International marketing Essay

The company that was chosen for this essay is Dubai Aluminium Company Limited which is an owner of one of the largest aluminium smelters.
The country of origin
With attributes like a rising industry and the huge exporting businesses, The United Arab Emirates’ economy is considered to be a well developed and diversified, especially in comparison with the many other Arab countries.
Manufacture and construction industries in the United Arab Emirates economy are just booming. This country is reach in natural resources and therefore it exports oil, gas; besides it also deals with re-export issues.
Japan is its biggest partner in trade, but among the other trading partners of UAE we can name Japan, South Korea, India, Iran and Thailand.
The Company
Dubai Aluminium Company Limited was founded in 1979 and recently has celebrated a 30th anniversary. It is a 100% state-owned business. It was organized in order to make the UAE economy more diverse, as a rival to the well developed oil and gas industry.
Dubai Aluminium Company Limited is recognized as the industrial non-oil leader of the UAE economy and considered as one of the largest non-oil contributors to the country’s GDP. It actually owns and controls a half of all Aluminium green-field smelter industry in the UAE commercial center, Abu Dhabi.
Below please find the detailed description of the company magnificent industrial site in Abu Dhabi (official company information was retrieved from its corporate website www.dubal.ae)
The huge primary aluminium smelter, a carbon plant, and a powerful power station that provides 2,335 megawatt of energy, seawater desalination plant, laboratories, port and storage facilities are included into the company’s giant industrial complex.
Besides the primary aluminum manufacturing, it also specialized on producing of big amount of high quality finished aluminum products.
These quality products form three major branches. First which is called foundry alloy is used intensively by car making industry. The second is extrusion billet, that is used by construction, transport and other industries. Finally, the third is high purity aluminium, which is vitally important for electronic and also for aerospace industries.
In total, Dubai Aluminium Company Limited is able to make an annual supply of more than one million metric tonnes of high quality finished aluminum.
A total number of company’s customers is about 300, and they are located in 45 different counties (Europe, the ASEAN region, the Middle East and Mediterranean region, and North America).
The company currently holds ISO 9001, ISO/TS 16949, ISO/IEC 27001, ISO/IEC 20000, ISO 14001 and OHSAS 18001 certifications.
The Dubai Aluminium Company Limited staff consist of 4,000 high skilled employees (operators, tradesmen, administrative staff, technicians, professionals and managers). The team consist approximately of 15% of local citizens, while the managing staff consists of more that 70% of local citizens as well.
In order for Dubai Aluminium Company Limited’s requirements of alumina and other critical raw materials to be met, investments are being made. For example, the company participates ed in four strategic upstream bauxite/alumina projects in the number of countries (Brazil, Cameroon, Republic of Guinea and India).
An improved reduction cell technologies that not only ensures productivity is increasing, but also help to reduce the operations’ impact on the environment via better energy efficiency and reduced emission levels. These efforts were made by the company over the past decade, according the continuous improvement and ongoing innovation organizational principles.
Beside it, some other important flagship technologies have been developed by Dubai Aluminium Company Limited.
The nature of the product
Dubai Aluminium Company Limited is oriented on B2B customers, and nowadays it is a leading supplier of foundry alloy to the automotive industry of the region.
It is also a significant supplier of extrusion billet for construction markets and a preferred supplier of high purity primary aluminium for use in the electronics and aerospace industries.
Foundry alloys, billets and high purity ingots are the categories of than 330 individual products that this company is producing. All individual products are made to customer specifications.
The company has produced 1,043,104 metric tonnes of quality finished aluminium products in 2010.
Also, Dubai Aluminium Company Limited has managed to increase its sales till 1,015,520 metric tonnes in more than 45 different countries.
A wide network of reputable metal handling forwarders and logistics companies are used oin order to proved a “just in time” reliable and quick delivery to the clients in Europe, North America, and the Middle East.
Company’s export policy
More than 300 customers are served in at least 45 countries predominantly in the Far East, Europe, Asia, the Middle East, Mediterranean region, and North America.
An estimated 92 per cent of DUBAL’s annual production is exported to global markets – from China to North America. An excellent infrastructure in terms of transportation, port facilities and prompt document processing and clearance, all contribute to a growing international presence.
New export market recommendation.
