Singapore as a Target Market for the Australian Butter - Term Paper Example

International Marketing Opportunities Name Professor Institution Course Date International Marketing Opportunities Executive summary This report is formulated to evaluate international marketing opportunity for Australian dairy products, in particular butter. According to report by ibisworld, the prices of domestic milk products, especially butter decreased slightly in 2009/10 because of a decline in demand for sector products following the global economic crisis. Nevertheless, this fall did not overshadow the increasing force of Australian dairy producers on the global platform. Strong increase in global demand for butter and other dairy products outdid supply growth, mainly because of supply limitations in some major exporting nations. This acts a major boost to some of the leading Australian butter producers to cover this shortage. This report analyse Singapore as a target market for the Australian Butter. Table of Contents International Marketing Opportunities 2 Executive summary 2 Table of Contents 3 1.0Introduction 4 2.0 Country Introduction 4 3.0 PESTLE Analysis 5 3.1 Political 5 3.2 Economic 5 3.3 Social 5 3.4 Technology 6 3.5 Legal 6 3.6 Environmental 7 4.0 Preliminary Marketing Plan 7 4.1 Product 7 4.2 Price 7 4.3 Place 8 4.4 Promotion 8 5.0 Sources of Information 8 6.0 Conclusion 9 7.0 References 10 Appendices 12 1.0 Introduction As times changes the world keep on shrinking and becoming a global village (Gruber 2004, p.165). Technology platform are advancing, people are getting informed about new products and marketing opportunities is increasing. Farm product companies have begun to exploit of international marketing since they become responsive to their firms' full potential. Australia is the third leading butter and dairy products exporter in the world and is doing well in the Asian market which is a rapid-growing economy (IBISWorld 2013). Some of the butter products are shown on the appendices. Based on these facts, this report evaluates the international marketing opportunity for Australian butter with regards to country production, PESTLE Analysis, Porter’s Five Forces Analysis and preliminary marketing plan. 2.0 Country Introduction The most important foreign market for Australian butter is Singapore. This is encouraged by growing income levels among the middle class in Singapore. Singapore has a highly developed market-based economy. It has highest trade-to-GDP ratio in the world at 407.9%. This is a significant aspect of trade to its economy. 3.0 PESTLE Analysis 3.1 Political Singapore government is a considered to be friendly towards investment (Scribed 2013). However, the governments are strict on its laws which that have enforced through various agencies. The competition commission of Singapore is set to ensure fair atmosphere in the business sector. Today, the rate of corruption in Singapore is among the lowest among the countries (The Economist 2010). This means Australian companies operating in that country must play according to the rules (IBISWorld 2013). 3.2 Economic The GDP of Singapore has been growing since 2000. In 2010 the country registered a GDP of 14.5 % growth from 7.9% in 2006 (Ministry of Manpower 2011). Today the economy and expanded greatly and registered a GDP of 51,709.45 USD in 2012. The income among middle class has also improved tremendously boosting the opportunities for Australian dairy companies. This is because the main target group for butter is the middle income earners. 3.3 Social Since butter is an accepted product in all societies, this has made it simple for Australian dairy companies to market their dairy products in the Asian markets (Hitt, Ireland & Hoskisson 2011, p.130). What can affect butter marketing and sales is the income distribution and trend change. In most cases the company normally sells their product to the customers who have higher disposable income. Butter is a luxury product therefore its target markets are people or places with high disposable income. Singapore is reported to have highest percentage of millionaires in the world, and one out of each family having a minimum of one $1M in disposable wealth (The Economist 2010). 3.4 Technology According to the 2013 report by IBISWorld, the degree of technological advancement is modest but very consistent in this industry. As growing economy, government of Singapore puts a lot of emphasis in technology to improve the operations in key industries including dairy. It is believed that the increase of internet use has increase export greatly (Slideshare 2013). This includes communication, production and sales. Currently, major companies in Singapore use big machines to separate milk in bulk into butter (IBISWorld 2013). This will be a bigger boost to Australian companies intending to put up dairy plants in Singapore. 3.5 Legal Singapore has for a long time recognized the significance of reliable and stable legal mechanisms in attracting foreign businesses (Scribed 2013). The efficiency, transparency and integrity of the authorities and courts have contributed considerably to its growth. As mentioned before, Singapore is considered to be having one of the lowest levels of corruption according to Transparency international (Slideshare 2013). Therefore, Australian diary companies will involve themselves in cannot involve in corruption to gain market advantage. Also, employee’s legal policy favours a lot of firms in Singapore. There is also strict adherence for set rules for business in Australia. In establishing business on both Australia and Singapore, one has to ensure all the set regulation regarding new business establishments are adhered to (Kotler & Keller 2011). 