PREFACE

The project assigned to me was "market study of Vardhman for internationalization". A CASE STUDY FOR MYANMAR . I thus got an opportunity of working with VARDHMAN threads Ltd. the manufacturers of threads, acrylic fibres, arn ! steel.

The work has been carried o"er a span of # months. The scope of the work undertaken by me includes the collection of secondary data form "arious means ! analysing it. I, thus got an opportunity law to understand to it and "arious the factors for for

internationalisation,

pertaining

procedure

establishing new markets.

ACKNOWLEDGMENT
% report, when prepared with true spirit goes a long way in enriching many peoples knowledge and also it ser"es as an "ital ingredient in the learning process of the indi"iduals in"ol"ed in preparing it. I am deeply greatful to Mr. Gurjeet Arneja &'.(. marketing) for pro"iding me the opportunity to study the research which pro"ided me with a"ailable insight. I would like to e*tent my heartiest thanks to Mr. Vipu Anan! &%sstt. +*ecuti"e (arketing) my +*ternal guide for pro"iding me with "aluable idea, "iews ! suggestions, in preparing the report. I am thankful to ,rof. -.V. .amanan, ,rof. /ubroto 'anguly ! all the faculty of /risim for pro"iding me their suggestions ! guidance in each step.

"ACKGROUND OF THE PRO#ECT

V%.12(%3 T2.+%1/ LT1. has since increased its production capacity is planning to look forward for the new markets. In the initial step they are looking at the neighbouring countries such as (yanmar, /rilanka, 4angladesh ! 3epal. %s the 'o"t. is in the process of upraising smallscale industries which will force .3' sector to come up with growth. Vardhman felt a strong need to e*pand their market. 5hen I discussed the project with (r. Vipul %nand &+*ternal guide). It was decided to ha"e a o"erall scan of the country. .egarding both (acro ! micro "ariables. /o it was mainly the analysis of secondary data to look whether it is worth going for e*port in (yanmar.

RAT$ONALE OF THE RESEARCH

(arketing .esearch is concerned with the authentic and objecti"es collection, analysis ! e"aluation of information about specific aspects of marketing problems in order to help management make effecti"e decisions. (arketing .esearch is not an end in itself, it is a means to an end and the important is decision making. The main .ationale behind the study undertaken was to pro"ide the company information about the macro ! micro "ariables of the country. .egarding economic, social, geographic ! political information ! to ha"e a full scan of the country to pro"ide "aluable information whether it is worth going for e*port in (yanmar.

SCOPE OF THE STUDY

REV$EW OF L$TERATURE
The initial step was to understand the process of how to go about the project itself. The aim was to understand better "ision, mission objecti"es ! culture of the organisation so as to ensure that the work done is in consonance with the o"erall goal of the company. In this regard "arious +mbassy, councils, Institutions, 1irectories, magazines, books, websites searched. There were 7

EM"ASS$ES
Indian +mbassy in (yanmar 8#898#: (erchant /t. ;yauktadu yangon ,h. 0<=8>0 +mbassy of (yanmar 698?@A 3yaya (arg. 3. 1elhi. ,h. ><<=??:.

COUNC$LS
/ynthetic and .ayon Te*tiles +*port ,romotion -ouncil &/.T +,-) AI--I -otton Te*tiles +*port ,romotion council

$NST$TUT$ONS
Indian Institute of Aoreign Trade &IIAT) 3ational Institute of Aashion Technology &3IAT).

D$RECTOR$ES
(yanmar 1irectories

MAGA%$NES
/.+,- 3ewsletter 0< th 1ec. $===.

"OOKS
'lobal marketing strategies published by B%I-C ,D4LI/2I3' 2CD/+ second addition. 'arment +*port ,ublished by ,rentice hall of India ,"t. Ltd., $==: +dition.

WE"S$TES
www. (yanmars.net www.yangonglabe.com www.myanmol.com www.yangon.anglicon.org www.myanmornet.com www6.wlwonline.de www.europages.com www0.kompass.com www.e*pobase.com www.wssn.net www.asiansource.com www.asiaone.com

