Section III: Management – Draft
We would recommend MVP Hair to use as entry mode partnerships with both local schools and online retailers. According to all our findings, This entry mode will allow the company to integrate smoother the French market. Indeed in France, the business and social culture is very different than the African culture. Therefore, local partnership a very useful strategy in order to bring knowledge to local markets.
Partnership with local schools
In France, there exist a lot of hairdressing school. The most known are the following:
L’Ecole Internationale de Coiffure (EIC)
This school is a hairdressing and aesthetics school. It was established in Paris in 1944. Signing a partnership with this school is an advantage for MVP Hair company because it is in close relation with the employers’ fairs. The company can contact L’EIC through its website (http://www.eic.paris/contact/ ), or via phone using this number: +331 42 36 70 15. The best option to contact the potential partner is to call or write an email to ask for a face-to-face meeting with one of the heads of the school. Then, the company’s representent could discuss and explain deeper the company’s business. The company should also give some products for free so the school can use it as samples to test the products quality.
This school is a very big school specialized in beauty and luxury. It is established since 1953 and located in Paris, Lyon, and Cane. Signing a partnership with Elysees Marbeuf is an advantage for MVP Hair company because this school is highly involved in the French Miss Beauty contest. This is a national beauty contest, during which the most beautiful french miss of the year is elected. The contest is very publicized, which is a great opportunity to show MVP Hair’s product quality. The company can contact Elysees Marbeuf thanks to one of these two email addresses: [email protected] or [email protected] The school can also be contacted via the phone using these numbers: +33 1 53 23 87 00 or +33 4 93 38 39 39. As for the previous school, the best option to contact the potential partner is to call or write an email to ask for a face-to-face meeting with one of the heads of the school.
Partnership with physical wholesalers
The second possible promising partner for MVP hair would be physical wholesalers. In fact, they are closely related to hair salons, and hair professionals. Usually salons and professionals use wholesale distributors because it is cost effective and they have a large choice of products. One of the biggest wholesale distributor in France is located in Paris for 26 years. It is called France Coiffure Diffusion. This wholesaler is specialized in beauty and haircare pruducts and is very used by individuals and professionals. France Coiffure Diffusion equips hair salons and beauty centers with good quality products and equipment. The store works in partnership with a lot of brands, which are well-known for their high quality products. Therfore, this store has a very good reputation. France Coiffure Diffusion also have a blog where the company posts acticle related to the products it sells. MVP Hair can contact France Coiffure Diffusion by email, using this link: https://www.francecoiffurediffusion.com/nous-contacter.html or via the phone hanks to this number: 01 30 40 81 43. This number is available only dunring openning hours, which are from Monday to Frieday, between 9am and 6pm.
Online Retailing Platforms
MVP Hair’s products should be sold via large, online retailing platforms. E-commerce is the buying and selling of electronic goods and services over an electronic network, primarily the internet, and it works efficiently for B2B transactions. With the use of mobile devices and laptops increasing everyday, there are many advantages to selling products on an e-commerce website. The benefits of using an online retailing platform are being able to reach the global market and giving the consumers a wide range of products to choose from. Other benefits can include a shorter product/service distribution chain, as well as lesser costs and pricing. E-commerce is widely used in France. A survey was done from July 2017 to September 2017 to display results of the amount of visits to the top 15 e-commerce websites used in France. Out of the list of 15 sites, MVP Hair only needs to consider the websites that would actually carry and sell their hair products. Amazon was ranked first for receiving 24 million visitors per month, and 3,640,000 visitors per day. Cdiscount was ranked second with 16 million visitors per month and eBay was ranked seventh for receiving over 10 million per month. Since Amazon, Cdiscount, and eBay are the most visited e-commerce websites for French users, MVP Hair should consider using one or all of these platforms to sell their products.
The easiest and most effective way of delivering goods to the French market is shipping by water. As it was mentioned earlier, France is considered an extensive merchant marine. It is a strategic maritime partner for many countries with around one hundred shipping companies, which operate over 1400 ships.
Approximately all import duties are based on an ad valorem CIF (cost, insurance, and freight) value basis. According to CIF conditions, the seller have to: perform export customs clearance, insure the goods, load them on board of the ship and deliver to the port of destination.
