Marketing Smokeless Tobacco in Turkey

Marketing Smokeless Tobacco in Turkey

Introduction

Since our core task involved doing business in a foreign country, Turkey, we are governed by various laws and regulations thus the need to understand them.  Marketing products and services abroad is a better way to grow a company, but it is risky too (Mohan, 2009). Therefore as an entrepreneur selling smokeless tobacco in a foreign market, Turkey, there was need to first get information on the product/ service, make an export plan, and survey the market and finally source for finances.  It was essential for us to gather information to have a clear understanding of the nature of the host market, economic conditions and culture of people residing in Turkey.  We decided to make a pre-visit to the country to have a chance to talk to who will be potential buyers and determine their buying behaviors as well as the viable products and services that we would offer.  The prior visit helped us in familiarizing with channels of distribution, potential business ventures, competitors and the rules of the land.  We did a thorough examination of services offered and products, how competitors behave in the business as well as branding and labeling of such products. This would give us a clear view on the marketing of our products, smokeless tobacco.

We explored on other possible ways of transacting our business venture by following closely the proceedings of government delegates on trade missions in the country.  The fact that they are government officials they carry weight behind them ad are most likely to be given credible information concerning current market situations that proved beneficial to our service choice.  We consulted government of Turkey on the foreign investment policies and their laws concerning the same.  The visit also took us to the stock trading which proved helpful in the selection of smokeless tobacco as a product we were to market.  We finally concluded that   Smokeless tobacco was the product to market in Turkey.  This is because it fits the market viability and economies and rules of Turkey best suits its growth as a business venture.

Study of the Internal Environment

A thorough export plan is essential before the commencement of your operations in exportation; hence we came up with a well scheduled export plan.  Our market plan focused on all areas that affect our business internally but more so on; the opportunities of any kind, threats in the market and how to conduct and control them.  This helped in defining our objectives of exporting clearly thus realizing profitability.  Our environmental study thoroughly examined the threats and opportunities we face in the foreign country. Some of the threats included; the distribution channels, the completion from established competitors, strict taxation laws in Turkey as well as environmental restrictions.  Our timeline we had set for realization of the business goals also faced threat of dimensional completion.  Continuous evaluation of the plan we had set to keep abreast with our objectives proved paramount in project implementation. There were many channels of distribution in use such as retailers, direct sale or use of sale representatives, commission sale and provision to the malls. After a pre-visit, we decided to follow all methods in use for the distribution of the smokeless tobacco in Turkey.  This, we thought will be helpful in the piloting stage so that we get to establish ourselves before reducing the expenses in this line.

During the market analysis, we made sure that the right strategies were chosen for the smokeless marketing in Turkey.  Penetration of a foreign market is challenging and thus requires undivided attention and commitment when organizing this and implementation, an idea we put in practice in our tobacco project. We carefully organized to have a team that is fully behind the objectives, mission, goals and vision of the tobacco business in our efforts to realize them.  This is due to them being direct implementers of our tobacco marketing plan.  Effective leadership in the companies we visited was core to ensuring that all necessary coordination is achieved, thus our company will employ a team of managers that are effective in their work. Information is vital for the success of companies we sampled during the pre-visit, many of them reliably told us that to be competitive in the tobacco business, and requires updated information on marketing.  The success of smokeless tobacco marketing entirely rests in the market research we had carried out, and then concentrate on all areas of operation such as control and implementation. Just like those who had made success in the business and closely related business, we will put emphasis on all departments as they are part of the whole company and their coordination will be essential to our success.

In the course of your analysis, pay greater attention to the issues surrounding the environment and health (George, 2008).  It is evident that more countries all over the world are adapting stricter laws when it comes to the environment and heath and so is Turkey.  The governmental legislations on environment are tight and attract heftier fines.  In our plan we intend to put clear, the environmental implications on the smokeless comp-any so that the costs are reduced.  It is an issue that cuts across all sectors including consumer products. The smokeless tobacco is beneficial to the environment and would be our strength when it comes to environmental issues.  The foreign exchange bureau is also a point that comes out clearly in the organization of our company and projection of our profitability.  It is a fact that when you are exporting services or products, care need to be taken in the market analysis not to forget that various political and trade agreements differ from place to place. This includes factors such as custom requirements, bilateral trade agreements, trade zone that are free and multilateral agreements.  The market research gave us an opportunity to know the implications of these on the project and majorly the advantages that we will derive from it as well as restrictions. Trade tariffs are different in all nations and so are the customs that govern them all in the name of benefiting the locals.

Nevertheless this is a critical point of analysis in the market research since it will give us directions on which way to follow and succeed.   In the planning as well as implementing stage, a thorough knowledge of the logistics that will arise in the course of our tobacco exporting operation is vital. As we went through the foreign policies during market research, we discovered many logistics that we intend to put them in the costs. This will help us to have precise costs to avoid falling short of our projections. Some logistics such as shipping of the smokeless tobacco and clearance from the customs were also considered in costs estimates.   The controlling of the company costs will be made easier through such revelations.  The logistics can be eliminated or reduced with the assistance we intend to seek from authority and shipping consultants. Custom brokers just like the stock brokers are helpful in such situations.

