Reference no: EM132401753

THE HOSIERY MARKET IN TAIWAN: INFORMATION PLEASE!

Al Marshall Robbie Barnes found his short-term assignment working at Research Partners Taiwan a challenging task. He was there for three months while one of the local directors was away on maternity leave. Robbie's regular job is in the Sydney office of Research Partners Australia. His responsibilities in the Taipei office were essentially to cover all aspects of the job role of the director he was filling in for. This involves business development, project design and supervision and the analysis and reporting of research results for a range of local and multinational clients. These clients included large FMCG (fast moving consumer goods) clients as well as a number of business-to-business clients. Among the possible future multinational clients is Glamour Girl, a large US hosiery manufacturer. Glamour Girl manufactures and markets a brand of pantihose with the brand name 'American Woman' both in the US market and many other markets around the world. To date, however, they have not entered the Taiwanese market but now have an interest in doing so. Taiwan is seen as a Chinese market to gain experience in prior to launching the brand into the mainland China market. Robbie and Betty Foo, the local MD of Research Partners Taiwan, have recently had a meeting with representatives of Glamour Girl, who have been in Taipei on a field trip to gather information on the Taiwanese hosiery market and to make a preliminary assessment as to the market potential there for the 'American Woman' brand. The outcome of the meeting was that the research agency has been issued with a research brief. The brief to Research Partners Taiwan is to undertake an assessment of the hosiery market in Taiwan, and ultimately to provide Glamour Girl with sufficient information in order to enable them to make the decision to enter (or not to enter) the Taiwanese market. Glamour Girl is also interested in any advice that the research agency can give as to the most appropriate mode of market entry, and any information relating to the marketing mix decisions that would need to be made. Both Betty Foo and Robbie Barnes feel that Glamour Girl is asking a lot, and that the company is really only going to make the decision about possible market entry based on the market research that will be undertaken. While Glamour Girl has been marketing the 'American Woman' brand in many other markets around the world, the company representatives they met seemed very unsure about the Taiwanese market. They had pointed out that they really want to use the Taiwanese market as a test market prior to entering the mainland market. It was apparent that Glamour Girl would be wanting to work closely with Research Partners Taiwan should the agency be successful in winning the competitive tender for the research project. Robbie thought about how little he knew about the hosiery product category in Taiwan, and what a steep learning curve it would be to demonstrate competencies in the category when he wrote the research proposal. He would need Betty Foo's help. From Robbie's own observations hosiery products (pantihose and stockings) seemed to be distributed through a variety of channels in Taiwan, and there seemed to be quite a number of brands. On visiting a department store to have a look he spotted locally made brands as well as Japanese brands. He also saw one or two European designer label brands and these were very expensive compared to the other brands. 319 Midland Typesetters PART B International Market Planning Process On his short reconnaissance trip Robbie also saw hosiery products in the markets, and that evening while on the way home from the office he saw a couple of local brands in his neighbourhood convenience store. Hosiery products (mostly pantihose) seemed to be widely available, at least in Taipei anyway. Robbie assumed that this was probably the case elsewhere in Taiwan. Prior to writing the research proposal Robbie Barnes also asked Betty to ask a number of the female employees of Research Partners Taiwan whether they bought and wore these types of products regularly, and if so where do they typically purchase them. Robbie felt that knowing this would possibly help in informing him about the product category and therefore assist him in his research proposal. The results of this small qualitative check were interesting-the great majority of the women in the office did wear pantihose (though some wore stockings instead), and it seemed that there was a real mix as to where they were mostly purchased. The younger women, according to Betty, tended to cite department stores, while the older women tended to cite a mix of department stores, convenience stores and markets. Markets were far more significant than Robbie imagined they would be. Betty cautioned that in small cities and towns outside Taipei and Kaohsiung, the second-largest city in Taiwan, the incidence of hosiery purchasing and usage is likely to be a lot lower. Consumption of these products seems to be linked with urbanisation and participation in a modern economy. Robbie also speculated that there may be a linkage with the degree of Westernisation. He had observed many young girls in Taiwan who seem highly committed to wearing the latest Western fashion trends. The Glamour Girl research brief specified that a broad range of information was required on the hosiery market in Taiwan. This information did not, however, include a profile of production, importing or exporting. Glamour Girl is already aware that there are a number of Taiwan companies that manufacture for the domestic market, as well as exporting their products elsewhere in East Asia. They are also aware that the main hosiery imports are Japanese brands, with the top end of the market dominated by European designer brands. The brief contained some of this information. What Glamour Girl wanted from Research Partners Taiwan was an understanding of the purchasers and users of hosiery products, particularly pantihose purchasers and users. The stocking component of the market is considered to be a relatively small, almost a niche component. Pantihose sales comprise the bulk of the sales in the market. Glamour Girl has no understanding of how Taiwanese consumers in the target market purchase and use pantihose. The decision by Glamour Girl to explore the export potential of the Taiwanese market has been based on a review of the statistics made available to them by the representatives of the Taiwan trade office back in the USA. The trade office was able to provide the statistics on domestic production of hosiery products, imports into Taiwan and exports to other markets. By checking the volume and value of production it is possible to see that there is substantial domestic production. By looking at the volume and value of exports it is possible to see that only a percentage of the products are exported, which implies that the bulk are consumed in the domestic market. On top of this, the fact that hosiery products are imported into Taiwan implies that there is a market demand for imported hosiery products, and that the market is larger in volume and value terms than the domestic production minus the exports would indicate. All of this has led Glamour Girl to want to investigate the Taiwanese consumer market. This is aside from the fact that the company considers that what it could potentially learn from marketing the 'American Woman' line of products in this market could potentially help it in future in the mainland Chinese market. 320 Midland Typesetters Case Studies PART B The research brief states that Glamour Girl is interested in a number of aspects of consumer purchasing and a number of aspects of using (consuming) pantihose. Robbie, in the proposal he and Betty Foo will need to write, has to respond to each facet, specifying how information might be collected and analysed and how it might assist in developing a holistic understanding of the Taiwanese hosiery market. They know that their report will be closely reviewed by management when making the decision about market entry. Consumer purchasing aspects of most interest include place of purchase, degree of search, whether purchasing is a solitary or group activity, purchasing criteria, role of brand image and loyalty and price sensitivity. Using (consuming) aspects of most interest include regularity of wearing, occasions worn and length of usage per pair, styles preferred and brands at home. In addition, Glamour Girl is interested in whether Taiwanese pantihose consumers perceive quality differences between local and imported brands. In writing the proposal Robbie Barnes reflected that the sort of information Glamour Girl is seeking is essentially similar to the types of information that many of his clients back home in Australia seek when studying consumer markets. On this basis he felt somewhat more confident in beginning the process of writing the Research Partners Taiwan proposal.

Questions

1. Will the information in the Glamour Girl research brief be sufficient to allow company management to make a decision as to whether or not to enter the Taiwanese hosiery market?

2. In preparing the Research Partners Taiwan research proposal what additional information, if any, should Robbie Barnes recommend be collected to assist management in their market entry decision?

3. It is likely that Robbie Barnes will recommend a principally qualitative or a principally quantitative methodology to capture the information sought by Glamour Girl? Explain the reasons why.

4. Undertake some secondary research on Taiwan as a market for consumer goods

5. In what ways is the process of researching the Taiwanese hosiery market likely to be different from researching such a market in Australia?