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Made Group International Marketing - Case Study Example

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The paper "Made Group International Marketing " is a perfect example of a business case study. Globalization has brought about different changes over the last year. Different countries now do trade freely without the restrictions that existed in the past (Dacko, 2002). Currently, more and more firms are opting to internationalize more rapidly than ever before…
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Made Group International Marketing Name Institution Course Date Made Group International Marketing Executive Summary The report has compared Thailand and Singapore as potential markets for Made Company. The best market for the company is Singapore due to its favourable political, social, economic and technological factors. In addition, Singapore is one of the largest importers of food and drink products. The report has explained some competitive advantages of Made such as low packaging and production costs, lack of preservatives in their juices and use of healthy alternative juices etc. Even with high competition in Singapore, due to the competitive advantages of the company, Made has the potential to grow and succeed in Singapore. In addition, the report has offered a recommendation for Made in terms of marketing mix. The company should offer products at lower prices compared to competitors, should train their employees, and should use the social media, television advertisement and direct marketing in order to great brand awareness. The best mode of entry for Made is exporting. The company can export its products to Singapore and distribute it to retail stores such as supermarkets, and hypermarkets among other retail stores. Table of Contents Made Group International Marketing 2 Executive Summary 2 Table of Contents 3 Introduction 4 Company and Product Analysis 5 Comparative Country and Product Market Attractiveness 7 Comparison of Potential Markets 7 Macro-Environmental Analysis of Thailand 7 Macro-Environmental Analysis of Singapore 9 Political 9 Economic Factors 9 Social Factor 10 Technological Factor 10 Product Market Analysis 10 Comparison of Singapore with Australia 11 Competitor Analysis 12 Buyers Analysis 13 Market Selection with Justification and Opportunity Statement 13 Recommended Marketing Mix for Singapore 14 Entry Strategy 16 Exporting 17 Conclusion 18 References 19 Introduction Globalization has brought about different changes over the last year. Different countries now do trade freely without the restrictions that existed in the past (Dacko, 2002). Currently, more and more firms are opting to internationalize more rapidly than ever before. An organisation that choose to expand and grow its operations by reaching markets that are found beyond its national boundaries makes a decision on the mode of entry to be employed. There are a number of market entry modes that are available for companies wishing to go international into foreign markets overseas. When an organisation has decided to go international, there are a number of options open to it. Examples of entry modes include Exporting, Strategic Alliance, Licencing and Joint ventures to name a few (Dacko, 2002). With globalization and liberalization, it is not difficult for multinational companies to enter into new markets. The entry of multinational companies into international markets can be found to be beneficial for the foreign company and to the domestic market (Dacko, 2002). These multinational companies are getaway options to new technologies and innovation by making life more tranquil and comfortable. The idea of international marketing by foreign multinational companies sound promising for both the company and the new market but it is not as easy as it sounds (Dacko, 2002) . This is attributable to the fact that every market is different in relation to economy, political, regulation and policies, technology and culture. This report details out the international marketing analysis of Made Company. This paper will analyse Made Company and the products it offers. It will also compare the choice of Singapore as a potential market for Made products in terms of macro-environmental analysis. In addition, the report will describe potential entry strategies to be used by the company and justify export as the best strategy for Made. Company and Product Analysis Made Group was started in 2005 and was started with apparently simple strategy in mind through determining the gap in the market, coming up with great ideas as well as taking action (Made Group, 2016). First, it commence with the launch of Australia’s first enhanced water beverage as well as NutrientWater, which shortly after its publication; the corporation began introducing some of their competing brands. Therefore, with their five category-leading beverage brands in their portfolio, Made is an upright integrated business with a committed sales force, up-to-the-minute manufacturing facility and a direct distribution network. The aim of the company is to come up with nutritious, hydration, enjoyment as well as convenience with consistency in the quality of their products (Made Group, 2016). The company uses fresh, natural as well as organic ingredients and doesn’t use preservatives in any of their products. Therefore, they are committed in promoting a healthy lifestyle in their day-to-day operations. The product handled with the company includes impressed juices which are delicious variety of cold pressed juices directly from fresh produce and furthermore, they are never heated. Their juices includes Summer Greens, Ginger Ninja, The Works, Berry Bits and Sunny Side Up to mention a few(Made Group, 2016). These juices are cold pressed by submerging the in cold water so as to deactivate detrimental bacteria as well as to increase their overall shelf life. These products satisfy the needs of their consumers because they have an increased shelf life therefore can be used for an extended period of time. Furthermore, their