Exporting Local Saskatoon Berries from Canada to Australia - Research Paper Example

4. Target Market and Environmental Background Environmental Scan Australia is one of the main developed countries in the South Pacific Ocean which is a target market for the exporters of Saskatoon berries. The Saskatoon berries are a Native American produce which are often traded in dried, canned or frozen form. The product is a very profitable one, with increasing demand in the international market for the wild tasting organic produce. "Investment in human capital through education and training is the key ingredient to innovation and the development of knowledge-based industries." (Harcourt, 2000) The Saskatoon berries are popular in Australia amongst the local aboriginal population as well as those residing in the urban areas. Marketing to this region can bring the company profits with high margins. The political scenario in the region is sound, with a growing economy and an established central legal system. The social environment in the region is very similarity that in Canada, making the target market much more understandable and easier to relate to. Business Climate for Exporting The business climate in for the Saskatoon berries is very strong and profitable right now as the berries are quite in demand due to their tastes, their use in dairy products, bakeries as well as ice creams as well as due to their antioxidant properties. The fruit has heritage links with China where a version of the fruit was originally grown, however it has been discovered in the central north Canada and has become a native original fruit to the region. It would be more profitable for the company to operate through Canada, as the cost of the logistics ad the transportation of the Saskatoon berries would be much more feasible for the company than if its was outsourcing to China or operating form there. Risks The main risks that are present to the company for exporting to the region of Australia pertain to the risks associated with spoilt and bad harvest, which can affect the supply of the product to the region. Moreover the changes in the prices of the berries are also very volatile according to their demand and supply each season and the quality of the harvest produced. This can make operations very volatile with unpredictable revenues. Moreover the Australian dollar is valued at a lesser denomination than the Canadian dollar with considerable fluctuation. This can affect the revenues of the company with the volatile exchange rates applicable. Other risks that the company would be exposed to are conforming with and getting approval from the local Australian food control authorities. A case took place in 2004, when the Saskatoon berries were ordered off the shelves in the UK due to their bad quality of packaging which effected the quality of the berries. (Gillis, 2004) Consumer Profiles The consumers who will be the direct target market for the Saskatoon berries and would be buying the berries in Australia would include restaurants, organic food and fruit retailers as well as the housewives and catering service providers. The restaurants and the caterers would be buying the product to add the exotic flavor to their dishes while the housewives, and the general consumer will be buying the berries due to their intense and unique taste, their diverse usage in dairy products, baking and cereals as well as due to their properties of being high in fiber and a major source of antioxidants 5. Market Entry and Marketing Strategy SWOT The strengths of exporting Saskatoon berries to Australia include the increased business operations, the increase in the profit margin as well as the positioning and the placement of the company name and brand in the international market. The weaknesses pertain to incurring larger cists for logistics and the transportation the frozen berries to the region of Australia. The opportunities that exporting to Australia provides for the company include the increased market share of the company, and future prospects of operating in the Australian market with other wild berry based produce and products. The threats faced by the company pertain to the fluctuating exchange rate which can effect the revenue of the company and the competition form the local berry producers which operate in the same market which can be mitigated by entering into memberships with local trade associations for the dry fruit industry. Products The Saskatoon berry is a unique wild fruit native to the region of Canada. The "Saskatoon berries can be considered as one-kind of 'Superfruit'. The word 'Superfruit' refers to fruit which