The to Myanmar, however, the government is

The
Impact of Myanmar opening

            Myanmar
is a developing country that has been walking up to full Democracy. Since the
Military Government had ruled the country with Isolationism, it encountered
economic recession. Lately Myanmar opens its door again to foreign investors so
the economy boomed in within 4 or 5 years. According to a report by the Central
Statistics Organization, Myanmar, FDI in Myanmar increased to 905.77 USD
Million in February of 2015 from 339.41USD Million in January of 2015. (Siam University, n.d.) These days many
foreign investors are still attracted to Myanmar, however, the government is
still reforming process.

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            Myanmar budding beauty sector has been increasing as
Myanmar people has become aware of beauty conscious that they want to be
smoother and blemish free skin. From 2008 to 2012, for hair care,
the average increase was 97.5% (with a 181% increase in 2012); while
for facial skin care products the average increase was 70.25% (an
129% increase in 2012). For body care, the average increase was lowest, at
63%, however 2012 saw a spike in spending of 170%. (Mudditt, Democratising beauty: Myanmar’s cosmetics
market, 2013)

 

Positive
Impacts

            Increasing Foreign Investment, we
can have a lot of advantages in the country. It gives a long-term relationship
between two countries and provides new markets and cheaper production
facilities. For these reasons, multinational corporations are likely to appear
throughout our country. It means that it is the growth of our country’s
economy. It helps job creation because they create new jobs and opportunities
by opening new companies in the country. By means of this, increment in income
will rise for the country. The foreign companies usually offer higher salaries
than local companies. Not only most of the local people are employed but also
skilled workers and technicians can learn new experience. It is undoubtedly
true that it enhances the development of human resources implicitly.
Transferring technologies, sharing knowledge and providing facilities are
considered to be overall economic growth. Though Myanmar is one of the poor
countries in Asia, there is still sales opportunities for foreign companies.
Most
of the companies in the global beauty is waiting to enter into the country with
a middle class that will be twice in number by 2020 and a potential customer
base of nearly 60 million across age groups. (The Booming BeautyBusiness, 2014)

Medi
Myanmar Company see the future ahead so acts as distribution channels for Estee
Lauder companies and delivers high quality products to Myanmar beauty market.
Exploitation of opportunities in the booming market is the benefits of gaining
its sales and revenue in the market.

 

Negative
Impacts

            On
the other hand, increasing foreign investments can deeply affect to local
firms. The local firms have to struggle in market competition with foreign
firms. It is not easy task for local firms to survive substantially and to get
profit maximization through the foreign firms and they may even break down.
Most international brands, mainly Korea skincare and makeup products, are
flooding in the market since 2012 and it is easy to buy different ranges of
products like facial cleansers, toners, moisturizers, serums and latest creams
that are offered by L’oreal, Revlon, Maybelline, Kanebo, Shiseido and so on.

 

Development
of high speed internet and technology

As soon as technology is
advanced, the company can access huge volumes of information like closer
targeting of potential customers and more promotional activities. It is the
development of doing business as it provides open system to anyone with
internet access to connect to World Wide Web (WWW).  Advancement of technology software keeps the
collection, storage and analysis of both product and customer data by storage
in databases. This allocates company to analyse and manipulate the data in
providing management with detailed information to get a deeper understanding of
their customers and of product knowledge. Due to technological development of
the internet, a lot of changes in marketing activities. That can be undertaken
directly with the customers through e-commerce, direct mail, email marketing
and telemarketing. (Marketing
policy, planning and communication) We can make
immediate response any enquiries along with the price of Estee Lauder products
and enable to give the knowledge of product details on the site. Moreover, it
is able to calculate the number of visits to site, customer preference, range
of products purchased and the consistency of purchasing specific brands.

 

PART
A

            Medi Myanmar Group
Ltd is a pharmaceutical company consisting of distribution industry that offers
products to customers from reliable manufacturers. In 2013, the company started
to introduce cosmetic brands to Myanmar as people want to spend more money in
order to look good. Due to the popularity of Korea movies, Korea makeup trend
is dominant among young women. This is one of the challenging tasks for the
company to gain market share as western cosmetic brands and it is still risky
as foreign investment companies in doing business in Myanmar mainly due to lack
of infrastructure and high commercial rents.