3.6 Environmental Singapore has strict measures towards ensuring solid waste management. It also lays a lot of emphasis optimum usage and recycling. Singapore government has put extra efforts in ensuring a clean and healthy environment as well as clean and hygienic water resources (Kotler & Keller 2011). 4.0 Preliminary Marketing Plan 4.1 Product IBISWorld (2013) argues that Singapore as a growing country, most companies are scrambling for this market. This means in future there could be presence of several companies offering butter and dairy products. Therefore, Australian dairy companies must different from their products through good packaging. 4.2 Price Dairy prices changes from a supply driven to a demand driven and could be responsive to consumer demand and market signs (Dairy Australia 2013). In a growing economy as Singapore global demand for dairy such as butter will continue to increase, and in the average term global dairy prices are projected to be average just above the levels attained in the past year, before it shoots (IBISWorld 2013). Through price differentiation Australian companies can take advantage of this market. However, penetration pricing method would be recommendable for this butter product. This will ensure that if the price is set a lower price initially, then it will attract new customers. 4.3 Place Australia as the world third dairy products exporter, show that the company has gone global and targeting various markets (Dairy Australia 2013). The company has presence several Asian countries including Singapore. Every year different companies are joining the market; this means Australian companies improve the awareness about their products. To do this, good positioning is needed through intermediaries as retailers and distributors instead of exporting (Kotler & Keller 2011). 4.4 Promotion Since the Australian dairy companies with presence in Singapore operates on the international sphere, its promotional strategies concentrates on the need to consider external environmental elements, such as culture, economy, political structures, demographic makeup, natural resources, and technological advancement (Hitt & Ireland, 2008). In terms of business development, the telecommunication sector in Singapore is being controlled by the numerous big state owned companies, it is critical for Australian dairy companies to extend their partnership with these companies as to take advantage of the market. 5.0 Sources of Information Entry to a new market requires a lot of research of the products and companies existing and those that are coming (Gruber 2004, p.173). As such there is a need for very reliable source of information. To make entry or continue working Singaporean market, Australian companies should always gather information from government agencies’ reports, reliable articles, journals, media, books just to mention but a few. 6.0 Conclusion In conclusion, Singapore has been chosen because it is among the fastest growing economies with a good and favoring trading environment for establishing business. As the companies go global, every company and sector must also fight for its place to create its brand awareness to the global customers. In the past, the reaction of the Australian dairy companies have been positive for the rapid changes in market and firms’ strategy is to capitalize on its strengths and market mix to increase its revenues in foreign markets. The industry has managed to serve the world with their butter and other dairy products to an extent of becoming number three worldwide. With the global dairy industry expected to improve, Australian industry must embrace technology to reach other markets as much as possible. 7.0 References Dairy Australia 2013, viewed 20th Jan. 2014 from http://www.dairyaustralia.com.au/Statistics-and- markets/Production-and-sales/Butter.aspx Brassington, F & Pettitt, S 2003, Principles of Marketing, third edition, UK: Prentice Hall Financial Times. Gruber, M 2004, Marketing in new ventures: Theory and empirical evidence, Schmalenbach Business Review, 56(April 2004), 164-199. IBISWorld 2013, IBISWorld Industry Report C1133c: Butter and Dairy Product Manufacturing in Australia, viewed 20th Jan. 2014 from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports/au/industry/default.aspx?entid=96 Hitt, M. A., Ireland, R & Hoskisson, R 2011, Strategic Management: Competitiveness & Globalization, Concepts. 9th edn., Mason: South – Western, Cengage Learning. Kotler, P & Keller, K 2011, Marketing Management, (14th Ed.), London, Prentice Hall. Ministry of Manpower 2011, Employment Situation in Fourth Quarter 2010, retrieved from http://www.mom.gov.sg/newsroom/Pages/PressReleasesDetail.aspx?listid=347 Scribed 2013, Pest Analysis of Singapore, retrieved from http://www.scribd.com/doc/57814135/Pest-Analysis-of-Singapore Slideshare 2013, A Cultural & Economic Analysis of Singapore for making Market Entry Decisions, retrieved from http://www.slideshare.net/SrikiranCRai1/a-cultural-economic-analysis-of-singapore-for-making-market-entry-decisions The Economist 2010, Singapore government response. retrieved from http://www.economist.com/node/15541423 Appendices Read More