Market Entry Strategy for FESTO LX

01/08/2021

Sommersemester 2021 / Festo

EXECUTIVE SUMMARY

Some nations in Africa are among the fastest growing economies in the world. They have large industries and great resources. However, as they are not able to fully exploit their economic potential, a business case for the educational software provider Festo Didactic and their product, “Festo LX” arises, reason why we developed a market entry strategy for them.

Goal

The objective was to identify and formulate a concrete and beneficial market entry strategy for Festo LX in Egypt, Ivory Coast, Morocco and South Africa.

Methodology

In a first step, the research question was identified, and a rough overview of the possible market entry strategies was given to be in a position to address the objectives and subjects of our project partner (FESTO) in a more targeted manner. With the help of the PESTED analysis, a better understanding of the current situation in the respective countries (Ivory Coast, Egypt, Morocco, and South Africa) was established. Furthermore, the micro level was also profoundly analyzed for the purpose of being able to concentrate on the appropriate target group. From this evaluation, the B2B sector emerged as the best possible entry sphere, and a list of suitable companies in the B2B domain in the respective countries was generated. Based on this list, 87 companies were identified and each of them was contacted. As a result, new insights were gained through 9 expert interviews with open ended questions about the marketing mix. At the same time, a survey focusing on product, price, place, and promotion was performed. The project team succeeded in sending the survey to 580 companies and collecting specific data for further proceedings. After the primary and secondary data collection, the data obtained was assigned to the 4Ps in order to successfully cluster the findings and thus collect validated data. Finally, by combining all the data, a suitable market entry strategy for Festo LX in Ivory Coast, Egypt, Morocco, and South Africa was successfully identified.

Results

After a detailed macro- and micro-analysis, the B2B market was identified as an ideal target market in all four countries, with its vast opportunities in the sectors of automotive, goods, machinery, aerospace and large number of students enrolled in private universities.

With B2B defined as the goal target market in every country, the marketing mix analysis conducted, consisting of the 4Ps (product, price, place, promotion), showed similarities spanning over all four markets. For a successful market entry strategy and market penetration, local sales forces proved as the most promising option, with personal and trust-based business relationships setting the tone for the best market entry option as an international company. Additionally, for the francophone markets, the option of providing the product in both French and English received high positive response rates. For the promotion of the product on the local markets, social media marketing with personal follow-ups were identified as the main communication channel, allowing Festo to reach a large percentage of possible business partners and customers. Regarding the pricing of the product, large discrepancies in replies of the survey could be observed, thus making it impossible to narrow down the wide-ranging replies.

Cooperation Partner

  • Festo SE & Co. KG
    Ruiter Straße 82
    73734 Esslingen - Berkheim
    Germany
    www.festo.com

Contact Person

  • Marcela Marin Villegas
    marcela.marinvillegas@festo.com

    Horst Weinert
    horst.weinert@festo.com

    Simon Colas
    simon.colas@festo.com
     

Student Team

  • Olivia Fuchs

  • Raul Antonio Cortez Hidalgo

  • Tamara Neulinger

  • Robert Lainer

  • Gabriel Konstantin Kefer

Project Manager

  • Caroline Fabian, M.Sc.

  • Shtefi Mladenovska, M.Sc.

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