Download SIRUS GASIMI INTERNATIONAL MARKETING STRATEGY OF

VYTAUTAS MAGNUS UNIVERSITY
FACULTY OF ECONOMICS AND MANAGEMENT
MARKETING DEPARTMENT
SIRUS GASIMI
INTERNATIONAL MARKETING STRATEGY OF SHEKI-IPEK
Master Diploma Paper
Programme: Marketing and International Commerce, State code 621N50005
Study Field: Marketing
Advisor: Assoc. prof. dr. Nina Klebanskaja
(degree, academic position, name, surname)
(signature)
(date)
Defended: Prof. habil. dr. Pranas Žukauskas
Dean of the Faculty of Economics and Management (signature) (date)
Kaunas, 2015
68
CONTENTS
SANTRAUKA .................................................................................................................................... 3
ABSTRACT ....................................................................................................................................... 4
GLOSSARY OF TERMS ................................................................................................................. 5
INTRODUCTION ............................................................................................................................. 7
1. THEORETICAL ASPECTS OF INTERNATIONAL MARKETING AND EXPORT ......... 9
1.1. Analysis of international marketing environment .................................................................... 9
1.2. The formation of the company’s strategy penetrating into the international market ............. 12
1.3. International strategy formation ............................................................................................. 15
1.3.1. Decisions of international marketing strategy ................................................................. 15
1.3.2. International marketing program elements ...................................................................... 18
2. INTERNATIONAL MARKET RESEARCH OF SHEKI IPEK ............................................ 27
2.1. Sheki Ipek and its activities in Azerbaijan ............................................................................. 27
2.2. Methodology of the research .................................................................................................. 28
2.3. The results of the research ...................................................................................................... 31
2.4. Economic relations between Azerbaijan and Lithuania ......................................................... 39
2.5. Macro environment analysis of Sheki Ipek ............................................................................ 41
2.6. Competitive and SWOT analysis of Sheki Ipek ..................................................................... 47
3. THE DEVELOPMENT OF INTERNATIONAL MARKETING STRATEGIES FOR
COMPANY SHEKI IPEK IN LITHUANIAN MARKET .......................................................... 53
3.1. Marketing objectives .............................................................................................................. 53
3.2. The selection of target segments ............................................................................................ 54
3.3. Positioning of Sheki Ipek home-made carpets ....................................................................... 56
3.4. Functional marketing strategy ................................................................................................ 57
3.4.1. Product ............................................................................................................................. 57
3.4.2. Price ................................................................................................................................. 59
3.4.3. Distribution ...................................................................................................................... 62
3.4.4. Promotion ........................................................................................................................ 65
3.5. The strategy formation model of Sheki Ipek .......................................................................... 67
CONCLUSIONS AND RECOMMENDATIONS ........................................................................ 70
REFERENCES ................................................................................................................................ 72
ANNEX 1 .......................................................................................................................................... 77
ANNEX 2 .......................................................................................................................................... 80
2
SANTRAUKA
Baigiamojo darbo autorius:
Sirus Gasimi
Pilnas baigiamojo darbo pavadinimas:
Sheki Ipek tarptautinė rinkodaros strategija
Baigiamojo darbo vadovas:
Doc. dr. Nina Klebanskaja
Baigiamojo darbo atlikimo vieta ir metai:
Vytauto Didžiojo universitetas, Ekonomikos ir vadybos
fakultetas, Kaunas, 2015
Puslapių skaičius:
82
Lentelių skaičius:
10
Paveikslų skaičius:
33
Priedų skaičius:
2
Pagrindinis darbo tikslas – naudojant išanalizuotus teorinius modelius ir charakteristikas
plėtoti tarptautinę rinkodaros strategiją Sheki Ipek. Darbą sudaro trys pagrindinės dalys. Pirmojoje
dalyje aptariami teoriniai tarptautinės rinkodaros modeliai, aplinkų analizė įmonės požiūriu,
tarptautinės įsiskverbimo į rinką strategijos ir strategijos formavimo ypatumai gamybos
organizacijų aplinkoje. Antroji dalis skirta tarptautinės prekybos strategijos formavimo Sheki Ipek
galimybių tyrimui. Trečioji dalis pristato tarptautinę rinkodaros strategiją Sheki Ipek. Darbo
pabaigoje pateikiamos išvados ir pasiūlymai.
3
ABSTRACT
Author of diploma paper:
Sirus Gasimi
Full title of diploma paper:
Intenational marketing strategy of Sheki Ipek
Diploma paper advisor:
Assoc. dr. Nina Klebanskaja
Presented at:
Vytautas Magnus University, Faculty of Economics and
Management, Kaunas, 2015
Number of pages:
82
Number of tables:
10
Number of figures:
33
Number of annexes:
2
Main aim of the work – using analyzed theoretical models and characteristics to develop
the international marketing strategy for Sheki Ipek. The work consists of three main parts. The first
part deals with the theoretical models of international marketing, analysis of the environments in the
enterprise point of view, international market penetration strategies and strategy formation
peculiarities in the manufacturing organizations. The second part carries out a research for the
possibilities of international marketing strategy formation for Sheki Ipek. The third part presents the
international marketing strategy for Sheki Ipek. At the end of the work conclusions and
recommendations are being presented.
4
GLOSSARY OF TERMS
Advertising – is the customer’s paying for indirect sale of the information promoting the
product (Hoxie, 2010).
Concentrated market strategy – a strategy of small companies, the company seeks to get
the big part of the market or several smaller markets (Murphy and Tenold, 2008).
Differentiated market – market where the company offers different elements of market
complex: different product is sold, the price differs, the product is sold in different places, it uses
different forms of promotion (Brasington, Pettitt, 2003).
Distribution – is the element of the marketing mix, covering decisions and actions related
to the movement of products from producer to consumer (Hui-Chu and Green, 2009).
Export – the selling of products abroad.
Franchise agreement – is a contract under which the franchisor undertakes to transfer for
value the franchisee and gives the right to use the trade name, trademark or service mark, protected
commercial (industrial) information and other rights, and the franchisee shall pay established
franchises salary in this contract (Business & Management Dictionary, 2007).
Global marketing is when the company operates in the global market and doesn’t divide
the market into internal and external.
License is an international trade that can be understood as an authorization for production
or commercial purposes legally use the invention, the net or industry benchmark, trademarks or
service marks protected by law and the technical knowledge and practical experience (White,
2009).
Non differentiated market strategy – strategy where the whole market is being
considered as one market, and all the consumers must react the same way to the marketing actions.
It is rarely effective. There are no products that everybody would want (Brasington, Pettitt, 2003).
Personal selling – is a compelling delivery of products or services to a potential customer,
dealing with him face to face.
Product differentiation – production for the individual segments.
Sales promotion is such an activity of the company, when buyer gets improved
conditions.
Target market is a group of consumers, that has the same needs and wants, that the
company wants to fulfill (Kotler and Armstrong, 2013).
The leader of the companies – a company that has the biggest share of the market.
The manufacturer-persecutor – company that always observes the company-leader, its
actions, uses its ideas to get into the company-leader place.
5
The followers of manufacturer – some of them plagiarize the main ideas, and others –
plagiarize everything that comes to the company-leader and its actions, even they can sell the
product using the manufacturer’s name.
The manufacturers-niche fillers – the ability to adapt the specific needs of small market
segments.
6
INTRODUCTION
Information technology, business models, market relations development in the world
increased competition, developed the market and provided businesses with a huge acceleration and
new possibilities. Nowadays complex world pushes to get oriented in the marketing: to look for
innovative ways to interest buyers, where to realize the production, how to present it and distinguish
from other competitors. In many countries where the economy is based on the market-based
approach, developed and applied marketing strategy consists of business basics, which are
indispensable for efficient business process management.
Relevance of the topic. Companies pay little attention to the international business, when
the local market is huge and there a lot of different options. But increasing interdependence between
different countries’ market goods and services caused the companies to recognize that business
must be seen globally. Home made carpet manufacturers, relying on modern and advanced
technology, in response to dynamic customer needs, has acquired a new, flexible business forms. In
other words, a successful international marketing activity requires continuous improvement, and the
education of the key competencies in the field. The novelty of international marketing activities
assessment is the fact that here international marketing strategy formation for home made carpets is
being formed. This type of analysis of the company’s international marketing strategy is different
from trade or service international marketing strategies. Therefore, it can be said that this is a
specific marketing strategy, which differs from the traditional in some aspects, which will all be
referred in the conclusion part.
Changing environmental conditions and strong fierce competition in all areas of activities,
forces the company leaders evaluate their possibilities very seriously and provide further ways of
developing activities, thus, the opportunity to expand business activities internationally. The
ongoing relationship between the market development of the country not only opens up new foreign
markets, create new economic development opportunities, but also imposes strict requirements.
Each company will have to develop their competitive advantage in the international market by
choosing some competitive sphere (products, market segments) that is not used by competitors, or
gain a competitive advantage in combining exceptional product features, quality, distribution, and
promotion. Marketing knowledge for business organizations helps to choose the methods to act in
the market, also arouses the initiative, creativity and progress. Expanding the market and
competition relations, marketing analysis is necessary for businesses that seek their goals acting not
only locally but also in the international markets. Any manufacturing company, expanding its
activities must be able to correctly understand and evaluate the macro environment surrounding it
and the influence of possible changes on the company’s objectives.
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Scientific problem. Sheki Ipek wants to open its shop in Lithuania and sell home-made
carpets. So the most important problem the company faces is the preparation and development of
international marketing strategy for Sheki Ipek to enter Lithuanian market in the best way.
Object of the work – the international marketing strategy for Sheki Ipek.
Aim of the work – using analyzed theoretical models and characteristics to develop the
international marketing strategy for Sheki Ipek.
Main objectives:
1. To summarize international marketing strategy in manufacturing companies: to analyze the
international marketing models, perform international marketing environment analysis,
develop international marketing strategic decisions, analyze the international marketing
program elements.
2. To analyze Sheki Ipek possibilities for international marketing strategy formation.
3. To develop international marketing strategy for Sheki Ipek.
Logical structure of the work. The work consists of three main parts. The first part deals
with the theoretical models of international marketing, analysis of the environments in the
enterprise point of view, international market penetration strategies and strategy formation
peculiarities in the manufacturing organizations. The second part carries out a research for the
possibilities of international marketing strategy formation for Sheki Ipek. The third part presents the
international marketing strategy for Sheki Ipek. At the end of the work conclusions and
recommendations are presented.
Methods and techniques – analysis of the scientific literature and other information
sources, questionnaire will be used in the research, also descriptive statistics will be used for the
second part of master thesis.
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1. THEORETICAL ASPECTS OF INTERNATIONAL
MARKETING AND EXPORT
1.1. Analysis of international marketing environment
Marketing macro environment consists of factors outside the organization – a whole of
country’s economic, social and political developments, technological capacity and competition.
Macro-environment changes are inevitable. Hence rapid spread of technological innovation, the
organization is important to provide its adaptation to the environment means. In deciding to trade or
not to trade abroad, a company has to study international marketing environment in-depth. This
environment is characterized by its structural model, shown in Fig. 1.
Fig. 1. Structural model of international marketing environment
Source: Kumar (2011)
When examining the international marketing environment, the main focus should be on the
company’s macro environment elements that cannot be controlled. There are seven of them (Fig. 1).
The analyzed authors (Riekstina, 2010; MacLeod, 2010) usually indicate such elements of
international marketing macro environment: cultural, economic and political-legal environment. It
is necessary to assess the effect of international marketing environment forces for the company, that
decides to do exports.
Cultural environment. Each country has its own traditions and norms. Before planning a
marketing program, the seller has to study, what representatives of different countries think about
certain products and how they use these products. The seller must identify the existing cultural
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constraints of target market and investigate and comprehend them diligently (Terpstra and Sarathy
2012). The main cultural elements of the environment are shown in Fig. 2.
Religion
Values
and
attitudes
Language
CULTURE
Aesthetics
Education
Social
organizati
on
Law and
politics
Technology
and material
culture
Fig. 2. A cultural framework
Source: the figure has been created by the author, based on the data from Terpstra and Sarathy (2012)
All these elements form the resulting stereotypes that to some extent, directly or indirectly
effect the forming strategy of an exporting company. Also it can be noted that the aesthetics in most
countries, is indeed makes a serious impact on people’s attitudes to many products.
Another element of the cultural environment that may affect the company is education. The
country’s literacy rate, the persantage of people that have secondary and high education show the
level of education. The country’s level of education matters when creating foreign capital
companies and searching employees.
Next environment, influencing international marketing strategy formation, is economic
environment. In this environment, global forces exsist and it is virtually impossible to control
them.
The main economic environmental factors can be: demand in the market and economic
conditions of company functioning.
The evaluation of competitive potential is important before new products are released on
the market – by researching and designing, because almost 80 percent of production’s marketing
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costs depend on the success of the economic technical parameters research at the initial product
development stage (Banterle et al., 2014).
Another important factor affecting the economic environment – market demand, which is
resulted by a number of indicators. The first indicator – population. Population density in a given
market is the most important indicator of the market size, revealing the potential demand.
Population indicators can be classified by: age distribution and life expectancy, economic
structure and income distribution. For the markets to be attractive, they must contain not only a lot
of people, but also their purchasing power, which depends on income, prices, savings, debt and
credit facilities. Purchasing power of people is reflected in the country’s GDP per capita.
Next factor affecting economic environment is the economic conditions of company’s
functioning. Most often they are resulted from the economic system of the country, the structure of
state expenditure, which reflects the expenditure slippages by key government functions or
objectives in concrete spheres of economic, currency system, foreign trade policy, qualifications of
staff, the profit potential, infrastructure.
Political-legal environment. Political-legal environment is also another important element
of macro environment of marketing (Fig. 3). It directly affects the marketing activities. So, a
marketing manager should study and analyze it carefully while making marketing strategies, plans
and programs. Law, government policies, government agencies, pressure groups etc. are included in
political-legal environment. Since these elements do not remain under control of any organization,
marketing mix should be made in agreement with them.
Fig. 3. Political-legal environment
Source: the figure has been created by the author, based on the data from Analysisproject (2013)
There are no countries, where laws and regulations seek to regulate only international
business, but they still affect the activity of the company abroad. For example, the state-determined
minimum wage affects the international competitiveness of enterprises, when the manufacturing
processes of the organization require a lot of labor force. Thus, unlike the other examined elements,
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political and legal environment effects business from two positions – the country to which export is
conducted and the country in which the organization is established.
In conclusion, once the main environments are being talked about, it can be said that each
nation has unique features that need to be known. Country’s consumers willingness to purchase a
variety of products and services as well as its position as attractive market for foreign companies,
depend on the cultural, economic, political-legal environments. In this aspect, it is very important
for companies to know these environments that way it would be easier to meet the buyer’s needs
and expectations. Thus, the evaluation of international marketing environment of the company can
help to analyze the competitive environment and the buyer. By assessing the environments, it is
appropriate to analyze the factors influencing international trade. These factors and their influence
on the willingness to engage in international trade are being discussed in the next chapter.
1.2. The formation of the company’s strategy penetrating into the
international market
In the market there are a lot of companies that are reluctant to participate in international
competition. It goes without saying, because often these companies are real connoisseurs of the
internal market, while stepping into international market forces to encounter with the unknown
customs, culture, language, tax and tariff systems, transport systems and currencies. And at the end,
products will be modified or even their structure will be changed to meet the requirements of
foreign quality and technical parameters (Abrahams, 2009). All things considered, the question is
why more and more companies want to go into international market? There seven main reasons for
that (Fig. 4).
Business
portfolio
diversificatio
n
Oversaturate
d domestic
market
Slow
growth of
internal
market
Influence of
competition
Domestic
market is
too small
Internation
al interest
in
production
Maintanace
of the
company
12
Fig. 4. The company’s reason for going into international market
Source: the figure has been created by the author
In search of a new marketing opportunities in the leading foreign countries, companies
realize that the internal market growth is very low. This becomes a reason to engage in international
activities. Another common factor to engage into international business, is related to product
demand abroad. Often foreign manufacturers’ products are required. This is related to the famous
international brands and companies’ logo that guarantee the quality of products or services. In most
cases, when one of the competing companies decides to expand its business abroad, the other
follows it. This is especially true with oligopolistic economy companies. Other factor related to the
competitive environment, is company’s goal to compete with foreign company that settled in its
domestic market. Taking into account all the factors that influence the company to engage in
international trade, the company has to choose the most necessary ones for formation of its strategy
(Prymon, 2014).
The company, that is planning to go in foreign market has different choice for doing that.
This is one of the important decisions when forming a strategy, because this affects the
implementation of international strategy and the size of profit. Different forms for entering a foreign
market are decided upon degree of risk. The company, that decided to enter a foregn market, also
has to decide at the same time which form it is going to use and what size of the market it wants to
occupy. Each of the forms give the perspective opportunities for development in the international
market. So the company can use not only one form.
One of the most famous forms for entering a foreign market is export, i.e. the selling of
products abroad. The government that sucessfully operates, states that export should be developed
and small and mid-size companies have do export as well.
Export is the least risky way for entering the foreign market. This is implemented through
existing dealer in foreign market. However, the exporter weakly controlls the intermediaries.
Intermediates do not use aggressive marketing and do not try to sell a product at the highest cost. So
the biggest disadvantage of export is low degree of control and limited feedback on the market
(Abraham et al., 2009).
For the minimum degree of risk, export is used for testing foreign markets. If it is
successful, the company chooses such method, which gives the greater control possibility of
international trade operations.
The previously mentioned limitations of export can be avoided by switching to the second
stage of the export organization in a foreign country – the establishment of its own sales
department. Such department helps the company to aggressively promote its products, to create
foreign market for its products and to monitor sales efforts.
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Creating own sales department gives the question – what kind of people should work in
this branch. If foreign national workers are hired, it is obvious that they will be closer to the culture
and have a better understanding of the country‘s buyers and consumers. On the other hand, they will
know little about the company and its products. Otherwise, exporter country’s people can work, but
they are poorly adapted to the local culture and traditions so they need a lot of efforts to start a
successful work. But it can be an intermediate decision, where representatives from both countries
could work.
Company, expanding in foreign markets and selling its production, can use product
