Mid term report international marketing lecturer mba pavlov dmitry

Japan seems like a potential market due to its emphasis on quality and innovation and a consumer base that values high standards, making it a hub for global toy innovation and business o

Group: 3

Acknowledgment First of all, we would like to sincerely thank Mr Pavlov Dmitry - International Marketing lecturer for enthusiastically teaching and guiding students throughout the course Thanks

to your timely advice and guidance, we overcame the difficulties in writing our report Next, we would like to express our gratitude to the teachers of Ho Chi Minh City University

of Economics & Finance - Those who have contributed to imparting knowledge to help us have a good foundation like today

But after all, we realize that with our little knowledge and experience, it will certainly be difficult to avoid shortcomings in the report We hope that teacher will sympathize and give us feedback to help us improve more and more

We sincerely thank you!

TABLE OF CONTENTS I.OVERVIEW OF KALOTOYS COMPANY LH HH kh ky 1

II POTENTIAL MARKET ANALYSIS FOR KALOTOYS LH He 1 2.1 JAPAN ooo xi a 2

Ill EVALUATING AND ANALYZING TARGET COUNTRY MARKET SELECTION; CHOOSING MARKET ENTRY METHOD QQQ HH HH HH HH kh kh 7 3.1 PESTEL ANALYSIS FOR JAPAN AND NETHEHRLANDS 7

3.2 MARKET ENTRY STRATEOY LH TH KH HH krt 17

IV MARKETING MIX (4P) LH HT KH HH KH KH KH KH it 21 chn 9P) Ề.Ề 5< (1+‹1ÍÍI In 21 4.2 PHICE LH HT HH KH KH KT TH KH TK TH KH 21

in 90a ằẮe.G ăa ẽ.ẽ (a4 23 4.4 PROMOTION -Q TT nHn TH HT KT KT TK KH rt 24

V CONCLUSION: Ác HH HT KHE KH vn kh 25 VỊI.REFEHENCES Q HH TT TK KT TK KH it 26

|.Overview of Kalotoys company

Best-selling product

II Potential market analysis for Kalotoys

In accordance with Diamond's Porter framework, our team chose the following two possible markets:

2.1 JAPAN

Factor Conditions

Japan has one of the highest literacy rates in the world, with a strong emphasis on

STEM (Science, technology, Engineering, and Mathematics) education According to the OECD, Japan ranks highly in educational attainment, especially in mathematics and science (OECD, 2021)

Japan is known for its advanced technological infrastructure The country invests

heavily in R&D; in 2020, Japan spent approximately 3.2% of its GDP on research and

development (World Bank) This investment drives innovation in a variety of fields

The Japanese government is shifting to invest more in preschool education, with the

goal of improving the quality of education for young children This includes funding educational programs that develop skills and mentor children from an early age

=> Japan's emphasis on STEM education, advanced technology infrastructure supported by significant R&D investments, and recent focus on strengthening early childhood education have highlighted its commitment as a country in promoting innovation and nurturing talent from preschool to advanced research levels At the same time, there is a highly qualified labor source, ensuring the supply of talent

Demand Conditions

Japanese consumers are known for their high expectations of quality and innovation

This demand drives Japanese companies to continually invest in research and development, creating advanced technologies and innovative products Consumer preferences for high-quality goods also foster a culture of craftsmanship and precision in manufacturing

Japan's GDP in the second quarter of 2024 increased by 3.1% over the same period

last year, thanks to the strong recovery of private consumption, accounting for more than half of the economy Personal consumption increased 1.0% after four consecutive quarters of decline, showing that consumer demand is gradually recovering

=> With high expectations for quality and innovation driving demand for high-quality goods,

it also promotes a culture of craftsmanship and precision in manufacturing, while GDP and personal consumption show signs of growth after years of continuous decline, providing

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significant opportunities for the highly-finished toy industry such as Kalotoys, making Japan

a potential market for the brand's product lines

Related and supporting industries

Industry ties: Toy manufacturers often work closely with media companies to develop products that align with current trends This synergy allows for timely product launches that align with popular culture, enhancing market relevance

Investment in research and development: Companies are increasingly investing

in R&D to incorporate cutting-edge technologies into their toys This focus on innovation helps maintain competitiveness in a rapidly evolving market

