Bridget

Ryan

AMB336: International Marketing

Case Study Analysis

Company: Oz Active
Outsourcing From: Myanmar
Marketing to: Japan

Complied by: Bridget Ryan

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Section one

Oz Active (QLD) is a SME company located in Brisbane with 40 employees, who are a retailer of
active wear in the medium to high-end market. The clothing has a technological advantage of
keeping form after stretching. Oz Active pursues to increase its global presence in both production
and retailing, and managing the complexity of synergistic brand perceptions across them
(Madden, Roth & Dillion, 2012). This case study will identify the ethical issues associated with
outsourcing production from Myanmar, to market the clothing to the Japanese and provide
recommendations.




The Carroll Model has been used to evaluate how the
pyramid of responsibilities works together to create
overall sustainability for Oz Active (Visser, n.a).




Stakeholder Theory implies Oz Actives actions appeal to the multidimensionality of the consumer
as not only an economic being but also a member of a family, community and country (Luo &
Bhattacharya, 2006). Therefore, Corporate Social Responsibility (CSR) is becoming increasingly
important as part of global branding strategies to create a differential advantage by building
emotional bonds with consumers and enhancing overall corporate image (Hoeffler & Keller,
2002). Businesses and corporations are initiating programs and strategies aimed at enhancing
social welfare, protecting the environment and defending human rights (Luo & Bhattacharya,
2006). 21.4% of companies in Burma have CSR pledges (Bauer, 2012).

International business ethics demonstrations that cultures and nations hold entirely different
standards of both law and ethics (Joseph, 2015). The standards for employment practices are not
constant between countries, unethical practice may be banned in Australia, however legal in
Myanmar a less developed country, consequently companies take advantage (Welford & Zieger,
2013).

Additionally, the textiles and clothing industry falls under all four layers of Carrolls Model.
Manufacturing will help Myanmar both economically and social terms, in the short-run providing
incomes, jobs, and foreign currency receipts. In the long run, the opportunity for sustained
economic development with appropriate policies and institutions to enhance the dynamic effects
of textiles and clothing (HKTDC Research, 2016).

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In June 2013 the International Labour Organization lifted all restrictions on trade and investment
in the country, however, Oz Active needs to be aware the military controls the business sector
(Bauer, 2012). Also, Myanmar has unclear regulatory frameworks and outdated legal systems,
thus companies are unsure as to what they can and cannot do (Myanmar Manufacturing, 2015).
Leading to foreign countries reducing their help in Myanmar against human right abuses by the
government and military officials, examples, forced labor, torture and extrajudicial killing
(Wagley, 2013).

Furthermore, Myanmars Environment-Friendly Reform has been under way, Oz Active has to
ensure the factory is environmentally friendly by partaking in, renewable energy, waste reduction,
energy audits, conserve water, and recycle materials (Layne, 2014). For example, by Oz Active
using bamboo within the T-shirts and to reduce carbon footprints importing, the company can
purchase bamboo from the closely located farms, and recycle the pickled-bamboo shoots as a
source of food.

Lastly, the Labour Organisation Law 2012 are granting more statutory rights to workers in
Myanmar, both in working conditions and increased wages (Myanmar Manufacturing, 2015).
Therefore now, foreign firms are paying higher wages than local, with a monthly minimum wage
of $90; Oz Active should pay employees a monthly wage of $160 with benefits to families in the
initial stages and further increasing with time (HKTDC Research, 2016).

Section Two
Japan was the chosen country to market Oz Active clothing to, due to the information in table one
and further considerations that are discussed in sections two and three.

Table one: Target Market comparison between Japan and Indonesia.
Country GNI per Government Unemployment Responsible Population Imports
Capita - PPP Rate Competitor (2013
Dollars index est.)
(2013)
Japan: 37, 790 A parliamentary 3.1% 8/138 127, 103, $766.6
Chosen government 388 billion
country with a
constitutional
monarchy
Indonesia 9, 270 Republic 5.94% 41/138 253, 609, $178.6
643 billion
Target The Japanese markets for Oz Active are extremely fit and healthy especially in the
market younger generations. The International Prevalence study found more men than women
within aging from 16 25 will be primary target and secondary audience will be both genders
Japan: 30-40 yrs. (Bayman, et al, 2009). Observers argue that everyday life in japan involves

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more commuting by public transport than by car, meaning more daily exercise (Ghosh,
2013). According to the World Health Organisation, 98% on average do 60 minutes of
exercise a day (Pawlowski, 2016). Also, the Japanese pride themselves in looking
acceptable, the active wear needs to be socially adequate and trendy for them to feel
comfortable wearing it both to work and gym (Segal, 2015). This information will help
with designing the perfect product for the consumer.

Issue One Country of Origin

Country of Origin effect is the Image created in the minds of consumer from individuals
knowledge, experience, exposure and inclination towards a particular country (Abraham & Patro
2014). Consumers previous cognitions towards production in Australia and Myanmar may affect
their decision making process, irrespective of the products true quality. The Japanese believe
purchasing foreign products hurts the local economy by causing loss of jobs (Maheswaran, 2006).
However, Japan are manufacturing within Myanmar, therefore customers could be familiar with
the Made is Myanmar label promoting the social and sustainable compliance aspect of the
industry (Myanmar Garment Industry, 2015). Though, they may not be willing to pay premium
price for the clothing, as quality can be different to Made in Italy (Salsbery, 2010). This is a
psychological effect that occurs when customers are unfamiliar with a product (e.g. product
quality) and the image of the products Country of Origin has a halo effect on the customers
evaluation (Madden, Roth & Dillion, 2012). These factors, all contribute to how the Japanese
consumers will view the company, brand and product for manufacturing in Myanmar.

