Market Entry Plan

Analyze below market segmentation and Country selection PESTEL analysis in terms of product Smart Eco-Cooker and Country Germany. 

1. Choose a market entry plan for Smart Eco-Cooker in Germany. In-text Citations and references are required.
2. Describe that market entry plan with the latest data and detailed information. In-text Citations and references are required.
3. Prove your market plan by explaining an example of that market category in Germany. In-text Citations and references are required.

The 'Smart Eco-Cooker', a brand-new and cutting-edge B2C product, will be introduced to the German market according to the plan's international marketing strategy. An innovative product that promotes energy efficiency and environmental awareness in cooking is the Smart Eco-Cooker. This appliance offers consumers the ease of automatically making pre-programmed dishes with minimal energy consumption because to its sophisticated automatic timing and heat regulation. This product is anticipated to benefit from a sizable, ready client base given the rising emphasis on minimizing carbon emissions and the current culinary trend in Germany.

Finding a target market for the Smart Eco-Cooker is the first stage in the marketing strategy. A market segmentation analysis was carried out to correctly segment the market. The findings suggest that young, wealthy, tech-savvy, and health-conscious Germans will be the target market for the Smart Eco-Cooker. These market segments are probably drawn to the appliance's cutting-edge culinary features and health advantages. 

The device will be promoted as having features including an automatic timer, heat regulation, and energy economy. The messaging will highlight the product's usability, technological capabilities, and eco-friendly features.

 

Market Segmentation and Position

Market Definition

The Smart Eco-Cooker is a futuristic kitchen appliance that combines the latest in smart technology and eco-friendly design. As the global smart kitchen market continues to grow at a rate of 17.5% annually until 2030 (Iot-mesh, 2022), the Smart Eco-Cooker is poised to take advantage of this trend. With consumer demand for user-friendly, energy-efficient appliances on the rise (MordorIntelligence,2023), the Smart Eco-Cooker is designed to meet these needs. It utilizes technology to provide greater flexibility, lower costs, and decreased emissions (IEA, 2021). As the market for smart home appliances is projected to register a CAGR of 17.3% during the forecast period of 2022-2027 (MordorIntelligence,2023), the Smart Eco-Cooker is well-positioned to tap into this growing market. By building an eco-friendly smart home, consumers can seriously reduce their carbon footprint. The Smart Eco-Cooker is a key component of this vision, providing a sustainable and efficient solution for cooking in the modern kitchen (Blue&Green Tomorrow, 2022).

The sale of networked gadgets and associated services that enable home automation for individual end users (B2C) makes up the smart home market. Devices that are directly or indirectly connected to the Internet through a so-called gateway are taken into account. Control, surveillance, and regulation of domestic functions are their primary goals.

Intelligent home automation is reliant on remote control, monitoring, and, if applicable, direct communication of individual devices with one another (Internet of Things). As a result, services like external monitoring fees or subscription costs for control apps that are required for the maintenance or management of the home network are also taken into account.

Mobile phones and tablets are examples of devices whose main usage is not the automation or remote control of home appliances. Similarly to that, gadgets like smart TVs that only loosely link to remote control and home connectivity are also excluded. (Statista, 2023)

For more understanding, look at Appendix 1.

Highlights

• Revenue in the Smart Home market is projected to reach US$6.49bn in 2022.
• Revenue is expected to show an annual growth rate (CAGR 2022-2027) of 10.92%, resulting in a projected market volume of US$11.92bn by 2027.
• In the Smart Home market, the number of active households is expected to amount to 33.13m users by 2027.
• Household penetration will be 31.6% in 2022 and is expected to hit 76.2% by 2027.
• The average revenue per installed Smart Home currently is expected to amount to US$478.10.
• A global comparison reveals that most revenue is generated in the United States (US$31,450.00m in 2022). (Statista, 2023)

We may give the following examples to support the identification of the Smart Eco-Cooker's target market as young, rich, tech-savvy, and health-conscious Germans:

• Young: According to a Statista survey, young Germans (aged 18-34) are growing interested in new kitchen gadgets such as the Smart Eco-Cooker (Statista, 2021).
• Wealthy: Germany has a high average income level, and wealthy people are more inclined to invest in premium, technologically sophisticated items like as the Smart Eco-Cooker (OECD, 2021).
• Tech-savvy: Germany is well-known for its sophisticated technology sector, and Germans in general have a great affinity for technical innovation and digital solutions (Deloitte, 2012). This corresponds to the target market's technological savvy.
• Health-conscious: In Germany, the health and wellness movement is expanding, with a strong emphasis on sustainable and healthy lives. The Smart Eco-Cooker's health benefits and eco-friendly characteristics would appeal to health-conscious consumers (Euromonitor, 2021).
• Current culinary trends: Germans have a strong culinary culture and value high-quality eating experiences. The cutting-edge culinary features of the Smart Eco-Cooker would appeal to their enthusiasm in gourmet cuisine (Allied Market Research, 2021).