Taking into account the fact that Japan is the biggest exporting county for UAE, I would advise DUBAL to explore the Japanese market. Japan is one of the major world economies and very perspective exporting market.
The Japanese economy is one of the third largest in the world. Only the USA and China have a higher GNP. The Japanese currency is the Yen. Cars, electronic devices and computers are it’s the main exports. The major supplier import goods to Japan is China, followed by the USA, Australia, Saudia Arabia, South Korea, Indonesia and the United Arab Emirates. Japanese import mostly raw materials such as oil, foodstuffs and wood.
The most developed among the Japanese industries are:
Manufacturing,
construction,
distribution,
real estate, services, a
communications
It should be mentioned that Japan has poor reserves of natural resources, they are very limited and the mining industry rather small.
The Japanese aluminium industry mainly consists of rollers, extruders, foil rollers, etc. who import most of the primary aluminium ingots for making a variety of end products in such market segments as construction and transportation. Japan has also sizable secondary aluminum industry
According to the data of Aluminium Research Council, in 2010 the country has faced a grow by 3.5% for all aluminum products.
Current market trends caused by force majeure
According to the latest market information, aluminium products shipments to Japan
fell 8,5% in March 2011, in comparison with the previous year data.
Earthquakes and tsunami have devastated northeastern Japan and influenced infrastructure damages and power cuts.
Currently there is also another negative trend – a decrease of demand from key customers in the industry sectors like auto industry. The auto production was slashed, because the supply chains of key part were disrupted by disaster.
For example, Toyota Corporation made an official forecast that output will be recovered to the previous levels at the end of 2011.
Unfortunately the industry is hurt by power blackouts that happen after the quake due to the loss of output from nuclear plant in Fukushima.
The majority of Japanese primary aluminium are imported from abroad, and annual import consist of2 million tonnes of the metal. The industries starting from computers, planes and electronics to food packaging are highly dependable on aluminium import.
There is also may be problem with three major Japanese ports that have aluminium stocks held, at the moment situation is normal, but stocks may rise later if demand will be continuously decreased.
External environment analysis
The Japanese aluminium industry mainly consists of rollers, extruders, foil rollers, etc. who import most of the primary aluminium ingots for making a variety of end products in such market segments as construction and transportation. Japan has also sizable secondary aluminium industry
Demand for all semi-fabricated aluminium products in 2010 has demonstrated a recovery trend, mainly supported by demand from the automotive market. Foil demand also will increase due to capacitors and electrical appliances demands.
Due to the enormous rise of construction market after the earthquake, extrusion products demand finally will be out of long term bottom.
Japan imports almost all of its primary aluminium requirements.
– Domestic production of primary aluminium: 5,027 tons (2009)
– Imports of primary & secondary aluminium: 1.96 million tons (2009)
In 2009, UAE was ranked the ninth largest importer of primary aluminium requirements.
Besides it, Japan imports semi-fabricated aluminium from various countries in Asia, North America, Europe, etc.
After the global financial crisis, Japanese government has implemented incentive policy for purchasing for green vehicles. It contributes to sustain domestic auto sales and aluminium automotive products demand. Now, high fuel economy cars such as hybrid car and small & compact cars dominate top-ranking of domestic auto sales. In automotive industry, aluminium demand will increase for accomplishing light-weighting and high fuel efficiency. And aluminium demand for lithium-ion battery also is expected to increase in electrical vehicles.
In order to reduce the weight of railway vehicles, Shinkansen trains as well as subway cars are now aluminium intensive. As of the end of 2009, the total number of aluminium railway vehicles produced domestically reached 17,673 units.
For railway vehicles, aluminium is used not only for the body frame structures, but also used in
applications such as window-frames, seats and bogies. Approximately 100 tons of aluminium used for one train (consisting of 16 coaches) of the Shinkansen 300 series.
With improvement in welding technologies, aluminium vessels are gaining popularity. Fishing boats, patrol boats, passenger vessels using aluminium are now popular and being built in greater numbers.
In the past, many fishing boats were made of FRP (Fiber Reinforced Plastics). However, FRP boats are difficult to dispose of. Thus, highly recyclable aluminium boats are now replacing these FRP boats to a large extent.
An LNG ship carries liquefied natural gas in specially designed aluminium tanks. As much as 2,500-3,000 tons of aluminium is used for each of this type of vessel.
