Introduction
International expansion always presents a challenge for a company, regardless of its prosperity within the domestic market. It requires large investment of financial and human resources, detailed strategizing and advanced preparation and analysis of a target country. From a marketing standpoint, international expansion affects the firm’s advertising and promotion management in two aspects. The specifics of the company itself and the details of the current political, economic, and social situation in the target country affect the change in marketing objectives, strategies, and tactics. This analysis aims to discuss these aspects from the standpoint of the Berry Genomics company’s expansion to Bulgaria.
Company Overview
Berry Genomics is a China-based firm that specializes in development and commercialization of health science technology and clinical application. The business is dedicated to creating next-generation sequencing-based treatments for genetic illness and cancer. According to the results of their latest clinical tests, the firm’s technology is applicable to a wide range of patients from birth into adulthood (“Berry Genomics”, 2021). Between the years of 2015 and 2017 the enterprise was present on several lists in the Forbes journal, such as the most promising privately owned small businesses in China.
In 2020 the firm managed to raise a total of 155.6 million dollars despite the devastating consequences the COVID-19 pandemic had for the SMEs nationally. This is in part due to the company’s production of medical technology and software, which traditionally demonstrate one of the lowest elasticities of demand possible. However, it also illustrates the efficiency of organizational, financial and marketing management of Berry Geonomics, as well as the presence of resources necessary for the international expansion. Berry Geonomics’ main investor, Qiming Venture Partners, is a venture capital firm that specializes in investment in healthcare industry at the growth stages. Therefore, one can assume that it might be interested in potentially providing Berry Geonomics with extra funding if the need arises, to get an access to Bulgarian and, by extension, Eastern European market.
Situation Analysis
Bulgaria’s suitability to become the location of Berry Genomics’ new outlet can be assessed via the established business analysis frameworks. The PESTLE system, and in particular Social, Economic and Technological factors were chosen to assess the internal situation in Bulgaria and design the marketing solutions accordingly. Social situation in the target country is especially important in expansions of such companies as Berry Geonomics, since this groups of factors includes health consciousness and lifestyle choices. Economic situation concerns the inflation and employment rates, average industry wages and population’s disposable income, affecting the profitability of the Berry Geonomics future outlet in the most direct way. Finally, technological situation in the country is relevant due to Berry Geonomics’ specialization on the production of medial technologies, which requires the substantially developed infrastructure to be executed.
Bulgaria’s social and demographic environment has been defined by factors common to the majority of countries in the transition period over the last thirty years. Dramatic drop in the quality of life, rising unemployment levels, and escalating dynamics of discrimination towards various minorities are the largest trends among these factors (Mihailova, 2020). In combination, these social processes have resulted in labor shortage caused by high levels of immigration and talent drain. Consecutively, the Berry Geonomics might find it difficult to hire the industry professionals they need to uphold the current quality standard.
From the economic point of view, Bulgaria currently relies on the large amounts of international debt. The financial injections from abroad has facilitated the internal policies aiming at stabilizing the economy after the fall of the communist regime and the sharp transition to the free market. Consecutively to the foreign financial interventions, Bulgaria has established ties to banking institutions worldwide. These connections could aid Berry Geonomics in the process of acquiring new investors and partnerships for their first international outlet.
There is a substantial lack of data on technological development within the country on a national level due to the lack of generalized research in the area. However, statistical and cross-sectional studies exist for more specific industrial contexts within Bulgarian economy (Mihailova, 2020). Given the specialization of Berry Geonomics, one might pay attention to the stay of healthcare industry and healthcare technology in Bulgaria. Bulgarian health system is characterized by the high level of centralization and a single payer administered social care insurance prevalence (Dimova et al, 2018). The private medical sector is currently comparatively underdeveloped and in search of new talent and technology. As national digital medical production facilities and formulas are in their development stage, Berry Geonomics might fit a valuable gap in the market. It is however important to consider, that due to the rudimentary stage of the healthcare technology production facilities in Bulgaria, the relevant expansion is likely to turn out expensive.
Marketing Objectives
SMART marketing objectives stand for five key characteristics of the modern marketing approach: Specific, Measurable, Actionable, Relevant and Time-Bound. The marketing department could prioritize the three of the five SMART objectives to facilitate the swift development of the first stage of expansion. The factors of Measurability, Actionability and Relevancy were chosen for the more detailed examination in the report to outline the initial marketing objectives for the Berry Geonomics after the firm’s expansion to Bulgaria.
The measurability of marketing campaigns of Berry Genomics in Bulgaria could be analyzed by calculating the total of company’s sales and assessing its accounts after the end of the first year in the new country. It is essential that the analytics adjust their expectations accordingly to the new challenge, and not expect performance indicators to be on the domestic level straight away (Fotiadis et al, 2018). Quantitative and qualitative analysis then should be applied to the results to develop a performance assessment metric with account for the local specifics. The actionability of marketing campaigns should assess whether the information they are based on is effective in enhancing sales. Similarly, the relevancy of the marketing campaigns can be analyzed by ensuring the data they are based on is as current and reflective of reality as possible.
