Nubs mba group management project team

Why Australia

1. 
   English-speaking country, hence, ease of acceptance and access to market
   

2. 
   Psychic distance, cultural commonalities
   

3. 
   Team members could use existing contacts and relationships
   

4. 
   Australia’s proximity to emergent economies, reach, strategic access point
   

5. 
   Customer’s increasing technology awareness & mature market with scope for increase in sales (See further sections on Demographics & Market attractiveness)
   

6. 
   Potential scope for partnerships with already established usability expert companies
   

7. 
   Tobii’s established presence in the area of exploration
   

8. 
   Presence of encouraging agencies like AIMIA for new media & marketing businesses
   

9. 
   Geography conducive for dividing into demographic segments – 22 million population
   

10. 
    Developed country – more disposable income, companies’ willingness to spend
    

China/India – Known for improved international relations, governmental reforms, a rapidly expanding economy and enhanced Foreign Direct Investment past 2000, had made China an option to be importantly considered. Moreover, cheaper labor and reduced supply chain costs would have made China an ideal choice for a manufacturer or any industrialist for that matter.

Nevertheless, some of the reasons explained below did not lead us in the direction of China to launch Realeyes’ business.

1) Language: We wouldn’t say language is a barrier, but it certainly presents us with a challenge to overcome. Realeyes’ service model involves choice of audience to collect samples and carry out the data collection exercise. To be able to do that, it would be necessary to understand the local language and culture, be it in the clubs, the airport or any other public place. Employing a Chinese or Indian partner to carry out this interactive exercise would have overcome our challenge, but on the other hand, shift control and command to the partner away from Realeyes. The company is known for its USP, i.e. large sample size to provide for the eye-tracking data. It would not be appropriate for this core part of the business to be transferred to a third party.

Foreign language can prove a challenge in b2b scenario. For the directors of Realeyes to be able to understand the subtleties of Chinese business etiquette and culture would take commitment and resource spent on training.

2) Psychic distance: Usually, it is regarded best to pick a country which has lesser psychic distance to do business (Ojala and Tyrväinen, 2007), especially when you are an SME. Moreover, Impact of cross-cultural differences in decision-making is considerable, particularly when risk-taking is involved. China has a risk-avoiding culture. Australia is conservative to an extent (Hofstede score 46, obtained from http://spectrum.troy.edu/~vorism/hofstede.htm), but score close to the US in terms of Uncertainty avoidance (Score: 51)

3) Collectivist culture: Australians are very individualistic (score: 90), but however, the Chinese or Indians are part of a very interdependent society. If they perceive social or psychological risks, they are eager enough to get approval of the service from people around them. They would want to be assured that their decisions are right, in order to protect their image (Keh and Sun, 2008). In highly collectivist cultures, the ‘group diffusion effect takes place where risk perception decreases and businesses feel a sense of safety when others are put into the same situations of risk (Yamaguchi , 1998).

4) Developing country with developing awareness: China appears to show strong economic growth, although less promising in terms of disposable income of companies and awareness of Realeyes’ nature of service, whereas competitors already know of Realeyes, which may also provide us potential scope for partnering with them.

5) Bureaucratic nature and higher corruption rate: China is known to have ranked higher in terms of corruption, than Australia.

4) “Not just for economic advantage”: Literature has shown that firms don’t just choose a site for launch because of cheapness of labour and economic advantage, or in financial language, the country of choice need not be the one that possesses better Net Present Value for investment (Sylvester O. Monye., 1997). There are considerations of safety, regulatory hassle, political risk, foreign exchange implications and reliability and credibility of partners or supply chain elements before selecting a country for launch.

1. 
   Australia had a record of increasing Foreign Direct Investments. This meant that Australia was becoming a very favourable place for foreign companies to invest or venture and expand their business (FDI Atlas, viewed 05/08/09).
   

2. 
   The country showed a reliable set of economic credentials, being a complex knowledge-based economy with services accounting for 79% of gross value added (Australian Bureau of Statistics (ABS), 2007, FDI Atlas 2009).
   

3. 
   Australia was overall a good strategic location, with easy access to rapidly growing economies in the far-east, & predominantly New Zealand. Moreover, Australia worked with China/Japan closely as trade partner (Appendix G, FDI Atlas ‘09).
   