We may conclude from these facts that youthful, prosperous, tech-savvy, and health-conscious Germans are an appropriate target market for the Smart Eco-Cooker.

 

PESTLE Analysis for Country Selection in Germany

The Smart Eco-Cooker will be introduced in Germany, according to the Marketing Plan's next stage. A PESTLE analysis was used to carry out this procedure of choosing the country. This investigation uncovered a number of elements that qualify Germany as an ideal location for the Smart Eco-Cooker launch. A favorable market for the product should be created by Germany's high GDP growth rate, and the product's innovation and security should be safeguarded by the country's stringent FDIA rules. Along with being recognized as a leader in green energy, the area offers a favorable legal environment that will make it easier to market the product.

 

Political Factors

Germany has been involved in peace-building missions in Afghanistan, the Middle East, and Africa. It has forged strong security relations with international organizations such as the North Atlantic Treaty Organization (NATO), the United Nations (UN), and the Organization for Security and Co-operation in Europe (OSCE).

Germany placed sixth overall among 140 countries, according to the World Justice Project's Rule of Law Index (2022). On the index for order and security, the country came in at number 22 out of 140. How successfully a society protects people and their property is gauged by the order and security indicator.

Germany has evolved over time from a union of various independent states with their own leaders who submitted to the authority of a single ruler, to a constitutional republic, to an authoritarian regime, and finally, upon the reunification of East and West Germany, into a federal parliamentary representative democratic republic.

In August 2021, the European Commission disbursed EUR2.3 billion ($2.4 billion) to Germany in per-financing, equivalent to 9.0% of Germany's allocation under the Recovery and Resilience Facility (RRF). The pre-financing amount has helped in the implementation of crucial investments and reform measures which are outlined in Germany's recovery and resilience plan. 

The country aims to invest EUR3 billion ($3.1 billion) to digitalize more than 215 public services and invest EUR2.6 billion ($2.7 billion) in large scale cross-border European initiatives in microelectronics and next generation cloud infrastructures.

Germany aims to invest EUR3.0 billion ($3.1 billion) in modernizing hospitals to improve their digital infrastructure, emergency capacities, tele-medicine, robotics, and IT, and cyber-security. In addition, the government aims to implement a joint program at the national and regional levels to tackle investment bottlenecks, shortening administrative planning and approval procedures, standardizing requirements to request financing subsidies, and accelerating housing construction.

Germany was ranked in the 95.7 percentile in terms of voice and accountability in 2021, and 70.8 percentile on the political stability and absence of violence indicator in 2021.

 

Economical

In 2020, economic growth contracted by 4.6% amid the COVID-19 pandemic, with a slump in investments, consumption, and exports, which was already lackluster because of prolonged trade tensions between the US and China casting a shadow over international demand. The economy recorded a growth rate of 2.9% in 2021. According to MarketLine, the economy is forecast to grow at a slower pace of 1.5% in 2022 due to soaring levels of inflation. Disruptions to gas deliveries from Russia, one of Germany's largest suppliers of gas, has negatively impacted the country's industry, thereby resulting in higher prices of food and energy. Consequently, due the spiraling energy crisis and soaring levels of inflation, Germany is forecast to face a recession in 2023. According to MarketLine, the economy is forecast to grow by 0.1% in 2023.

Industry: Germany has a well-developed industrial sector. The German economy has highly specialized sectors, such as mechanical engineering, electrical and electronics, automobiles, and chemicals. The automobile industry is one of the largest industrial sectors in the country, and Germany is one of the main global car exporters. The industrial sector recorded a growth rate of 6.0% in 2021. According to MarketLine, the sector is forecast to grow by 3.5% in 2022.

Services: Financial services, real estate, transport, storage, post, and communications are important sub-sectors of services. Germany's financial industry, which is the main pillar of its services sector, is concentrated in Frankfurt, a location where the European Central Bank (ECB), the German central bank, and the country's main stock exchange are all headquartered. Germany's services output registered growth of 5.5% in 2021, and is forecast to grow by 3.6% in 2022, according to Market Line.

Exports and imports: According to the IMF, Germany's goods and services' import and export volumes recorded growth of 8.9% and 9.5%, respectively, in 2021, and are forecast to record a growth of 5.6% and 2.1%, respectively, in 2022.

Inflation: According to Market Line, inflation rate was 3.1% in 2021. In April 2022, Germany imported 35% of its overall gas imports from Russia.

Social

Composition by age and gender: In 2021, Germany had a population of 83.3 million, according to Market Line. As of 2021, 13.8% of the population was in the 0-14 age group, while 22.0% of the population was in the 65+ age group. The remaining 64.2% of the population was in the working age group (15-64). The gender ratio is broadly even, with the country having 97.4 males per 100 females in 2021

Healthcare: The government is working to maintain and improve its excellent healthcare system and, despite austerity measures, continues to allocate a major chunk of the budget to healthcare. The government spent 5.4% of GDP on healthcare in 2021. Healthcare spending is mainly funded by the public sector.