licenses. License is an international trade that can be understood as an authorization for production
or commercial purposes legally use the invention, the net or industry benchmark, trademarks or
service marks protected by law and the technical knowledge and practical experience (White,
2009). Licensing is most commonly used foreign markets through the sale of “know-how”. It may
be physical products, production processes, management techniques, marketing strategies or any
other combination of these various markets.
Franchise agreement – is a contract under which the franchisor undertakes to transfer for
value the franchisee and gives the right to use the trade name, trademark or service mark, protected
commercial (industrial) information and other rights, and the franchisee shall pay established
franchises salary in this contract (Business & Management Dictionary, 2007).
Next entrance to the foreign market – an establishement of a joint venture that involves
local and foreign capitals. This method provides an opportunity to gain experience from a foreign
market partner, provides “local” status of the company and distributes the risk. The biggest
problems in joint ventures are associated with bad management (Chen et al., 2014). The more equal
are the parts of local and foreign capital, the biggest is the possibility of conflict between the two
sides.
The greatest potential for gain control and entrance to the foreign market goes to next
method – development of production overseas. These companies, which seek to capture the longterm and strong positions in foreign markets, often prefer the establishment of branches and direct
investments. By choosing a branch establishment method, the company gains more control to
implement its marketing and production programs. On the other hand, this method requires the
largest investments in finances and labor, also large management efforts (Niron and Ravi, 2011).
This method – the most risky method because the effectiveness of direct investments is influenced
by political, financial, economic and other external, uncontrolled environmental factors.
Creating a global corporation is the highest international integration form. These
corporations usually do not share activity to the local and foreign activity components. Both
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activities are integrated into one and cannot be separated. The companies plan and implement their
global marketing strategies worldwide (Levicki, 2003).
Thus, each of the above mentioned methods for entrance to the foreign markets have their
own advantages and disadvantages, but it does not mean that any one of them is better than the
other. The best entrance to the foreign market method is the one which optimally meets the
company’s objectives, resources and foreign market conditions. Only this combination allows the
company to successfully enter foreign markets and meet its objectives. Depending on these goals,
every company should decide what international marketing techniques to use in their activities, set
strategic decisions and marketing program elements which face the company.
1.3. International strategy formation
1.3.1. Decisions of international marketing strategy
The choice of international marketing strategy objectives includes the company‘s
objectives in international market. To set a goal – means to pave a way to the future for survival and
growing of the company. Goals give the company clearity and purposefulness (Chung, 2009). The
marketing strategy helps to find out if the business can be done in the competitive market.
The formation of marketing strategy firstly begins with the prediction of sales volume and
other goals‘ indicators. The are four strategic decisions to be analyzed:
1. The choice of target market;
2. The choice of competitive strategy;
3. The choice of positioning;
4. The choice of strategies for market complex elements.
The choice of target market. Target market is a group of consumers, that has the same
needs and wants, that the company wants to fulfill (Maihotra et al., 2009). According to the target
market, the marketing strategies can be as follows: non differentiated market, diferentiated market
and concentrated market.
When applying non differentiated market strategy, the whole market is being considered as
one market, and all the consumers must react the same way to the marketing actions. It is rarely
effective. There are no products that everybody would want.
In the case of differentiated market, the company offers different elements of market
complex: different product is sold, the price differs, the product is sold in different places, it uses
different forms of promotion. Company needs a lot of funds for implementation of this program, so
this program is usually used by the large companies (Brasington, Pettitt, 2003).
15
The concentrated market strategy was treated as a strategy of small companies for a long
time, because it doesn‘t need a lot of funds. In this case the company seeks to get the big part of the
market or several smaller markets (Murphy and Tenold, 2008).
The choice of competitive strategies. The competitors of the company must be evaluated
by performing the analysis of the situation. The position of the company and its abilities in
comparison with competitors, can reveal the important advantages or disadvantages of the
marketing strategy.
According to Ph. Kotler and G. Armstrong (2013), the competitor can be:
1. The leader of the companies – a company that has the biggest share of the market. Such
company always gives better prices, offers more new products than competitors and etc.
2. The manufacturer-persecutor. Such company always observes the company-leader, its
actions, uses its ideas to get into the company-leader place.
3. The followers of manufacturer – some of them plagiarize the main ideas, and others –
plagiarize everything that comes to the company-leader and its actions, even they can sell
the product using the manufacturer’s name.
4. The manufacturers-niche fillers. The main competitive strategy – the ability to adapt the
specific needs of small market segments. The sales volume aren’t very big, but these
manufacturers work profitably.
The selection of positioning method. The conception of products or services positioning
recognizes that consumers are affected by different companies, servicing the individual market,
marketing program. Ph. Kotler and G. Armstrong (2013) present four positioning methods:
 Positioning by consumption;
 Positioning according to the user;
 Positioning according to user interaction with goods;
 Positioning based on a direct comparison.
Positioning solutions in the company can not be done before the perspective analyzed, and
particularly those of competitive strategies. As well as the positioning can not be done before
choosing a target market, because the positioning options depend on the consumers’ characteristics
of the planned segment. On the other hand, positioning strategy in a company must be provided
before decisions on specific marketing mix elements are made (Shrafat, 2014).
The selection of seperate marketing elements strategy. By developing the coherent
marketing strategy it is necessary to choose the appropriate functional elements of the marketing
mix strategies. Their options include:
 In marketing mix element “Product” – strategic decisions in assortment, quality, trade name
issues;
16
 In marketing mix element “Price” – the strategic decisions of new product
prices, the payment issues;
 In marketing mix element “Distribution” – distribution strategic decisions (exclusive,
selective, intensive distribution strategies), distribution control system (system of ownership
and control ways) issues;
 In marketing mix element “Promotion” – decisions about choosing promotion strategy
(push, pull or mixed), strategic decisions in budget allocation.
The following factors that need to be constantly assessed in the formation of an
international marketing strategy (Zeriti et al., 2014):
1. Company resources. Every company must have the recources for production development
and other marketing costs.
2. Product differentiation. Production for the individual segments.
3. The stage of the product life time. When the product reaches maturity stage, its marketing
strategy must be reviewed.
4. The competitors’ strategy. Continuous product improvement for seeking the competitive
advantage.
Different companies have different search methods for international market and the
implementation of international marketing strategy. International marketing can be implemented in
such ways shown in Figure 5.
No direct
marketing
Infrequent
foreign
marketing
Permanent
foreign
marketing
Internation
al
marketing
Global
marketing
Fig. 5. International marketing stages of implementation
Source: the figure has been created by the author, based on the data from Zeriti et al. (2014)
Indirect marketing. This phase doesn’t do any users’ preparation actions. The
manufacturer sells its products to trader or other foreign company that have an interest to resell or
distribute them. In other ways, the products reach the foreign market by the help of intermediaries
using no any prior marketing efforts to prepare buyers.
Infrequent foreign marketing. Temporary surplus commodities or irregular orders
disrupt continuity of production, that’s why the company sometimes needs the efforts of infrequent
foreign market. The excess of products is usually temporary, that’s why the sales possibility abroad
exists temporary and the need of international marketing is also temporary.
17
Permanent foreign marketing starts when the company has production capacity for
producing products to the foreign market. Here we have the international marketing research and
decision making need. A big dependence on foreign market is being felt in this phase.
International marketing. The company already operates internationally in this phase,
applies different marketing to different countries. The production is being planned and implemented
according to the demand and specification of foreign markets and the products totally depend on the
luck in the international markets.
Global marketing. The global marketing is when the company operates in the global
market and doesn’t divide the market into internal and external. The global marketing seeks to find
the unique features markets, that let the creation of marketing strategies suited globally for all
markets.
The organization can go through all these stages or it can omit some. It depends on the
company’s situation, objectives and international marketing strategies selected.
So the international marketing strategies can be defined differently and can be
implemented in different ways. The formation of the strategy can be defined according to what
products and markets are being covered by the actions, how much investment this activity gets,
what function strategies would be used and what kind of strategic advantages would be developed
for competitors. The strategy can be defined according to competitive advantages: low costs,
differentiation, directed activity to one small part. By forming a marketing strategy, it is
recommended to follow the recognizable structure, which is connected with the most important
marketing aspects: the exclusion of target market, the selection of competitive strategy, the
positioning method, and the selection of separate marketing mix elements’ strategy that effect the
successful activity of the company. Next section will give a better view of the selection of
marketing mix elements’ strategies.
1.3.2. International marketing program elements
Product and its decisions. The company‘s marketing activity begins with discovering a
market and interpretation of its environment requirements. Of course, sometimes the company can
sell the products without the understanding of the market, but this success does not maintain a
constant test. It is far more useful to determine what is required and thus try to meet this need by
analyzing product, price, distribution of products and organizing promotion. It is appropriate to
carefully plan the marketing program for each foreign market. An effective conception of a
developed product is the first step in planning a marketing program.
Product – is a complicated concept that has to be consistently described. In marketing the
most important thing is product value or its utility to the consumer. The value of a product shows
18
how much raw materials, materials or labor was used to produce the product, and the value of
consumption of the product describes its utility for its intended purpose, social significance,
practical applications, and so on (Felzensztein et al., 2014).
To make a success in a foreign economics, the company has to assess more accurately its
products eligibility for export. Some products do good with only small changes that make
customers interested in foreign markets, others need big changes. The main challenges for the
companies would be, before presenting the product to foreign markets, compare their products‘
advantages to competitors, to explore how the product is evaluated by trading companies, how the
product meets the needs of consumers. It is recommended to apply the research procedure of
product eligibility for foreign markets (Fig. 6).
The analysis of own
and competitors'
products
How traders evaluate
the product
How the consumers
evaluate the product
Product adaptation in
the market
Fig. 6. Procedure of product eligibility for foreign markets
Source: He and Avinandan (2009)
Investigation of their own and competitor products must take into account some criteria:
technical characteristics of the product, the quality of the product and additional services. Analysis
of the products offered by competitors according to the following criteria can help to identify
market niches, or the opposite – to avoid a certain market segment.
A product is customized for foreign markets by modifying it, changing some of the
physical parameters, design, identification of elements, additional services. According to this, the
strategy for adaptation of products to foreign markets can be (Luan and Sudhir, 2010):
1. The distribution of unmodified product.
2. The distribution of modified product.
3. The distribution of new product.
Unmodified product distribution in foreign markets is the cheapest method. It is possible
when the goods are sold in foreign markets or their segments in which the macro environment are
close to local market macro environment elements. By modifying a product for foreign market
needs, a change of the physical product happens rarely because it is associated with certain
production changes and requires considerable additional costs (Brasington, Pettitt, 2003).
19
Companies that decide to work in foreign markets, should choose strategies very carefully.
In some cases, the low level of development in the country requires reverse innovation, that is,
drastically simplified versions of products appearing in the market. It happens when a consumer
purchasing power is weak or they do not know how to use the product.
Such technically sophisticated facilities of consumer behavior for companies to trade in
foreign markets can be identified (Luan and Sudhir, 2010):
1. A buyer‘s decision to purchase a product is determined by the price of product and its
technical parameters.
2. When deciding to buy a product, the indices of products and services offered by the seller
(additional services) are important. In order to properly and timely serve the customer,
usually support services abroad are organized. This is an expensive and complicated
process.
3. The country‘s social and cultural background differences in trading technically sophisticated
devices are less important than trading every day use products.
When deciding on the product, the company must take into account other elements of the
marketing mix, such as price.
Price and its decisions. Out of all the marketing mix elements only price generates
income, all other elements are expenses. It is a key competitive tool. And although the company
always wants to set the price as high as possible, competition pushes the company to reduce the
price.
Export price setting – is a task, that is being solved by all companies without exception. In
most cases it is based on the costs of production, although in the prevailing conditions, such pricing
is unacceptable. According to B. A. Vander Schee et al. (2010), in most cases companies will have
to have their own pricing methodology.
There are different ways to establish export prices. Preferred phasing is as follows:
1. The optimal product pricing in the foreign market is determined.
2. The difference for foreign product prices in different markets is grounded.
The setting of export pricing relates to a number of variables, which are different in
different markets. The expenses of different companies operating in foreign markets also are not the
same, they might reach different purposes. Therefore, the first step is to determine the optimal
product price in the particular market.
The first factor in export prices – market demand. Price setting methodology, focusing on
the demand for products is based on the research of demand and economic value, this product
creates for the consumer. Economic value is determined by the social and cultural environment. It is
20
also necessary to investigate the economic environment. The interaction between export prices and
the factors determining them is shown in Fig. 7.
Consumer
purchasing power
Social values
Demand of product
Company’s activity
objectives in foreign market
Ratio of product
value and price
The competition of
product
Origin country of
product
Optimal export price
Fig. 7. The factors influencing the optimal price setting
Source: the table has been created by the author, based on the data from Liozu and Hinterhuber (2012)
One of the most important factors in the fluctuation of pricing, by choosing the optimal
price, is competition in the market. The calculation of export price based on the price level of
competitors can be divided into four stages:
1. Competitive material is selected.
2. The main selected material competitive conditions are compared: technical and economic
parameters of the production, delivery and payment terms, prices.
3. In accordance with an appropriate correction coefficients the selected material competitive
prices are being corrected; This takes into account technical delivery terms and economic
differences in the price.
4. The reference export price is being set according to the company’s pricing strategy chosen
by the setting of the intervention of export price. Pricing also may be influenced by the
company‘s internal capabilities, producer of products and its country’s image abroad.
To set one optimal price is not enough, because different countries has different
environmental and economic factors. Thus, in order to get an acceptable pricing, an export price in
the second stage of pricing formation has to be adjusted.
To achieve proper regulation of prices in different countries, even in their region is
difficult. It should also be noted that the formation of an international pricing strategy requires to
develop and regulate the distribution chain margins. F. Brasington and S. Pettitt (2003) provide a
framework, providing exemplary mark-up in the system (Fig. 8).
21
Producer price – 45EUR
Wholesaler price – 78EUR
Producer
Wholesaler
Production expenses:
50EUR
Mark-up: 30%
15EUR
The buying price: 65EUR
Retailer
Retailer price – 109EUR
Mark-up: 20%
13EUR
The buying price: 78EUR
Mark-up: 40%
31EUR
Fig. 8. Mark-up system
Source: Brasington and Pettitt (2003)
Export price forming factors and goals lead to the fact that the company has to choose the
export price strategy. International marketing uses three main export price strategies:
1. The global standard price (subject to the same all over the world product prices).
2. The dual pricing (in the local market product has one price and exported product has a
different price).
3. The pricing belonging from the market (same product is offered for different markets at
different prices).
In summary it can be said that in any particular case such price policy and strategy must be
implemented that the prices set would let to penetrate the market and conquer its part, promote the
sale of products, what would guarantee the profit. The effective pricing is a key element of the
company’s market policy. Pricing as a marketing tool used most effectively when it is combined
with other elements of the marketing mix, i.e., presentation of products and their stimulation.
Therefore, next the rational distribution of products at the international level will be discussed.
Distribution channels. Products produced in the company must reach the consumer, to be
offered to him and sold. Manufacturer‘s efforts to achieve this objective may be successful only if
the products will be offered for those customers who need them, in a place, at such time and in such
quantity as they wish. Distribution is all the activities, including the presentation of products to
consumers, the product movement from the manufacturer to the consumer. Ch. Hui-Chu and R. D.
Green (2009) defines distribution as follows: distribution – is the element of the marketing mix,
covering decisions and actions related to the movement of products from producer to consumer.
Distribution channel choice is influenced by many factors: product related factors, factors
related with consumers, competitors, factors associated with the company. Manufacturer on the
basis of factor analysis has to evaluate the distribution channel alternatives and select the most
appropriate (Xia, Xiao and Zhang, 2013).
Before selecting the method of allocating products, the manufacturer needs to evaluate
how much additional income will be received, how much additional expenditure he will have, to
what extent he is able to properly perform marketing functions. Such distribution channels may be
22
distinguished (Table 1). Each manufacturer selects the most suitable type for him and applies its
appropriate structure.
Table 1
International distribution channels
Type of distribution channel
Direct distribution
Indirect distribution
Business success depends on the
distribution system formed
Possible structure of international distribution channel
The manufacturer sells his goods to the consumer in his own
brand shops
Manufacturer operates through its intermediaries in a foreign
country, i.e. supplying them products.
Manufacturer operates through its sales representatives
abroad.
Establishment of equipment manufacturing or collecting unit
in foreign market
Note: the table has been created by the author, based on the data from Harison and Hoek (2002)
There are three main distribution chain links between the manufacturer and the end user.
The first link in the chain is manufacturer‘s international marketing division within the country,
controlling distribution channels and at the same time is one of the channel’s part. The second link
is the international distribution channel that take care of distribution from one border to another.
The third level is the internal distribution channel in a foreign country, when foreign products are
delivered from the border of the importing country to the end user.
Assessing the company’s ability to build the distribution channel structure, the company
has to keep in mind the analysis of expenditures, distribution channel control, channel quality and
channel activity duration.
When choosing a distribution channel, it is appropriate to compare the costs of product
distribution moving through different channels. Distribution channel control objects are
transportation and storage of the products, the forseeing of sales promotions, price level and sales
conditions, quality of service.
The quality of distribution is described by the channel‘s capabilities, reliable image in the
market. Therefore, when selecting intermediaries, it is needed to consider trading intermediary
image in the market. The consumer can always take into account the level of reliability in the
market. The image of the exporter in the foreign market depends from the image of manufacturer
(Christopher and Peck, 2003).
In summary, it can be said that the final solution of organization for the distribution
channel and the strategy depends on the company‘s, operating in foreign markets, goals.
Consequently, product distribution channels and strategies, on the one hand, are determined by the
needs of consumers, on the other hand, the aims of the producers and opportunities.
Promotion decisions. Effective communication is very important for international
marketing: producers, consumers and intermediaries are appointed by the geographical and
23
psychological distance, and it is often the communication process that helps to achieve win-win
arrangements. As far as the international activity of the company, communication is communication
between international business company and end consumers buying products imported from abroad.
It is very important for companies to develop an appropriate strategy for the promotion and
take into account each country’s environmental factors influencing the communication process.
Formation of promotion strategies in foreign markets involves several key elements:

Identifying the target audience;

Determining communication objectives;

Determining the message;

Budget decisions (Sneha, 2013).
It is very important to choose the appropriate means of promotion to support the objectives
of the company. Main promotion means are advertising, sales promotion, personal selling and
Internet.
1. Advertising – is the customer’s paying for indirect sale of the information promoting the
product. Campaign costs are determined by the objectives of foreign companies operating in the
market and the prevailing level of spending in foreign market advertising. Advertising in foreign
countries is usually done by advertising companies. The main objectives of advertising are
distinguished by their effect on the audience and are divided into information, persuasion and
reminder (Hoxie, 2010). There are several basic types in product advertising: brand advertising,
advertising of regular price policy, promotional advertising of special items.
2. Personal selling – direct communication between buyer and seller. It’s interpersonal
communication with one or more potential customers, hoping to sell or convince to perform certain
actions. It may be a telephone call, help staff at the store, and so on. Personal selling – is a
compelling delivery of products or services to a potential customer, dealing with him face to face.
Compared with the previously discussed means of promotion, this promotion form is an expensive,
time consuming, and requiring expertly trained personnel. Personal selling has clear advantages –
the response and the visible result are being gotten (using personal sales price of products is being
raised 2-3 times). This form is less important to the manufacturer. In a foreign country it would be
pretty hard to organize this type of promotion. However, this form of promotion is useful when the
company has its office in a foreign country.
Personal selling is an especially flexible stimulation, because it is adapted to each
customer. And the costs are usually lower than when using advertising. However, the disadvantage
of such selling is that it includes quite a few buyers (Ferrell et al., 2007).
3. Sales promotion is such an activity of the company, when buyer gets improved
conditions. To form such conditions, a company has to dedicate portion of its profit. This is one of
24
the most popular and most reliable forms of promotion. The main sales factors are indicated in Fig.
9.
Coupon use guaranteeing
discount when purchasing
the product
Free samples
sending
Gifts for buying
other products of the
company
Sales promotion
factors
Reduction of sales
price and etc.
Organization of competition
between vendors, dealers and
buyers, giving awards
Demonstration of
products on store
shelves
Discounts for
wholesalers
Fig. 9. Procedure of product eligibility for foreign markets
Source: He and Avinandan (2009)
If the advertising provides a cause to buy, a sales promotion stimulates to perform an
action – to buy. One can distinguish the main objectives of promoting the sale, which can help to
select the corresponding stimulus measures: increase purchases over a short or long period of time;
increase benefits (number of customers, company’s profit); to introduce a new product to the
market; to introduce a consumer with the brand name (create identification); encourage the loyalty
to the company, its brand, products and (or) services, and so on. Price reduction is perhaps the
simplest and most common form of promotion. It is particularly prevalent in enterprises, where
manufacturers do discounts for intermediaries. Intermediaries’ promotion – manufacturer
companies encourage intermediaries, who buy directly from the manufacturer. Commercial
discounts for buying in bulk, goods paid advertising costs are the most frequently used methods.
Sometimes manufacturers envoke demonstration at the stores. New products are displayed in
exhibitions and fairs. Here traders can get the detailed information (Kapferer, 2004).
4. Internet in the international marketing is very popular, distinguished by unique
marketing features and performs a dual role:
 This is a new communication tool, different from traditional media, because of its
interactive, flexible and infinite nature;
 This is a virtual global electronic market, without any territorial restriction. All consumers
want to get the required products quickly, so everything is determined by the term “time-tomarket” (time before entering the market). And in todays world, even a monthly delay can
25
cost millions of losses (Gosselin and Poitras, 2008). Online campaign can be far more
effective than traditional advertising channels. An advertising online can be created,
delivered and, if necessary, changed faster. As an advertising can lead consumer directly to
the site where he will get more information and the opportunity to communicate
interactively, much more impressive and more informative data can be given on a product.
In order to obtain adequate benefit from international marketing execution, advertising
campaign and other promotion actions should be carefully planned and combined in a way that they
fortify rather than interfere each other, i.e., a free flow of communication must be.
To sum up, it can be said that by forming an international marketing strategy it is the most
important to assess the environments in which the company operates or intends to operate, select the
appropriate strategic decisions and analyze the international marketing program elements. These
decisions are the base for strategy accomplishment scheme and subsequent performance of the
company. In practice, these aspects will be analyzed in the formation of international marketing
strategy for an Azerbaijani company.
26
2. INTERNATIONAL MARKET RESEARCH OF SHEKI IPEK
2.1. Sheki Ipek and its activities in Azerbaijan
Sheki Ipek produces silk goods in Azerbaijan for many years now. Sheki Ipek has been in
business since 1931, so it has a large experience in selling silk products. The company deals with
production of raw silk, twisted silks (silk yarn), fabrics from natural silk and in a blend with other
artificial and synthetic fibers, national lady‘s head cloths „kelagai“ and master manufacture of
carpets from natural silk. This cooperation has made partnership and trading with post Soviet Union
republics.
However in Azerbaijan still there are big potential opportunities and all necessary
preconditions for revival and development of sericulture and the silk industry. In the country there
are very favorable climatic conditions for sericulture, still existing two P3-P1 egg production
stations and 7 hybrid egg production factories, 80 centers for cocoon drying and storage, located in
30 areas of the republic, indefatigable interest of farmers to sericulture, presence of rich genetic
resources of the silkworm and mulberry, strong support by the Government, subsidized the Sheki
Ipek silk company with about 2 million US$.
The vision of the company – business and society that mange the resources effectively.
The mission of the company – to be the leader in the home-made carpet production sector,
to satisfy all the needs of consumers and to offer the best quality products.
The values of the comapny:

Innovative and highquality products;

Responsible attitude to customers and employees;

Long-term and reliable partnership.
From this year, the carpet production in Azerbaijan amounted to 50,000 m2 per year. The
company’s stable growth rates and high professionalism of the staff allows the company to expand
and do export to another countries.
Sheki Ipek is a large company, that employs more than 1000 employees. Total annual sales
volume is about 1 mln US dollars.
Main market of Sheki Ipek covers Eastern Asia, so the company decided to expand and to
fill the niche market in Eastern Europe countries.
Company Sheki Ipek produces silk products and hand-made carpets. Hand-made carpets
can be woven, knitted, knotted, sewed or embroidered and glued. Company sells exclusively handmade carpets, which production method reaches the oldest times. They like works of art are
produced and practicing both in rural communities and urban manufactory, supervised by
professionals. Classic Eastern carpets are smooth. They are made by hand from wool, cotton or silk,
27
with horizontal and vertical machining and their weft is wool. Thread after thread they are blend ed
in seamlessly by the pattern layout, drawn up by an artistic designer and illustrator. The oldest pile
carpet types - knotted. They tethered vertical or horizontal frames. The oldest type of shaggy carpet
– knotted. They tethered vertical or horizontal frames.
Long gone are the days when Eastern Asian rugs traveled with buyers miles in caravans –
now they reach Europe via the experienced traders. West European experience shows that it is very
risky to buy a carpet using the service for home delivery, or during the sell-out or in market. Often,
the original Asian patterns are reproduced in the wool and silk carpets from China, India, Nepal and
Pakistan, indicating that they are made in the world recognized Iranian provinces. These rugs are
relatively cheaper and qualified as an ordinary commodity. However orginal carpets for the quality
of wool or silk, color harmony and nodes density and coupling method, the accuracy of ornaments,
are more valuable and therefore more expensive.
So next chapter is appointed for the research of Lithuanian market for Sheki Ipek
production – hand-made carpets.
2.2. Methodology of the research
To keep the research flow and consistency, the second part of the thesis was done
following these research steps:

The formulation of research problem;

The setting of research type and information resources;

The selection of research data gathering methods and forms;

The setting of research sample and gathering research data;

The analysis of research data and interpretation;