Construction industry will be booming after the earthquakes and construction market is expected to recover. The negative thing that there is e dmogpraphic trend that Japanese population has already begun to decrease. In construction market, aluminium extrusion demand will increase in high heat insultation sash, mainly for renovating houses. Japanese government has implemented incentive policy for green construction products at present.
Also, aluminium demand for solar cell is expected to grow. Aluminum is applied in frame and back sheet of solar battery. Japanese government has established incentive policy for setting up solar battery as well. In addition, the government has introduced the purchasing renewable energy program.
Beverage containers industry as one of the aluminium importers customer mush be mentioned as well. Aluminum can demand was 18.2 billion cans in Japan in 2008.
Among which 62% is for beer, 28% is for soft drink and 10% is other alcohol drink. Beer demand has decreased in recent years in Japan while the demand for the third-category beer, which is a new kind of alcoholic beverage, has been popular due to its cheap price.
In 2009 aluminium can recycling rate was 93.4%, which is the highest rata over the last 10 years, of which 62.5% was recycled to aluminum can.
Used aluminium beverage can has higher crap value compared with other containers, resulting in the lowest recycling costs. This helps reduce costs born by the self-governing bodies for their segregating, collecting, and disposing operations.
The total amount of beverages (beer and soft drinks) produced in Japan amounted to approximately 23.3 million kiloliters in 2009, of which beer and soft drinks accounted for 26% and 74% respectively.
As for soft drink packaging in 2009, PET bottles held the largest share of 64%. Aluminium canned soft drinks accounted for about 7.7% of the market.

Politic climate in Japan
The legal/political aspect is very important in global marketing. The political/legal environment in Japan is stable, rather liberal , that makes it comfortable to operate in it. The government has a good relationship with many countries
Cultural or social environment in Japan
The Japanese culture developed in relative isolation from other countries and different cultures. This isolationist development led to homogeneity in race, language, lifestyle and culture for the Japanese people. Their main characteristic is a need for stability and order – that occurs through a sense of responsibility, a respect for discipline and training.
Their emphasis on education, collectivism and loyalty to the management mean that Japanese companies (both customers and competitors of The Dubai Aluminium Company Limited in this market) have aa highly literate, group-oriented and cohesive workforce at their disposal to accomplish the organizational goals and produce the products needed for the market. The larger companies of Japan offer nenko, or lifetime employment, to some of their employees. However, only about 30% of Japanese workers are under this system now.
The cultural aspects the Japanese have shaped are a strong part of organizations within Japan. However, it is not only the cultural aspects within organizations, but the understanding, acceptance and effective application of the principles of marketing that
have made the Japanese so effective and successful. They carefully studying consumer needs, develop products incorporating desired features and put effective marketing programs in order to support it.
The Japanese have built and are running exceedingly successful businesses, yet their basic business strategy not usually incompatible with the economists’ theories of economic behavior, therefore the company should pay more attention to these cultural and social differences in order to gain reputation among Japanese customes.
Japanese are fans of new technologies, exploration of new materials, new market segments and distribution channels; therefore we can presume that UAE company that will follow these innovative trends will be popular among B2B customers.
In general, a country is a perfect partner for goods import. Its economy possesses a liberalization and freedom.
The real problem with the social situation in Japanese market has happened this year. After the series of earthquakes a lot of people have lost everything, they are desperate.
Market segmentation
In accordance with the need for aluminium in Japan, we can make a conclusion that this market has a number of different segments, and the company may not participate in all of them, but in the most attractive, depending on its products proposal.
Also I would suggest the company to initiate the production of a certain kinds of aluminium product that are demanded by Japan, especially by its construction sector of economy.
For the Japanese, their rule seems to be “market share or die”. The Japanese are very aggressive in pursuing long-term market share. Their main strategy in the entering of a new market is to build and secure market share rather than early profits.
When the Japanese enter a market behind the innovators, their strategy has not been to attack the leader head on, but to spot emerging segments not yet prioritized by the leaders. In my opinion, The Dubai Aluminium Company Limited can use this smart market strategy in Japan itself.
When the Japanese decide to enter a market, they spend several months analysing the feasibility of that market. The Dubai Aluminium Company Limited should also evaluate market and then develop a detailed strategy and market segmentation, before the market entry.