4. 
   The nation showed less political risk and a stable state of affairs (FDI Atlas 2009).
   

5. 
   The state also indicated a pro-business environment with less regulations and great corporate governance, being called as the “fastest place to start a business” (Appendix G, FDI Atlas, 2009)
   

6. 
   The country has proved to be a technology-savvy state with great R & D infrastructure (FDI Atlas, 2009) and is said to be growing aware of eye-tracking applications
   

7. 
   Showed to have a strong financial services sector with a market cap of US $14.1 Trillion, Australia’s foreign exchange market was 7^th largest in the world, which meant that significantly less deficiency problems would exist with obtaining hard foreign currency for trade (FDI Atlas, 2009).
   

3. Literature Review

1. Introduction

2. Objective and Scope of Literature review

The literature around the marketing plan would encompass the following:

1.1) Toolkits for examining the right corporate market and product segments

1.2) Analyzing practicalities faced by firm in entry-mode, marketing and pricing strategies

1.3) Proposing the international marketing mix

Our group project mainly focuses on launching Realeyes’ business in Australia. This research question throws light on three major areas of work, namely:

1. 
   Globalization of services of an SME such as Realeyes
   

1. 
   Realeyes’ feasibility and capability to internationalize
   
2. 
   Rationale of internationalization of a service-product
   

2. 
   The SME’s B2B solutions
   

2.2) B2B service practices and relationship marketing

3. 
   The SME’s global branding and brand management
   

3.2 Positioning the brand “Realeyes” amongst co-opetitors.

3. The literary link to our Approach

Accordingly, myriad pieces of literature have been published, that talk about these areas.

Edvardsson et al (1997) talk about globalizing services. Their work highlights the different stages of internationalization and a set of evaluations that need to be considered about internationalization of services by managers and entrepreneurs alike. The company could be in any of the 4 stages of prospecting, introduction, consolidation, or reorientation. The question remains of the company’s balance between globalizing its service and adapting its offerings to local conditions. This work leads us to believe that one would need to go a step beyond strategic decisions of investing in internationalization in order to come to terms with the service globalization’s realities and treat it as a vital learning curve path, right up to the individual owner level.

However, Cavusgil (1984) also place firms in different stages of internationalization, mainly stating and evaluating from differences amongst large and small exporting firms based on their degree of internationalization. Although the work is a little aged, it would be useful to identify intrinsic weaknesses and strengths, looking at challenges faced / to be faced by Realeyes while internationalizing.

Sandra Vandermerwe and Michael Chadwick (1989) elaborate on the modes for service internationalisation are influenced by a combination of the nature of the service – the degree of interaction between service provider and consumer - and the way in which it is delivered - the degree to which services are embodied in or delivered through goods.

This piece has been used in our work in order to analyze the SME’s capability to “export” its services, i.e. without having to physically transfer to Australia. But for this, they must have access to local (on-site) infrastructure and can usually be accomplished more effectively if the company joins hands with a third party provider/distributor of services in Australia.

Meckl and Schramm (2005) quote many terms coined to describe the phenomenon of start-up firms that go global shortly after their foundation, stating that they were first called innate exporters (Granitsky, 1989), and then high technology start-ups (Jolly et al, 1992). More frequently used term would be “Born Global” (Rennie 1993; Knight & Cavusgil, 1996; Moen 2002; Chetty & Campbell-Hunt 2004).
On the contrary, Miozzo, Marcela and Soete, Luc (2001) suggest that “the ‘trade in services’ debate concerns not only the services sector per se, but the broader international division of labour in the next century. It also finds that although new technologies are making it increasingly possible to “transport” service outputs in the form of electronic digits and separate the production of services from the point of final consumption, this does not mean that services will “behave” increasingly like goods, in contrast to what is generally believed”.

Consequently, Realeyes must revisit its internal capabilities such as its mobility of labour while launching in Australia, and also consider the tax structure and policies of the local government in Australia. In order to highlight the various implications of services trade across borders and anticipate necessary plan/course of action for the SME, this work has been utilized.

So, globalization or regionalization of services requires some rigorous thought. When globalizing, it becomes necessary to think about the business solution that the company is going to provide internationally.

Tether et al (2001) come up with evidence to evaluate standardization vs. the particularization of services saying that they are usually supposed to be tailored to clients’ needs intensely. But in reality, services are mass produced.

A trade-off point must be found to mass-customize services, that is, keep the core of the service standardized and customize the periphery to the local environmental needs, whilst not losing contact with innovation when expanding the firm’s business across borders.

