EVALUATE INTERNATIONAL MARKETING OPPORTUNITIES BSBMKG605B ASSESSMENT LENKA MUSILOVA 31895

TABLE OF CONTENTS: 1. INTRODUCTION OF PRODUCT 2. INTERNATIONAL TRADE PATTERNS OF AUSTRALIA AND THE CZECH REPUBLIC 3. RESEARCH ON MARKET FACTORS AND OPPORTUNITIES TO ENTER TO AUSTRALIA MARKET 4. AUSTRALIAN TRADE POLICIES AND AGREEMENTS WITH THE CZECH REPUBLIC AND IMPACT ON THE PRODUCT 5. ECONOMIC, POLITICAL, SOCIAL AND CULTURAL FACTORS THAT MAY AFFECT THE MARKETING OPPORTUNITIES 6. LEGAL AND REGULATORY REQUIREMENTS AND TRADE MARRIERS FOR THE MARKET 7. COST, BENEFITS, RISKS AND OPPORTUNITIES IN AUSTRALIA MARKET 8. RETURN ON INVESTMENT AND POTENTIAL COMPETITORS

1. INTRODUCTION OF PRODUCT

Bata is one of the world's leading footwear retailers with consumers, employees, business partners and shareholders in more than 90 countries. In keeping with the responsibilities that a world-wide organization holds, international and local social concerns are intrinsic parts of the Bata culture. More than 75,000 people are employed throughout the world producing and selling approximately 300,000,000 pairs of footwear each year. An additional 400,000people and their families depend on jobs created in support services to the Bata operation. Although Bata operates in a wide variety of markets, climates and buying power Bata companies share the same leadership points. Two important ones are product concept development and constant improvement of business processes in order to offer customers great value and the best possible service. Bata offers an extensive range of footwear including: Womens Mens Girls School Shoes Rainwear Industrial Boots, Shoes & PVC Since Australian market is always open to new goods and services as long as they are being delivered in good quality, I believe that Bata shoes and boots have the power to succeed on this demanding market. Bata has everything Australian consumer is looking for High quality goods, Prestige well known brand, original design and good servis channels.

2. INTERNATIONAL TRADE PATTERNS OF AUSTRALIA AND THE CZECH REPUBLIC Australia has a positive and constructive relationship with the Czech Republic. Australia and The Czech Republic are like-minded on many international policy issues and we share strong people-to-people links. The framework for Australian commercial relations with the Czech Republic include an Investment Promotion and Protection Agreement and a Double Taxation Agreement, signed in 1994 and 1995 respectively. The Agreement between the Government of Australia and the Government of the Czech Republic on Cooperation in Peaceful Uses of Nuclear Energy and the Transfer of Nuclear Material entered into force in 2002. Australia and the Czech Republic have finalised negotiations on a bilateral Social Security Agreement, which is currently awaiting ratification. The Australian Transaction Reports and Analysis Centre (AUSTRAC) signed a Memorandum of Understanding with its Czech counterpart in May 2008 to allow Australian law enforcement and other Government agencies to receive vital financial intelligence from the Czech Republic.
Australia's trade and investment relationship with Czech Republic (d):
Australian merchandise trade with Czech Republic, 2010: Exports to Czech Republic (A$m): Imports from Czech Republic (A$m): Total trade (exports + imports) (A$m): Major Australian exports, 2010 (A$m): Wool & other animal hair (incl tops) Taps, cocks & valves Alcoholic beverages Electrical circuits equipment
Total share: Rank: Growth (yoy):

83 263 346 Major Australian imports, 2010 (A$m): 72 2 1 1

0.0% 0.1% 0.1%

64th 50th 57th

55.1% 12.7% 20.6%

Passenger motor vehicles Wood, simply worked Prams, toys, games & sporting goods Paper & paperboard, cut to size

34 31 25 12

3. RESEARCH ON MARKET FACTORS AND OPPORTUNITIES TO ENTER TO AUSTRALIA MARKET The Footwear Manufacturers Association of Australia Inc. represents the interests of footwear manufacturing, designing and supplying industries located in Australia. These interests cover the full gamut of supply chain activities from sourcing and producing footwear parts, manufacture, assembly, design, sourcing, supplying and retailing. There is therefore little to suggest the Australian footwear industries will receive significant benefit in the next five to ten years from reductions in General System of Preferences (GSP) tariffs. This is a major impediment for the development of Australias footwear industry in terms of its ability to integrate its development with that of the global market. A significant concentration of local manufacturing capabilities has occurred. Currently the Australian market consumes 66 million shoes a year (excluding sporting footwear, thongs and footwear with a value of less than $1.70). The overall consumption of footwear has increased by 40% or nearly 20 million pairs (refer Attachment for detailed break up). The industry has also worked closely with the major retailing organizations to implement world class supply chain management, stock control and ordering systems through the creative development of the technology and application of e-commerce and bar coding. This responsiveness is an essential characteristic in the strategy of manufacturers as they drive and adapt to fashion trends. The period through to 2015 is seen as one that will have protracted international negotiations as each country jockeys for the best possible outcome for themselves in the TCF industries. 4. AUSTRALIAN TRADE POLICIES AND AGREEMENTS WITH THE CZECH REPUBLIC AND IMPACT ON THE PRODUCT Australian merchandise exports to the Czech Republic in 2009 were valued at A$53 million, down from A$81.6 million in 2008. Although wool remains by far Australia's largest single export item (A$37 million), Australian firms have begun to diversify the export mix in health products (including veterinary), measuring and analysis instruments and alcoholic beverages. Imports from the Czech Republic over the same period totalled A$233 million, and included passenger motor vehicles, prams, toys, games, sporting goods, wood products, and electrical circuits equipment. Australian investment in the Czech Republic has reached a reasonable level (aboutA$200 million), but there remains ample room for further development in this strategically located market. As the Czech Republic has entered the EU, the range of trade and investment opportunities has grown. Expectations are that exporters will continue to profit from the Czech Republic's economic transformation, as major upgrades of pollution control equipment, telecommunications equipment and services, energy production and distribution, housing and municipal infrastructure and medical services continue. There should be increasing opportunities for Australian business in IT (smart card applications, e-government, e-business), automotive industry (components and spare

