Exporting Products Al Merik Surfboard Company

Exporting Products Al Merik Surfboard Company


TOC o “1-3” h z u Introduction PAGEREF _Toc379627937 h 1Geopolitical PAGEREF _Toc379627938 h 2Cultural Issues PAGEREF _Toc379627939 h 3Legal and Tax Environment PAGEREF _Toc379627940 h 4Marketing PAGEREF _Toc379627941 h 5Pricing and Currency Issues PAGEREF _Toc379627942 h 6Logistics PAGEREF _Toc379627943 h 6

IntroductionFor over 30 years, Al Merik Surfboard Company has been referred by many as a world leader in the production of surfboards .the Company has been producing more world champions’ board than anyone in history. Products from Al Merik Surfboard Company are known all over the world and they have been quite marketable abroad. Despite the presence in the world, AL Merik Surfboard Company has never ventured into exporting its surfboards to Japan. The paper is a proposal on the basic idea to the Vice president of Al Merik Surfboard Company on how their surfboards can be marketed internationally.

Before embarking on the introduction of a product that is fairly new to market, it is mandatory to carry out market research on the particular new market. There are therefore various important factors that have to be considered when looking at Japan as a potential market for surfboards abroad. These factors are:

GeopoliticalBefore surfboards to Japan the geographical and political situation in Japan should be thoroughly examined. First of all Japans geographic location presents a challenge for exporting Surfboards into the country. Japan is located in the Pacific Ocean and lies east of the Sea of Japan, North Korea, China, South Korea and Russia. This does not hinder the exportation of surfboards into Japan since there is an effective logistic system that will ensure the products securely reach the destination.

Japans demographic provide both an opportunity and a challenge when it comes to marketing of surfboards. First of all Japan is ranked tenth when it comes to population in the world. Japan has a population of over 125 million people. This is a great opportunity since a high population is an indication of a large market for products exported to the country. However Japan has a very serious demographic disadvantage since its population is seen to be ageing and shrinking. This situation is not so very serious as yet but in decades to come the situation will have escalated. The working population in Japan between the age of 15 and 24 has declined by 6% in the past decade. This fall is stipulated to be steeper in the next decade meaning that the market for the surfboards will be declining.

Despite globalization of business companies have to ensure that they abide by the rules and regulations which are set in the countries where they operate in. Japan is an established democracy therefore there is a high level of political stability in the country. The political stability in Japan will encourage trade and therefore it will be easy to export surfboards to the country. Other multinational companies in Japan are doing fairly well since the political climate is favorable for their existence and continued stay in the country. Surfboards have become quite popular in Japan and there are some local companies which have taken up the production of surfboards. There is also a growing culture of home board building which has gained a lot of popularity. This is not a big competition since pro shapers still occupy a large market and therefore surfboard exports will attract more people since they have been professionally done and since they are imports they will be considered to be better.

Cultural IssuesJapan is becoming more westernized and American things are now becoming trendier. Among the things that are becoming trendy in Japan are surfboards. The surf culture in Japan is what will affect the business plan of exporting surfboards to Japan. This unique surf culture came to Japan with the hippie movement that took place in the 1960s.it was not until the late 70s that surfing became popular particularly for teens who liked competing. Surfboards then became popular and surfing was a trend for families and even older people and not just the youth for leisure. Now a large variety of people really enjoy surfing in japan. Surfing culture has evolved in Japan such that surfing is enjoyed by anyone and everyone wherever waves are found.

With a very high population of about 125 million it means that Japan will provide a large market for surfboards. The surfing culture is not in the young only even the old are now taking up surfing for leisure. This means that the surfboard market in Japan is very large due to the high population. Japanese people also enjoy high living standards. About 90% of the population terms them selves as being part of the middle class. This means that a large percentage of the population can easily afford the surfboards thus a large market.it is quit easy to reach potential surfboard customers in Japan .this can be done through carrying out online advertisement. Japan is a country where technology is at peak therefore it is quite easy to reach potential customers online. Surfboards have a high market value in fact there is an increase in surf tourism in Japan .tourists are coming to japan to enjoy surfing in the waves. Surf tourism has also increased the, market value of surfboards a great deal (Weinberg, 2013).

Legal and Tax EnvironmentThere are rules and regulations that govern trade in every country. These legal entities exist in the country that is exporting the products and the country that is receiving the products. Al Merik Surfboard Company is based in the U.S.A meaning that there are rules which U.S.A has established that the company has to follow. Secondly there are also rules set by the recipient company bin this case Japan which the company has to adhere with before the export anything to Japan (Cooper, 2013).