Cho and Park (2002) find taxonomy for the classification of e-commerce services after defining variables such as the degree of online substitution for such services, need for online interaction and customization and the impact of professional knowledge in services. And these variables are key elements for our thought process while expanding business of Realeyes as an SME to Australia. The consideration of consultancy services post-sales would be hypothesized based on this research work by Cho and Park (2002).

O’Farrell and Moffat develop a more conceptual framework along the interacting dynamic nature of relationships between partners and within a business itself. One important aspect of this research is the non-linearity of relationship between service quality that satisfies client requirements and the utility derived by the customer. In other words, quality of service might not necessarily lead to substantial improvement in client sales, as compared to delivery of the service that could turn out more profitable to client. Hence, Realeyes might need to look into its service-offering and service delivery processes on its way forward to Australia.

Also the importance of value calculation to benefit provision to clients may be discussed here. Anderson and Narus (1998) state that knowing that a good improvement is needed in service provision does not necessarily imply the customer’s willingness to pay for it.

1. Realeyes’ Service-product offering using Eye-tracking for usability research

Usability is defined as “the extent to which a product can be used by specified users to achieve specified goals with effectiveness, efficiency and satisfaction in a specified context of use." - ISO 9241-11: Guidance on Usability (1998).

Tracking the saccadic and normal movements of eyeballs while visiting websites, interacting with media such as video, packages and games is shown to help immensely in researching the usability of the media because of the cognitive link between the eyes of the consumer and his/her buyer behaviour. Today, commercial eye-trackers (from vendors like Tobii) capture the eye-movements of the subject, post-calibration, using infra-red rays reflected from the subject’s retina. The resultant eye-tracked recording is analyzed and presented in the form of heat-maps indicating the fixation of eyes implying the ease of access and usability of the particular webpage or any other media.

The white paper from Panalysis (2003) puts forward a simple but powerful proposition to measure the return from Eye-tracking service and constantly improve your marketing initiatives (Figure 1), saying that the company’s website should have defined targets that can be tracked regularly, placing emphasis on trends rather than absolute numbers.

Figure 1 - Recommended approach to measure the usability and performance of websites (Panalysis’ white paper, 2003)

Jacob and Karn (2003) present a good amount of metrics for measuring usability. These metrics could be benchmarked against the current metrics of Realeyes and improvements can be suggested to be made on its way to launching its services in Australia. Some of the salient usability metrics suggested are “the no: of involuntary and the no: of voluntary fixations” and “the time to first fixation on the target area of interest”.

Challenges of eye-tracking:

The need to constrain the physical relationship between the eye tracking system and the participant remains one of the most significant barriers to incorporation of eye-tracking in more usability studies (Jacob and Karn, 2003). It is important to understand similar challenges for Realeyes to globalise its eye-tracking services.

1. Data collection as part of the business Solution

Branding is actually part of the tactics discussed in the next section. The marketing strategy includes branding strategy. However, it is chosen convenient to be discussed in detail in this section.

Kotler & Pfoertsch suggest robust frameworks for B2B brand positioning strategy and management by making observations like factors influencing the buying center (Figure 2) and how Branding influences buyer decision (Figure 3). How brand creates value in B2B (p69) is also indicated.

It is learnt from Kotler and Pfoertsch’ work that the unique selling point of a service from a brand doesn't necessarily need to lie in product or service itself; it could be a special production or delivery process, extraordinary service, or industrial design. This work of literature indicates the necessity of brand to B2B. Many important facets should also be elaborated here.

In the buying centre, factors influencing the “professional service” purchasing decision are as following (Webster, F.E. and Wind, Y (1972))

• 
  User
  
• 
  Buyer
  
• 
  Influencer: those who influence the decision making process by supplying information and criteria that can be used in making the purchasing decision.
  
• 
  Deciders
  
• 
  Gatekeeper
  

Brand Communication is found to consist of 3 interfaces, according to literature.

• 
  Corporate communication
  
• 
  Marketing communication
  
• 
  Dialogue communication
  

Kotler and Pfoertsch (2006) mention bare facts about B2B websites: 1. Customers tend to lose focus in 10 seconds, 2. a critical finding in case of B2B websites is that they have to be found in the first place, since only few customers is searching deliberately for one company or one brand (Pg 144).

Figure 2 - Influential dimensions of the buying center (Kotler and Pfoertsch, 2006)