We have imported one of
the world leading and prestige cosmetic brand, Estee Lauder which has been
distributed since 2013 in Myanmar. Estee Lauder brand was launched in 1946 and
now is reaching 150 countries through retail channels and digital commerce. (Estee Lauder Companies, n.d.) People in Myanmar
would like to buy authentic skincare and cosmetic US products directly even
though they have to pay more than usual price as they are concerns that the
products are fake. Under the control of brand owner, we’ve marketed and
distributed into the market so that consumers can totally rely on. By having
restricted number of outlets, value service level is likely to be added to the
market served. Staff are also trained in order to contribute and to deliver
satisfaction and value to customers.

Research and development
was undertaken into Myanmar beauty industry before Estee Lauder brand hadn’t
been delivered to market. Lately change in the consumer behaviour is dramatic
concerning the growth of the skin and beauty sector. Getting available a wider
range of skincare and cosmetics products, competitors in Myanmar beauty market
highly exist. Many smuggled cosmetic products are dumped and predominantly
imported from China and Thailand. In order to prevent from fake products, Food
and Drug Administration (FDA) permission is still required. Decision making of
manager is important to decide exactly what we need to find and to collect the
right kind of information that is crucial to the success of management
objectives. In accordance with distribution management, a wider range of
activities carefully has been applied in detailed logistics, transportation,
warehousing, and storage. Inventory management is crucially important to keep
products fresh and healthy especially pharmaceutical products, food supplements
and cosmetics and skincare products.

 

Popularity
of Local Thanaka

            Thanaka is
yellow-white paste which is made of Thanaka wood. Myanmar people still prefer
Thanaka as a traditional and organic one that take care of their face from
direct exposure of sunlight. Although foreign brands have been increasingly
interested by Myanmar consumers, Thanaka stands one of the trusted cosmetic
items in Myanmar and is quite cheap. Shwe Pyi Nann Group of Companies is the
largest manufacturer of Myanmar traditional cosmetic Thanaka. Due to popularity
of Thanaka, entering the new market is still a greater barrier for new skincare
and cosmetic products. (Mudditt, Myanmar’s beauty market poised for growth, 2016)

 

Estee
Lauder

            Estee Lauder
companies is top manufacturers and marketers in the world with regard to skincare,
makeup, fragrance and hair care products. Firstly, Estee Lauder brand was
started with just four skincare products and its sales were round the local
salons and hotels. From 1946 to 2017, Estee Lauder companies owns 25 major
brands including Bobbi Brown, MAC, Clinique, Jo Malone, Crème de la Mer, Tom
Ford and Origins. Estee Lauder brands hold a good image in cosmetic market with
mission statement, “Every woman can be beautiful”. (Shetty, 2011)Their products are pricey but delivering
good quality. Starting from 2013, Estee Lauder brands made agreement with Medi
Myanmar Group Company.

 

Direct
or Indirect External Impacts to the Company

            When
profitable Myanmar beauty industry will create a centre of attraction to new entrants
that engender the existing companies to decrease profits and revenue. Thailand
and China are significantly importing cosmetics to Myanmar market that can make
distribution of Estee Lauder, Clinique brands difficult because there is no law
right now to prevent illegal cosmetics imports to Myanmar. As Medi Myanmar
Group Ltd must continuously not only monitor possibility of new entrants but
also maintain brand customer loyalty. Product
differentiation, high quality, customer service and after sales service are
required to promote brands.

            Nowadays,
Korea drama series are influencing Myanmar culture. People would like to try do
makeup like Korea Stars and use Korea skincare and cosmetics as substitute
products in the place of high-end brands like Estee Lauder. Buyer switching
costs is also low and availability of substitute products highly exist.

            So,
competition in the market is strong in resulting direct impacts to the
company’s marketing strategies. South Korea and Japan are importing their local
brands, SK II, Shiseido, Nature Republic as well as western brands. Level of
advertising expense and powerful competitive strategy are always necessary to
consider from managers. As a result, customers can switch easily between
brands. Buyer power is high unless they can perceive uniqueness. (Porter’s Five Forces Analysis, n.d.)

 

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