Marketing expansion strategies
Japanese customers are perceived as having the qualities like as flexibility, quality, pragmatism and the hard work ethic. They are felt to be more intuitive and subjective and have more communication orientated qualities. (Nakane C., 1970).
Despite unique characteristics and unique buying behavior of Japanese customers that are so different from Western customers and clients from the Arab world, we can be sure that Japanese people attitudes toward the UAE products is generally good.
Besides, as far as we are talking about raw materials import, we should remember, that historically UAE is one of Japan’s biggest trading partners.
The products are targeted for the industry and commerce, these clients will not pay much attention on the origin, but will concentrate on the product’s quality and cost issues.
The Dubai Aluminium Company Limited customers belong to B2B sector and large capital projects.
Surprisingly, some experts confirm the fast that the cost is not the most important factor of the customer choice in the aluminium industry. The more substantial factors are: reliability of delivery, consistency of product quality and the qualified technical support.
As it was mentioned before, the product targeted for this market should be modified in order to meet specific requirements. It’s not a FMCG product that may be suitable and remain almost unchangeable for every market it is presented on.
Japanese businesses are totally committed to gain and maintain and expand their market shares through the use of product innovation strategies that challenge their resources and technology.
Regarding marketing channel systems and physical distribution issues, I need to indicate that this kind products of industrial and other needs should be distributed via the company’s local representative office that already exists, in accordance with the direct contracts conditions.
The Japanese exploit markets by using market share pricing strategy; low entry price to build up market share and establish a long-run dominant market position. Price is a key element in the Japanese marketing mix and in the expansion of their market share strategy. The Japanese use pricing to penetrate, gain and secure market share. Their concept of pricing a product is to decide first how much consumers will be prepared to pay for the product and then direct engineers and designers to meet that price.
Although the product innovation is considered to be the crucial in long term perspective, initially aggressive pricing strategies are used by Japanese companies in order to help secure their market share and win the market competition.
The Dubai Aluminium Company Limited prices policy in Japan should be formed in accordance with local competitor’s policies. Taking into account that country is facing a big tragedy, and will need a lot of raw resources in order to rebuilt itself, the company should not concentrate on making the maximum profits there at first, but should focus on forming the trustful relationship with clients and make the proper base for the future expansion of this market
The promotion of raw materials is very specific. In my opinion, the marketing communication first of all must emphasize the most appealing things for the customer in this industry. The advertising message should be rational, professional, suggest more technical support and solutions and should contain an indication on the logistics opportunities, after sale warranties. (Lancaster G.,2007)
The serious trade press and trade internet portals should be used as main media for for advertising campaigns of raw materials. The advertising should be both direct and indirect (PR).
While traditional advertising is passive and expands slowly, direct sales activities bring more immediate result.
Let’s explain the term “direct marketing”. It’s an advertising that communicate the consumer directly with advertising techniques such as fliers, catalogue distribution, promotional letters, and street advertising. It helps to reach the audience without traditional formal channels of media mix and is very straight by its nature – the product is offered and also it is explained how to get it.
Direct mail can be used as well as this marketing tool can provide the cost effective contact at an ideal frequency with the customer.
Personal selling as promotional activity is considered to be a critical element of marketing mix for large scale capital project-based.
Personal selling is communication with potential buyers of a product with the intention to result in a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to “close the sale”
Personal selling is one of the oldest forms of promotion. It involves the use of a sales force to support a push strategy (encouraging intermediaries to buy the product) or a pull strategy (where the role of the sales force may be limited to supporting retailers and providing after-sales service). Among the advantages of using personal for promotion goals the following can be defined:
Personal selling is a face-to-face activity; customers therefore obtain a relatively high degree of personal attention;
The sales message can be customised to meet the needs of the customer;
The two-way nature of the sales process allows the sales team to respond directly and promptly to customer questions and concerns;
Personal selling is a good way of getting across large amounts of technical or other complex product information;
The face-to-face sales meeting gives the sales force chance to demonstrate the product
Frequent meetings between sales force and customer provide an opportunity to build good long-term relationships
The main disadvantage of personal selling is the cost of employing a sales force. Sales people are expensive. In addition to the basic pay package, a business needs to provide incentives to achieve sales (typically this is based on commission and/or bonus arrangements) and the equipment to make sales calls (car, travel and subsistence costs, mobile phone etc).