Japanese toy designers excel in blending traditional aesthetics with modern trends, emphasizing quality and craftsmanship, which reflects the country’s cultural values of manufacturing excellence

=> Close cooperation with media companies and significant investments in R&D allow Japanese toy manufacturers to remain competitive, relevant to popular culture, and deliver innovative, quality products High quality, creating a global reputation

Firm Strategy, Structure, and Rivalry

Firm Strategy: Japanese toy manufacturers, such as Bandai, practice the Kaizen philosophy, which promotes continuous improvement in the manufacturing process This approach encourages all employees to contribute ideas to improve quality and efficiency, in line with consumer expectations of high standards

Organizational Structure: Japanese companies are known for their strategic focus

on long-term planning, innovation, and quality The keiretsu system is a distinctive aspect of the Japanese business landscape, consisting of closely knit groups of companies with interconnected business relationships This configuration often facilitates streamlined operations, risk sharing, and long-term cooperative relationships between companies, contributing to the stability and resilience of the industry

Rivalry: The competitive landscape is characterized by fierce competition between established companies such as Bandai and Tomy, which drives innovation and quality improvement This competitive environment forces companies to quickly adapt to consumer demands and market changes For example: Renowned for its iconic brands like Tomica (die-cast model cars) and Plarail (toy train systems), Tomy

emphasizes product durability and play value They frequently integrate new technologies, such as augmented reality (AR), to enhance the interactive experience

Conclusion:

The Japanese toy industry excels through Kaizen principles, promoting continuous improvement and innovation The keiretsu structure strengthens collaboration, stability, and resilience, while fierce competition among leaders like Bandai and Tomy drives technological advancements and alignment with consumer needs Japan seems like a potential market due to its emphasis on quality and innovation and a consumer base that values high standards, making it a hub for global toy innovation and business opportunities

2.2 NETHERLANDS

Factor Conditions:

The Netherlands boasts a highly skilled and educated workforce with a strong emphasis on innovation and entrepreneurship The country’s education system consistently ranks among the best in the world, producing a steady stream of talented professionals across various industries According to the World Bank, the labor force with basic education in the Netherlands was reported at 49.55% in 2023

telecommunications, and logistics systems Its strategic location and extensive ports make it a key gateway to Europe, connecting over 170 million consumers within a 300-mile radius and boosting trade efficiency

=> With a highly skilled workforce, a top-tier education system, and advanced infrastructure, the Netherlands creates a competitive environment that fosters innovation, efficient trade,

and strategic access to the European market, making it an attractive hub for global business

and investment

Demand Conditions:

Dutch consumers have strong purchasing power, which significantly influences market dynamics Consumer spending in the Netherlands reached €103.41 billion in Q3 2024 (Trading Economics)

Dutch parents increasingly prioritize sustainable and educational products for their children As of 2024, 73% of parents consider sustainability in their purchasing decisions

This trend reflects an increasing demand for high-quality, environmentally friendly

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educational toys that promote learning and development

Companies in the educational toy sector are encouraged to innovate and differentiate themselves to meet evolving consumer preferences, aligning with the broader cultural shift towards sustainability and product quality

=> The increasing demand for sustainable and educational toys in the Netherlands presents

a significant opportunity for companies in the sector As Dutch consumers prioritize eco- friendly, high-quality

Related and Supporting Industries

The Netherlands’ logistical assets, including the busy Rotterdam port and Amsterdam Schiphol Airport, support industries like manufacturing and trade with efficient transportation networks for importing raw materials and exporting goods

With Amsterdam as a prominent global financial center This industry supports businesses by offering various financial products and services, including banking, insurance, and investment, facilitating capital allocation, risk management, and business development

The rise of e-commerce has changed the way Dutch parents shop for educational toys and entertainment for their children Around 45% of toy sales in 2023 will be made via online platforms, a figure that continues to rise With these trends, the Toys

& Games market will continue to grow in the coming years

=> The Netherlands’ strong logistical infrastructure, financial services, and growing e-

commerce trends provide a solid foundation for the continued growth of the Toys & Games

market With the rise of online shopping and the support of efficient logistics and financial systems, companies can optimize operations, expand market reach, and attract more customers, ensuring long-term success in this evolving sector