REASON FOR $NTERNAT$ONAL$%AT$ON &E'PORT(

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Vardhman is ha"ing 0 plants for sewing threads one in 2osiarpur with a capacity of 8?? tonnes9month ! other at 4addi with a capacity of 6? tonnes9month. 2osirpur plant is running at $??E production ! 4addi plant with the production of :8@<?E. Last year combined sales of 2osiarpur ! 4addi went upto 0$? crores which was mostly domestic sales &==E). This year sales will be closing at 06? crores. Vardhman is also coming up with its 6 rd sewing thread plant. 5hich will increase its capacity. 'o"ernment is in the process of upraising small scale industries this will force .3' sector to come up with growth, also the consense of good Fuality of garment ! upgradation of technology will force many garment industry to shift from local "endor to an organised "endor. This will also include the thread supply which will see shifting from unorganised sector to an organised sector fro better Fuality ! consistent supply of thread. ;eeping in "iew the abo"e "ision V%.12%3 has opened a third sewing thread unit at Ludhiana with the initial capacity of :8 T,( which will be e*tended to $8? T,(. This factory is planned to cater the e*panding garment industry with cotton, spun polyster ! poly@poly core spun threads which are commonly used by the garment industries. This will also gi"e additional capacity to Vardhman ! thus ample

opportunity to look forward for the new markets beyond their boundaries. %t initial step Vardhman will eye on the neighbouring countries such as 3epal, /rilanka, bangladesh and of cause (yanmar. Inface there are same of edge no. of industries with their units located in India as well as in neighbouring countries. %lso +uropean ! D./. buyers such as Tommy hill figure, 3ike, %(-, 3e*t, 'ap, structure who ha"e their buying head

office in India ! are coordinating with the garment with in India as well as its neighbouring countries. Thus Vardhman plans to look the Indian subcontinent as a signal platform market will pro"ide an opportunity to ha"e a deeper relationship with customer besides the e*panded market.

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COUNTRY SCAN
,opulation7 This population of (yanmar, spread o"er states and se"en di"isions, is estimated at #< million. (yanmar is inhabited by $68 ethnic nationalities. The 4amols, caruprising about >= per cent of the population from the largest group. %bout 0.> million populations in culti"ation. Land area7@ (yanmar is spread o"er a totla aea of >:>, 8:: /F. km. 5hich is about the size of the Dnited ;ingdom combined. It lies in /outh +ast %sia, with parts of India ! 4angladesh to the west -hina to the 3orth ! Laos and Thaliland to the +ast its southern borders are the seaG the 4ay of 4engal to the /outh 5est and the %ndaman /ea to the /outheast and $8E o fthe total land is under culti"ation. C i)ate* (yanmar enjoys a tropical climate with three distinct seasons. The wet season lasts from mid@(ay to mid@Cctober, the dry cool season from mid@Cctober to mid@Aebruary, and the warm season from mid@ Aebruary to mid@(ay. Te)perature+* KAY$NSTATE 2ot season7 %"erage temperature is o"er <? A &0>.> -)G in the north, ma*imum temperature is about =? A &60.0 -). -old season7 %"erage temperature is o"er >? A &$8.8 -)G ma*imum temperature is #? A &#.# -).

SHAN STATE -old season &1ec, Ban)7 %"erage temperature is below ># A &$< -). %pril, (ay, Bune7 %"erage temperatue is between :? A &0$ -) and <? A&0>.: -). MANDALAY D$V$S$ON %t the plateau7 %"erage temperature in %pril is between :? A &0$ -) and :8 A &0# -). -old season7 %"erage temperature is below >? A &$8.> -). (inimum temperature of cold season7 4etween 60 A &? -) and #? A &#.# -) In the plain area7 %"erage temperature in the hot season is about << A. %fternoon temperature is between $?8 A and the a"erage temperature in the cold season is about :? AG minimum temperature is about 8? A. CH$N STATE 2ot season7 %"erage temperature is between >? A &$8.8 -) and :? A &0$ -). -old season7 %"erage temperature is about #? A. KAYAH STATE 2ot season7 %"erage temperature is ::.# A &08 -).

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-old season7 %"erage temperature is >0.> A &$: -).

Tran+p,rt 4y %ir 4y /ea 4y C"erland .ail /er"ice

C,))uni-ati,n Ser.i-e+ ,ostal ser"ices 3ews paper ! management .adio ! Tele"ision. "/ Air* (yanmar is ser"ed internationally by7 %ir -hina, %ir, (andalay, %ll 3ippon %irways &%3%) 4hutan %irlines, 4iman, Indian %irlines, (yanmar %irways International &(%I), ,akistan International, .oyal 4runei, /ilk %ir and Thai %irways International &T'). angon has direct

air@links with 4angkok, 4hutan, 4runei, /ingapore, 2ong ;ong -alcuta, -hiang (ai, 1haka, jakrata, ;arachi, kuala Lumpur, ;unming, London, Csaka and /ingapore. (yanmar %irways International &(%I), Thai %irways International &T'), /ilk %ir, 4iman, ,I%, Indian %irlines, .oyal. "/ Sea* -ruise /hips call at granted on prior arrangement. angon ,ort with Visa on %rri"al being