cold-fill processing methods have brought about a reduction of production costs, waste reduction, longer shelf-life, environmental efficiencies, and broader bottles and reduced packaging costs to the company in general (Made Group, 2016). The target market for Made juices is healthy conscious individuals, middle-class individuals as well as aged people. Healthy conscious people are one of the largest consumers of the juices because of their health status for they neither contain any form of additive nor preservatives (Olivier and Pichon, 2004). In addition, the middle class also are a huge consumer of the impressed juices because they have high sending power due to their experimental nature. Also, aged individuals are a high consumer of these impressed juices for they are prepared directly with no kind of preservatives in them which is preferable for them (Olivier and Pichon, 2004). The performance of impressed juices made the consumers really impressed with their cold pressed juices due to the new technology for specifying “super-premium” juices which has led to the huge population of individuals consuming these juices. According to Made Group (2016), cold-pressed juices are gaining steam through this market since they are constantly regarded to be a superior taste as well as quality over their traditional counterpart. Made Company has a centrally-managed distribution centres which are conveniently located in Melbourne, Perth, Sydney as well as in Brisbane which take care of thousands of deliveries weekly with options such as ‘direct to store’ deliveries all over the four states (Olivier and Pichon, 2004). In addition, they have a third party distribution channel that offers extra coverage to regional locations providing broad national coverage. They also have a Made Direct distribution team that upholds excellent services to their customers. Also, the company has a sophisticated supply-chain and logistics unit that incorporates ambient and cold-chain storage and logistics that ensures a fast and reliable end-to-end solution for their customers all over the world. Comparative Country and Product Market Attractiveness Comparison of Potential Markets Two Potential markets for Impressed Juices of Made Company are Singapore and Thailand. Juice market in Thailand covers products ranging from ambient and chilled juice, fruit juice, vegetable juice, and carbonated fruit juice among others (Thailand, 2012). The growing concern for health and good diet has enabled the growth of juice market in Thailand. The market prefers tomato juice and other fruit juices in place of high sodium and sugar offering juices. More and more manufacturers who offer fresh and organic juices have entered Thailand market. Juice in Thailand has showed a growth rate of 7% from 2012 (Thailand, 2012). Juice industry continues to grow partly as a result of hot weather in Thailand. With the preference revolving around health and wellness, a large percentage of consumers are opting for fresh juices in place of carbonates. Nevertheless, compared to other markets such as Singapore, Thailand makes up a small percentage of the global market for juice products. Macro-Environmental Analysis of Thailand Political Factor Thailand is considered politically unstable as it has been dealing with a large number of anti-government protests. The instability in the country is a major threat to local and international businesses (Thailand, 2012). In order to solve this problem, the government has established some strategies aimed at strengthening some industries and private sector. Generally, the political factor is unfavourable for Made Company. Economic Factor The up and down changing of the global economy is one factors that can affect the operation of businesses. When there is strong economic growth, the company has the potential to grow. Thailand has an upper middle class economy that is expected to grow to $522 billion by 2017 (Thailand, 2012). The country’s economy has been boosted by high growth in skilled workforce, export value and free trade. Socio-cultural Thailand has a large and expanding market that is able to attract investors and multinational companies. Thailand is a small Asian country with small population of middle class individual. The population has about 68 million people which is about 0.92 per cent of the global population (Thailand, 2012). In addition, the changing preferences of people have increased the need for healthy products. Technological The advancement of technology in Thailand has opened opportunities for companies. Companies in the country are being judged on their online presence and their image can be tarnished when they are out of touch with the technology. More and more business in Thailand are using the internet to market their products. This has enhanced growth but has led to intense competition. Macro-Environmental Analysis of Singapore Political The market of Juice business in Singapore is said to be developing very fast. All food and juice companies are expected to comply with the country political requirements including national minimum wage regulations and Hygiene and Quality regulations (Mauzy, Diane and Milne, 2002). Made Company will be under these strict health regulations that may impacts its operations. Singapore is said to have a strong and enhanced political system which has boosted its economy. The country is considered among the few countries with effective and operational policy that favour investors who invest money in different sectors of the country. The government is also committed to ensuring businesses in the country flourish and production of different products increase (Mauzy, Diane and Milne, 2002). Therefore political factor in Singapore is favourable for Made. Economic Factors Despite the 2008 recession that affected the global economy, the average consumer spending in Singapore has increased dramatically. In the recent years, the economy of Singapore has flourished and has increased the growth rate of GDP (Economy Watch, 2010). The country has a remarkable rate of saving, skilled manpower and