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Marketing Strategy for Costa Rica

Essay by   •  January 15, 2011  •  Essay  •  1,008 Words (5 Pages)  •  1,548 Views

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Marketing Strategy for Costa Rica

In order for companies to be global successes, they must first meet certain criterion. Firstly, leadership at home gives profitable foreign growth companies the cash flow and management resources to invest in international expansion. Building a strong core business requires management to fully understand the limitations of the core business, recognizing clearly which customers, costs and geographies are part of the core, and which are not. Foreign norms and local market knowledge are important and 'going global' can mislead companies that have not first understood the profit dynamics of their industry. Luxottica has clearly mastered these traits for its current global dominance in the designer optical markets worldwide.

Luxottica has used the strategy of adding new capacity through acquisitions to drive down returns through superior execution and used this strategy to become a world leader in eyeglasses. The company quickly recognized the importance of retail distribution for profitable growth: Direct access to eyeglass wearers provides unique data on what customers are buying, and allows Luxottica to market its own products. When the firm began to expand abroad, Luxottica managers looked for acquisitions to establish a strong presence in distribution or retail. With that in place, the company can begin to extract value through its integrated business -- the efficiency of its manufacturing and its expertise in marketing and product selection. A perfect example of this was Luxottica's acquisition of Lenscrafters and Sunglasses Hut, by far the most successful and lucrative made in the history of the company. Through the LensCrafters and Sunglass Hut International, Luxottica Group is the leader in the mid- to premium- priced categories of the North American optical retail market.

Because of its success in North America, our proposition for this chain to expand into the Central Americas would prove to be a wise choice; and what better place for a distribution center, than the free trade zones of Costa Rica - a stable country, highly literate population with a relative balance between its rich and poor classes compared to its neighbors, politically stable and a fantastic location. Costa Rica would act as a great hub for establishing a distribution network with the emergence of the CAFTA protocol. Added benefits of CAFTA would allow the ease of the flow of the logistical supply chain. Currently Luxottica has distribution centers setup in Argentina and Brazil - two of the biggest powerhouses in Latin America. It has experience in targeting the Latin American Audience and is familiar with the cultural nuances as well as it can use the existing sales representation in these areas for assistance.

In Costa Rica, currently there is no distributor of designer brand imported opticals. There is a dire need for long lasting and durable eyewear. There are no local products or brands that are currently popular. The government subsidizes local cheap frame and lens for its people. Otherwise, frames and lens are often bought either via mail courier or imports which are expensive. There are no optical chains - just independent opticians who are expensive and conduct private eye clinics.

Through Sunglasses Hut C.A. (Central America), we will introduce a specific brand of conservative, affordable and durable eyewear manufactured specifically for the majority of the population. These will be both clinical eyewear along with sunglasses for fashion wear. These glasses are manufactured in Luxottica's wholly owned subsidiary in China and will be distributed via the Central American distribution center we will setup in the Free trade zones of Costa Rica. The following is more detail on our target market and segmentation strategies.



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