The preparation of the research report.
The formulation of research problem. The aim of this step is to define proper the
existing problem and the objective. The identification of the problem and the methods of
elimination of it should reflect in the research conclusions. This research will help to analyze and
eliminate the problems, answer the questions, obtain the information about the behaviour of the
potential customers and would help to choose the right decisions for setting the strategy of homemade carpet entering the market.
This year, company Sheki Ipek plans to start export of home-made carpets to Lithuania, so
the most important questions that the company can face are:
 What means will be used to reach its target market?
 How to get the part of Lithuanian market?
 What kind of home-made carpet tendencies are in Lithuania?
28
 Are Azerbaijani home-made carpets known in Lithuania?
So to answer these questions, the objective of the research was formulated – to find out the
importance of criteria, which the clients use for choosing the home-made carpet.
The objectives to reach this aim:
1. To find out the buying habbits of home-made carpets and the notoriety of carpet selling
companies;
2. To evaluate the criteria of choosing the home-made carpets;
3. According to different criteria evaluate the expectations of the ideal possible home-made
carpet shop in Lithuania.
The setting of research type and information resources. The objective of the second
type is to set what kind of methods will be used to reach the aim of the research. The quantative
research method was chosen to ask a bigger number of respondents and to get the more accurate
data. The descriptive research was carried out, during which the primary data was collected. This
method is rather informative and cheap, which lets to gather precise results.
The selection of research data gathering methods and forms. The questionnaire was
chosen for the research method. The questionnaire in Lithuanian and in English was formed of 23
questions (Annex 1 and 2), because they were handed to Lithuanian people. The questions were
formed in groups.
First group of questions consisted of common closed type questions about the tedencies of
buying the home-made carpets. These questions will help to find out if the customers buy carpets,
how much they are willing to spend and what factors are important when choosing a carpet.
Second group of statements was formed to find out the meaning of criteria to the customer
when choosing the home-made carpets. This group of statements was evaluated by Likert scale,
where 1 meant that the respondent disagreed with the statement, and 5 means that the respondent
fully agreed with the statement.
Third group of questions was formed to find out how the customer imagines the ideal shop
for selling Azerbaijani home-made carpets. To find out how important is the criteria to customer,
the last group of statements was evaluated by Likert scale, where 1 meant that the respondent
disagreed with the statement, and 5 means that the respondent fully agreed with the statement.
The questionnaire contains ranking question, that would help to know what countries make
home-made carpets the best or worst in customers‘ opinion. The customers had to rate the countries
that produce home-made carpets in the five point scale (5 – country that makes the best home-made
carpets, 1 – country that makes the worst home-made carpets).
To find out how the respondent knows the Sheki-Ipek brand, their products, the open-end
and closed questions were asked before the demografic questions.
29
Last group of statements were asked to find out what factors are the most important to the
customer when choosing home-made carpet shop. This type of statements will help to evaluate what
factors should the company Sheki Ipek take a notice at and pay more attention when creating and
developing an international marketing strategy.
At the end of the questionnaire the demografic questions were asked to find out the
repondent‘s gender, age and education.
The setting of research sample and gathering research data. The fourth step of the
research is to name the research population and to set the research sample size. The research was
carried out in Kaunas city, but there is no data what number of people is buying home-made
carpets.
The common demographic tendencies in Kaunas are similar to the tendencies of other
Lithuania‘s cities – the number of population is constantly decreasing. As the company Sheki Ipek
wants to open its store in Kaunas, the target segment is mature people (age 18 and up). According to
Statistic department of Lithuania, more than 300 000 people live in Kaunas (Table 2), so this
number can be a size of population.
Table 2
The number of people at the start of year (features: administrative teritory and year)
2010 m.
3 141 976
329 542
Republic of Lithuania
Kaunas area
2011 m.
3 052 588
317 319
2012 m.
3 003 641
310 773
2013 m.
2 971 905
306 888
Note: the table has been created by the author, based on the data from Statistic department of Lithuania, 2015
The survey sample then can be counted by the use of formula (1):
1
n = ∆2 +1
⁄N
(1)
where: n – sample size;
Δ – error size (0,05);
N – general whole size.
n=
1
= 399
0,052 + 1⁄300000
General whole size is N=300 000. Thus, for a successful survey 399 respondents has to be
interviewed.
The analysis of research data and interpretation. It‘s the fifth step of the research, when
the analysis of the research data is being done and the results are interpreted. The results were
processed by Microsoft Excel program.
The preparation of the research report. This is the last and most important research step.
All the results of the research are being summarized and the conclusions are being made.
30
To do a research, the simple convenience by chance selection was chosen. This is a
selection based on a principal of convenience. This method was chosen because it is convenient and
cheap. There was no possibility to ask people in the home-made carpet shops, because they are
competitors of Sheki Ipek. For these reasons, the research was carried out by shopping center
Akropolis and Mega using a principal of convenience. The research was carried out from the 9 th of
March till the 22nd of March.
400 questionnaires were handed out, but only 308 respondents fully completed them. Only
203 questionnaires were good for a research and contained valuable information, because the rest of
the respondents don‘t buy carpets. So 203 respondents will represent the Kaunas city people and
their view into the carpet market perspectives.
Next chapter describes the results of the research in more details.
2.3. The results of the research
The aim of this part of work is to analyze all the data collected during the research: to
systematize the information, to carry out the meaningful notice and draw conclusions that will be
useful for the third part of the master thesis.
A total of 308 respondents participated in the survey and 203 of them were suitable for the
research. According to the obtained data, 47% of them are men and 53% are women. Thus, the
gender distribution among the survey respondents are more or less the same.
The analysis of the data by age shows that the majority of respondents (36%) fall into 3645 year age group and 34% fall into 26-35 years age group. Respondents whose age group 61 years
and more contains the minority of respondents (only 4%). So most respondents are from 26 to 45
years old, and are considered to be the target segment of specialized home-made carpet shop (Fig.
10).
40%
30%
20%
34%
36%
10%
0%
6%
20%
4%
18-25 26-35
36-45
y.
46-60 more
y.
y.
y.
than 61
y.
Fig. 10. Age groups of respondents
Source: the table has been created by the author
31
The analysis of the distribution of respondents by education received showed that the
majority (71%) respondents have higher education (Fig. 11). Accordingly, as the age groups
mentioned, respondents with higher education are also considered specialized carpet shop’s
segment. Therefore, the greatest attention is paid to the analysis of these group’s responses.
12%
1%
3%
4%
Not finished
secondary
9%
Secondary
Professional
Higher education
University
education
71%
Fig. 11. Education of respondents
Source: the table has been created by the author
The first survey’s question was to find out how often the respondents buy carpets. The
distribution of responses is shown in the Fig. 12 below. These figures show that slightly more than
half – 56% respondents buy carpets once every 5-10 years. While 9% - once a year. Never buy even
34% of respondents. No respondents buy couple times a week. Carpets are such products that are
not used every day. They can be treated as a luxury product that’s why they are not being bought
very often.
Never buy
34%
Once every 5-10 years
56%
Once a year
9%
Couple times a month
1%
Couple times a week
0%
0%
10% 20% 30% 40% 50% 60%
Fig. 12. Respondents carpets’ buying frequency
Source: the table has been created by the author
The second survey question was: how much you normally pay for a carpet when you buy it
in a shop? In that regard, it was important to find out what would be the most appropriate pricing
strategy for the company in order to sell its production by the price categories according to the
32
majority of respondents. From the chart it is clear that the majority – 53% of respondents compared
with other price categories, are choosing carpets in the price range of 151-200 EUR (Fig. 13). The
second most common answer selected by respondents (25%) was 201-250 EUR for a carpet buying
it in the shops. Meanwhile, the very small percentage of respondents choose carpets costing 251300 EU (3%) more than 300 EUR (2%).
60%
50%
40%
30%
20%
10%
0%
53%
25%
6%
11%
3%
2%
Fig. 13. Respondents spending for carpets
Source: the table has been created by the author
Third question was asked to find out what factor influenced the most when buying a carpet
(Fig. 14). The responses to this question didn‘t surprise because the factor that influences the most
was price. This factor was chosen by 31% of respondents. Colours, pattern and quality go close too.
28% of repondents think that quality of the carpet matters the most, and 27% of respondents think
that colours and paterns should be important the most. The least important factor was size of the
carpet (only 2%). Country of origin also is not so important (5%) that makes some doubt for Sheki
Ipek when entering a Lithuanian market – how their carpets would be sold in this country.
Recommendations of friends, family and etc. matters only to 7% of respondents. Buying a carpet is
such a process that you want to be responsible for yourself and to decide what is better for you
because nobody else can advise what kind of carpet you should lay down in your house.
Recommendation of friend,…
7%
5%
Country of origin
2%
Size
31%
Price
27%
Colours and pattern
28%
Quality
0%
10%
20%
30%
40%
Fig. 14. Factor influences the buying habbits the most
Source: the table has been created by the author
33
Carpet buying selection criteria is specified by questionnaire’s statements (Fig. 15): “By
choosing the carpet, the quality is important for me”, “By choosing the carpet, the price is important
for me”, “By choosing the carpet, the origin country is important for me”, “By choosing the carpet,
the colour and texture are important for me”, “By choosing the carpet, it is important that the carpet
is hand-made”, “I think that the best way to buy a carpet is in the shopping centers”, “I think that
the best way to buy a carpet is in the specialized shops”.
The first statement according to the importance is the colour and texture of the carpet
(60%). This is the most important feature for respondent when choosing the carpet. Also important
is the price of the carpet. 55% of respondents think that by choosing the carpet, the price is
important. People want to pay but get good quality (37%). The least important factor, that influence
buying the carpet is the choice whether to buy in a shopping center or in the specialized shop. 12%
of respondents don’t think that it is good to buy at the shopping center. Usually shopping centers
sell carpets at an affordable price. They are not of a very good quality, usually they come from
China. And they are not hand-made. The country of origin is not important to 11% of respondents.
The answers to this statement distributed pretty much evenly, this shows that origin of country can
be important to one respondent, and totally unimportant to the other. But 22% of the respondents
would like to have their carpets hand-made. This statement reveals that respondents’ answers are
quite different. Some of them values quality, some of them want the carpet to be cheap and others
want hand-made carpet. But the majority of respondents (53%) agrees that you can only buy a good
quality carpet in the specialized shops.
By choosing the carpet, the quality
is important for me
3%
0%
0%
By choosing the carpet, the price is
important for me
6%
1%
4%
34%
55%
15% 25%
30%
11%19%
By choosing the carpet, the origin
country is important for me
By choosing the carpet, the colour
and texture are important for me
33%
37%
3%
0%
0%
5
60%
37%
22%30%
By choosing the carpet, it is
important that the carpet is hand-… 1%
1%
3% 10%
I think that the best way to buy a
25%
carpet is in the shopping centers
12%
21%
I think that the best way to buy a
19%
3%
carpet is in the specialized shops
4%
4
3
2
46%
1
50%
53%
0% 10% 20% 30% 40% 50% 60% 70%
Fig. 15. Carpet buying selection criteria
Source: the table has been created by the author
34
The next block of statements helps to find out the vision of an ideal home-made carpet
shop (Fig. 16). This statement is very important for Sheki Ipek company, because when entering a
Lithuanian market it needs to open a shop there. So the respondents‘ answer to these statements can
help to decide better what kind of shop it should be. The most important factor for the respondents
is the assortment of carpets (49%). The respondents want the assortment include at least 50 kinds of
carpets. This is quite large range of assortment and Sheki Ipek have to produce at least 50 different
kinds of carpets. The sellers at the shop also have to meet such criteria. 39% of respondents agree
that the seller should be an expert in this field because they want to get the best service at the shop.
53% of respondents think that the ideal home-made carpet shop should sell different assortment of
carpets that the shopping centers. Of course, home-made carpets are different in their structure,
material, colour and most importantly – the quality. The size of the shop doesn‘t matter that much.
Only 6% of respondents think that it should be large. So it doesn‘t matter what kind of shop it can
be as long as it sells good quality, large assortment home-made carpets.
6%
The area of the ideal home-made
carpet shop must be large
Only expert sellers should work
in the ideal home-made carpet
shop
The assortment of the homemade carpets should include at
least 50 kinds of carpets
In the ideal home-made carpet
shop the assortment of
production should be different
than in the shopping centers
14%
22%
14%
27%
4%
4%
0%
13%
17%
19%
44%
39%
5
4
28%
49%
2
1
21%
3%
1%
3
22%
53%
0% 10% 20% 30% 40% 50% 60%
Fig. 16. Ideal home-made carpet shop criteria
Source: the table has been created by the author
When asked to evaluate the countries that make carpets by the least important to the most
important, the respondents of course, evaluated China being the country that makes the worst homemade carpets (Fig. 17). Persia (Iran) was rated the best home-made carpets’ country. No wonder,
because this country has a long carpet producing traditions that go back to the ancient times. Persian
carpets are always being valued as of good quality, beauty and ornaments. The Azerbaijan and
Turkey takes the second place of being the countries that make good carpets. This question revealed
an important factor, that the company Sheki Ipek can start its international marketing entering
35
strategy because Lithuanian people value Azerbaijani carpets. All Eastern countries are known for
their good quality carpets. India and Lithuania is in the third place (3 points) and Russia got only 2
points. Russian carpets are not valuated because of the events going on between Russia and
Ukraine. People do not like Russia and that maybe influences the choice of its products too.
0%
2% 9%
12%
0%
0%
33%
55%
12%
15%21%
41%
12%
11%
59%
13%
14%
5%9%
15%
33% 46%
3%
3%
19%
43%
10%
13%
15%
28%
10%
44%
8%
10%
China
Russia
Lithuania
Persia (Iran)
Turkey
Azerbaijan
India
0%
20%
40%
60%
77%
5
4
3
2
1
80%
Fig. 17. Respondents opinion about countries, that produce home-made carpets
Source: the table has been created by the author
By the 17th survey question respondents were asked to list what specialized carpet shops in
Lithuania they know. By analysing the responses received, six specialized carpet shops located in
Lithuania have been mentioned at least once. Figure 18 shows the most frequently mentioned
carpets shops. Most often mentioned was Dubingiai shop – 121 time, next – Senukai shop –
mentioned 62 times. Thirdly, most frequently mentioned is Maxima – 31 times. Although the
survey was carried out in the city of Kaunas, respondents knew and mentioned the specialized
carpet shops in Vilnius – Persija and Kilimu pasaulis.
9%
6% 4%
Dubingiai
43%
17%
Senukai
Maxima
27%
Iris
Persija
Kilimu pasaulis
Fig. 18. Respondents notoriety of carpet shops in Lithuania
Source: the table has been created by the author
To check the Azerbaijani carpets‘ populiarity one more control question was asked if the
respondents would like to buy Azerbaijani carpets (Fig. 19). So 18% of respondents would like to
36
buy Azerbaijani carpets, 68% maybe would like to buy, and 14% would not buy Azerbaijani
carpets. So the answers to this question shows that Sheki Ipek has 18% potential customers, and it
can attract more if choosing the right international marketing strategy when entering Lithuanian
market.
18%
Yes
No
14%
Maybe
68%
Fig. 19. Respondents willingness to buy Azerbaijani carpets
Source: the table has been created by the author
To find out if the respondents know Sheki Ipek company, the next question was asked
about Sheki Ipek notoriety (Fig. 20). The results were not surprising because 97% of respondents
never heard about such a company. 3% of respondents thou say they heard about such a company.
Sheki Ipek has a distributor of its silk scarves and shawls in Vilnius – Trading Estate JSC. So these
answers showed that the company has to create a good promotion company to get the potential
customers to get to know about it.
3%
I heard about it
97%
No
0%
Yes
0%
20%
40%
60%
80%
100%
Fig. 20. Respondents notoriety of company Sheki Ipek
Source: the table has been created by the author
Next group of statements helps to evaluate the factors that are important when creating a
shop (Fig. 20). The most important factor when evaluating the shop is the quality of the products.
This factor is important to 55% of respondents. Also important factors are exclusivity and
professional staff. 47% of respondents want to be attracted by exclusivity of the products, staff’s
clothes and etc. Also professional staff is important to 46% of respondents. So the company Sheki
Ipek has to think about hiring only the professional employees to please Lithuanian customer.
37
The image of the shop is moderately important (30%). Lithuanian customers are concerned
more with the price and quality of the products than with the image of the shop.
The answers to the statement about the pleasant staff communication and service didn’t
differ a lot: it’s very important to 32% of respondents, important to – 25% of respondents,
moderately important to – 19% of respondents and unimportant to – 21% of respondents.
Mobility is totally unimportant to 17% of respondents. This means that the distance is not
very important to the customer. If the product is good and has a good price, the customer is willing
to go an extra mile.
Also the customers would like to get a lower price than in the other shops. This factor is
very important to 38% of respondents and important – to 25% of respondents. So the conclusion is
that price is the most important factor when evaluating the company’s shop. The customer wants the
lower price but he wants good quality too.
3%
Pleasant staff communication and service
21%
19%
25% 32%
8%
9% 14%
Exclusivity (in staff’s clothes, products and
etc.)
2%
2%
Professional staff
16%
7%
The image of the shop
30%
32%
31%
57%
33%
0%
0% 5%
The quality of products
6%
Prices lower than other shops
0%
Unimportant
15%
16%
17%22%
11%17%
Mobility (I’d choose a shop in my city which is
closer to my home)
10%
46%
34%
7%
5%
0%
Notoriety (constantly observed shop’s
advertising)
Totally unimportant
47%
22%
40%
14%
17% 25%
20%
Moderately important
30%
55%
38%
40%
Important
50%
60%
Very imortant
Fig. 21. Factors that are important when evaluating a shop
Source: the table has been created by the author
The purpose of this research was to determine the importance of the criteria by which
consumers prefer carpets. It was also intended to create a vision of an ideal shop. Therefore, in this
section the comments received and the results processed with the computer program Microsoft
Excell are being summarized.
The first task of this empirical research was meant to determine the patterns of buying
carpets by reviewing the demographic characteristics of the respondents and to perform the
notoriety of carpet shops. A total of 308 respondents participated in the research and slightly more
38
than half – 72% respondents buy carpets less than couple times a year. So the vast majority buys
carpets rarely.
Also it was important to find out how much the respondent usually pays for a carpet
buying it in a shop. The results showed that most 53% of respondents are willing to pay 151-200
Eur for a carpet. This criteria should help to figure out what would be the most appropriate pricing
strategy in order to market this production.
By analyzing the notoriety of the carpet shops in Lithuania, the most known in
respondents’ opinion is the shop Dubingiai (it was mentioned 121 times), located in Kaunas city.
By evaluating buying habbits of the customer, the six statements were given. The answers
showed that the most important factor is the colour and texture of the carpet (60%). This is the most
important feature for respondent when choosing the carpet. Also important is the price of the carpet
(55%).
The statements about the vision of an ideal home-made carpet shop showed that the most
important factor for the respondents is the assortment of carpets (49%) and selling different
assortment of carpets than the shopping centers (53%).
When evaluating countries that make carpets, China was being the worst and Persia (Iran)
was the best evaluated country. Azerbaijan was in the second place. So this shows that people value
Eastern countries‘ carpets and that could be a good niche market for company Sheki Ipek.
There are not so many shops in Lithuania that sell carpets, except shopping center. The
best know specialized carpet shops were: Dubingiai, Persija and Kilimu pasaulis. Persija sells
Persian carpets and is a competitor to Sheki Ipek.
The question about Azerbaijani carpets‘ populiarity showed that 38% of respondents
would like to buy Azerbaijani carpets, 54% maybe would like to buy, so Sheki Ipek has a quite
large target segment that it could attract if choosing the right international marketing strategy.
But Sheki Ipek firstly has to use a good promotion strategy in order to get the people know
it, because only 3% heard about such company.
Lastly the results of the statements about the important factors when evaluating a shop
were revealed. The most important factor when evaluating the shop is the quality of the products
(55%), exclusivity (47%) and professional staff (46%).
2.4. Economic relations between Azerbaijan and Lithuania
The Lithuanian economic system is being transformed from 1990. Also, integration into
the European Union, globalization, changed Lithuanian trading system. Measures used for country
to compete in the world trade is also bring changed and liberalized. Foreign trade seeked to
integrate into the international trading system, liberalize trade and develop free trade agreements.
39
When Lithuania ratified the World Trade Organization arrangements, it became a member
of WTO – that meant Lithuania got stability and reliability in trade relations.
According to Saboniene (2009), Lithuanian trade with the third countries has become more
liberal, transparent and predictable, while Lithuania – more attractive to foreign investment. Since
membership in WTO, Lithuania has gradually moved towards more free trade by introducing a
simplified tariff band structure and simultaneously decreasing the average tariff rate to
internationally acceptable levels.
As Lithuanian economy has opened up to international trade, it would be easier for Sheki
