Hosiery Market In Taiwan
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In this case of hosiery market in Taiwan, Glamour Girl, who manufactures and markets pantihouse with brand name “American Women” wants to enter Taiwan market. They had asked the research partners Taiwan to conduct a market research for them. Glamour girl also provided a research brief.
Market Research brief provided by Glamour Girl
Assessment of hosiery market of Taiwan
Advice regarding what would be the most appropriate mode of entry
Information relating to marketing mix decisions
Consumer Purchasing aspects
Place of purchase
Degree of search
Purchasing criteria
Role of brand image and loyalty
Price Sensitivity
Aspects of using (i.e consuming) pantihose
Regularity of wearing
Occasions worn
Length of usage per pair
Styles preferred
Quality (local brands VS. imported brands)
But, according to our analysis the research brief is not sufficient and they need some additional information like;
Local distribution channel
Local competitive situation
Government rules and regulations relating FDI
Market entry risks
Market size, growth and potential
Local infrastructure
Economic and social culture
Import information in Taiwan
Exit Strategy
Key Issues:
The key issues that they need to address before entering the Taiwanese market are;
Information about the Taiwan and consumer goods market
What Marketing Research methodology to be used and
What should be the appropriate mode of entry in Taiwan
Now in this report we are going analyze these issues and try to address them using international marketing concepts.
Information about Taiwan
A. Geography:
Taiwan has an area of 4,000 square miles, and three major citesTaipei (Capital), Kaohsiung, Taichung, Tainan. The climate is tropical, marine, with rainy season during southwest monsoon (June to August) and cloudiness is persistent and extensive all year.
B. Demography
Taiwan enjoys a considerable population of 22.7 million, heavily concentrated along the west coast. Second, there are three ethnic groups, Taiwanese, mainland Chinese and aborigine, 84%, 14%, and 2% respectively. Next, the age structure is quite favored to the consumer market, seen as followed. 0-14， 19.7%，14-64，70.7%, over 65, 9.6%
In addition, Taiwan people usually regard Mandarin as the official language, but would also speak in Taiwanese or Hakka Chinese dialects in daily life. And the locals share couples of religions: mixture of Buddhist, Confucian, and Taoist, 93%; Christian, 4.5%; others, 2.5%.
C. Economy
Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. In recent years, some large government-owned banks and industrial firms are being privatized. Meanwhile, exports have provided the primary impetus for industrialization. Substantial trade surplus and foreign reserves are the worlds third largest.
Although Taiwan witnessed a great suffer in the financial crisis in 1998, its output recovered moderately in 2002 and pushed ahead in 2003-05. as a result, the real GDP Growth Rate in 2004 and 2005 is 5.7% and 3.8% respectively that directly result in the GDP is $610.8 billion and GDP per capita: $26,700 in 2005. Moreover, the Taiwan government has managed to maintain a high rate of employment for its 10.31 million labor force with a relatively low unemployment Rate of 4.4% in 2004. Thus, the ratio of middle class has already reached 34%, which is an important indicator to the purchasing power of consumer goods.
In the aspect of trade, Taiwan has several major trading Partners, United States, Japan, China, Europe, Hong Kong. Particularly, the growing economic ties with China become a dominant long-term factor, in terms of exports to China of parts and equipment for the assembly of goods for export to developed countries.
Thanks to the improvement of economic policies in recent years, especially after Taiwans entry into WTO in 2002, about 4,500 tariffs were reduced and average nominal tariff rate has been lowered from the pre-accession level of 8.20% to 5.64% in 2005. The government has also permitted the foreign investors a right of up to 100% foreign ownership and a 20-year guarantee for enterprises with a foreign investment component of at least 45% equity. Therefore, in 2004, the merchandise Exports and imports and merchandise Trade Surplus all reached high records, $173.2 billion, $156.7 billion and $16.5 billion respectively.