While entering the market, we strongly recommend to deliver all products directly to distributors. Initially, MVP Hair can use the services of companies such as DHL, UPS, TNT, TG Express, TG International. However, when the company has already strengthened its position in the French market and occupies a certain niche, it will be advisable to rent or acquire warehouses from which products will be distributed among distributors, retailers and customers.
France adheres to the EU’s common external tariff for imports. Customs threshold (from which tariffs are required) is EUR 150. Tax threshold is EUR 22. VAT is 20%.For hair care products export tariff is 0%. See the screenshot below:
Since the company will only enter the market, the first product can be sent in trial batches. For goods valued at under 1,000 kg or EUR 1,000, it is enough to have a verbal declaration at customs and presentation of the receipt of purchase.
Nevertheless, goods that are higher-valued have to be declared at the Customs Office with the documents listed below:
Brief declaration to conclude the collection of the goods;
Common law declaration (SAD, single administrative document), which can be obtained from Chambers of Commerce or an approved printer. In addition, SAD should be sent with the enclosed documents to allow goods clearance.
To simplify the process of clearance, companies can usr an online clearance platform by automated transmission (DELTA). Company can access it from the portal PRODOUANE (in French).
According to the WTO law, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.
All companies established outside of the EU are required to have an Economic Operator Registration and Identification (EORI) number if they wish to submit a customs declaration or an Entry/Exit Summary declaration.
Finally, all products must comply with European requirements and quality certificates, which were mentioned in the first section.
Pricing of a product is based on a lot of things such as expenses on manufacturing, marketing, shipping etc. There are also some other things like target market, people’s buying power, location, time, necessity which affect the price of a product. As MVP Hair Company’s target is to maximize profits, France surely is a great market to do so as it has all the advantages to offer.
MVP Hair products are manufactured by SLID Industries Limited which is in Ghana and it adopted some new concepts from AFAM Concept which offer sodium, lithium, calcium relaxers for each hair texture and scalp type. It takes a lot of steps to create products such as getting suggestion about the kinds of shampoos and relaxers from hairdressers, meeting with chemists, choosing right ingredients and catalysts. Manufacturing cost is low at Ghana and prices of relaxers, oils, conditioners are about (GHC 8- GHC 30) which is approximately (USD 2- USD 6).
The target market is quite good in France as there are about 20 Million men between age 20-64. The GDP Per Capita was about $39,000 USD in 2017. The hair care industry formed about 19% of the French beauty market. So, people are interested in these sort of products.
As we are selling online, we have to ship our products from Ghana to France. UPS is a bit cheaper option than DHL. Especially UPS Saver as its costs about GHC 2500 (USD 523 ) to ship 30 kg of products. As we are developing a B2B business, we should try to ship more products at once because it becomes relatively cheaper with the increasing weight of products. So, if the average weight of products is 300ml, there will be about 100 products in each shipping. So, it will increase the price about $5.23 USD of each item for shipping cost.
We will sell our products at departmental stores, chain hair salons, hairdressing schools. Monoprix is a large departmental chain with about 300 stores in France and another one is Carrefour which has more than 12,000 stores. We will sell our products in this retail chains. It will be sold as a combo (Shampoo and moisturizers) for $15 USD to retail chains if they buy at least 500 products. Otherwise, it will be $17 USD if they buy less than 500 products. If they sell about 80% of products and want to buy again more than 500 products, the cost will be $16 USD. The price will be same ($17 USD) if they buy less than 200 products.
We will also sell our products in salons especially in Franck Provost Paris and Dessange as these are chain salons. We won’t sell all the products as combo this time. Rather we will charge 8 USD for moisturizers and 10 USD for shampoos. They have to buy at least 200 products for that. And lastly, we will sell to hairdressing schools like L’Ecole Internationale de Coiffure (EIC), Elysees Marbeuf for the same price as salons and they have to buy at least 200 products too.
Elysees Marbeuf School Official website: https://www.elysees-marbeuf.fr
L’Ecole Internatioale de Coiffure (EIC) Official Website: http://www.eic.paris
France Coiffure Diffusion Official website: https://www.francecoiffurediffusion.com