Ipek to start its business there and to bring home-made carpets from Azerbaijan.
According to ICC Open Markets Index (2011), Lithuania’s trade openness is relatively
high. In 2011, intra-EU trade amounts to around 80% of GDP which is above the EU average
(68%).
Diplomatic relations between Azerbaijan and Lithuania were established on the 27th
November, 1995. Between the European Union (EU) and the Republic of Azerbaijan, Partnership
and Cooperation Agreement was signed in 1996, which entered into force in 1999.
Such agreements and contracts have an impact on Lithuania and Azerbaijan economic
cooperation:
 The contract between the Government of the Republic of Lithuania and the Government of
the Republic of Azerbaijan on the avoidance of income and dual capital taxation and
prevention of tax evasion (effective 2004-11-13).
 The Government of the Republic of Lithuania and the Government of the Republic of
Azerbaijan Agreement on cooperation in the economic, industrial and energy (effective
2008-12-15).
 The Government of the Republic of Lithuania on the 17 of June, 2009 accepted a resolution
No. 659 and decided to make an intergovernmental bilateral cooperation between Lithuania
and Azerbaijan, which is chaired by the Minister of Foreign Affairs. Lithuania and
Azerbaijan signed the investment protection agreement on the 6th of June, 2006 but it is not
ratified yet.
According to the Lithuanian foreign trade turnover in 2008, Azerbaijan has 59 place in
terms of exports – 52, according to the import – 55 place. In January-July, 2009, Azerbaijan was
analogous in the 50, 41 and 60 place (Ministry of Foreign Affairs of the Republic of Lithuania,
2009).
According to the statistics of Azerbaijan‘s State Customs Committee (AzerNews, 2015),
foreign trade turnover between Azerbaijan and Lithuania increased by 9.4 percent in JanuarySeptember 2013 compared to the same period last year and reached $17.58 million. During 2013,
40
Azerbaijan‘s imports increased by 12.2 percent and reached $15.7 million, while exports decreased
by 9.5 percent and reached $1.9 million.
According to 2015 Index of Economic Freedom (2015), Lithuania’s economic freedom
score is 74.7, making its economy the 15th freest in the 2015 Index. Its overall score is up by 1.7
points from last year, reflecting improvements in half of the 10 economic freedoms including
freedom from corruption, the management of public spending, labor freedom, and monetary
freedom. Lithuania is ranked 6th out of 43 countries in the Europe region, and its overall score is
well above the world and regional averages.
Recording its fifth straight year of advancing economic freedom, Lithuania achieved its
highest score ever in the 2015 Index. Since 2011, its economic freedom has advanced by 3.4 points,
with gains in seven of the 10 economic freedoms driven by prudent fiscal and monetary policies and
declining levels of perceived corruption. Remarkably, Lithuania has experienced no score declines
in any factor over this period.
Lithuania’s transition to a dynamic economy open to global commerce is facilitated by low
tariff barriers and open financial markets. Investors are attracted by an efficient regulatory
environment with low barriers to entry. The economy scores above average on rule of law, but
institutional issues in the judiciary and property rights regime persist.
So to wrap up, it can be said, that Lithuania is an attractive country for foreign investment
and Sheki Ipek can be positive about opening its shop in Lithuania. For further analysis and better
view of the possibilities for Azerbaijani company to enter a Lithuanian market, competitive
analysis, macro and micro analysis and SWOT analysis are done in the next chapter.
2.5. Macro environment analysis of Sheki Ipek
Analyzing the company’s macro environment, the attention should be paid to the following
key factors:
Economical environment. First of all, is the GDP factor has to be analyzed (Fig. 22).
Lithuanian Gross Domestic Product annually rises – soon that should feel ordinary citizens too.
41
Fig 22. GDP per capita, at current prices
Source: the figure has been created by the author, based on the data from Lithuanian Statistics (2015)
As it can be seen from Fig. 22, the GDP factor in the 4 th quarter dropped down a little and
now is even to 3163.192 EUR. And it is bigger than last year, so GDP is growing in comparison
with 2013.
According to Bank of Lithuania (2013), annual inflation was decreasing significantly in the
beginning of 2013: compared to December 2012 (2.9%), its rate in March almost halved (1.6%).
Inflation was reduced by more favourable changes in prices in all main consumer basket groups, but
among them, food, fuel and administered prices had a greater impact, while the core inflation had a
lesser impact.
Trends of indicators associated with consumer prices remain favourable for low inflation.
The annual rise in producer prices on the domestic market is still declining (in December 2012 it
amounted to 2.9%, in March 2013 – 1.1%). Producer prices for non-durable and durable consumer
goods, i.e. producer price components, most associated with consumer prices, had a negligent effect
on the growth of producer prices.
The economic situation is pretty much stable. Lithuania’s currency euro is strong. The
income should increase too. Having more income, residents will be able to spend more too, because
with lower income home-made carpets are not the products of necessity.
42
Fig 23. CPI-based consumer price changes
Source: the figure has been created by the author, based on the data from Lithuanian Statistics (2015)
Fig. 23 shows CPI-based consumer price changes from 2007 to 2014. It can be observed
that CPI is being constantly dropping down from being high 8.1 in 2007 to -0.3 in 2014.
Unemployment rate is changing unevenly (Fig. 23). It reached the lowest peak in the 3rd
quarter of 2014 and in the 4th quarter it started to rise slowly. This is a good thing because more
employed people, the more money they could make.
Fig 24. Unemployment rate
Source: the figure has been created by the author, based on the data from Lithuanian Statistics (2015)
The average earnings (Fig. 25) didn’t changed drastically in the period of 2013-2014. Now
it is even to 714.5 EUR gross monthly earnings.
43
Fig 25. Average earnings
Source: the figure has been created by the author, based on the data from Lithuanian Statistics (2015)
Textile and clothing sector is particularly important for the whole economy of Lithuania.
Although the past few years, the volume of this sector in the Lithuanian economy has been steadily
declining, but this market is still remaining one of the basic. At present, the textile and clothing
industry is experiencing quite a serious transformation in the world. Although classic products are
dominating in this sector that are intended for the general mass of users, however, is the need of the
production which requires the modern scientific and technological knowledge is constantly
growing, as well as showing up non-productive activities’ trend signs.
Lithuanian textile industry is one of the largest exporters of the country. It is not only
facing the benefits of the new markets, but it is often forced to cope with a variety of obstacles.
Manufacturers consider how to move from relatively cheap sale of labor to the conception of
innovative product development value, the implementation of which requirs not only microeconomic level initiatives developed.
Lithuanian textile manufacturers noticed that Lithuanians are buying products and prefer a
lower price at the same time, of course, and a reduction in quality. So, it is natural that the majority
of Lithuanian textiles are exported to foreign markets. On the other hand, it is not true to blame a
decrease in purchases of Lithuanians, because the government claims that the textile industry is
highly feasible, without the future. For this reason, and a lack of young professionals, because they
prefer laser technology or biochemical sciences, rather than textile industry. It is hard to believe that
Lithuania would create so many job places for them, but textile industry could do that.
For this reason, Sheki Ipek can try to enter Lithuanian market because Lithuanians don’t
like txtile sector and Sheki Ipek could find a niche market in Lithuania by selling hand-made
carpets.
44
Another important factor is that Lithuania manufactured products’ price is slightly higher
than the products that are imported from Asian countries so the company can use the competitive
price marketing strategy.
According to the Lithuanian Statistics, even before the economic crisis Lithuanian textile
industry employed 60 000 people. Today that number has decreased slightly, but it started to rise
again. Textile and garment industry in Lithuania create the most jobs in comparison with all other
light industries. For this reason, the textile sector deserves the attention, respect and to it must be
supported. The industry is always open to innovation, so it’s another proof of its vitality. In recent
years, the textile industry, as well as an investment into it is constantly growing, so it is a favorable
factor for the company Sheki Ipek to enter the market. Currently most of the Lithuanian textile
industry products are exported, this proves that despite all the negative predictions of this industry,
competitiveness is very high.
According to information of Omniteks representatives, economical factors contributed to
the better clothing and textile industry results. Still constrained, the financial markets in Europe
influence the fact that the order get smaller, as well as the rising need of production terms, the
average delivery time is 4-8 weeks. Declining competitiveness of Asian manufacturers – China
continues employees’ wage increase, in addition, marine transportation services are getting
significantly more expensive (Malinauskiene, 2014).
All of these factors increase the competitiveness of European manufacturers, and the
companies, which are able to quickly and flexibly meet orders, win.
Political-legal environment. This environment also makes an impact to Sheki Ipek export
activities. The company has to monitor the changing laws of Lithuania and take measures to adapt
them. Sheki Impek is exposed on the law changing, also custom laws and laws and procedures for
opening a company in Lithuania.
Starting a business in Lithuania takes on average 22 days. In Europe this time is only 14
days. But on the other hand, Lithuanian businesses average time to enforce contracts is almost twice
shorter than the EU average and thus it ranks first in Europe (respectively 275 days and 510 days).
Resolving Insolvency takes 1.5 years (Single Market Governance, 2012). So as it can be seen, the
procedure of opening business in Lithuania for Sheki Ipek is quite shorter and simpler than in other
countries.
Lithuania faces the following primary challenges to its long-term competitiveness:
unfavorable demographic developments; labor-market deficiencies and high emigration rates; rising
levels of poverty and social exclusion; a lack of competition and interconnection in the country’s
infrastructure; low energy efficiency; a low level of R&D spending; and a poor performance in
45
terms of innovation. Therefore, the country should continue implementing policy reforms, in
particular regarding the labor market, social policies, energy efficiency and the energy sector.
The European Union’s planned 2014-2020 financial assistance for Lithuania, which is
expected to total about €13 billion over the seven-year period, offers an opportunity to boost
Lithuania’s competitiveness. However, these funds should be rationally allocated, with particular
focus on growth-enhancing sectors, while avoiding mismanagement and the addition of new
administrative burdens (Nakrosis, Vilpisauskas, Jahn, 2014). So as it can be seen the political-legal
situation in Lithuania will hopefully get better with the investment of EU.
Socio-cultural
environment.
Social
environment
primarily
characterized
by
demographics. Their study allows to identify potential customers, their composition by gender, age,
household composition, education, place of residence, occupation, ethnicity and so on.
Demographic changes are taking place in the Lithuanian social environment. The most
important of them are:
 depopulation;
 decline in fertility rates and an aging population;
 changes in family structure (marriage age increases, decline in the number of children,
divorce, growing number of families in which the wife is working);
 the growth of non-family households (sole households – divorced spouses, widows and
widowers).
These factors are very important to the company and especially their dynamics. For
example, because of changes in the population of a country the market can expand or narrow.
Increase rate of birth means that the growing children will need more and more things. Rising
average life expectancy increases specific goods needed by elders.
Many goods are not used individually, but together. Therefore, an important demographic
indicator is the family (household), its size, composition, age and other respects, the number of
employees, and other income. Sheki Ipek should take a notice to satisfy women’s need firstly
because women usually picks the interior details, so do the carpets.
The culture also influences the buying decisions of customers. Consumers who purchase
the product, think about its function, design and content. The seller should pay attention to all three
aspects of the user resulting from cultural attitudes. For example, such product as home-made carpet
will have specific buying decisions – for some people it is just a decor, others value its origin,
patterns and etc. Different cultures, different customers influencing the choice of products.
Technological environment. Technological environment includes: rapid technological
changes, the huge investments in research and deployment, updates, control building. Factors
affecting the demand of home-made carpets and their impact assessment:
46
Complex production technology – the cost of ptoduction of home-made carpets is not ow,
because the technological processes used are complex. Production automation and mass production
technology would help to reduce production costs and increase the amount of production and will
lead to investment. Minimizing the cost of production of home-made carpets would increase the
demand.
Analyzing the company’s micro-environment, the following key factors can be
highlighted:
Target market segmentation. Sheki Ipek will choose a target market according to
demographic characteristics of the customers. As the results of the research showed, more
customers (53,1%) are women and 36% of them are of the age of 36-45 and 34% fall into 26-35
years age group. Also they have higher education (71%) and willing to spend 151-200 EUR (it can
be considered medium income). So the target segment of Sheki Ipek production will be higer
educated women, 26-45 years old, with medium hosehold income.
Products. Sheki Ipek will sells such products in Lithuania – home-made carpets. The
carpets assortment will include: carpets for living room, small bathroom carpets and carpets for
dining room. All the carpets will be hand-made, of the best quality. The composition of carpets will
be of two kinds – rough fiber based and short-fiber based. Also the carpets will come in such
dimensions: 70x140 cm, 100x200 cm, 120x170 cm, 140x200 cm, 160x230 cm. So the customer
will have a good choice of the sizes. The carpets will be of different patterns and colours. The
company will present its catalog with the examples of carpets. Also for the convenience of the
clients, the custom orders will be taken too.
2.6. Competitive and SWOT analysis of Sheki Ipek
Competitors‘ assessment based on M. Porter’s five forces model. Analyzing the
situation in the carpet market, the competitive forces analysis is done by using M. Porter’s five
forces model.
It is appropriate to analyze separately each of these competitive forces:
The bargaining power of customers. By the growth of the carpet market, consumers are
the most important factors that influence company’s success or failure.
Sophisticated users differ in age, income, education, habits and so on. So their reaction to a
product is different too: carpets are not daily necessity goods, as well as they do not require the
involvement of consumers buying them. So, for carpets consumer quality of the goods, durability,
innovation and other features are the most important factors.
Therefore, users looking for high-quality carpet products, have no bargaining power, as
they seek to find themselves the most acceptable option. It should be noted that some companies in
47
order to retain existing customers and attract new ones, seek competitive advantage through flexible
discount systems (e.g., ‚Kilimai Art de Vivre‘ offers good discounts for some of the production;
‚Lentvario kilimai‘ sometimes organizes discount for their carpets too) or organizing some extra
services for the customers (e.g., the company ,Made in Lithuania‘ has a service for renewing the
carpet for the customer).
The bargaining power of suppliers. The analysis of home-made carpets companies’
competitive position, the most important factor becomes the bargaining power of suppliers. The
bargaining power of suppliers and the image of the company depends from the organization’s
current and future suppliers. At a time when the supply is decreasing, and consumers are willing to
buy their proposed products, companies are forced to pay higher prices to suppliers or to find new
ones, offering similar products at lower prices, but, again, remains a big risk, because users can
hardly accept innovation.
Analyzed companies has a lot of suppliers, so by deterioration in the quality of products
offered or the price makes to look for new opportunities (e.g., ‘Lentvario kilimai‘ has a supplier that
brings them New Zealand sheep‘s wool). All the companies have to order the raw material, because
Lithuanian farmers grow sheep but their wool is dirty and it is not good to be pocessed. Usually the
producers order wool from New Zealand ans Australia.
Evaluation of existing competitors. According to R. Rutkauskaite (2013), some of the
companies, that were making hand-made carpets went out of business, so the market niche is not
filled at the present. This situation was used by the company ‚Fashion Colours LT‘ but still they
don‘t fulfill all the orders. The demand is bigger than the supply so this factor is favorable for Sheki
Ipek too.
There is almost no competition for carpet manufacturers in Lithuania, and consumer
willingness to buy durable and valuable product, created for you, that could be left for children and
grandchildren, still survived.
Lithuania companies make hand-woven carpets from natural wool and wool, cotton or
linen and Sheki Ipek would offer products made from silk. So the company’s products can be very
competitive with the products of Lithuanian companies.
The competition between carpet producing companies is very low in Lithuania. The
company‘s Sheki Ipek direct competitors are only three companies that produce home-made
carpets: ‚Kilimai Art de Vivre‘, ‚Lentvario kilimai‘ and ‚Made in Lithuania‘. Those companies
produce home-made carpets.
The competitive analysis of these companies by sales volume is shown in Table 3.
48
Table 3
Sales volume of the competititor companies
Companies
Kilimai Art de Vivre
Lentvario kilimai
Made in Lithuania
Sheki Ipek
Sales volume, EUR
100 001-200 000
300 001-500 000
don‘t show its sales volume
700 001-800 000
Note: the table has been created by the author, based on the data from Rekvizitai.VZ (2015)
As it can be seen from Table 3, Sheki Ipek has the biggest sales volume. These are the
main competitors, occupying a similar position in the Lithuanian textile market. The companies
competitors were chosen based on the similarity of product strategy. All of these companies
produce home-made carpets. The biggest difference between company Sheki Ipek and other
companies, is that its sales volume is bigger than other companies‘, and it can offer a great variety
of home-made carpets.
‘Lentvario kilimai’. This company is a well known Lithuanian company that has a big
experience in producing home-made carpets. The company looks at the carpet not just as a
beautiful, stylish accessory, but also as a practical and functional element of interior. The company
works with only reliable suppliers.
‚Art de Vivre‘. The company was founded by hand-made carpet production professionals
in Europe in 1995. ‚Kilimai Art de Vivre‘ is the branch of the ‚Art de Vivre‘. The company creates
contemporary and trendy carpets by using the newest technologies. The active development secret
of ‘Kilimai Art de Vivre’– is the highest quality production at affordable prices. All this, as well as
the love of carpets, their philosophy, a huge work in this particular field of expertise and corporate
approach to customer service, ensures the company’s ‘Kilimai Art de Vivre’ successful work.
‚Made in Lithuania‘. It is a young company, created just before the economic crisis but it
is stilll successfully working and expanding. The company offers quite a wide range of textiles:
rugs, lamps, carpets and other products for the interior. The company’s products are mainly
exported to Western countries.
The threat of new competitors. Home-made carpet trading market in Kaunas city is not
filled yet so new competitors may try to enter it by getting interested in the growing consumer
demand. Newcomers foothold is quite difficult (e.g., In 2012, ‘Denava’ tried to establish itself in the
market, but it did not stand a strong competitive advantage of companies-leaders and failed). It is
now appropriate to draw attention to just newly popuped linen carpet producing and trading
company ‘Pluosto linija’, which has a good marketing strategy, and so it can be assumed that the
company will be able to establish themselves in a particular area of Panevezys market.
49
The threat of substitutes. Home-made carpet trading companies do not have threat from
direct substitutes. Customers who don’t have a lot of money looks for carpet substitutes in the
shopping centers, but they won’t get the same quality and natural fiber there. So these substitutes
usually come from China and other Eastern countries that makes cheaper but lower quality carpets.
Internal analysis of Sheki Ipek. Internal analysis of the factors is used by the
organization to find out strengths and weaknesses of it. This process starts with the analysis of
strategic internal factors. Sheki Ipek collects the majority of information about the textile industry
by actively participating in international exhibitions. This helps the company to get into relations
with the international companies.
The company Sheki Ipek has a good reputation in Azerbaijan. It‘s a biggest company that
produce home-made carpets. As it‘s been in the market for a long time and has deep traditions in
the production of carpets, that helps this company to stand out from the competitors.
Another strategic internal factor is company’s staff training. Company spend time and
makes investment in the staff‘s teaching, organizes various educational courses. Most of the
company’s specialists have higher education. The salaries of employees depend on their education
so every employees tries to get the right qualifications.
The organizational structure of the company Sheki Ipek is organized as a subordination of
the lower links to the higher. This makes the implementation and assessment of the work much
easier. Each employee is responsible for its department manager and each manager is accountable
to the director of the company. The director is the leader of the company. He organizes the
production, planning proceses and makes sure the control activities are being implemented.
The main weakness of the company is that there is a lack of employees for the foreign
market. Also the advertising and promotion of home-made carpets can be done not only in the fairs
and exhibitions but also other promotional methods should be applied. The lack of staff for the
international markets minimizing the competitive chances for the company in the foreign markets.
The service level also could be higher because that would help the company to stand out from its
competitors, especially trying to enter a foreign market.
To test the strategic business and its environmental situation the SWOT analysis is used
(Table 4). SWOT analysis makes it particularly powerful and with small efforts the company can
see a great opportunity, which is well positioned to take advantage of. Seeing the weaknesses of the
business, the company can manage and eliminate all threats that could be damagable, if unobserved.
There are many options that can affect the success of the marketing strategy inside the company.
50
Table 4
Sheki Ipek SWOT analysis











