in the Kenyan Coast, the products will be transported by road to designated stores in major urban areas in the country’s inland before being supplied to retail units for stocking. Some of the potential disruptions to this chain include political instabilities, terrorist acts in the country and legislative barriers and logistical problems with regards to clearing in the Mombasa port. An occurrence of these incidences will disrupt the supply of the products and cause a shortage will create apathy amongst the customers threatening their loyalty to these brands.
Pricing Strategy
When a firm is expanding or introducing new products to new markets, pricing is the most critical element that determines success (Johansson, 2009). Glopaper will use penetration-based pricing strategy for its toilet tissue and Facial tissue in the Kenyan market. This is the most effective pricing strategy for most firms entering new markets (Smith, 2012). This means Glopaper will charge lower than the current prices of toilet tissue and facial tissue in Kenya. This is a market which is dominated by three main player’s products. The industry players include Chandaria Industries, African Cotton, and KimFay East Africa. These players charge almost a similar price, and Glopaper will have to charge slightly lower than their figure. Glopaper will charge $0.25 for a single toilet tissue roll and $0.8 for a pack of facial tissue.
Costs
Activity/Item Department Action Cost
Sourcing& Modifying Stores Modification $1000000
Distribution Sales Cost of listing & related expenses $20000
Market Research Marketing Research $ 200000
Advertisement(1)T.V Marketing A month’s ad. $7400×3 TV Stations = 22200
Shipping& Storage Procurement Transport &storage $150000
(2) Radio A Month’s ad. 3 Radio Stations @ $ 700 X3 =$2100
(3) Print 3 dailies $40,000
Sales Promotion Sales Give-Aways $6000
Digital Marketing (1)Facebook Marketing Account operation $2000
(2)Twitter Account Operation $2000
TOTAL $1444300
The price of $0.25 for a single toilet tissue roll and $0.80 for a pack of is the most appealing in the Kenyan market for the products. These prices are lower than what the local players charge for similar products in the market. This means the prices will be readily accepted by consumers. From the results of focused groups and survey, the identified prices were the average of the responses from the participants who were asked to suggest the best price for the products which are lower than the prices charged by the three major players in the local market.
The three major players in the Kenyan market who are Chandaria, Kimfay and African cotton have one common competitive advantage; they are producing locally. Despite this factor, they still charge relatively high prices for toilet tissue and facial tissue. These companies charge a similar price of between $0.28 to $0.50 for a single roll of tissue and an average of $ 1 for facial tissue. These prices are still out of reach for many consumers in the local market who sometimes view these products as luxury goods.
Promotional strategy
It is not always enough to stock products on the shelves of supermarkets or any other retail outlets and expects customers to be aware of their existence. Products compete for visibility on the shelves, and even before the customers decide to go shopping, they always have an idea of what to purchase. There are massive opportunities to reach out to customers with purposeful messages courtesy of an expanding technology in mass media (Johansson, 2009). Glopaper will use Television and radio to reach its target consumers in the Kenya market. These two mass media outlets are popular with Kenyans. Kenyans in the rural areas mostly listen to the radio and Glopaper will identify popular radio stations that broadcast in the local dialect, Swahili and English so that it can reach all listeners in different geographic and demographic groups. The TV is popular with an urban section of the population. Most Television programs target the urban educated and middle-class Kenyans offering an opportunity to reach this demographic exclusively.
The social media space is expanding worldwide, and Kenya is not left behind. There I increased use of social media by the youth and elites in Kenya. The two most popular social media sites in Kenya which will be used by Glopaper are Facebook and Twitter. The company will open official pages for the two products where they will update content daily regarding the product’s use, offers, promotions, benefits and all the information about the company and the product the customers would want to know. These platforms offer an easy and cheap avenue to reach to consumers and interact with them compared to other platforms which are quite expensive.
The two sales promotional activities that will be used by Glopaper are contests and discounted prices. Sales promotions are aimed at increasing the sale of a particular product and build customer satisfaction. Sales promotions also encourage customers to try new products. The social media will be the best place to stage contests amongst consumers whereby they will be asked questions or asked to upload product photos or some fun activities that must have a winner. Discounted prices will be advertised on the shelves using wobblers stuck on the products or the shelves and gondolas displaying the products.
References
Ishak, A. (2008). The Use of Market Orientation As an Effective Approach in Winning and
Sustaining Market. Sinergi, 10(2), 107-119. http://dx.doi.org/10.20885/sinergi.vol10.iss2.art3Johansson, J. (2009). Global marketing. Boston: McGraw-Hill Irwin.
Ryals, L., Knox, S., & Maklan, S. (2000). Customer relationship management (CRM). [London]:
Financial Times Prentice Hall.
Smith, T. (2012). Pricing strategy. Mason (Ohio): South-Western.