Japan and U.S.A have had strong relations for a very long time. This relationship has been strengthened and improved over time. The two countries have a bilateral relation that makes it easy for trade to take place freely between the tow countries. However there are instances where some trade restrictions have occurred hence restricting importation or exportation of particular products (Tanaka, 2013). There are also some trade treaties that have been signed between the two countries that make it possible for trade to take place between the two countries. The existence of some tariffs imposed on some goods is a way of controlling the trade between the two nations. Without the existence of these tariffs then it would be quite meaningless for trade to take place between the tow since the process will not be well coordinated. Intellectual property protection is important for any product that is being imported and exported. This is because it will prevent any form of duplication of the product since the rights are fully owned by a particular producer. Therefore surfboards being exported to Japan from the U.S.A are fully patented which prevents any form of theft of idea. The surfboards will also be charged VAT which is mandatory for any goods that are entering any country (McCulloch,1987).

MarketingThe culture and geopolitical climate in Japan will be a great influence on which the surfboards will be marketed in the country. The culture of the people in japan plays a vital role in marketing since their cultural beliefs will be put into consideration before coming up with a marketing strategy. Using a marketing tool that is not in line with the culture in Japan will mean that the product will not even be considered by the potential customers. Therefore, when coming up with the marketing plan the culture of the people should be put into consideration so as to capture as many potential customers as possible.

You should ensure that you adequately market the surfboards using online media, television advisement and magazines. This should include a detailed description of the surfboards so as the potential customers will have adequate knowledge of the product hence make an informed decision on whether they should purchase it or not. You should ensure that the surfboards are fully stocked in stores of all the major cities within Japan. An online should also be created where people purchase online and the delivery is made promptly without any form of delay. This will ensure that even those who are not able to reach the stores physically are still able to purchase the surfboards without any hustle whatsoever. We expect to penetrate a great deal of the market and leave no one out. This product is not only intended for the young but the young at heart too. The initial marketing costs are expected to be very high since the company has never ventured into Japan before. Japan is a new market therefore a lot of resources should be put in to ensure that the potential customers are fully captured. should be expected that the product will not do very well in the first few months since it is relatively a new brand name .however as time goes by the sales will go up as soon as the products is fully known in the market.

Pricing and Currency IssuesThe surfboards will not cost the same in Japan as they do in U.S.A. The production cost of a surfboard is approximately between $200 and 225.the manufacture sells to shops at $300.however retailers are expected to mark the price up to $400.this are not the prices we expect for surfboards in Japan. this is because there will be transportation costs as well as taxes that have to be paid when exporting the surfboards to Japan.. All these costs incurred have to be factored into the price of the surfboard .at the same time the company has to make some profit at the end of the day. This is because every business is started for the purpose of making profits. Therefore the final cost of the surfboard in Japan is expected to be close to $ 500.this is the price which we sell directly to the customers. Selling will not be done through intermediaries. However if one wants to sell the surfboards individually they will be expected to buy them directly from the U.S.A and met their own transport and taxation costs. When they buy them there they will be charged $300 just as other retailers. We will only sell on cash on delivery basis. This is for the final users so as to reduce any chances of defaulters in payment. Incase one is buying directly from us in the U.S.A we will require a bank letter of credit so as to prove they are trust worthy to receive any form of credit (Rizzo ,2010).

LogisticsLogistics is a very important market when it comes to the exportation of products. This is because the products have to get to the market and there are some logistics to be followed before this is done. Japan has evolved into an economic heavy weight despite of its challenging geographic conditions. The most important freight transport in Japan is road and coastal shipping. Sea freight has now been shifted to air transport .as compared to other industrial countries the distribution system is Japan is a very complex one. Goods distributions are under a tight regulation by the government. Joint distribution is something that is very common whereby competitors that make deliveries to same businesses use joint delivery capacities. Logistics companies in Japan are now trying to strengthen their position in land, sea and air transport through multimodal shipping provided by one source (Discover logistics, 2008).


Discopver logistics.(2008). Logistics in Japan. Retrieved October 11,2013 from http://www.dhl-discoverlogistics.com/cms/en/course/trends/asia/japan.jsp HYPERLINK “WEINBERG, C .(2013). Japan’s ‘demographics of doom’ trump market-stimulating tricks. Retrieved October 11, 2013 from

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/japans-demographics-of-doom-trump-market-stimulating-tricks/article12092365/” Weinberg, C. (2013). Japan’s ‘demographics of doom’ trump market-stimulating tricks. Retrieved October 11, 2013 from


Tanaka,H,.(2013). Revitalizing Japan’s politics and economy the key to Japanese foreign policy and regional stability. Retrieved October 11, 2013 from

http://www.eastasiaforum.org/2013/04/05/revitalizing-japans-politics-and-economy-the-key-to-japanese-foreign-policy-and-regional-stability/Rizzo ,P.(2010).U.S.A surfboard makers thrive in choppy waters. Retrieved October 11,2013 from http://www.nbcnews.com/id/38472495/ns/business-us_business/t/us-surfboard-makers-thrive-choppy-waters/#.Ulhk7MuLrFw

McCulloch, R.(1987). United States-Japan Economic Relations. Retrieved October 11,2013 from http://www.nber.org/papers/w2408Cooper, W, H.(2013).U.S.A –Japan Economic Relations: significance ,prospects and policy options. Retrieved October 11,2013 from http://www.fas.org/sgp/crs/row/RL32649.pdf

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