Opportunities
Attracting new customers





Finding new markets




Absorption of new
products and services
Threats
New and strong




competitors

The slow growth of
market
Consumer pressure
Strenghts
Company’s reputation
Quality of products
Reputation of quality
Customer satisfaction level
Guarantees
Planning system
Professional competence of managers
Competence of the leader
Staff competence
Working capacity and potential of staff
Geographical location
(Use of company’s strenghts for
realization of opportunities)
Export market development
Export market competition
Exploiting the company’s reputation
and goodwill (using customers’
recommendations)
Maximum satisfaction of needs
Using the competence of employees




Weaknesses
Advertising strategy
Service level
Working capital
Competitive status
(Neutralization of weaknesses
by using opportunities)
 Minimizing the inefficienct
products
 Increase the service level
To use the proffesional level of 
managers
To use the competence of managers 
and the leader
To use the geographic position of the
company
To use the satisfaction of customers
needs
The value of promotion
minimizes
Increase the use of potential
opportunities
Planning system
The potencial and working capacity of
the staff
(Using strenghts to avoid threats)
Strategies (strengthening of the
company’s weaknesses)
The use of competitive status
Orientation to the existing level of  Improvement of promotional
strategy
customers needs improvement

Strengthen the operational
Focus on the company’s reputation for
management control
quality
 To increase the efficiency of
products


Use of existing patents and licenses

Harnessing the potential competitors’ 
products “on the company’s server”
Better use of the service level
Properly adjust the use of
working capital

To use the professional competence of 
the managers
Improving
the
use
company‘s opportunities
of
Source: the table has been created by the author
51
SWOT analysis helps to identify factors associated with the strategy that can have a major
effect to a company. All factors in this analysis are not of equal value. In this way, the experts
should identify the critical factors affecting the company. From the list, they must select the most
important threats and opportunities assessment of each, with the help of two parameters, as this may
affect the company’s follow-up actions. From the foregoing, it is important to focus on two aspects:
export market development and export market competition. These two aspects are mentioned
because they affect the company’s marketing strategy and can indirectly influence events. Export
market development relates to the overall level of education and life in the export market. As the
level of development of the export market is growing, the company will have to adapt its marketing
strategy to this market. In addition, more educated consumers need more specialized marketing
strategies that better adapt to their use. Marketing strategy must be tailored to the export market
environment. Export market competition takes place when companies seek to overcome one another
in order to obtain the relevant part of market. Competition may change from many aspects, such as
the amount of competition, price and service performance. As the level of competition within the
export market rises, the company has to adapt its strategy to stand out in its proposal. When
competition increases, the company has to adapt all aspects of marketing strategy.
So it can be concluded that in order to achieve the strategic objectives set, in Lithuanian
market, the company’s Sheki Ipek choice of foreign marketing model is proposed to interconnection
of the company’s activities and marketing strategies. From SWOT analysis it can be seen that one
of the company’s weaknesses is a lack of working capital. The company could open a shop in
Lithuania with the same minimum cost. And not to be afraid to take this risk, even in the global
economic recession. The company without enough capital to enter new markets, it is possible to use
a semi-franchise model, then the branch and the company will have stocks in another country’s
subsidiary. The subsidiary is useful because it has access to the know-how, i.e. experience and
information, also, the company’s reputation, the different technical options, etc. Marketing strategy
is developed only in the Lithuanian market, but some segments may be used in other markets too.
Next part of this master thesis concerned about providing management solutions to Sheki
Ipek company which would be most appropriate marketing strategies to follow in order to enter the
Lithuanian market with Azerbaijani carpets. Since the company’s principal activity would be the
trade of Azerbaijani carpets, the largest task of the company will be to penetrate into the retail handmade carpet market, to market its products and become the major home-made carpet representative
in Lithuania.
52
3. THE DEVELOPMENT OF INTERNATIONAL MARKETING
STRATEGIES FOR COMPANY SHEKI IPEK IN LITHUANIAN
MARKET
3.1. Marketing objectives
The third part of master thesis provides specific solutions related to Azerbaijani homemade carpets entering the Lithuanian market. First of all, the work discusses the objectives of the
proposed marketing strategy, then a target market segment is selected, product positioning is done
and the solutions for the four ‘P‘s‘ are made.
The aim of marketing strategy is the creation of an exclusive position of the company. The
key to growth – even survival – is to create a position which is less vulnerable to direct (existing or
future) competitors and less vulnerable to the loss of buyers or suppliers. It can be created in many
ways – the most favorable is by uniting the relationships with customers, product differentiation,
integration, creating technological leadership.
In order to offer the company the proper marketing strategy it is necessary to follow a
certain marketing strategy model. The author of the thesis created such a model for a company
Sheki Ipek (Fig. 26).
Mission
Goals
External
opportunities and
threats
Perspective research
Internal strengths
and weaknesses
Marketing objectives
Marketing strategy



According to target market
Positioning
According to the marketing complex elements
Fig 26. Marketing strategy model
Source: the figure has been created by the author
53
As it can be seen from Fig. 26, the initiative step for planning the marketing strategy is the
company‘s mission. As it has already been mentioned in the second part of the master thesis, the
company‘s Sheki Ipek mission is to be the leader in the home-made carpet production sector, to
satisfy all the needs of consumers and to offer the best quality products.
The second and the third step of the marketing strategy model was also analyzed in the
second part of the master thesis.
It is therefore important to analyze the fourth step in the strategic planning of marketing –
marketing objectives, which show what the company would like to achieve by the help of marketing
means. These objectives could be:

To become the most reliable and the best home-made carpets representatives in Lithuania.

To become the most informative home-made carpets dealer to the consumer.

To inform consumers about the Azerbaijani culture and traditions of home-made carpets
production.

To promote and expand the home-made carpets market in Lithuania and to familiarize the
user with a high quality home-made carpets of Azerbaijan.

