UNIQLO company

The company uses this strategy as they are confident that the customers will come back due to such low prices of the products. Once a customer is attracted towards the products, they will come back for the same of more products (UNIQLO, n.d.).

Distribution

UNIQLO owns and operates a chain of a highly robust supply network. The global production sectors in shanghai, Istanbul, Jakarta and Dhaka can be used to manage the distribution network in Istanbul. For Istanbul, the company will use the supply chain already in place in Turkey.

Port Selection

For international imports, the port of Tokyo japan and the port of Istanbul will be used as they can help ship from origin to destination in 43 days.

There are several modes of transportation the can be used

Rail Roads are an effective mode of transport as they are economical and faster than roadways.

The disadvantage is it requires large capital for construction maintenance and is not very flexible in nature.

Air Carriers can be used by UNIQLO as it is very fast and can transfer the bulk amount of products. The main disadvantages of this model are that large capital is required and is not suitable for working goods. Weather is also a major concern for the air carrier.

Ocean Carriers is the most suited type of transport for UNIQLO as it is the cheapest and large bulk of goods can be transported via sea. The risk capacity for this model is also very low. The disadvantage is that the mode is very slow as there is a delay from one port to another. Seasons can affect the performance of this model.

Motor Carriers can also be used by UNIQLO in case of facilitation of goods to remote areas. The mode is very flexible in nature and requires a very low capital investment. For short distance journeys, this mode is very well suited. The disadvantage is that is can be used for long distances as it is not economical. It is slow in comparison to railways, and the goods can also be damaged due to dust and pollution particles.

Packing

As per the regulations of Turkey, all the packaging must be labelled and marked with “100%”,” pure”,” all” in case of textile products. In the case of multi-fibre clothing, the packing must be marked with the name and percentage by weight of all the consistent fibres in descending order.

The role of Containerization is very important as it helps to transport bulk material in reasonable costs from one port to another. UNIQLO can use both twenty feet and forty feet containers to transports their products from its distributive and production units (ERDOGAN, n.d.).

The following documentation will also be required in order to transport goods.

• Bill of lading: It is a contract between the owner of the goods, in this case, UNIQLO and the carrier who is responsible for transporting the goods.
• Dock receipt: The dock receipt is the proof of the respective port certifying the goods have been received by UNIQLO. This a=creates accountability of the goods being forwarded or shipped.
• Air Bill: This bill will be used if air transport is used by UNIQLO. It contains the tracking number and other information regarding the shipment to allow the company to track it.
• Commercial Invoice: This invoice is to bill a bill of goods from the seller to the buyer. The government will use this invoice to estimate the value of foods and assess the tariffs and customs duties upon the consignment.
• Pro forma Invoice: This invoice will be sent to the receiver in advance to tell them about the contents of the package. It mentions the shipping charges and the weight of the consignment.
• Shippers Export Declaration: This documentation is a must for every shipment above the value of $2500. This documentation is required by the destination country.
• Statement of Origin: This document states the origins of the location of the item of export. It is almost the same as a commercial invoice but still is a necessity.
• Special Documentation: Packing list is also needed by the company to attach with each of the packages. The list contains information about the contents of each package. The list also has the weight and dimensions of the packages.

Insurance Claims

The goods that will be transferred to Turkey from various UNIQLO production and distribution centres must be insured. The insurance document will be attached to the goods so that in case of loss and theft, the shipper would be responsible for recovering the losses. An insurance certificate will also be provided to state how much of the damages will be covered and what will be the time frame (Swan, 2015).

Freight Forwarder

The freight forwarder is responsible for the import and export of all the goods of businesses. The freight forwarder handles all the logistics aspects, including paperwork and the regulations of the destination country. UNIQLO will use the logistics carriers that have the most efficient system and also offer insurance for the goods that are transported to the country. The freight forwarders that transport UNIQLO goods to this region can be used by the company to engage the logistics of Turkey.

Channels of Distribution

Retailers

The company will start with one retail store in the city of Istanbul as it is the man shopping hub of the country and is most suitable for UNIQLO. The store will be of the traditional UNIQLO store types so that it established a brand image and positioning, adding loyalty to the customers. The response from this outlet will devise the plan for future outlets of the brands in other cities.

The Retail markups for products retail store will depend on the category of the products. The markup on clothing and apparel will range between 4 to 13 per cent as the company is known for its low prices. The premium products will have higher markup that will account for forty to fifty per cent of the cost.

The operational methods will include both credit and cash lines. Mostly the transactions will be in cash, and the credit channel will be used very rarely as it most suited for the retail channel of distribution.

The small scale of operation means than there are 1 or 2 staff members, and there are very fewer transactions in a single day. The large scale of operations is suited for UNIQLO as it is a multinational company. There is a complex management hierarchy, and the number of business operations on a daily basis are many. A large number of business Communications takes place in this scale of operations.