Marketing Strategy
Despite its socially unwelcoming environment and somewhat underdeveloped current economical situation, Bulgaria remains a very attractive target country for the international firms provided they have enough financial resources. The demand for private medicine and medical technology keeps growing, as the centralized healthcare system and social security services are overwhelmed with patients (Daiberl et al, 2019). Although Bulgarian medical market is one of the smallest in the EU, it has grown substantially over the last few years, and keeps staidly expanding. Thus, it can be assumed that the current stage of the industry in Bulgaria is beneficial for new entrants, providing them with opportunities for rapid gain of customer base.
The typical expansion methods of franchising or export are unlikely to be efficient in the Berry Genomics case. As the company specializes in medical technology production and distribution, it does not possess an easily replicable formula that a franchisee could be trusted with (Guerras-Martín et al, 2020). Similarly, as Bulgarian healthcare is strongly centralized and reliant on social security, with an exception of few larger private healthcare firms, export is also not feasible. However, Berry Geonomics could merge or open a joint venture with one of these private companies, or a pharmaceutical firm looking to branch out into medical technology (Singh et al., 2018). One of these entry methods could help Berry Genomics to navigate its transition costs, as well as provide them with access to the local expertise and a conditional access to the established customer base.
Marketing Tactics
Considering the scale of geographical, social and economic differences between China and Bulgaria, the challenges generally presented by the Global Marketing scale accordingly. The brands that compete outside of their country of origin utilize the knowledge of the country’s environment and market specifics to design the marketing mix (Thabit et al, 2018). Traditionally, the marketing mix consists of Promotion, Product, Price and Place, all of which are likely to experience transformation if Berry Genomics’ expansion to Bulgaria was to take place.
Product is, perhaps, the most straightforward element of the marketing mix, as it concerns directly the goods to be sold by the outlet in the firm’s new location. As specified above, Berry Genomics produces healthcare technology and clinical applications. Despite the high transition costs, it is recommended that the company remains loyal to its current formulas, since the Bulgarian market has a high demand for foreign medical innovations. However, the executives must be reasonably flexible in their production procedures, since the firm might struggle to partner with identical suppliers and have access to the same facilities (Kotabe & Helsen, 2020). Overall, the products of Berry Genomics’ Bulgarian outlet would need to fit both national quality standards and the general reputation and brand of the firm.
Promotion conceptually refers to the processes and strategies incorporated to achieve successful branding and advertisement, as well as other activities that enhance sales of the company. Berry Genomics’ executives would have to take into account external and internal influences that shape Bulgarian marketing strategies, such as traditional eastern European family values. Then, to market the firm’s products successfully to a new target customer base, the marketeers might design a promotional campaign, presenting the Berry Genomics’ products as complimentary to these values. To elaborate, an advertising campaign emphasizing the firm’s potential of keeping families together by providing clinical support to a gravely ill member could be designed by the Berry Genomics’ marketing department.
Pricing has the potential to become the most challenging element of the marketing mix for the Berry Genomics’ expansion team. The disposable income levels in Bulgaria are relatively low for the majority of the population, due to the economy still undergoing the process of recovery and stabilization. Consecutively, at least at first Berry Geonomics might need to position itself as a luxury medical service for the VIP patients that are able to afford the private healthcare. Their target demographic would include older people of middle and upper class, as well as established private hospitals. The establishment of lower prices, as well as the maintenance of the domestic ones are hardly feasible, since Berry Geonomics is an SME and would struggle to fund its initial expansion cost at the current price point. Alternatively, if a merging is chosen as an entry method for the firm, there would be less financial pressure put on the pricing process of Berry Genomics’ technology, since the initial costs could have been split with a partner firm.
Finally, the Place of the operations in global marketing mix is in this case defined by Bulgaria as target country. To elaborate, for the marketeers the Place element entails the existing infrastructure within the chosen location, and the ways in which it shapes the processes of production and distribution. Berry Geonomics is likely to have to rent a company that is located conveniently in relation to one or several large private medical facilities. Additionally, the company is likely to be in need of renting or buying transportation vehicles, which should be included in the expansion budget in advance.
Marketing Action Plan
Berry Genomics should consider hiring and training expatriates to travel to Bulgaria and establish the firm’s new outlet personally. This approach is time-consuming and requires, once again, detailed preparation and investment, with the firm needing to ensure its foreign agents are ready to undertake their tasks. Cultural and language training might be appropriate, as well as the general optimization of communicational and managerial skills of the staff (Wang & Varma, 2019). Furthermore, Berry Geonomics would need to design a package of benefits for its foreign agents to motivate staff members to volunteer for the role, thus expanding their assortment of candidates. These expatriate agents could then oversee the establishment and running of the new outlet of Berry Geonomics. The costs associated with the expatriate approach would be compensated for by the significantly higher efficiency in comparison with exclusively remote management.
Conclusion
In conclusion, Berry Genomics’ expansion to Bulgaria appears to be an expensive and challenging process that nevertheless provides the firm with a wide range of opportunities. As the local market is in demand of private and high-class medical technology and software, the proper marketing strategy and mode of entry might secure the customer attention for the firm. The overall success of the project is then dependent on whether Berry Genomics may uphold is typical production quality within the entirely new environment.
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