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Choosing exporting would allow Lunapads to incorporate both the Canadian expertise as well as local knowhow in expanding to the chosen segment. By not setting up a physical factory or aligning themselves with another firm, Lunapads will be able to spend more effort and time centered around understanding the stigma that surrounds menstruation in India. This way Lunapads is able to cater to the women while still aligning with the menstruation culture. By having complete control, there is not possibility of losing the social message behind the brand, which mentioned above is a core value of the company.
However, there are limitations and setback to adapting the exporting strategy. Because we are relying on economies of scale, and high level of distributions, that raises new cost for Lunapads. The primary additional cost would transportation. Shipping a large amount of orders from Canada to India would be costly. Furthermore, the second additional cost would the 10% importing tariff India places on imported goods (Tariff 2015-16, 2016). These two concerns can be mediated through the potential subsidy introduced by the Indian government that
Lunapads follows the community model, implementing a multi-level marketing tactic. Meaning that the firm distributes its products through members of the local community. The members of the community then act as selling agents, to engage the products between the women in their community and Lunapads. This strategy would excel in the BoP market in India because women are more receptive to a new product once they see women that they trust using it. This is also a cost effective method of increasing brand awareness. The flexibility and the benefits of this mode of entry will reduce the risk associated with this investment as well as allow Lunapads to benefit from the local trust and loyalty that the women share having lived together for years.
The table below demonstrates how the direct exporting strategy will penetrate the Indian BoP. This table shows where Lunapads should focus their efforts while entering the Indian BoP.
covers 25% of the cost of manufacturing of feminine hygiene products (Matem, 2016). As a company, Lunapads would benefit greatly from this subsidy as it would eliminate part of the cost it would take to get the products into the hands of the Indian women.
Diving in further into the entry strategy, it is recommended that