There will be one or two wholesale middlemen involved in the market plans. The markups will be very low as they will buy in bulk. The method of operation will be credit as there will be a long chain of transactions between the company and wholesale. The scale of operations will be very complex and large. Small scale operations are not suitable for this type of distribution.

The export agents of the company will be from various production centres of UNIQLO as they ship the produced shipments to Turkey. The import agent will be from turkey, and they will receive the goods and transfer them to their warehouse. The warehouse will be a public warehouse as it will help the company get a competitive advantage over the company. It will serve a long term strategic advantage for the company (Agarwal, n.d.). The location will be in close proximity to Istanbul where large space is available to serve the purpose of a warehouse.

Pricing

The price determination is an important aspect of the marketing plan for UNIQLO and its operations in Turkey. The cost of freight for the transport of goods via sea or air that will impact the final pricing of the UNIQLO goods. Larger shipments will be used to transport via the sea from Japan to Turkey. The cost of transportation from the port to the retail or wholesale store will be account in determining the price.

There are a number of handling expenses the will apply on the shipments that will depart and arrive at the ports.

Pier charges mean the charges that have to pay at the port and it can vary depending on the day and night times. It is charged the time the shipment is unloaded at the port. Wharfage charges are charged by ocean carriers on there through a freight terminal. Similarly, another handling charges the will be a part of the market plan are loading and unloading charges for the shipments.

The average Insurance costs for general clothing stores range from $37 to $49 per month depending upon the location, size, payroll, sales and experience (General Liability, n.d.). The custom duties tariffs for Turkey are also a part of price determination. Turkey has decreased it custom duties from 10% to 5% (Santader, 2019).

The import taxes and value-added tax imposed by the government of Turkey accounts for 18% of the value of imported goods. Import taxes are also imposed by the government for clothing products (CAKMAK, n.d.). The wholesale and retail markups by UNIQLO is not great, so the discount campaigns that can be offered must be accounted for the price-setting strategy. The company does not give discounts that often because it is recognized for its low prices and high quality.

The gross margins of the company have witnessed a record increase in the fiscal year 2019. The international business of UNIQLO generated a profit of 2.29 trillion yen. The operations in Turkey also forecast positive trends (Fast retailing, 2019). The retail price will be set after adjusting all the factors mentioned above and also the rates of competitors like H&M and ZARA.

Terms of Sale

EX works are applicable when the buyer is responsible for door to door shipment. All the cost and liabilities are with the buyer. The advantage of ex-works is that is it’s a good way to get a view on all the cost upfront. It helps the supplier to control the entire shipment. The disadvantage is the customs laws of the country that the shipment originates in. The company has to bear charges on the products that are being randomly chosen for inspection (Shippo Ltd, n.d.).

FOB means Free On Board, and it divides the responsibility between the buyer and seller on an equal basis. The advantages of FOB are that they enable to manage cost without any hidden charges. The disadvantages are that it increases the costs of goods. The supplier is able to add margins to its costs.

FAS or Free alongside shipping the shipment alongside the vessel at the specific port of shipment. The advantage of this term of sale is that it enables the buyers and sellers to manage the risks and liabilities of transporting the cargo easily. The buyer gets exposed to a lot of inflated costs because he is responsible for insurance and freight.

C&F means the cost of goods and the freight of all the transporting means whereas CIF means the cost covered by the seller to cover the costs, insurance and freight against the buyer order in case of possible loss or theft. The advantage of CIF is that the seller does not have to bear any risk during the transit of goods. The disadvantage is towards the buyer as he signs the contract as per the sale of goods act of 1979 (akterfarin, 2011).

Methods of Payment

The Cash in advance payment will be used by UNIQLO as it requires the buyer to pay the seller before the shipment is received. This will help the company eliminate credit risks. The company can also open accounts for the sellers in order to keep track of the payments and keep the accounts updated.

UNIQLO can also use the consignment sales method and pay the seller only after the goods the sold. The company will not have to pay any advance payments. This will enable the company to return the unsold goods and pay for only the sold products.

Sight draft in which the exported hold onto the title of the goods until the importer receives them and then pays for them. This method has a shortcoming that is the importer does not pay for the goods then the exporter has to pay for the return of this shipment. Time drafts can be used by the company as it involves a bank guarantee. It is not payable in full amount until after a specific period of time. Similarly, a date draft can also be used as the bill of exchange becomes mature at a specific date that has been accepted by the payer.

UNIQLO can use letters of credit as two countries are involved. The letters are from one bank to another in different countries to guarantee the payment to the buyer when the specific conditions are met. UNIQLO can use it to make payment to Turkey from Japan and Vice Versa.