Issues two Supply Chain

If Oz Active exhibits a genuine commitment to CSR and ethical business practices, this generates
power to transform their supply chain (Guthrie, 2012). However, the agricultural suppliers may
not be following the same practices (HKTDC Research, 2016). The agricultural industries are paid
considerably lower and have had human right violations, such as, child salves and torture.
(Wagley, 2013). Working with trade associations within the textiles, agriculture, and packaging
industry will help to reduce violations, creating ethical and sustainable supply chain and
distribution. This will help suppliers follow the correct laws that Myanmar are trying to
implement to ensure they are doing the right thing by the employees and government (Bauer,
2012). If Oz Active can achieve an ethical supply chain, they can apply for a Fair-Trade Standard
label on the clothing. This gives the company more transparency, so consumers cannot doubt the
credibility of their ethical product, which will lead to more sales, also reducing the affects of
County-of-Origin (Myanmar Garment Industry, 2015).

Issue Three Consumer Behavior

The attitudes and behaviors of the Japanese consumers are shifting dramatically, presenting

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opportunities and challenges in the worlds second-largest retail market (Salsbery, 2010).
Japanese prefer to buy products with a low environmental impact: reduction in energy
consumption and waste, environmentally conscious or green design (Huysveld, 2015).
Therefore, ethically sourced materials (Bamboo) for the T-shirts will gain traction (Salsbery,
2010). The four primary target market behaviors changing are, hunting for value, spending more
time at home, buying products differently and as stated, being health and environment conscious
(Salsbery, 2010). Study shows the Japanese consumers path to purchased are justified by their
choices (increasing the liking of the chosen item) only when self-relevant others were made
salient (i.e., social cues were present) (Lee & Ng, 2015). Oz Active has to ensure the Myanmar
factory and business plan is ethically responsible, guaranteeing there are no complications that
could affect the customers behaviors when considering/purchasing the product.

Section three

The recommendations below have been created after critically analyzing manufacturing in
Myanmar, how to target the primary audience in Japan, and linking the four layers of Carrols
Model. These recommendations should be incorporate to achieve overall sustainability in the short
and long run for Oz Active, achieving global success.

Recommendation One - Immediate Marketing Action

To generate recognition from the target audience, the marketing campaign needs to have strong
presence both digitally and on traditional platforms, plus create strategic alliances with
environmental groups, to help promote the company (Kaplan, 2009). Sustainable initiatives are
invested in Changing peoples minds instead of facilitating the desired behaviors, to do this, the
creation of a creative marketing campaign that will elicit people to action (Goodin, 2016). The
marketing campaign will be to package T-Shirts in a canister, creating a novelty that the Japanese
love, however also perfect to be bought and given as a present. The canister will be made out of
recycled materials, from the company Salazar (Sustainable Packaging). Also, within the canister
there will be a signed note from the employee who made the clothing saying Made with Love.
This campaign as a whole will create environmental awareness, show the values of Oz Active and
the canister will produce emotions with the customer. Seen below are the packaging examples.

Signed Note: Canister:

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Recommendation Two - Marketing Action

CSR practices help build brand equity, awareness, and image, also credibility, evoke feelings, and
engagement (Hoeffler & Keller, 2002). CSR for Oz Active can be more than a cost or constraint; it
creates, innovation, competitive advantage and opportunity (Luo, & Bhattacharya, 2006).
Essentially, Failure to be a good corporate citizen can devastate executive careers, Oz Active and
stakeholders, particularly if they appear to be taking advantage of the less fortunate Burmese
workers (Madden, Roth & Dillon, 2012). The following are CSR projects Oz Active could introduce:

5% of each purchase goes to Hands on Tokyo or Shine on kids, the customers can choose who
they want to donate to at the end of purchase,
Childcare room within the factory, one teacher/supervisor to every 15 children,
Recycled materials given to employees and Salazar and,
Environmentally friendly factory to both the planet and workers, using the available resources
within Myanmar.

Hence, it would be an economical advantage for Oz Active to incorporate CSR into their business
practices within Myanmar, to potentially reduce the degradation of their reputation and
credibility with the Japanese markets (Luo, & Bhattacharya, 2006).

Recommendation Three - Long Term Marketing Action

Oz Active can lower initial costs by investing in their own CSR terms, however this is not as
credible as receiving the Fair-Trade Textile Standard. The universal label has gained momentum in
Japan, educating the customers they are making ethical choices (Huysveld, 2015). Japan provides a
promising market through their high-income; therefore they have the ability to afford premiums
associated with the label (Segal, 2015). Also, the Country-of-Origin effect significantly reduces,
giving the company more transparency; therefore consumers cannot doubt the credibility of their
ethical products, leading to further sales. It is vital to have the Fair-Trade label to gain first-mover
advantage, and build market share and customer loyalty to break down competitors. This strategy
will provide a better working environment and wages for the employees in Myanmar, conserve the
environment and raise productivity (Fair-trade Textile Standard, 2016). Once the supply chain is
ethical and sustainable, Oz Active can present the Fair-Trade label on their active clothing, and
digital / traditional media platforms, ensuring customers will pay a premium price (Fair-trade
Textile Standard, 2016).

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