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$NTERNAT$ONAL MARKET$NG AN OVERV$EW

5hile practicing international marketing, a company goes beyond e*porting ! becomes much more directly in"ol"ed in the local working en"ironment within a country of market. The International marketes is likely to ha"e its own sales subsidies and participate in de"eloping entire marketing strategies for foreign markets. Important challenge for the international marketing phase of a firm because the need to understand the different en"ironment the company needs to operate in understanding different cultural, economic, ! political en"ironments becomes wassory for success. International marketing is defined as "the performance of marketing acti"ities across two a mole countries. In broad terms international marketing is a subset of international business. International 4usiness is a creati"e social process of commercial and economic acti"ities that cross national frontiers. It concerns the international mo"ements of goods and ser"ices, capital, employees, and technology, importing@e*porting, cross border transactions in intellectual property &patents, trade makes, know how, copy right materials etc.) "ia licensing and franchising, in"estments in physical and financial assets in foreign countries, contract manufacture or assembly of goods abroad for local sale or for e*port to other nations, buying and selling in foreign countries, the establishments of foreign warehousing and distribution system and the import to one foreign country for subseFuent local sales.

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%ll the basic tools and concepts of domestic market are rele"ant to international business. Infact, international markets are the e*tension of domestic markets. 4usiness can be concei"ed as an integral part of two process i.e. technical and social. In regard to technical process domestic and international market are identical. The technical process includes non@human faction i.e. product, price, cost, brand etc. In social process, human elements are in"ol"ed i.e. the beha"iour patterns of consumer and gi"en characteristics of a society, such as customs, attitudes, "alues, etc., and it is ob"ious that these social process differs from country to country and different from domestic markets. The basic purpose of the business acti"ities can be defined as to create customers and to satisfy their needs and wants through e*change process and through professional skills or techniFue and retain them on long term basis for mutual benefit at profit. The emergence of global economy and global trade market has transformed the world into a integrated world economy. 2owe"er, international business today is "ery comple* and competiti"e in nature. "AS$S OF $NTERNAT$ONAL "US$NESS 5e are li"ing in multinational, multilingual, multicultural, multi@religious world. ,olitical and social systems are different. Laws and regulatory system and currencies differ from country, technology and li"ing standard are different, the economic standard and trading pattern differ. T0e a1,.e pr,1 e)+ 2e per-ei.e in internati,na 1u+ine++ are*

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1eals may ha"e to finalised in foreign language under foreign laws and regulation and customs. In business information needed may be difficult to obtain. 1ue to "ariation in e*change rates, it is difficult to do business without risk. 1ifferent and communication systems are normally comple* and rigid in foreign market than domestic market. .isk le"els are always higher due to political situations, commercial and financial regulations and its fluctuation and ad"erse mo"ements. (anagers operating in foreign countries need different mind set and professional skills than in home markets. THE PROCESS OF $NTERNAT$ONAL$SAT$ON The company who is operating in domestic markets may "isit e*hibition and fairs or participate in the international fairs held in foreign or in domestic market where it may arise due to non@a"ailability of reFuired Fuality of product and price differentials between local and foreign supplies. Initially, the company may work through an intermediary i.e. state bodies or big corporate companies engaged in international business. 5ith the increased knowledge and e*perience, the company may acFuired detailed knowledge of business and then it may start doing its own business directly with the buyer9seller. It may set@up its own branches, subsidiaries, its own .!1, and establishes production unit in foreign countries and undertake promotional acti"ities and ad"ertisement. Then

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the company may enter into foreign market through licensing to produce its brands, or franchising or local manufactures. The ne*t stage the company may undertake is joint "enture with foreign company and establishes its presence in foreign land. It then starts operating like it operates in domestic markets @ all contingent factors of business operations i.e. own employees, premises, warehouse, deli"ery "ehicles etc. It acFuire local skills, cheap labour technical knowhow, reduced production costs, obtain grants from local 'o"t. and ta* facilities.