Firm strategy, structure, and rivalry

Firm strategy: Many firms prioritize research and development efforts to create cutting-edge products and services that meet evolving consumer demands while minimizing environmental impact This strategic emphasis on innovation fosters a culture of creativity and entrepreneurship, driving industry competitiveness Structure: The Netherlands has a highly decentralized business structure, with many small and medium-sized enterprises (SMEs) alongside larger multinational corporations Furthermore, the Netherlands benefits from a collaborative business ecosystem with strong partnerships between companies, research institutions, and government agencies This collaborative approach fosters knowledge sharing,

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technology transfer, and collective problem-solving, enhancing the competitiveness

of Dutch firms on the global stage

Productive rivalry: Competition among firms in the Netherlands is intense, it is also characterized by cooperation and mutual respect Companies often engage in healthy rivalry, pushing each other to innovate and improve while maintaining cooperation in supply chain management, industry standards, and sustainability initiatives

Conclusion

The Netherlands offers a prime market for the Toys & Games industry, driven by its skilled workforce, excellent infrastructure, and strategic location within Europe Rising demand for sustainable, educational toys reflects strong consumer purchasing power and preferences, creating significant opportunities for innovation and growth The country’s robust logistics, financial networks, and expanding e-commerce sector enable businesses to optimize operations and reach broader markets efficiently With

a collaborative business environment and a focus on innovation, the Netherlands is

an ideal hub for expanding the Toys & Games industry

Ill Evaluating and analyzing target country market selection; choosing market entry method

3.1 PESTEL analysis for Japan and Netherlands

3.1.1 JAPAN

e Political

- Japan's political stability, maintained for decades, sets it apart from many neighboring

countries This consistent environment fosters economic and social development,

creating a predictable climate that supports long-term business planning and investment

=> Creating favorable conditions and low risks thereby supporting Kalotoys to enter the market more easily

- According to the Viethiam = Japan Economic Partnership Agreement (VJEPA), most

Vietnamese goods exported to Japan will enjoy tariff incentives of up to 92% within

10 years from the date the agreement takes effect

=> This preferential treatment fosters stronger bilateral economic relations, encourages investment, and supports the growth of trade between the two countries, paving the way for long-term economic cooperation

- Japan's stable economy, with a projected GDP growth of 1-1.5%, creates

opportunities for new sectors like high-quality toy brands to thrive

=>Japan's GDP growth forecast of 1-1.5% indicates a stable environment for the development of new industries, such as high-quality toys This also shows that businesses can expect stable growth opportunities without having to worry about economic fluctuations

- Japan's high GDP per capita of $43,000 in 2024 reflects its advanced economy Japanese consumers value product quality and are willing to invest in premium goods, such as educational toys

=> This indicates strong purchasing capacity, making Japan a promising market for premium products

Toys market revenue

In terms of revenue, Japan accounted for 4.6% of the global educational toys market

in 2023 The Japan educational toys market generated a revenue of USD 2,361.4 million in 2023 and is expected to reach USD 4,626.2 million by 2030

=> The rapid growth of Japans educational toys market, with projected revenues nearly doubling by 2030, highlights significant opportunities for businesses to invest and expand in this promising sector

e Social

Aging Population Challenges

Japan is facing significant demographic issues, including a high proportion of elderly people,

with more than 29% of the country's population aded 65/OF Older, the highest rate globally

In addition, the birth rate has declined significantly, reaching a record low The overall birth rate in Japan was recorded at 1.20 in 2023, indicating that the trend of low birth rates is continuing, posing serious challenges to the country's aging population and economic stability

Although the Japanese government has been actively promoting higher birth rates, it has been largely unsuccessful and the birth rate continues to decline

=> These serious demographic issues will be an obstacle for Kalotoys in some cases where the main product line is children's toys

Cultural Values

With a Uncertainty” Avoidance Index (UAl) score of 92, Japan is recognized as having the

highest level of risk aversion globally

=> Japanese consumers tend to avoid unfamiliar products, favoring reliable and established brands that reflect their cultural values and trust in local quality To succeed, foreign brands must build trust and provide clear, credible information

trends predict significant growth in demand for sustainable toys, as consumers are willing to pay a premium for eco-friendly options

=> This is a good opportunity for Kalotoys because the toys are made from high quality wood without chemicals

- The Japanese government promotes recycling through initiatives to reduce waste and encourage sustainability, urging toy manufacturers to design durable and recyclable products following circular economy principles

