International Environmental Analysis Of Pensonic Holding Bhd Marketing Essay

Under the Economic Transformation Programme (ETP), Pensonic Holding Bhd will establish a manufacturing hub and international distribution network of electrical home appliances. On top of that, Malaysia economy will boost up due to the increasing export volume of local product. In order to achieve objective of Pensonic Group that become worldwide well known household appliances brands, the company has adopted a multi-brand to cater different product categories and market segment in different country. The Republic of Turkey is a transcontinental country that provides opportunities to Pensonic Group to expand its business to South-eastern Europe and South-western Asia. In 2009, Turkish electronic sector has grown dramatically, reaching a production volume worth USD9.5 billion. According to Economist Intelligence Unit (EIU), the market demand for electronic goods is expected to growth in Turkey between 2009-2013 as the result of the growing population and disposable income. Turkish electronic sector is constantly working to produce innovative, high quality and globally competitive products.

The population of Turkey is estimated to be 78.7 million with a growth rate of 1.23% per annum. The adult population that range from 15 to 64 years old is approximate 67.1%, which will form most of the Pensonic target market. Turkey’s young population is larger than the total population of many European countries and half of Turkey’s population, is below age of 28 years old. In recent years, the growing number of youth with higher levels of education eventually led to a strong and stable economic growth. As the education level increases, Turkey’s middle class population is flourishing and growing solid with a series of changes in social and economic dynamic. Therefore the standard of living and purchasing power of the country increased significantly. With this statistics, Pensonic can introduce more high-tech electronic product to cater the Turkish young population as most of them are tech- savvy.

Demand for electrical product in Turkey are rapidly growing, therefore it attract many investor around the world to invest in the country. The numbers of players in the market are more than 2000 companies that register under electrical equipment and supplies. The largest competitor is Arcelik Company that has market share more than 50 percent in Turkey. Moreover, other main players in Turkey house appliance and consumer electronic sectors are Vextel Elektronik, Casper Bilgisayar, Philips and many. Those company already operate in the country for a long period of time, in order for Pensonic to enter and gain large market it acquire long period of time and effective promotion must be done. Furthermore, Turkish-made television sets have excellent reputation among European consumers.

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The increased of young generations in Turkey created demand for updated electronic good such as LCD television, home theatre system, and others. As expected, Turkish consumers embraced the new concept of attractive, portable devices, and reasonable prices. This boosted the demand for portable DVD player, air purifier, and more. The trend of high adoption towards new product to improve standard living was the main driver of the demand for portable products in Turkey. Additionally, the reduction in unit prices encouraged consumers to purchase portable products rather than choose traditional electronic products as portable versions are more convenient and easy to consume. Thus, this has provided a golden opportunity to Pensonic Group to expand their business in that country.

Prior to the global recession, the retail sales were strongly declines in 2009. However, most categories are expected to have positive growth performances over the forecast period. The recovery of the industry is expected to start in 2010, boosted by the tax reduction measures applied in the third quarter of 2009 by Turkey government. With the strong and stable economic growth, the Pensonic Group is predicted a healthy growth in future, for categories that are dynamic in terms of new products, such as paraffin wax spa, instant coffee maker and others. Additionally, the purchasing power of consumers is likely to start increasing in 2010 and 2011, which is expected to boost sales of Pensonic Company. With the increasing of disposable income, it increase the chance of people spend more of on luxury good.

By become member of organization such as World Trade Organization, Organisation of the Islamic Conference and under FTA, the trade relationship between Malaysia and Turkey are protected. Moreover, both countries were benefited by exploring to larger market. Example, Turkey would serve as Malaysia’s entrance to European market while Malaysia would be Turkey entryway to serve the Asian market. Therefore, this may enable Pensonic to expand the business to European country more efficiently. This ensures that Pensonic may gain more market share not only in Turkey but from other European countries. With FTA, it enables Malaysia manufacturing company benefited from duty elimination that reduces the cost of export the company product.

Given that the competitive environment of the Turkish consumer electronics industry is very fragmented and offering various brands in all price segments, therefore products with lower unit prices became more popular due to the economic crisis. The track record of the Turkish electrical industry was better than expected. There had been an increase in the number of local suppliers and retailer around Europe. Beside physical store, online retailer in more famous due to the convenience and the price is cheaper. Production increased stably and as a result of increasing demand the industry expanded its production capacity. Hence, Pensonic had to develop an approach wherein the hard facts of corporate life have to be consider before expand the business to Turkey.