extensive export business that add up to the success of the country. The already experienced economic development can have a positive impact of small and medium-sized enterprises. The GDP increase is adding value to the people in Singapore and is aggregating the consumer purchasing power (Economy Watch, 2010). Many local and foreign companies are benefiting from the available cheap labour. In 2010, the country was ranked as the third fastest growing economy with GDP growth rate of 14.471 per cent (Economy Watch, 2010). Social Factor Demographic pattern can change the social aspect of a society and social behaviour together with family size can affect aspects such as lifestyles, education and religion. Singapore is known to have high literacy level which has brought about a positive economic growth of the country (Geok, 2002). The changes in customer’s preferences, tastes and need for high quality and healthy products has affected many companies in Singapore. Therefore, Made should direct their plan to cater for the needs of people who require healthy and high quality products and services. The country is made up of middle class people who have high purchasing power as a result of average income. Technological Factor Over the years, there have been new technological developments and many companies have opted to adopt this changing technology with an aim of increasing productivity. There are a number of technological factors that contribute to the distribution mechanism, purchasing process, production process and development of new product. In Singapore, due to the growth of e-commerce, consumers prefer to do shopping online at the comfort of their homes (Geok, 2002). This has changed how businesses operate and market their products and has increased online businesses. Product Market Analysis Exporting Top Juice to Singapore will expand on the market currently available. Singapore is considered one of the tiniest republics in Asia. Nevertheless, it is the prevalent importer of drinks and food products. Since Singapore produce little food products, approximately 90% of its food is imported (Backman, 2005). In 2011 alone, the nation made an importation worth about $12.1 billion of food and drinks (Backman, 2005). Due to consumption growth, importation of agricultural products and drinks is expected to grow in the near future. In Particular, food retail is expected to grow immensely due to higher incomes. There are four key groups of food retailers in the country including large retailers, outmoded stores, convenience stores and petrol stations. As confirmed by 2010 retail report, there exist about 3,000 supermarkets, convenience stores, hyper markets and departmental stores in Singapore that vend imported food and drinks. The country also has additional 1,300 food and drink outlets with approximately $9.1 billion worth of sales reported in 2010 (Backman, 2005). Singapore also contains fragmented wholesale businesses in the food sector that generates up to $1 billion worth of sales. Many are family owned and are involved in re-exportation of the commodities to other countries. Singapore has a developing retail food market that is not growing at a rate as in the previous decades due to market seasonality. For instance, in the supermarkets, it reaches a point where growth is modest and retailers resort to give discounts to attract customers. Singapore customer confidence ranges from being neutral to pessimism. Low confidence level of customer was reported in 2011 due to weaker economic conditions. The lack of customer confidence has led to consumers becoming part of ‘bargain hunting’ in retail channels (Economy Watch, 2010). Comparison of Singapore with Australia Australia has a high GDP growth and favourable economy. It has strict political structure characterised by strict laws and regulations such as Hygiene and Quality regulations. Just as Singapore, there is change in preference of customers (Backman, 2005). Online shopping has increased due to technological advancement. One difference between Australia and Singapore is that Australia enjoys high population which translate to a larger market for juice products. There is potential for growth of Made in Singapore since the market shares some similarities with Australia where the company has grown tremendously. Competitor Analysis Although there is potential market in Singapore, competition may be a challenge from both local as well as international markets. Singapore acquires fruit juices from Australia, China, Japan, Netherlands, United States of America, Vietnam, Brazil, Thailand, Ghana and the local juice producers (Robert, 2002). An example of an Australian firm that would pose a challenge to Made Juice is the Nippy’s. Their range of products include orange and apple juice which has a very high demand in Singapore thus targeting a greater share of the market. Consumers in Singapore are becoming health conscious and are mostly purchasing beverages with high fruit juice content (Robert, 2002). Nippy’s therefore exports high juice content beverages. The importers of fruit juices in Singapore have set strong brand recognition through high food safety and health standards. In addition, Made Juice may face challenges from international markets such as Coca Cola which also has a wide range of products such as sodas. Furthermore, Coca Cola may pose as a huge competitor for Made Juice since some of the consumers may prefer sodas as opposed to juice. Also, products from Coca Cola are cheaper than those at Made Juices and due to their global recognition, they have the ability to reach more market than Made Juices (Robert, 2002). Fresh juices in Singapore are channeled through local distributors whose work is to supply the products to the food service platform. The main supermarkets obtain fresh juices through agents or via direct import (Robert, 2002). For instance, Coca Cola have established their distribution networks almost all over the world which directly market their products to their consumers. Buyers Analysis Most juice consumers in Singapore favour fresh juices