The German government increased the minimum wage to EUR12 ($12.3) per hour, an increase of EUR2.2 per hour ($2.3), effective as of October 1, 2022. According to the government, approximately 6.2 million workers in Germany are expected to benefit from the increase in the minimum wage.

Technological

Germany has an outstanding research landscape with a high level of integration and networking. The Fraunhofer Society, Europe's largest ICT organization, is based in Germany. In addition, many major ICT manufacturers operate research and development (R&D) laboratories in Germany. As a result, Germany has evolved into one of the world's largest exporters of ICT products. In May 2021, Germany and France started a joint call to fund projects for 5G applications and private communication networks by up to EUR20 million ($23.6 million) for each project. In June 2022, the National Association of Software and Services Companies (NASSCOM), India and the German Association of Small and Medium-sized Businesses (BVMW) signed a MoU to increase cooperation and increase trade relations between Indian technological SMEs and German SME organizations. 

Germany's cooperation with Canada focuses on biotechnology and nanotechnology. Germany has bilateral cooperation agreements with countries in Central and South America in the areas of education and research, as well as cultural, political, and economic ties. The government's recent policies encourage private sector participation in the process of innovation and the commercialization of new technology. The government will continue to promote activities to utilize research results obtained at universities and R&D institutions and will help SMEs to file patents and utility models. The government has also launched a new process to validate results, to improve the commercial application of the results of academic research. The government aims to boost the innovation and competitiveness of the economy to facilitate the spread of digital technology in industry.

Environmental

As a member of the EU, Germany must meet certain targets related to the reduction of greenhouse gas emissions. Germany has cut emissions to levels below those specified by the Kyoto Protocol and has set a goal of reducing emissions by at least 40% by 2020, 55% by 2030, and by 95% in 2050 from 1990 levels. Nevertheless, air pollution, diminishing biodiversity, land degradation, soil erosion, water pollution, and a shortage of resources are contributing to major environmental problems.

Under the National Development Plan for Electric Mobility, the government plans to put 6 million electric vehicles on the road by 2030. Germany played a crucial role in establishing the International Renewable Energy Agency (IRENA) in January 2009.

Tax exemptions have weakened the incentives for industries in the chemical and iron and steel sectors to cut down on emissions. The country is on track to meet its target of renewable energy sources delivering 65% of consumed electricity by 2030, with 52% of electricity coming from renewables in Q1 2020. However, in Q1 2021, power generated from renewable energy sources accounted 40% of total consumption in Germany, down from 52% during the same period last year, as weather conditions brought little wind and sunshine, leading to problems in achieving the target of 65% by 2030.

Legal

Germany has an independent and effective judicial system that is responsible for the maintenance of law and order. There is a clear hierarchy of courts at state and central levels, and the judicial system is divided into five categories of courts: ordinary, labor, administrative, social, and financial. The overall freedom to start, operate, and close a business is protected by Germany's regulatory environment. According to the World Bank, Doing Business (2020), Germany was ranked 22nd out of 190 countries. According to the Heritage Foundation, Index of Economic Freedom (2022), Germany was ranked 16th out of 180 countries. The business tax scheme and the availability of grants and incentives have resulted in strong foreign investments in the country.

For corporations, the overall corporate income tax rate is 15% and a surcharge of 5.5% (solidarity surcharge) is levied, including local trade taxes. As of September 2022, the country's standard VAT rate was 19%.

In February 2020, the country approved The Skilled Immigration Act, which will make it easier for non-EU people to work in Germany. The law came into force in March 2020. In September 2022, the country amended changes to the immigration law to attract highly skilled workers to the country. The new laws are expected to benefit foreign workers who aim to migrate to Germany and Germany's legal landscape as a whole.

The Smart Eco-Cooker should go through rigorous testing and certification procedures to fulfill safety requirements specified by competent authorities such as the International Electrotechnical Commission (IEC) and national regulatory organizations (European Commission, 2021).

The strict Food and Drug Administration (FDA) requirements in Germany assure customer safety and product quality. Compliance with these rules is critical to the Smart Eco-Cooker's reputation and customer happiness (German Federal Ministry of Food and Agriculture, 2021).

The legal environment in Germany promotes ecological practices and consumer protection. The nation has strong eco-labeling, energy efficiency, and product safety standards, which create for a suitable foundation for selling the Smart Eco-Cooker (Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety, 2021).

 

Prospective markets for the Smart Eco-Cooker

Other favorable markets for the Smart Eco-Cooker could include countries with similar characteristics and values, such as Switzerland, Sweden, and the Netherlands, which prioritize sustainability, innovation, and healthy lifestyles (Euromonitor, 2021).