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International Business Triumph

Essay by   •  January 8, 2011  •  1,308 Words (6 Pages)  •  1,581 Views

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1. The market entry method that Triumph should use in entering the North American market is exporting indirectly to an Importer/distributor. Here, the importer/distributor actually buys the motorcycles from Triumph, stores them in a warehouse and sells them on to a third party. The mark-up is usually around 33%.

The reasons why they should use exporting to an importer/distributor are;

Distributors, merchants, dealers or factors are characterised by two features. First, unlike agents who take a commission, they buy stock for re-sale. Second, they are usually but not always appointed by the manufacturer to cover a specific geographical area or sector of the market. Typically the distributor is a small company, perhaps with only one or two branches. It may be privately owned and managed by the proprietor, an ex-salesman who has opted for a life of greater independence.

The ideal environment for a distributor is a market with many small customers and where the level of sales service required is high. The spread of customers is difficult and expensive to reach with a directly employed sales force that is more suited to dealing with a limited number of large buyers. Distributors generally aim to win business on sales rather than technical service. Their stock of products means customers can have instant delivery.

Easy to support the Agent or Distributor

Agents will only take your product line if they think it will make money for them. They must be convinced that it is a good selling proposition, that your company is efficient and committed and that you can supply sufficient quantities to make handling your account worthwhile.

Support your agent to make the selling job as easy as possible. This may involve supplying selling aids, providing product and application training and enlisting the agent's advice and co-operation on market strategy, promotions etc. Above all, keep in close contact and remember that a neglected agent will neglect your product.

2. The product strategy Triumph should use for entering the North American market is;

Market dominance - In this scheme, Triumph is being classified based on their market share or dominance of the Motorcycle industry. Typically there are three types of market dominance strategies but for this case Triumph is the Challenger in the North American market due to Harley Davidson already being established.

Porter generic strategies - strategy that is based on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. Triumph is using product differentiation in this area because to own a Triumph motorcycle holds a more sophisticated nostalgia than Harley Davidson brand.

Innovation strategies - This deals with the Triumph's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types of this strategy but it is very easy to tell that Triumph are pioneers in the motorcycle industry because they boast of their heritage of making motorcycles since 1902.

Growth strategies - In this scheme we ask the question, “How should the firm grow?”. There are a number of different ways of answering that question but Triumph is using Horizontal integration because it is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets.

Triumph Motorcycles should emphasize product adaption for the product strategy because the same product is being modified to be sold in a different environment (North America). They are going to use same product, same message - It is appropriate when the product fills similar needs and is used in a similar way abroad and at home. Triumph brand again is all about its heritage and nostalgia.

3. The type of distribution channel strategy Triumph should use in North America is an Exclusive distribution because it is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area. They offer substantial support for the dealers. They use this because of the Motorcycles high price, infrequent purchase, high involvement and planned purchases. Triumph currently has 190 dealers serving North America with a goal of 275 over the next five years. They want to attract the right dealers, in the right places, strategically and will not dilute existing dealer sales by adding dealers just to add volume.

Channel Length and structure

The choice here should be a single channel that is leaning towards indirect. Triumph does not want to deal directly with the consumer but does not want an overly long channel. Triumph generally uses Manufacturer вЂ" Retailer вЂ" Consumer structures where as a longer or direct channel have an agent and wholesaler also involved. The benefits of using a shorter distribution channel is it gives Triumph a greater control over the marketing of the product but also means increased distribution costs. Short channels are used for expensive goods that are customizable and need service. They are also sold in geographically concentrated markets that the product is bought infrequently by relative small number of customers.

Choice of intermediary

Intermediaries used to distribute Triumphs brand need to be carefully chosen. Triumph motorcycles are expensive and need to be distributed by intermediaries with the expertise to offer appropriate customer service and sales. The choice of intermediary in this case affects the image of the product.

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