due to their healthy nature and less to no preservatives. Therefore, Made Juice can have a huge market share for their products because they are healthy, directly pressed and have no form of additives or preservatives unlike products from competitors such as Coca Cola who manufacture products pumped with preservatives and sugars. In addition, buyers tend to prefer purchasing bottled juice with which they can see the contents in it. Made Juices bottle their products in PET bottles with no preservative levels (Arbindra et al., 2001). This creates a huge market for their impressed juices in Singapore due to their PET bottle packaging. The main target market segmentation for Made Juices are psychographic and geographic segmentation. In psychographic segmentation, the lifestyle of individuals in Singapore embrace a healthy living which creates a huge market share for Made Juices for their wide range of healthy products (Arbindra et al., 2001). In addition, its geographic segmentation of Made Juices in Singapore entails dividing individuals in relation to nations, countries or even regions. This criterion brings together both geographic and demographic data to form a definite profile. For example, Made Juices have a number of retail stores located in Singapore especially in areas with huge numbers of consumers living in middle-class status regions (Robert, 2002). This makes Singapore a potential geographical market segment for Made Juices. Market Selection with Justification and Opportunity Statement Singapore is a potential market for Made Company especially for its juice product. It is a small country but is one of the largest exporters of juice and food products. Although there is intense competition in Singapore, Made has the potential to take up the largest market share for juice products. First, one of the major competitors, Coca-Cola Company offers carbonated drinks which are different from what Made Company offers (Robert, 2002). And due to the changing preference of consumer who opts for healthy products, Made has higher competitive edge. Due to the large number of supermarkets, convenience stores, hyper markets and departmental stores in Singapore, there is high vending for imported food and drinks (Yusuf, Altaf and Nebeshima, 2004). This is advantageous to Made as they will have an avenue to sell their products to consumers. In addition, Singapore is made up of large percentage of middle class individuals who have high disposable income. High disposable income translates to higher sales for Made Company. Technological advancement is high in Singapore as more and more businesses utilize technology for advertisement and selling of their products and services. Technology in Singapore is able to reduce cost of operation and advertisement of Made and this will give them a leverage to lower its prices in order to be competitive (Yusuf, Altaf and Nebeshima, 2004). From the analysis, due to favourable political, social, economic and technological factors, Singapore is best market for Juice products of Made. Recommended Marketing Mix for Singapore Product A product is a tangible commodity or service a business offers to its customers. Made Company has unlimited product depth. The company should offer its products according to the taste and preference of its consumers. For instance, the company deals with organic foods and drinks such as premium dairy products, fresh juices, and other organic produce (Made Group, 2016). The company is known to offer quality products with best features based on the preferences of the target market. The recommended product for Singapore market should be pressed fresh juice. Price Made is loved and trusted by its customers in Australia for manufacturing premium quality products that have affordable prices. In Singapore, the company should offer considerable and typical prices for its products which is made possible by its low cost of production. In Australia, Made products are generally sold at reasonable prices a little bit higher compared to the competitors. However, in order to gain competitive advantage and survive in Singapore where there is intense competition, it should lower its prices (Yusuf, Altaf and Nebeshima, 2004). It should use discount campaigns to increase its sale and create brand awareness. Promotion Promotional activities can assist Made Company communicate clearly with the target customers in Singapore. The company can use the social media and the internet to advertise its juice products in order to create customer loyalty and expand its market. Made can also promote its products through television commercials and promotional campaigns. Other promotional activities that can be utilised by the company include the use of sales persons, direct marketing as well as online advertisement (Dacko, 2002). Distribution The company’s products should be distributed across all the regions in Singapore. Generally, Made should follow the concept of breaking the bulk. It should pass the bulk through the distribution channel until it reaches the consumers. Another distribution channel involves the use of distributers and retailers. In addition, the company should utilize supermarkets, hypermarkets and large retailer outlets in Singapore to sell their products directly to the consumers (Dacko, 2002). Generally, it should use the retail concept in order to make its products available to the consumer at the right time. People The company should strengthen the relationship between its employees and customers. The employees should undergo training and development in order to have effective customer service in a foreign market. Singapore is considered a market with people with high disposable income. However, the Bargaining power of buyers is high because customers have many choices to select from due to many juice products in the market (Geok, 2002). Therefore, as mentioned earlier, Made should lower its prices in order to remain competitive. Entry Strategy Made can use Joint venture, strategic alliance, Wholly-owned foreign direct investment and exporting as a means of acquiring