parts, R&D), wine, consumer goods and tourism. Provision of developed business services, especially in franchising, appears to be a promising sector with high interest from local entrepreneurs. Foreign investment has played a major role in the development of the Czech economy by providing both management expertise and the capital needed to restructure many Czech firms. The most promising sectors for deepening Australia's commercial investment involvement are infrastructure, energy and coal gasification, the high technology sector (especially in the living environment area), and industrial services.

5. ECONOMIC, POLITICAL, SOCIAL AND CULTURAL FACTORS THAT MAY AFFECT THE MARKETING OPPORTUNITIES As mentioned above, Australian and Czech republic are two like-minded cultures, there is minimum risk of making a mistake by using the same approach in promotion this brand in Australia as compare to the Czech market. How ever the Australian market is obviously richer and that gives us the opportunity to focus are advertisement campaign in a spirit of a luxury brand entering AU market, rather then a brand which delivers only high quality shoes for reasonable price.

6. LEGAL AND REGULATORY REQUIREMENTS AND TRADE MARRIERS FOR THE MARKET LABELLING REQUIREMENTS FOR SHOES The Commerce (Trade Descriptions) Act 1905 and Commerce (Imports) Regulations 1940 set out the labelling requirements for certain goods imported into Australia. Customs administers this legislation. Shoes require a trade description including the name of the country in which the goods were made or produced, and a true description of the goods. The trade description must be in the English language, in prominent and legible characters, and on a principal label or brand affixed in a prominent position and in as permanent a manner as practicable to the goods. Additional labelling requirements for shoes Regulation 15B of the Commerce (Imports) Regulations sets out additional labelling requirements for shoes, specifically in relation to composition labelling and positioning of labels. It requires that the trade description applied to shoes includes: -entirely of leather -where soles consist partly of leather -where soles do not consist entirely or partly of leather

-where uppers consist partly of leather -where uppers do not consist entirely or partly of leather -where quarter linings consist partly of leather -where quarter linings do not consist entirely or partly of leather 7. COST, BENEFITS, RISKS AND OPPORTUNITIES IN AUSTRALIA MARKET Cost: Transport/shipping Tax &Tariffs Insurance Warehousing Distribution Benefits: Consumer; High quality Unique product not available in Australia Business: Increasing sale opportunities Increasing market share increased branch recognition Risk: Not a well known brand will, need a big and expensive promotion, which may need longer time to work and make customers trust this brand. As a brand stand more in the middle age consumer area for which, may find hard to sell their more sport oriented shoes to the younger generation.

Opportunities: Bata factory does not focus on only one segment in their food selection toward a potential consumer, but literally offers shoes and boots for every gender in any age and for any social or non social occasion. This is what we will take advantage of and enter the market as a universal footwear company

8. RETURN ON INVESTMENT AND POTENTIAL COMPETITORS In a matter of competition I believe that, there is not a single company in the world with such a wide selection of styles and use for their footwear as is Bata. However there are

companies focusing on specific segments of footwear , which will be our competitors: Sport shoes: Addidas, Nike, Puma Working footwear: Oliver, Redback, Caterpillar Men casual: UGG, Windsor smith Women casual: UGG, Candy, Nugget

We will use one million dollars for first investment in year 2012: During upcoming year we will spend these money on promotion to get our brand well known all over Australia. Promotion will include TV spots, newspaper adds, magazines and billboards. This includes cost of promotions and presentations toward our retailers. We will focus on sealing deals with big national chain as for our sport shoes selection Kmart, Best&Less, Target. With an average price of AUD100 for a pair of leather shoes and boots including tax and delivery cost. And an average price of AUD50 for a pair of non leather shoes and boots including tax and delivery cost. We will charge extra 20% on top of the final cost before supplying to a retail shops. Our aim is to secure very realistic 0.1% off footwear market by the end of the year 2012, which means to sell about 66.000 pairs of shoes and boots. For average price of AUD75 + 20% = AUD90. That gives us gross of AUD 5,940,000 and net profit of AUD 990, 000. If we will meet our expectations we will break even after first year from entering Australian market.