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Aberdeen Asset Management PLC Entry in South African Market

Strategy Development

A market entry strategy and strategic development is a method designed by a company to deliver or distribute goods or services into a new target market. In the case of exporting or importing goods and services, it refers to managing and establishing contracts in a foreign nation. Many organizations operate successfully in a niche market environment without the need to expand to new markets. Some organizations achieve increased brand awareness, sales, and business stability by making new entries into new markets. To develop an effective market entry strategy for Aberdeen Asset Management PLC into the market of South Africa, which is very competitive, an evaluation of possible customers and potential competitors is advised (Lymbersky, 2008, 90-1). Some of the major factors to put into consideration by the company when deciding on the viability of the entry strategy include the price localization, competition, localized knowledge, trade barriers, and export subsidies. According to Kusuoka and Maruyama (2010, 112-3), the decision of whether to enter or when to enter a South African market will majorly depend on the company’s financial resources and the nature of the product it produces. There are several strategies adopted by different companies depending on the favorable strategy and financial ability. However, the most common entry strategies adopted by most companies and also relevant for Aberdeen Asset Management PLC include: Directly exporting products, sales outsourcing, indirectly exporting products using middlemen, and producing goods in the target market. Other entry strategies include licensing, franchising, exporting, joint ventures, Greenfield project, alliances, and wholly owned subsidiaries (Lymbersky, 2008, 98).

Among the entry strategies listed above, the simplest and most relevant for the company is the aspect of exporting, which involves the use of either indirect method such as countertrade, or direct method such as the use of an agent. Other complex forms, which involve global operations may include:  Export processing zones or joint ventures. Kusuoka and Maruyama (2010, 78-9) assert that when a company has settled on a decision to enter into a new market, there are so many options open to it. The options will in most cases vary in the risks involved, costs likely to be incurred, and to what level the company can exercise control over such options. After the company has decided on the entry strategy to adopt, there is a need to decide on specific channels to adopt. Most agricultural products of a commodity nature or raw materials normally make use of distributors, agents, or involve the government, while processed materials majorly rely on sophisticated forms of accessibility. Since the company is interested in entering the South African market, it will most likely be faced with three major issues. The first issue is marketing, which describes how the country and its segments can manage, co-ordinate, and implements marketing effort. The aspect of marketing also describes how to enter the market; directly or with intermediaries, and with what kind of information. The second issue is sourcing, which describes whether or not to obtain products, to buy, or make the goods. The last issue in this aspect is control and investment, which entails joint venture, acquisition, and global partner. It involves the company deciding on how far it wishes to control and direct its own fate. The degree of attitude, risk involved, and the capability to achieve goals and objectives in the targeted markets are some vital facts on deciding whether to offer a joint venture or to license.

The decisions made on the issue of marketing majorly focus on value chain. The entry alternatives or the strategies adopted by the company must make sure that the required value chain processes are integrated and performed. When making decisions or forming strategies to enter South African market environment, there is need for the company to pay detailed attention to the country’s domestic marketing. In addition, for the company to successfully penetrate the competitive market of South Africa and rise above other companies in the same industry, it should have the ability to adopt multiple and unique strategies in order to ensure a successful penetration (Keillor & Wilkinson, 2011). Other strategies include adopting a technical innovation, which involves the production of goods that are superior to other products in the target market. The next aspect is the product adaptation strategy, which involves modification of the existing products to fit into the requirements of South African market. This would ensure that the products of the company do not appear irrelevant to its target customers.


Extended marketing operations involve a marketing mix or business tools used by marketers in marketing. The marketing mix is very significant in determining the brand or the product’s offer and associated with four P’s that include product, price, place, and promotion. This concept majorly focuses on placing the right good in the right location, at the correct price, and at the right time. It involves creating a product required by a particular group of individuals and placing the product at a place that is regularly visited by those same people (Grünig & Morschett, 2012, 97). The product should also display prices that match the value attached to the product by such individuals; this should be done at a time when the individuals are willing to buy the good. However, company needs to carry out a lot of research to find out what the target customers really want and locating the places they do their shopping within the South African market. Aberdeen Asset Management PLC needs to figure out the methods involved in producing its product at a price representing the market value of the product in the view of the target customer, and at a critical and relevant time. The elements go hand in hand in their operation and getting one element wrong can spell disaster and thus failure for the company (Grunig & Morschett, 2012, 102-3).

Looking at the first element (product), it should be noted that a company can only sell what is specifically required by the consumer. This implies that the company’s marketers should be able to study and understand the needs and wants of the customers and be able to attract them with a product that they are willing to purchase. The marketer needs to tell what the customer needs from the product or service and how the product satisfies the target customer. The marketer should also be able to determine the usage of the product and how the product should be differentiated to counter the products of its competitors within the South African market. The second element in this aspect is “price,” which reflects the product’s total cost of ownership. Issues that significantly influence price are consumer’s cost to change or the cost incurred in implementing the new product. It also involves the consumer’s cost of not choosing the product produced by a competitor. The marketer must be in a position to establish whether the customer is price sensitive and how the company’s price will compare with that of its competitor (Capass & Bakstein, 2012, 89).

The next element is “promotion,” which involves manipulatively talking to the target customers with the aim of making them purchase the company’s product. Promotion can take the form of advertising, viral advertising, personal selling, public relations, and any other forms of communication taking place between the consumer and the company. A marketer should be able to know how the company’s competitors carry out their promotions and how they are likely to influence the company’s promotional activities. The next element is “place,” which describes where the product can be gotten by the customer. With the rising use of internet, credit cards, catalogs, and mobile phones, people see no need of moving to any place in order to satisfy their needs or wants. This requires the company to study and know the level of technology in South Africa to be able to know how to approach the target customers. However, South Africa is a developed country and its citizens heavily use new forms of technology, thereby calling for the need of the company to adopt such forms of technology. A marketer should be able to determine how the target customers prefer to purchase and how to access them in order to provide a convenience to buy. With the rise of hybrid models of purchasing and the internet, “place” is slowly becoming irrelevant. According to Capasso and Bakstein (2012, 96-7), the concept of conve.............

Type: Essay || Words: 2806 Rating || Excellent

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