new markets. The decision of the mode of entry to be chosen is very critical and depends on many factors (Dacko, 2002). Foreign direct investment is another option in the case where a company wants control as it allows internalization for proprietary asset exchange. Nevertheless, since FDI calls for greater resource commitment in terms of capital, it will not be a greater option for Made. International licencing reduces political risks when it comes to exports and it can easily reach new markets with limited restrictions (Dacko, 2002). Nevertheless, the disadvantages are that it is considered limited form of partnership and potential returns may be lost. The best mode of entry into Singapore is exporting. Exporting Exporting is the best way for Made to internationalize into Singapore. Exporting is a relatively easier method to expand operations in foreign markets. Furthermore, it is relatively less risky compared to joint venture and wholly-owned foreign direct investment. This has been one of the finest methods undertaken by other companies in gaining entry and experience of new markets. Exporting is advantageous compared to other methods (Dacko, 2002). One major advantage of exporting is the potential economies of scope that result from production volume (Dacko, 2002). Increased level of production, distribution and even advertising leads to the decrease in cost of produce that a company is expected to incur. Furthermore, decreased costs have an impact on potential profitability of an export venture. When Made decides to export its products to Singapore market, it is likely that there is competitiveness in the local market. Local competitiveness may result from enhanced productivity and efficiency (Dacko, 2002). The advantage of competitiveness in the local markets is that it ensures dominance compared to the competitors and products are considered superior than others thereby demand of the products in the local and international market increases. Exports are considered a low cost as well as low risk method of gaining entry to new markets compared to international joint venture and wholly-owned foreign direct investment (Dacko, 2002). Exports are regarded cost effective in gaining access to lucrative international market opportunities such as Singapore. When compared to more complex modes of entry such as international joint venture and strategic alliances, exports tend to enable an enhanced pace of entering foreign markets (Dacko, 2002). Another advantage of exports is diversification. Companies that carry out their operations in more diversified markets face few risks than non-exporting firms. This is founded upon the fact that countries are not bound by similar timing and type in the business cycle. Therefore, the likelihood that an economic failure occurs at the same time across countries where business operations are is minuscule. In addition, market spreading and expansion tend to moderate the risk of declining demand and returns from a single market (Dacko, 2002). In addition, due to huge number of supermarkets, convenience stores, hyper markets and departmental stores in Singapore that vend imported food and drinks, exporting juice products to Singapore will be a great option. Made should therefore utilize export method in entering Singapore market (Economy Watch, 2010). Conclusion Singapore and Thailand are two potential markets for Made Juice products. Nevertheless, the preferable market between the two is Singapore due to favourable political, social, economic and technological factors. In addition, Singapore has a huge number of retail stores where Made can distribute its products. Although there is intense competition in Singapore, Made Company enjoys competitive advantage of offering healthy juices at lower prices. Also, Made Company enjoys the advantage of having low packaging and production costs and package their products in PET bottles which enable them to prevent the use of preservatives in their drinks. In order to be able to succeed, Made Company should offer their juices at lower prices should use promotional activities to enhance their image in Singapore, train their employees in order to blend well in the foreign market and should use export as a mode of entry in Singapore. Export is less risky, ensures dominance and is the fastest means of entering new markets. References Arbindra R. et al., (2001). “Perception of Food Safety and Changes in Food Consumption Habits: A Consumer Analysis”, International Journal of Consumer Studies, Vol. 25(1), 43-52 Backman, M. (2005). Inside knowledge streetwise in Asia. Houndmills, Balsingstoke, Hampshire New York: Palgrave Macmillan. Dacko, (2002), S.G. “Understanding market entry timing decisions: the practitioneracademic gap”, Marketing Intelligence & Planning, Vol. 20, No. 2, pp. 70-81. Economy Watch, (2010). Singapore Economy, Economy Watch, Follow the Money. http://www.economywatch.com/world_economy/singapore/ Geok B. (2002). Census of Population (2000). Singapore: Department of Statistics. Archived from the origina Made Group (2016), http://madegroup.com/ Copyright 2016 Made (Aust.) Pty Ltd. All rights reserved Mauzy, Diane K.; Milne, R.S. (2002). Singapore Politics: Under the People's Action Party. Routledge Olivier B., and Pichon P.(2004). “Food Related Risk Reduction Strategies: Purchasing and Consumption Processes”, Journal of Consumer Behaviour, Vol. 3(4), 360 – 374. Robert A. W. (2002) “ A case study of organization-level customer satisfaction ” . Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior Thailand, 2012, Pestle Analysis of Thailand 2012, Research and Markets, http://www.researchandmarkets.com/reports/2546420/pestle_analysis_of_thailand_2012 Wills, R. (2007). Postharvest : an introduction to the physiology & handling of fruit, vegetables & ornamentals. Sydney, Australia Cambridge, MA: UNSW Press CABI North American Office. Yusuf, S., Altaf, M. & Nabeshima, K. (2004). Global production networking and technological change in East Asia. Washington, DC: World Bank. Read More
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