Hosiery Market In Taiwan

In this case of hosiery market in Taiwan, Glamour Girl, who manufactures and markets pantihouse with brand name "American Women" wants to enter Taiwan market. They had asked the research partners Taiwan to conduct a market research for them. Glamour girl also provided a research brief.

* Market Research brief provided by Glamour Girl

 Assessment of hosiery market of Taiwan

 Advice regarding what would be the most appropriate mode of entry

 Information relating to marketing mix decisions

 Consumer Purchasing aspects

 Place of purchase

 Degree of search

 Purchasing criteria

 Role of brand image and loyalty

 Price Sensitivity

 Aspects of using (i.e consuming) pantihose

 Regularity of wearing

 Occasions worn

 Length of usage per pair

 Styles preferred

 Quality (local brands VS. imported brands)

But, according to our analysis the research brief is not sufficient and they need some additional information like;

 Local distribution channel

 Local competitive situation

 Government rules and regulations relating FDI

 Market entry risks

 Market size, growth and potential

 Local infrastructure

 Economic and social culture

 Import information in Taiwan

 Exit Strategy

Key Issues:

The key issues that they need to address before entering the Taiwanese market are;

1. Information about the Taiwan and consumer goods market

2. What Marketing Research methodology to be used and

3. What should be the appropriate mode of entry in Taiwan

Now in this report we are going analyze these issues and try to address them using international marketing concepts.

1. Information about Taiwan

A. Geography:

Taiwan has an area of 4,000 square miles, and three major citesTaipei (Capital), Kaohsiung, Taichung, Tainan. The climate is tropical, marine, with rainy season during southwest monsoon (June to August) and cloudiness is persistent and extensive all year.

B. Demography

Taiwan enjoys a considerable population of 22.7 million, heavily concentrated along the west coast. Second, there are three ethnic groups, Taiwanese, mainland Chinese and aborigine, 84%, 14%, and 2% respectively. Next, the age structure is quite favored to the consumer market, seen as followed. 0-14， 19.7%，14-64，70.7%, over 65, 9.6%

In addition, Taiwan people usually regard Mandarin as the official language, but would also speak in Taiwanese or Hakka Chinese dialects in daily life. And the locals share couples of religions: mixture of Buddhist, Confucian, and Taoist, 93%; Christian, 4.5%; others, 2.5%.

C. Economy

Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. In recent years, some large government-owned banks and industrial firms are being privatized. Meanwhile, exports have provided the primary impetus for industrialization. Substantial trade surplus and foreign reserves are the world's third largest.

Although Taiwan witnessed a great suffer in the financial crisis in 1998, its output recovered moderately in 2002 and pushed ahead in 2003-05. as a result, the real GDP Growth Rate in 2004 and 2005 is 5.7% and 3.8% respectively that directly result in the GDP is $610.8 billion and GDP per capita: $26,700 in 2005. Moreover, the Taiwan government has managed to maintain a high rate of employment for its 10.31 million labor force with a relatively low unemployment Rate of 4.4% in 2004. Thus, the ratio of middle class has already reached 34%, which is an important indicator to the purchasing power of consumer goods.

In the aspect of trade, Taiwan has several major trading Partners, United States, Japan, China, Europe, Hong Kong. Particularly, the growing economic ties with China become a dominant long-term factor, in terms of exports to China of parts and equipment for the assembly of goods for export to developed countries.

Thanks to the improvement of economic policies in recent years, especially after Taiwan's entry into WTO in 2002, about 4,500 tariffs were reduced and average nominal tariff rate has been lowered from the pre-accession level of 8.20% to 5.64% in 2005. The government has also permitted the foreign investors a right of up to 100% foreign ownership and a 20-year guarantee for enterprises with a foreign investment component of at least 45% equity. Therefore, in 2004, the merchandise Exports and imports and merchandise Trade Surplus all reached high records, $173.2 billion, $156.7 billion and $16.5 billion respectively.