To pay attention to the Azerbaijani home-made carpets brand positioning.
Since the company is currently only in the process of establishing its shop, it needs to
develop a market strategy for Lithuania, i. e. set of marketing actions, the purpose of which – to
achieve the long-term marketing objectives.
So when planning the company’s activities, it is appropriate to follow a quite strict and
widely recognized structure which is related to the most important aspects of marketing:
1. Selection of target market.
2. The choice of positioning method.
3. The choice of individual functional elements of the marketing mix strategies.
3.2. The selection of target segments
As the company hasn’t opened its shop in Kaunas, there are no existing segments, so it is
necessary to determine Sheki Ipek’s target segments. As already mentioned in the situation analysis,
the largest part of users that would buy home-made carpets in Lithuania are older than 26 years,
with higher education, middle and high-income people, as well as consumers who prefer homemade carpets by coulours and patterns and quality.
The author of the thesis thinks that Sheki Ipek’s customers also should be segmented
according to consumer salary, i. e. the target segment of the company should be customers with the
average and higher than average income per month. As a shop will particularly have a large
selection of high quality Azerbaijani carpets, these carpets‘ rates compared to other venues (the
54
biggest, smaller shopping centers) will be lower, but relatively high for the user with low income
per month. The largest assortment of home-made carpets will consist of products ranging from 300600 EUR. And the current situation of rise in the cost of living, would make difficulties for the
customer with low incomes to afford to buy a home-made carpet.
Already couple decade ago, consumer shopping habits have become less and less
predictable. Many people have become rich without education, others’ sophisticated tastes have
become price sensitive. Therefore, consumer tastes and shopping habits are not necessarily
completely dependent on consumer income. A great example would be the cunstruction workers in
Lithuania, usually without higher education, which significantly get higher than the average wage.
However, high-quality carpets makes a really small percentage of their shopping cart. So, as an
additional to the main target segment, the desirable segment profile could be isolated, i. e.,
additional users are segmented by demographic criteria such as education and age. As well as the
empirical research showed that respondents with higher education are willing to pay more for a
home-made carpet than those without education. As already mentioned, the main price categories
will be approximately 300-600 EUR in the shop. Consequently, the company’s target segment
should be users with the higher education. Also, users with higher education usually have
sophisticated taste, and the company gives most of its attention to the high-quality product. It
should also be noted that often customers with higher education and the average and higher wage
per month are older than 26 years. Therefore, this age group also should be attributed to the
selection of company’s target segment.
Of course it would also be possible to segment users by gender – men, women. However, it
is difficult to define what type, color, or pattern one sex or the other prefers more. As the research
showed, more customers (53,1%) are women, so they can make a target segment too.
So Sheki Ipek the target users should be women, higher educated, mostly older than 26
years, with the average and higher than the average income per month.
Thus, in this case, the company’s marketing mix should be directed to the above mentioned
segment. When selecting one segment of the market and managing it, the company will use a
concentrated marketing strategy. Concentrated marketing is a strategy whereby a product is
developed and marketed for a very well defined and specific segment of the consumer population.
Concentrated marketing is particularly effective for small companies with limited resources because
it enables the company to achieve a strong market position in the specific market segment it serves
without mass production, mass distribution, or mass advertising.
55
3.3. Positioning of Sheki Ipek home-made carpets
There are different ways of positioning: positioning by user, positioning by product class,
positioning versus competition, positioning by use/application, and positioning by quality or value.
Since the company Sheki Ipek didn’t open its shop in Lithuania, it is still considered under
development, because it did not deliver its products to the Lithuanian market. Therefore, the author
of the master thesis thinks that the most appropriate way of positioning is to position the place and
production itself. Accordingly, the trade place should be positioned acording to the user, while the
production should be positioned according to consumption.
The empirical results of the research showed that the most important features of the carpet
are colour and texture. This is the most important feature for respondent when choosing the carpet.
Also it is important if the customers know such a company. As the results showed that almost all
respondents didn’t know such a company. So the company should position itself and its brand
better. Also some respondents buy carpets in the shopping centres, where they don’t get good
quality.
Assortment of Azerbaijani home-made carpet currently in Lithuanian market is really
small. Accordingly, the Azerbaijani home-made carpet brand is unknown. According to the survey
results, only a small proportion of consumers (18%) would buy the Azerbaijani carpets. Most
consumers cannot recognize and they don’t know the Azerbaijani carpets. Therefore, it can be said
that Azerbaijani carpets’ trademarks positioning in the market is really weak and almost invisible.
This only proves that Sheki Ipek entering the market should pay really close attention to its creation
of the image of its production and place of sale in the of the customer. In order to stand out from its
competitors, the company should pay attention to its brand positioning.
As the company plans to sell different kinds of carpets, it should pick and pay attention to
some special kind of carpets that could be a ‘face’ of the shop and represent the good quality of it.
The author of the thesis thinks that the best way to do this would be positioning of the brand for
carpets’ quality, price, and the country itself. In order to distinguish the product by any of its
feature, often referred to quality and price, which in itself is very important. For example, the
quality of positioning can be every time when the customer looks for carpet, talk about its
manufacture methods. That would represent Azerbaijani country and culture.
A great importance would be an Azerbaijani employees from Sheki Ipek that could work in
this shop. As the shop will be opened in the Kaunas Old town, it would be appropriate to position it
by the user. As a shop will be trading high-quality products, as well as exclusive attention would be
given to Azerbaijan, the country’s culture, the message for the user could sound like: ‘For the ones
that would appreciate the exquisite carpets and want to feel the spirit of Azerbaijan.’
56
3.4. Functional marketing strategy
3.4.1. Product
For the company to make successful sales and permanently increase of them, it is needed
to figure out the system of marketing opportunities and weaknesses and the most efficient use of
available marketing resources. An important factor in planning and managing marketing strategy –
a choice of functional elements of marketing mix strategy.
According to the product purpose, carpets can be attributed to the personal consumption of
products. Accordingly to the product consumption duration – it is a durable product, since the
carpet’s production will take a long time. According to the demand, carpets can be attributed to
nonperiodic demand of products, usually because carpets are purchased less than every year.
Sheki Ipek’s product assortment is continually expanding, adapting to new consumer
needs, following the textile products consumption trends in order to take advantage over the
competititors. A company should focus more on expanding the assortment and develop it, and
removing products that are of little use. It should also examine the potential for production of new
products. For the product objective to be implemented, the following strategy can be used:
 To have a full assortment of products for each target segment.
 To analyze and prove the rules for portfolio construction and twice a year do an assortment
of products inventory, ‘clean up’ the company’s products assortment from low-use products.
 To set the rules and start to model the product life cycle from the following year, use this
information to form future product assortment.
 To strengthen trade management process and to ensure that the new range of assortment
would be presented to the Board of the company for approval not later than 1 month before
launching into production.
Company Sheki Ipek in order to get success in foreign economic activity, as well as many
other companies engaged in the production of carpets, needs as accurately as possible to evaluate if
the product fits for export. In order to assess the suitability of products for foreign markets, the
fitness of product criterion, market traders and consumers assessment, and product adaptation
should be evaluated.
Evaluation of product criterion. Sheki Ipek is a manufacturing company producing
carpets. The product are with reinforcements – product come along with its service, product
delivery and personnel training. Carpets can be treated as a long-term use. All the assortment (Table
5) of the company is now being exported to Russia and other neighbouring countries. The same
assortment is going to be exported to Lithuania too.
57
Table 5
Assortment of products
Carpets for living room
Carpets for bathroom
rough fiber based, 70x140 cm
rough fiber based, 100x200 cm
rough fiber based, 120x170 cm
rough fiber based, 140x200 cm
rough fiber based, 160x230 cm
Carpets for dining room
rough fiber based, 100x200 cm
rough fiber based, 120x170 cm
rough fiber based, 140x200 cm
rough fiber based, 160x230 cm
short-fiber based, 70x140 cm
short-fiber based, 100x200 cm
short-fiber based, 120x170 cm
short-fiber based, 140x200 cm
short-fiber based, 160x230 cm
short-fiber based, 100x200 cm
short-fiber based, 120x170 cm
short-fiber based, 140x200 cm
short-fiber based, 160x230 cm
Source: the table has been created by the author
Sheki Ipek export production in procents is given in Fig. 27.
23%
Carpets for living
room
Carpets for bathroom
58%
19%
Carpets for dining
room
Fig 27. Sheki Ipek export production in procents
Source: the figure has been created by the author, besed on the company‘s documents
As it can be seen from Fig. 28, carpets for living room takes the majority (58%) of the
whole production sold by Sheki Ipek. Carpets for dining room (23%) and carpets for bathroom
(19%) are sold at pretty much the same capacity.
Inherent of the product is the packaging. The company’s packaging performs security
functions. Packaging helps to transport and store products safely – a requirement of the channel
participants (brokers) too. Packing consists of a wrap-up bag, label and instructions for taking care
after. The product also needs the taking care services, which the company can offer after sales.
Figure 28 presents the after sales care scheme.
58
Care after sales
Cleaning company
Individual cleaning
Sheki Ipek’s
persons
employees
Fig 28. Sheki Ipek after sales care scheme
Source: the figure has been created by the author, based on the company‘s documents
Cleaning persons, that work in the company Sheki Ipek are being taught once a year. The
teaching is being held in the company itself. Also a cleaning company can do that job.
Adaptation of the product in the market. The company Sheki Ipek uses unmodified
product distribution strategy. An analysis of the product and its compliance with the relevant
market, traders and consumers’ needs, showed the most problematic areas of expanding in
Lithuania – price. So the next section will review the company’s price strategy in international
marketing.
3.4.2. Price
Out of all marketing programs, only price element generates income, all other elements are
cost. It is a key competitive tool. And although the company always wants to set the price as high as
possible, the competition pushes it to reduce the price.
Setting export price is the most important and complicated task, which is solved by all
manufacturing companies. Sheki Ipek is trying to set a price that will guarantee the full company
cost coverage: production, transportation, marketing, stimulation, as well as costs associated with
certain risks. The final price of the product is guaranteed by the rate of return too.
Pricing objectives in the foreign market. In determining the prices, Sheki Ipek’s
objectives are:
1. Maximize profits;
2. Increase sales and market share in Lithuania and other Baltic States;
3. Stand out of the competitors.
According to the company’s Sheki Ipek activities in Lithuania, stages of formation of the
export price are presented in Figure 29.
59
Pricing stage in foreign market
Setting of demand
Product competitiveness setting
Cost influence on the price
Optimal pricing for the market
Fig 29. Sheki Ipek formation of export prices
Source: the figure has been created by the author
Demand setting. In the initial stage, in order to achieve a pricing objective it is necessary
to analyze the demand. After evaluation of distribution of the recent years sale, it is concluded that
higher demand is for cheaper carpets. The company’s product demand in Lithuania is partly
influenced by the reduction of population and consumer purchasing power. Another factor
influencing the demand of the carpets in the market – cultural environment of the customers,
because the buyer depends on the subjective assessments of psychological satisfaction which is
experienced by the consumer after using the product.
Setting product competitiveness. Sheki Ipek have some competitors in Lithuania –
‚Kilimai Art de Vivre‘, ‚Lentvario kilimai‘, Made in Lithuania‘. The most important weapon
against competitors that produce and sell similar products, is the price. Sheki Ipek’s product price in
some ways is less than the competitors‘ (Table 6).
Table 6
The comparison of Sheki Ipek‘s and ‚Made in Lithuania‘ carpet prices
Sheki Ipek
Dubingiai
Carpet size, cm
Price, EUR
Carpet size, cm
Price, EUR
70x140
202,90
60x130
859,00
160x230
145,90
180x180
648,00
140x200
260,90
150x180
183,00
Source: the table has been created by the author, based on the company‘s data
60
So as it can be seen from Table 6, the price of Sheki Ipek is staying competitive. Most of
the company’s production is less expensive than their competitors. Also, Sheki Ipek’s carpet
exclusivity is that they are made of natural silk.
Cost influence on the price. Cost determines lower price limit of Sheki Ipek’s carpets.
However, it is not low because the production requires a lot of hand work, expensive raw material.
In order to maintain a lower unit cost, large quantities of raw material should be ordered.
However, the final export price of carpets is formed by evaluating specific costs to
Lithuania. Cost of export prices is presented in Figure 30.
Conditioning
Special labels in Lithuanian
are being made
Commercial costs
Sample production, testing
Costs
Costs, associated with the
search of representativives
Organizing
of
exhibitions,
market
research
costs,
administrative
costs
of
document preparation
Transportation,
document preparation,
insurance costs
Fig 30. Sheki Ipek costs that influence export prices
Source: the figure has been created by the author
Optimal pricing for each market. The upper limit of carpet’s export price is determined by
demand and competitors in the target market in Lithuania. The selling price is of two levels: retail
and wholesale. Detailed price policy has been outlined in Figure 31.
The factory has established the wholesale and retail price limits in the Lithuanian market:
I. Wholesale price limit is valid:
1. For the selling price of the sale of products from the company’s factory to the Lithuanian
wholesalers that have entered into a cooperation agreement with the company.
2. For the selling price of the wholesaler that has a contract with the company, wholesalers and
retailers without contracts.
All the above sales contract don’t get reduce prices below the wholesale price limit.
II. Retail price limit is valid:
61
1. For the selling price of representative to end-user;
2. For the selling price of the wholesaler that has a contract with the company to the end
user.
Sheki Ipek factory
Wholesaler
Minimal wholesales price set by
the company
Wholesaler
Retailer
Minimal retailer price set by the
company
End-user
Fig 31. Sheki Ipek price policy in Lithuania
Source: the figure has been created by the author
So it can be seen that Sheki Ipek performs a complex pricing policy in Lithuania. The main
aim is to seek the highest possible degree of uniformity in the rate of price between the company’s
current official dealers. In order to accurately apply a fixed price policy, it is necessary to properly
select the distribution channel which will comply with the retailers and consumers needs.
3.4.3. Distribution
Sheki Ipek’s distribution – is the way in which the products reach the intended market of
consumers. The company distribution goes by direct and indirect channels. This determines the
number of representatives and their responsibility (Fig. 32).
62
Distribution of Sheki Ipek’s production
Subdivision of sales in Lithuania
Wholesalers
Retailers
The end-user in Lithuania
Fig 32. Sheki Ipek‘s distribution channels in Lithuania
Source: the figure has been created by the author
In the present case, Sheki Ipek, as the company of not particularly large production
volume, chooses wholesale companies that will perform marketing and distribution of products to
end-users.
Distribution to Lithuania will be done by direct and indirect channels, although direct is
rarely used, only at the customer’s request. Table 7 represents the functions to all distribution
channels.
Table 7
Functions of distribution channels
Company Sheki Ipek
Subdivision of sales in
Wholesalers
Retailers
Lithuania
Production
Sales
Sales
Sales
Promotion
Taking the orders
Taking the orders
Taking the orders
Help for brokers
Local marketing
Local marketing
Promotion in the shops
Broker‘s education
Financing
Financing
Financing
Organization of events
Promotion in the shops
for users
Organization of events
for users
Source: the table has been created by the author
63
Through these functions, the company carries out the control of its distribution channel
members. The company‘s production price depends from the quality of these functions.
Sheki Ipek performs expenditure, distribution channel control, channel quality and channel
activity duration analyzes.
Selecting the distribution channel structures in Lithuania, Sheki Ipek analyzed what costs
were required for methods of transportation (plane, truck, train containers).
Distribution channel control objects:
1. The transportation of products. The choice of the company-transporter is the important
moment of forming a distribution channel. Sheki Ipek has signed a long-term cooperation
agreement with the international transportation company. This helps to minimize the time
expenses for searching the right distributor and it is expected that long-term cooperation will
enable the application of special discounts.
2. Setting the sales conditions. The company Sheki Ipek for manufacturing activities needs
stable and relatively high working capital. The only condition for its enforcement – the
control of timely settlement of the sold production which is carried out by the company‘s
sales managers. Terms of the settlement in the Lithuanian market are given in Table 8.
Table 8
Terms of the settlement in the Lithuanian market
Settlement conditions
Remarks
100% advance payment; 50% Lithuania is the first Baltic country to which the export is being started.
prepayment and 50% after the At present, this market will have 4 traders pursuing the company’s
product realization
wholesale. It is a country of stable supply. Therefore, it is subject to
100% advance payment. In exceptional cases, when the order is large,
the amount of 50% is allowed to pay after realization, but it is defined in
a single annex of the general contract.
Source: the table has been created by the author
3. Quality of service. Sheki Ipek undertakes to comply strictly the time of order fulfillment.
This is emphasized in the cooperation agreements. For the order to be produced 30 working
days are needed. Delivery to Lithuania takes 5 working days. The difference between the
terms of transportation appears for the ordering of transport and distances.
By selecting representatives of the Lithuanian market, the company Sheki Ipek based on
their degree of reliability and how much they are known in the local market, because it affects the
quality of presentation of the distribution channel and duration. All representatives of the
Lithuanian market are known as textile sellers in Lithuania, so that would help Sheki Ipek to sell its
production better. Also it plans to open a shop in Kaunas which will be as the distribution center for
the wholesalers and retailers.
64
In summary, it can be said that the choice and the quality of the company’s Sheki Ipek
distribution channels depends on the objectives of the company, the competence of employees,
representatives. The timely made, at minimum cost presentation of high-quality products enables
the channel quality. It is also one of the objectives of the company.
3.4.4. Promotion
Another important element of the marketing mix – product support. Sheki Ipek decided to
engage in international trade, faces the difficulties in the organization of international advertising.
All foreign companies face with a similar challenge. But despite this, Sheki Ipek formed a
promotion strategy which is presented in Table 9.
Table 9
Promotion strategy elements of Sheki Ipek in the Lithuanian market
Elements
Objectives of promotion
Setting of geographic area of the
promotion campaign
Selection of promotion tools
Market reaction to promotion tools,
verification and evaluation
Remarks
The main objetives of product promotion: information about the
products and sales promotion
The promotion campaign is concentrated on those areas where
the company’s representatives are really working, except
exhibitions, which aim is to expand the company’s activity area,
then by the help of promotion tools the promotion is carried out
extensively.
Advertisement, popularization of products, personal sales, sales
promotion
Market reaction to the promotion tools is not estimated, trusting
in representatives and sales results.
Source: the table has been created by the author
The goal of the each company is to increase sales volume and introduce their products to
the market. Continuous promotion strategy will be done by the company and its representatives.
Used promotion tools by the company Sheki Ipek are: advertising, promotion, personal selling and
sales promotion.
Advertising in the company Sheki Ipek is understood as the customer paid indirect delivery
of products, promotion and information transfer. The advertising will be done by representatives but
the extent of advertising and expenses are being adopted by Sheki Ipek’s sales managers.
The main purpose of international advertising – informational. It includes brand
advertising and special sales promotion for products in specialized media. Ad text and layout is
formed by the local advertising company, because it can better evaluate the external environmental
factors (the country’s residents’ education, degree of nationalism, the approach to the exporter’s
country, the country’s level of economic development and direction), which affect the attractiveness
and the targeting of advertising. The frequency of advertising and publications in which it will be
hosted, is described in Table 10.
65
Table 10
Specialized publications and products’ advertising frequency in Lithuania
Publication
Magazine “Namas ir as”
Magazine “Interjeras.lt”
Informational brochure
Frequency
Promotional material is provided every month
Promotional material is provided every month
Promotional material is provided every three
month
Source: the table has been created by the author
The company as a manufacturer fails to comply with aggressive advertising for lack of
working capital.
Populiarization of products. The company Sheki Ipek doesn’t do direct promotion of
products on the Lithuanian market. This will be done by the respresentative companies.
Organization is less likely than representatives participates in international fairs and exhibitions.
The company sends the sales managers to the exhibition if requested to make a good product
delivery to the booth. Interested in the production new firms – potential customers, gets a catalog
and pricelist.
Private sales. Private sales is the communication of direct buyers and seller. The main
working part of company’s Sheki Ipek sales managers consists of personal sales to representatives.
It is quite expensive, time-consuming and highly qualified sales tool. However, this is the most
effective method of selling in the marketing carpets. The specificity of the product determines the
need of supplementary information and communication. According to the company’s sales
managers, the advantage of personal sales is an obvious customer reaction and immediate result.
The most results can be reached when the sale is made at no distance and cultural differences
between the seller and buyer. Sheki Ipek’s sales managers personally get acquainted with their
representatives at the time of the visit.
Sales promotion – it is such an activity of the company, when the buyer gets improved
conditions. Sheki Ipek applies such sales promotion actions:

discounts to wholesalers. Representatives of the country buy products at the same price. In
order to encourage excellent results showing representative, introducing new products or
improving them or wanting to realize modifications of the old production, company applies
additional discounts to wholesalers;

lowering the price for the frequent orders or large amounts. For ordering 3 or more
carpets, representatives receive an additional 7% discount;

lowering the price 3% for paying in advance;