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MARKET ENTRY STRATEG$ES

+*porting to a foreign market is a strategy many companies follow for at least some of their markets. /ince many countries do not offer a large enough opportunity to justify local production, e*porting allows a company to centrally manufacture its products for se"eral markets and, therefore, obtain economies of scale. $n!ire-t E3p,rtin4 /e"eral types of middlemen located in the domestic market are ready to assist a manufacturer in contacting foreign markets or buyers. Dire-t E3p,rtin4 % -ompany in engaged in direct e*porting when a company e*ports through intermediaries located in the foreign markets. Dnder direct e*porting, an e*porter deal with a large number of foreign contacts, possibly one or more for each country the company plans to enter. Li-en+in4 5ran-0i+in4 L$CENS$NG AS AN ENTRY STRATEGY Dnder licensing, a company assigns the right to a patent &which protects a product, technology, or process) or a trademark &which protects a product name) to another company for a fee or royalty. Dsing licensing as a method of market entry, a company can gain market presence without an eFuity in"estment. The foreign company. Cr license, gains the right to commercially e*ploit the patent or trademark either on an e*clusi"e right to a certain geographic region) or unrestricted basis.

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Fran-0i+in4 Aranchising is a special form of licensing in which the franhisor makes a total marketing program a"ailable, including the brand name, logo, products, and method of operation. Dsually, the franchise agreement is more comprehensi"e than a regular licensing agreement inasmuch as the total operation of the franchisee is prescribed. L,-a )anu5a-turin4 L,-a )anu5a-turin4 a+ an entr/ +trate4/ % common and widely practiced form of entry is the local production of a companyHs products. (any companies find it to their ad"antage to manufacture locally instead of supplying the particular market with products produced elsewhere. 3umerous factors such as local costs, market size, tariffs, laws, and political considerations may affect a choice to manufacture locally. The actual type of local production depends on the arrangement madeG it may be contract manufacturing, assembly, or fully integrated production. /ince local production represents a greater commitment to a market than other entry strategies, it deser"es considerable attention before a final decision is made. #,int Venture+ -ompanies entering foreign markets not only ha"e to decide on the most suitable entry strategy, they also need to arrange ownership either as a wholly owned subsidiary or as a joint "enture. Dnder a joint "enture &BV) arrangement, the foreign company in"ites an outside partner to share stock ownership in the new unit. The particular participation of the

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partners may "ary with some companies accepting either a minority or majority position. Strate4/ A ian-e+ % more recent phenomenon is the de"elopment of a range of strategic alliances. %lliances are different from traditional joint "entures in which tow partners contribute a fi*ed amount of resources and the "enture de"elops on its own. In an alliance, two entire firms pool theirr resources directly in collaborations that goes beyond the limits of a joint "enture. %lthough a new entity may be formed, it is not a reFuirement. /ometimes, the alliance is supported by some eFuity acFuisition of one or both of the partners. 3 an alliance, partners bring a particular skill of resource, usually one this is complementary, and by joining forces both are e*pected to profit from the otherHs e*perience. Typically, alliances in"ol"e either distribution access, technology transfers, or production technology, with each partner contributing a different element to the "enture. "/ O.er an!* C"erland entry with a 4order ,ass is permitted at the following 4order -heck ,oints7 ;yukoke, 3amkhan and (use on the (yanmar@ unnan &-hina) borderG and Techileik, (yawaddy and

;awthaung on the (yanmar@Thai border. Rai Ser.i-e* angon@(andalay is the main rail link with four e*press angon and (andalay. Aurnisked coaches angon to 4agan

trains running daily between

-herry and 4agan. There is alos a rail ser"ice from which operate on alternate days. C,))uni-ati,n +er.i-e+

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,ostal ser"ices 3ewspaper ! magazines .adio ! Tele"ision P,+ta Ser.i-e+* The angon -entral ,ost Cffice, located at 6=, %ung

kyaw /tree, is open from =76? am to #76? pm., (onday through Ariday. Ne2+paper 6 )a4a7ine+* Ne2+paper Pu1 i+0e! in En4 i+0 (yanmar %l Lie ;yemon The new light of (yanmar The adanabon &,ublished in (andalay)

E.enin4 Ne2+paper &L,-a ( -ity 3ews in (yanmid. &,.). Ma4a7ine+ in En4 i+0 'olden (yanmar (yanmar -hronical (yanmar ,erspecti"e F,rei4n Ne2+paper+ International 2erdd tribure

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/ingapore strairs Times. Ra!i, 6 Te e.i+i,n* .adio (yanmar broadcasts +nglish on the following schedule7 <76? am to =7?? am $76? pm to 07?? pmG and =7?? pm to $?76? pm. There are two local TV channels7 TV (yanmar and (yawaddy with programs running from : am to # amG and from # pm to $$ pm.

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