=> This is potential for Kalotoys when it launches with the criteria of producing safe, sustainable toys with recyclable wood

e Legal

The JFSL mandates safety compliance for toys intended for children, especially those that may come into direct contact with a child's mouth, such as pacifiers, rattles, and toy food items This law was enacted in 1947 and is enforced by the Ministry of Health, Labor and Welfare (MHLW)

Testing Requirements: Toys must undergo rigorous testing to ensure they do not contain harmful substances like heavy metals (e.g., lead, cadmium) and phthalates Compliance with these standards is mandatory before products can enter the market

Chemical Safety Testing: Toys must be tested for harmful chemicals such as phthalates, heavy metals (lead, cadmium), and BPA (bisphenol A) These chemicals can pose health risks, especially to children, so their presence in toys is prohibited or strictly limited Material Safety Testing: Toys made of various materials (plastics, metals, fabrics, etc.) undergo testing to ensure they are free from hazardous substances Testing may include checking for the presence of harmful levels of chemicals that could leach out or be ingested

by children

Mechanical and Physical Testing: The safety standards also require tests to ensure that toys do not have sharp edges, small parts that could pose choking hazards, or other mechanical risks that could cause injury For example, soft toys must be tested for the risk

of suffocation or entanglement

Flammability Testing: All toys must meet Japanese flammability standards to ensure that they do not catch fire easily, posing a risk to children

Certification and Labeling: After passing the necessary tests, toys must be labeled with appropriate safety markings, such as the ST mark in Japan, which indicates that the toy complies with safety regulations For children up to 14 years old, the ST criteria are voluntary but are considered universal criteria To achieve ST Mark certification, products must be tested for mechanical properties, flammability, and chemical safety by approved

laboratories

Eco-Friendly Policies: The government's promotion of eco-friendly products could be an opportunity for businesses to market sustainable and environmentally friendly toys, aligning with local consumer preferences and gaining a competitive edge

=> To conclude, the JFSL establishes stringent safety regulations for children's toys in Japan, focusing on chemical, material, mechanical, and flammability testing to ensure child safety Compliance, certification, and labeling, such as obtaining the ST Mark, are mandatory for market entry, while promoting eco-friendly products aligns with consumer preferences and offers businesses a competitive advantage

Trade Policies

The European Union — Vietnam Free Trade Agreement (EVFTA), effective from August 1,

2020, eliminates 85.6% of import tariffs on Vietnamese goods, with 99.2% to be removed within seven years This allows Vietnamese businesses to offer more competitive prices in the EU market and enhances market penetration Vietnam’s exports to the EU have

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increased by nearly 50% since the agreement began, providing significant growth opportunities for Vietnamese products in Europe

=> The Netherlands has a stable and private-friendly political environment, with good import tax policies creating favorable opportunities, minimizing risks and increasing the likelihood

of success in penetration when Kalotoys approaches the Dutch market

Economic Growth

The Dutch economy is characterized by stability, with a projected GDP growth rate of around

1.5-2% in the coming years This sustainable growth demonstrates a robust economic environment that can support the entry of new sectors, including high-quality brands Purchasing Power

The Netherlands has a high GDP per capita, estimated at approximately $52,000 in 2024,

placing it among the wealthiest nations in Europe Dutch consumers are willing to invest in

high-quality products, including children’s items like educational and creative toys.This indicates a strong purchasing power, making it a promising market for premium products such as Montessori toys offered by Kalotoys

Revenue of the toys market

The Netherlands toys and games market reached a valuation of EUR 2.8 Billion in 2028,

driven by the rising disposable income, increasing emphasis on educational toys, and growing popularity of digital gaming platforms

=> The valuation of EUR 2.8 billion for the Netherlands’ toys and games market in 2023 reflects a robust growth driven by rising disposable incomes, an increasing focus on educational toys, and the expanding popularity of digital gaming platforms This trend indicates significant opportunities for businesses to cater to evolving consumer demands in this dynamic market

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Revenues

Source: TraceData Research Analysis

=>The Netherlands is a country with a strong developing economy, with stable growth, high average income and an expanding consumer class, especially in the children's educational toy industry which is on a strong growth trend with good revenue growth This will create a great opportunity for Kalotoys if it enters the Dutch market to expand the market and increase revenue In addition, factors such as reasonable interest rates, stable exchange rates and favorable financial policies help reduce investment costs and maintain sustainable profits

e Social

The Netherlands has seen a surge in demand for educational toys because of the following key social factors:

Young population and relatively high birth rate

The Netherlands boasts a growing child population of more than 2 million children,

accounting for nearly 20% of the total population On 1 January 2024, the Netherlands had 689,013 children aged 0 to 3 years, 1,442,293 children of primary school age (4 to 11 years) The birth rate for the Netherlands in 2023 was 10.182 births per 1000 people, a 0.2% increase from 2022 The current birth rate for the Netherlands in 2024 is 10.168 births per

1000 people, a 0.14% decline from 2023

=> This is a good opportunity for Kalotoys because the birth rate is high and children aged 0-4 years old in the Netherlands account for a large proportion of the total population This makes the demand for educational toys for children increase sharply

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Prioritize education

In the Netherlands, education is compulsory This reflects the cultural value of Dutch society

on the importance of education, especially in the early stages of a child's life - age group of

0 to 4 years This cultural value has a great influence on consumer preferences, especially

in the market for educational and intellectual development toys Dutch parents place great importance on eco-friendly and child-safe products This influences parents' choices when purchasing educational toys Products made from natural, non-toxic materials, or with sustainability certifications, are often preferred

=> This is the potential for success for Kalotoys when launched with the criteria of early intellectual education and skill development for children from an early age

Cultural Values

The Netherlands is a country with a fairly stable cultural index That cultural value system is

a combination of three factors: knowledge - belief - lifestyle

- The Human Development Index (HDI) in the Netherlands is 95.8% - ranked 6th in the world Some of the main factors shaping the HDI for the Netherlands are education, health care and income distribution, in which childhood education plays an important role The Dutch education system, known for its accessibility and quality, ensures that children receive education from a young age

- The highest Hofstede’s dimension in the Netherlands is Individualism (IDV) at 80,

which is on par with Canada as the fourth highest IDV-ranked country in the world Individualism (IDV) focuses on the extent to which a society reinforces individual or collective achievement and interpersonal relationships These cultures foster extended and collective families where parents are responsible for their children Parents are more conscious about their children's education, so from the age of 0 to

4, they prioritize learning and developing their children's skills through intellectual educational toys in addition to traditional methods

- Based on Hofstede's Uncértainty Avoidance Cultural Dimension (UAI), the

Netherlands, with a score of 53, has a more moderate preference for uncertainty avoidance This implies a higher resistance to change and a preference for established norms

=> Socio-cultural indicators are important factors for penetration, easy access to target customers, attracting potential customers and thereby promoting Kalotoys market growth in the Netherlands

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e Technological

Digital Infrastructure: The Netherlands was an early adopter of e-commerce Favorable factors, such as high internet penetration and citizens who have both technical abilities and

a stable internet connection, contribute to the country's e-commerce boom The Netherlands

E-commerce Market size is estimated at USD 33.43 billion in 2024, and is expected to reach

USD 52.16 billion by 2029, growing at a CAGR of 9.31% during the forecast period (2024- 2029) The large population density, short distances involved, and the fact that the Flemish language and culture transcend national borders are all key aspects of the country's e- commerce

=> The technological factor brings many advantages for Kalotoys to penetrate the children's toy market in the Netherlands With an advanced technological infrastructure, the application

of technology in the design, production and distribution of toys helps businesses increase efficiency and reduce costs, thereby improving competitiveness in the market The development of e-commerce and online sales platforms in the Netherlands creates opportunities for businesses to reach customers quickly and widely, especially the group of parents and young consumers who tend to shop online

e Environment

Environmental Policies

In the Netherlands, toys must comply with strict regulations on material safety and environmental protection, including the requirement to use recycled materials and eliminate toxic substances such as phthalates and BPA Environmental factors, such as policies and regulations related to environmental protection, have a direct impact on the production process Therefore, companies must invest in clean production technology and use safe raw materials, leading to higher production costs However, meeting these requirements helps businesses build credibility, attract consumers interested in environmentally friendly products, expand the market and maintain sustainable development

Consumer Trends

Dutch consumers are increasingly favoring toys made from recycled or biodegradable materials This reflects the consumer trend, as people prioritize greener and more sustainable products In addition, models such as toy rental or reuse are growing rapidly For businesses, environmental factors have a strong impact on product and service

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