contains high sources of antioxidants. From a nutraceutical perspective, antioxidant rich fruits have anti-cancer, anti-aging, and anti-heart problem effects on human body. The benefits of antioxidant have contributed against cardiovascular and inflammatory diseases, and act as a protective guard to our immune systems." ('Prairie Berries') The processors and distributors of berries and the berry dryers that operate in Australia include companies like the Bestlan Group, Tumbarumba Grape Processors Pty Ltd and Anhydro Group. "Bestlan is a privately-owned Australian-based family company, which is located in Townsville in the Far North of Queensland in Australia. The Bestlan Group was first established in 1986 as a fruit processor." ('Food Processing Technologies') Aside form this independent small retailers also operate in the region which provide the wild organic berries to the consumers in the market. Australia Pricing The price of the Saskatoon berries which would be exported to Australia would be set at USD 2.00 per pound. This price however is not fixed, as according to the season and the harvest quality of the berries the price of the berries will need to be changed to 20 percent above and below the USD 2.00 per pound mark. Placement The cities where the Saskatoon berries will be exported to include Melbourne, Canberra, Adelaide, Newcastle, Sydney, Brisbane, Gladstone, Alice Springs, Perth, & Fremantle. These countries lie on the south east and the south west coast of Austria and house the main population of the region which demands products which include the Saskatoon berries. Moreover these are the developed regions of Australia, which makes it easier to transport the berries to these regions and sell the fare in the local markets. Promotion The promotion of the Saskatoon berries would be conducted mainly by establishing relationships with the customers and encouraging personal selling. This is the best form of marketing strategy for a product as unique as this which is not a product for the mainstream market. Aside from personal selling, print advertisements will be placed in specialty publications like Australian Women's Weekly as well as the industrial journals for the food, catering and the hospitality industry. Advertisements online on the internet as well as through the website of the company would be conducted to further promote and market the product. The budgeted costs for the promotion activities pertain to USD 35,000 for personal selling, USD 12,000 for advertising in specialty publications and direct mail advertising a well as an investment of USD 125,000 in the website for the company which will cost an additional USD 2,500 to maintain. Alliances In order to be profitable in the long run the company will need to form alliances based on business strategy with the local industry associations and communities like the Australian Dried Fruit association. Such alliances will help the company place and position itself better for operation in Australia. References (2004), Coming soon...Saskatoon, International Food Ingredients Issue 2, p52-52, 1/4p, 1 color, retrieved September 9, 2008 from http://web.ebscohost.com/bsi/detailvid=1&hid=105&sid=c6b1dc2d-7721-4c62-b4fe-046713e992a6%40sessionmgr103&bdata=JnNpdGU9YnNpLWxpdmU%3d#db=buh&AN=13605885 (2004), Saskatoon berries debut in UK, Food Manufacture, Vol. 79 Issue 3, p19-19, 1/6p, 1 color, retrieved September 9, 2008 from http://web.ebscohost.com/bsi/detailvid=1&hid=112&sid=ae24ce46-4537-4557-a6cb-c11487ab597b%40sessionmgr103&bdata=JnNpdGU9YnNpLWxpdmU%3d#db=buh&AN=12399473 (2007), Saskatoon berry production bearing fruit, EduTransfer Design Associates Inc. & Haywire Creative, retrieved September 9, 2008 from http://www.farmcentre.com/News/TodaysStory/Article.aspxid=66bd868e-1541-4657-b345-c92db2ad5c41 Cities in Australia, Epic Trip, retrieved September 9, 2008 from http://www.epictrip.com/Cities-in-Australia-places-l161.html Food Processing Technology, , retrieved September 9, 2008 from http://www.foodprocessing-technology.com/contractors/processing/ Hartcourt, T., (2000), Why Exports Are Good For Innovation, Australian Trade Commission, retrieved September 9, 2008 from http://www.austrade.gov.au/Why-Exports-Are-Good-For-Innovation/default.aspx Gillis, C., (2004), Foodies Wild for Exotic Berries, Maclean's, Vol. 117 Issue 31, p72-72, 1/4p, 1 color, retrieved September 9, 2008 from http://web.ebscohost.com/bsi/detailvid=1&hid=112&sid=a1273695-205d-47b6-9c50-9b1e7c96da2d%40sessionmgr108&bdata=JnNpdGU9YnNpLWxpdmU%3d Prairie Berries, Official Company Website, retrieved September 9, 2008 from http://www.prairieberries.com/ Read More