compensation of part of advertising costs. Upon advertising expenditure estimates and
named its expediency, representative can receive up to 50% compensation.
66
These sales inducement methods are planned in advanced and presented to the
representative in the cooperation agreement.
Internet – very popular form of promotion. Company Sheki Ipek website www.shekiipek.com.az is not working at the moment, because it is being renewed and adopted for the use of
international representatives. It will be in three languages: Azerbaijani, Russian and English,
because the most business is being done with Russia.
Advertisement is necessary on purely in increase of the number of competitors who offer
low prices and quality and it is difficult to survive in a competitive market. So the correct way of
organizing all the forms of the promotion campaign will help to meet the company’s objectives.
3.5. The strategy formation model of Sheki Ipek
International marketing strategy is a process: it starts much earlier than is actually
perceived opportunities. The process is very difficult, depends on many factors and is analyzed in
the scientific researches.
Analyzed and systematized the theory of international marketing strategy models and
practical company’s Sheki Ipek experience, the identification of four main stages are being
indicated to form an international marketing strategy:
1. The analysis of engagement in international trade and the factors influencing it.
2. The choice of entrance to the foreign market form.
3. The choice of international marketing strategic decisions.
4. The optimization of the company’s objectives and needs (Fig. 33).
At the I phase, the elements are identified, that affect the company’s wish to enter
international trade. This phase is important because you need to properly assess the circumstances
and answer the questions: Why do we have to engage in international trade? What are the main
reasons to go into international marketing? Is the domestic market too small? Is the growth of the
internal market, competition influences are too small?
At this phase, the answers to these questions should be sufficiently general in nature. The
main reasons to engage in international trade for Sheki Ipek were the following:

domestic market is too small;

competition among the local manufacturing companies;

international interest in the production.
After checking and identifying the causes affecting engage in international trade, the
company enters into the second phase.
67
Company Sheki
Ipek
I phase
WHY?
Reason for going into
international marketing
The selection of international
marketing strtegy
Analysis of the
external market
Economic
II phase
HOW?
Cultural
Franchise
Political
Export
License
Legal
Subdivision
of sales
III phase
IN WHAT
METHODS?
Selection of the strategic decisions
Positioning strategy
4 P’s strategy
Competition strategy
Strategy of choosing the target market
Optimization of the company’s objectives and needs in the international market
IV phase
IMPLEMENTATION
Fig 33. The model of international marketing strategy for the company Sheki Ipek
Source: the figure has been created by the author
68
In the II stage, the entrance to foreign market forms are being analyzed in details. A critical
evaluation of the future business at an early stage is necessary in order to avoid major mistakes
before investing time and effort on strategy formulation of the economically unsound idea. At this
stage, familiarity with the market should be deeper, direct. The company answers the questions:
HOW profitable the trade should be carried out? Run exports only? Open the sales division in a
foreign country, or establish a joint venture to develop production abroad? Selecting a form is
closely related to the country’s micro and macro environment analysis and foreign macro
environment. In order to make appropriate decisions, in this phase the environment is being
analyzed (economic, legal, cultural etc.), which influence the decisions suitability.
The greatest influence to the company Sheki Ipek is given by cultural environment (level
of education of the country’s population), the country’s economic environment (population,
industry structure) and the political and legal environment (customs system, laws on product
exports, registration and etc.). Next step is the choice of form for entering a foreign market.
There are two entrance phases to the foreign market for Sheki Ipek: export to the biggest
cities of Lithuania and then – trying to enter Estonia and Latvia markets. And after that, the
company can establish its own subdivision of sales.
At the III stage it is very important to form a proper team, a good initial business
environment – formal and informal relationships with suppliers, business advisors, potential clients
and many other important businesses for the long term – creating international marketing strategy,
which will help to better understand what and how to implement. At this stage, the issues raised:
Which way to shape the international marketing strategies? What path to choose? Implement a
marketing strategy, or positioning strategy, or target market selection strategy, or competitive
strategy, or multiple strategies?
The selection of the proper strategy for Lithuanian market shows that international
marketing strategy for this market is not formatted in advance – it is generated automatically by
selecting the profile of production, doing the production, product pricing, distribution and
promotion. In order to effectively carry out activities in this phase it is appropriate to predict them
in advance.
The IV phase is implementation of the formed international marketing strategy. According
to the international marketing strategy theoretical models and conducted Lithuanian market
research, this international marketing strategy model recommended to the company, influenced by
various reasons to engage in international trade, and which wants to optimize its goals and needs of
the international market, to analyze the environment of the country selected, choose the entrance to
the market strategies of the country and take strategic decisions. This model also be suitable for the
companies with similar activities.
69
CONCLUSIONS AND RECOMMENDATIONS
The following conclusions can be made:
1. International marketing strategy formation – foreseeing of the production company’s target
market, according to the chosen positioning techniques, combining individual elements of
the international marketing program. These features of the marketing program element of an
international marketing strategy for manufacturing companies can be defined:
 Pricing from trade companies differ in that it focuses more on company’s internal
factors, that it can adjust itself – these are the general objectives, pricing organization
in the company, giving attention to the foreign market characteristics of the products
manufactured for foreign market, production costs and so on;
 The quality of distribution channels of foreign market describes the channel
capabilities, reliability, image in the market, so it is important for the channel
selection;
 By forming the promotion campaign of the intenational companies, greater attention
goes to the company’s image and reputation.
 By evaluating the promotion in foreign markets through personal sales,
communication between the trader companies and the company-producer should be
evaluated.
2. SWOT analysis showed that one of the company’s weaknesses is a lack of working capital.
The company can first open a shop in Lithuania, which can later be a subdivision for the
wholesalers and retailers in the Lithuanian market. It is possible to use a semi-franchise
model, then the branch and the company will have stocks in another country’s subsidiary.
Marketing strategy is developed only in the Lithuanian market, but some segments may be
used in other markets too.
3. For the company Sheki Ipek to successfully enter a Lithuanian market and to achieve the
strategic objectives, a foreign marketing model is being proposed to interconnection of the
company’s activities and marketing strategies. The essence of the model: company,
influenced by various reasons to engage in international trade, and to optimize its goals and
needs of the international market, have to analyze the selected country’s environment
(economic, political, cultural, legal, etc.), choose the entrance strategy to the market (the
franchise, export, license, sales establishment, etc.) and to make strategic decisions
(positioning, marketing complex, competition, target market selection, etc.). This model can
be successfully used by other companies with similar activities too.
70
Recommendations for the company Sheki Ipek:
1. Optimize distribution of products in the Lithuanian market. By the first chance and
expansion possibilities, to start production in Lithuania.
2. It is important for the company to constantly analyze the situation, assess the Lithuanian
companies’ activity, monitor competitors, and in the light of changing circumstances, adjust
its actions, provide new targets and the ways for seeking them.
3. Centralized promotion strategy is required, mistrusting the promotion organized by
representative companies. It is necessary to carry out the control of the company’s
representatives’ actions:
 Obtaining the information from the official dealers about promotion carried on.
 Regular sales manager participation in major textile exhibitions and fairs in
Lithuania, in order to evaluate official dealers’ promotion actions.
4. It is recommended to question traders at least twice a year.
71
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ANNEXES
76
ANNEX 1
Questionnaire
RESEARCH OF AZERBAIJANI HOME-MADE CARPET ENTERING LITHUANIAN
MARKET
The student of Vytautas Magnus University is carrying out the research about Azerbaijani homemade carpets entering Lithuanian market. This research is totally confidential so please fullfill these
questions sincerely. Your answers will be used only for the master thesis. Circle the correct answer.
1. How often do you buy carpets?
 Couple times a week
 Couple times a month
 Once a year
 Once in 5-10 years
 Never buy
2. How much do use usually spend for carpet?
 50-100 EUR
 101-150 EUR
 151-200 EUR
 201-250 EUR
 251-300 EUR
 more that 300 EUR
3. What factor influences you the most when buying a carpet?
 Quality
 Colours and pattern
 Price
 Size
 Country of origin
 Recommendation of friend, family etc.
Rate the below statements using the 5 point scale (1 – totally disagree, 5 – totally agree). Mark the
correct answer in each line of statement.
4. I always buy the same kind of carpets
1
2
3
4
5
totally disagree
totally agree
5. By choosing the carpet, the quality is important for me
1
2
3
4
5
totally disagree
totally agree
6. By choosing the carpet, the price is important for me
1
2
3
4
5
totally disagree
totally agree
7. By choosing the carpet, the origin country is important for me
77
1
totally disagree
2
3
4
5
totally agree
8. By choosing the carpet, the colour and texture are important for me
1
2
3
4
5
totally disagree
totally agree
9. By choosing the carpet, it is important that the carpet is hand-made
1
2
3
4
5
totally disagree
totally agree
10. I think that the best way to buy a carpet is in the shopping centers
1
2
3
4
5
totally disagree
totally agree
11. I think that the best way to buy a carpet is in the specialized shops
1
2
3
4
5
totally disagree
totally agree
When choosing the ideal home-made carpet shop, rate the below statements using the 5 point scale (1 –
totally disagree, 5 – totally agree). Mark the correct answer in each line of statement.
12. The area of the ideal home-made carpet shop must be large
1
2
3
4
5
totally disagree
totally agree
13. Only expert sellers should work in the ideal home-made carpet shop
1
2
3
4
5
totally disagree
totally agree
14. The assortment of the home-made carpets should include at least 50 kinds of carpets
1
2
3
4
5
totally disagree
totally agree
15. In the ideal home-made carpet shop the assortment of production should be different than in
the shopping centers
1
2
3
4
5
totally disagree
totally agree
16. Rate the countries that produce home-made carpets in the five point scale (5 – country that
makes the best home-made carpets, 1 country that makes the worst home-made carpets)
India
Azerbaijan
Turkey
Persia (Iran)
Lithuania
Russia
China
17. What kind of specialized carpet shops do you know? (write the names)
______________________________________________________________________________
18. Are you willing to buy Azerbaijani home-made carpets?
 Yes
 No
 Maybe
78
19. Do you know the company Sheki Ipek?
 Yes
 No
 I heard about it
20. When choosing home-made carpet shop, which factors influence you the most? (Mark X only
one answer in each statement)
Very
important
Important
Moderately
important
Unimportant
Totally
unimportant
Prices lower than other shops
The quality of products
Mobility (I’d choose a shop in
my city which is closer to my
home)
Notoriety
(constantly
observed shop’s advertising)
The image of the shop
Professional staff
Exclusivity (in staff’s clothes,
products and etc.)
Pleasant staff communication
and service
21. Your age?
 18-25 y.
 26-35 y.
 36-40 y.
 41-60 y.
 more than 61 y.
22. Your gender?
 Man
 Woman
23. Your education?
 Not finished secondary
 Secondary
 Professional
 High education
 University education
 Not finished university
Thank you for your sincere answers!
79
ANNEX 2
Anketa
AZERBAIDŽANO RANKŲ DARBO KILIMŲ ĮĖJIMO Į LIETUVOS RINKĄ
TYRIMAS
VDU magistro studentas atlieka tyrimą apie Azerbaidžano rankų darbo kilimų iėjimą į Lietuvos
rinką. Šis tyrimas yra konfidencialus, todėl prašome atsakyti į klausimus nuoširdžiai. Jūsų atsakymai bus
panaudoti rašant magistrinį darbą. Apibraukite teisingus atsakymus.
1. Kaip dažnai perkate kilimus?
 Kartą per savaitę
 Kelis kartus per mėnesį
 Kartą per metus
 Kas 5-10 metų
 Niekada
2. Kiek maždaug pinigų išleidžiate perkant kilimą?
 50-100 EUR
 101-150 EUR
 151-200 EUR
 201-250 EUR
 251-300 EUR
 Daugiau kaip 300 EUR
3. Koks faktorius Jus labiausiai įtakoja perkant kilimą?
 Kokybė
 Spalvos ir raštai
 Kaina
 Dydis
 Kilmės šalis
 Šeimos, draugų ir kt. rekomendacijos
Įvertinkite žemiau pateiktus teiginius 5 balų skale (1 – visiškai nesutinku, 5 – visiškai sutinku).
Pažymėkite teisingus atsakymus kiekvienoje eilutėje.
4. Aš visada perku tokios pačios rūšies kilimus
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2
3
4
5
visiškai nesutinku
visiškai sutinku
5. Renkantis kilimą, man svarbu kokybė
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2
3
4
5
visiškai nesutinku
visiškai sutinku
6. Renkantis kilimą, man svarbu kaina
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2
3
4
5
visiškai nesutinku
visiškai sutinku
7. Renkantis kilimą, man svarbu pagaminimo šalis
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1
2
visiškai nesutinku
3
4
5
visiškai sutinku
8. Renkantis kilimą, man svarbu spalva ir tekstūra
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2
3
4
5
visiškai nesutinku
visiškai sutinku
9. Renkantis kilimą, man svarbu, kad jis būtų rankų darbo
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2
3
4
5
visiškai nesutinku
visiškai sutinku
10. Manau, kad geriausia kilimus pirkti prekybos centruose
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2
3
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5
visiškai nesutinku
visiškai sutinku
11. Manau, kad geriausia kilimus pirkti specializuotose parduotuvėse
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2
3
4
5
visiškai nesutinku
visiškai sutinku
Renkantis idealią rankų darbo kilimų parduotuvę, įvertinkite pateiktus teiginius 10 balų sistemoje (1 –
visiškai nesutinku, 10 – visiškai sutinku). Pažymėkite teisingus atsakymus kiekvienoje eilutėje.
12. Idealios rankų darbo parduotuvės plotas turi būti didelis
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2
3
4
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visiškai nesutinku
visiškai sutinku
13. Tik rankų darbo kilimų ekspertai turėtų dirbti parduotuvėje
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5
visiškai nesutinku
visiškai sutinku
14. Rankų darbo kilimų asortimentas turėtų būti bent 50
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2
3
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5
visiškai nesutinku
visiškai sutinku
15. Rankų darbo kilimų asortimentas specializuotoje parduotuvėje turėtų skirtis nuo asortimento
prekybos centruose
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2
3
4
5
visiškai nesutinku
visiškai sutinku
16. Įvertinkite šalis, kurios gamina kilimus 5 balų skalėje (5 – šalis, kurioje gaminami geriausi
kilimai, 1 šalis, kurioje gaminami blogiausi kilimai)
Indija
Azerbaidžanas
Turkija
Persija (Iranas)
Lietuva
Rusija
Kinija
17. Kokias specializuotas kilimų parduotuves žinote (išvardinkite jas)
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18. Ar Jūs pirktumėte Azerbaidžano rankų darbo kilimus?
 Taip
 Ne
 Galbūt
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19. Ar žinote kompaniją Sheki Ipek?
 Taip
 Ne
 Girdėjau apie ją
20. Renkantis rankų darbo kilimų parduotuvę, kuris faktorius Jus labiausiai įtakoja? (Pažymėkite
X tik vieną atsakymą kiekvienam teiginiui)
Labai svarbu
Svarbu
Nei svarbu, nei
nesvarbu
Nesvarbu
Visiškai
nesvarbu
Kainos, mažesnės nei kitų
parduotuvių
Produktų kokybė
Mobilumas (renkuosi parduotuvę
arčiausiai namų)
Žinomumas (nuolat pastebima
parduotuvės reklama)
Parduotuvės įvaizdis
Profesionalūs darbuotojai
Išskirtinumas
(darbuotojų
drabužiuose, produktuose ir pan.)
Malonus
bendravimas
ir
aptarnavimas
21. Jūsų amžius?
 18-25 m.
 26-35 m.
 36-45 m.
 45-60 m.
 Daugiau kaip 61 m.
22. Jūsų lytis?
 Vyras
 Moteris
23. Jūsų išsilavinimas?
 Nebaigtas vidurinis
 Vidurinis
 Profesinis
 Aukštasis neuniversitetinis
 Aukštasis universitetinis
 Nebaigtas aukštasis
Ačiū už Jūsų nuoširdžius atsakymus!
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