International laws and regulations are complex in their context and a clear understanding of the same is paramount to good trade.  This is because they have direct implications on every part of the project process right from the start till the end.  We were advised by the government and players in the Turkey market business to get staff who know the laws and how they are applied in respect to trade, contracts and taxation as they too, are core to the success of marketing our smokeless tobacco.  Before the commencement of the project, the leadership should also find time to survey market research done on the same foreign countries and make comparisons from their own research to further remove any doubts.  This can be sourced from international trade administration which gives clarity in the market research as it provides a customized search on the issues that you request.   In the course of our research, we were convinced that not all marketing technique work successfully anywhere, but a grasp of it is truly essential.  The company will change this threat into an opportunity by putting in place a system of best marketing techniques that will be reviewed periodically.  The company will be ready for change and appreciate those products and their prices might be changed from time to time to satisfy the needs of the local consumer.  The pricing strategies to be applied will take into account of the local tariffs, demand, competitors pricing strategies and currency fluctuations among other factor (Ubavans, 1997).  The company faces many challenges and opportunities in its internal environment but we will face them and try minimizing threats and maximizing opportunities.

Since the project will be based in a foreign country, we are to might consider having a partner as the business takes root.  We will, at the same time be careful to choose our partners wisely and in accordance to the laws of Turkey to avoid crossing the law hence jeopardizing our business.  The company will be candid enough to specify the roles of our partnership if applicable and clearly understand the terms before committing ourselves.

Cost Analysis

Financiers prefer to fund sound figures and facts (Wyplosz, 2009).  Here, the company will have both the long term and short term financial plan.  I is essential to note that financial planning or projection is not only important in the export but to any business venture all over the world.  The Smokeless Tobacco Company will acquire a loan and use its own capital to fund the export of tobacco and purchasing of fixed assets for its operation.  Lenders would want security of their investment hence the point of coming up with a well planned cost benefit analysis.  We have us come up with a good analysis of the benefits that both the company and the Turkish government stand to reap. The analysis involves the foreseen cost of exporting and beginning of the business as well as the revenue to be generated from this venture. The expenses include the payment of human resource that will be required in the operation. We intend to employee a total of 400 personnel on permanent basis and a further 200 on contract terms. This will cost the company an accumulative total of $10,000,000 annually.

The budget on the exporting expenses that will involve designing and redesigning costs, consultation costs, marketing fees, distribution and travel expenses, miscellaneous expenses and every other aspect of expense that might be incurred in the course of our operation is estimated to be $100,000,000 yearly.  This is but a precise and detailed financial analysis on the cost to be incurred. The financial options as stated earlier will come from lending and own capital. The company will require a loan of approximately $200,000,000. Since the main aim of the cost benefit analysis is to acquire a loan and make the most from our tobacco project to cover up the lending, the following is a detailed description on how the company will manage the cost of expanding the tobacco business, acquiring of equipment and more importantly, how we will streamline our tobacco operation.

Return on Investment

Looking at the market statistics of Turkey, we believe that the company can make an annual sale of $320,000,000 but the estimates will increase in the subsequent years.  The company is expected to get a return on investment of around $10,000,000 before tax in the first year but this will change positively in the long run as the fixed costs will remain unchanged. This will give the general public the validity of the project in context and will definitely catch the eye of the lenders looking at this analysis.  The financial cost estimate and projections were arrived at by calculating the total projected sales less the total costs and expenses.  The return on investment will thus help the company grow quickly and expand rapidly to all parts of the country hence becoming a reputable brand in many households.

The Benefits of Tobacco

The project is expected to have massive benefits both in the short term and in the long run.  The host country is going to get accrued benefits in employment. The project will employ residents in all level of management. The employment will be direct and indirect Blades, (2006). The staff will get direct benefits of employment hence pensionable while brokers at the customs and retailers will acquire indirect employment.  The citizens will get benefits of leave, medical cover, and job security among other benefits. The government will get many benefits from this project through, direct taxation to the business, paying of custom duty and value added taxes. The licenses also require payment of fees that go to government.  The employees in the business will be taxed by the same government (Athur, 2003).

Society at large will reap the benefits of the project through improved infrastructure, economic development as well as technical expertise we intend to provide to locals.  This would leave Turkey a better country.  International trade will also receive a boost from such project putting Turkey and its people on the world map of fair trade. This is a positive indication to economy as it an indication of economic growth.  Having assessed the cost and benefit analysis of this venture, it leaves no doubt that implementing it, will go a long way in benefiting the society in the host country as well as the project itself.

References

Athur, S. (2003). Economics: Principles in action. Upper Saddle River, New Jersey: Pearson Prentice Hall.

Blades, C. (2006). Understanding National Accounts. Paris: OECD.

George, C. (2008). From Colony to Superpower: U.S. Foreign Relations Since 1776.Oxford: Oxford University press.

Mohan, R. (2009). International Business. New York:  Oxford University Press.

Wyplosz, B. (2005). Macroeconomics: A European Text, Fourth Edition. Oxford: Oxford University Press.

Ubvans, Z. (1997). Effects of international relations. London: Haper Press.

 

 

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