International Strategic Marketing Plan For Dried Fish From UAE - Essay Example

? International Strategic Marketing Plan: Dried Fish from UAE to Brazil Executive Summary Product Three levels of Products The company produces driedsea food in the form of salted, smoked, pickled and frozen forms. However, the offerings of the company can be best explained by using the three levels of products. Core Product This is the core benefits that are provided by a product. In the present context it can be said that the one of the core benefits to be provided by the product would be good taste. Variations would also be a part of the part of the benefits provided by the product. One of the major factors that are to be considered while marketing of food related products would be heath. Hence another benefit to be provided by the product along with taste and variations would be health. Another benefit that could be provided by the product could be easy to process. As compared to traditional food products such products can be easily processed with ease within a short period of time. Actual Product The actual product is the tangible part of the product which can be seen and touched by the customers. One of the parts of the actual product could be the small sliced fishes which would save the time of the customers. Also the nature of the product is dry and hence it could take from one place to another with relative ease. A part from these another major factor of the actual product would be packaging. The product should package in an attractive fashion with colours that are attractive yet have an environment friendly image. Green would an ideal colour. A part from this packaging should also be used by the company to provide all the relevant information. Due to the nature of the product the customers may look for information such as processing date, expiry date, ingredients used. All these information should be mentioned in a user friendly manner. A part from this the environment friendliness of the material used in packaging could be conveyed. Augmented Product Augmented Product refers to the additional bundle of benefits offered by the company. One of the best ways to go for augmentation would be through after sales service. But due to the nature of product being discussed there would be very little scope for after sales service. But still the company can take full responsibility of damaged product or poor quality and offer cash back. Also customer service through various mediums can help the company increase customer satisfaction. A part from these, time to time special offers or coupons or loyalty cards can also be a form of augmentation. Vision To facilitate and promote dried food business to the highest level possible with international standards on the international platform to ensure transparent, smooth and long term relations. Mission To develop an efficient supply chain network to ensure satisfaction within channel partners and customers Micro Environment Factors Company Ghazal is a UAE based company which produces dried fishes. It is a 6 year old company and has its operations situated in UAE; Dubai to be more specific. The company supplement locally harvested fish stocks along with quality control program to ensure that the customers get the best quality and value possible. The company understands the value of customized offerings and services and the convenience resulting from flexibility. The company has a divisional organizational structure. Customers Based on customer demographics it can be said that the people belonging to the age group of 24 to 54 would be the target market customer. However, while market segmentation and targeting a bit more thorough approach should be adopted. A part from age another demographic factor be considered would be income. Primarily the people belonging to the middle to high income group should be targeted. In Brazil the income range of the people belonging to the upper middle income group mainly varies from $4,036 to $12,475. Also a part from this the company should be looking to create a niche market segment; such as the main target market segment should be people belonging to the upper middle income group in the age group of 24-54; working professionals; conscious about health (Moving away from red meat) should be the market segment to be targeted. While positioning the product all the three levels of product should be kept in mind; but primarily the positioning should be based on core level of the product. Product should be positioned as a tasty, healthy high quality product which can be easily processed and prepared for consumption (Czinzota, Ronkainen, Moffett, Marinova & Marinov, 2009). Media Media would be critical in the promotion of the product. Off-course, there would be various modes of media that can be used to promote the product such as print, television, etc. But the most preferred source of media to be used for communication should be the digital media. Simply because it is a lot less costly as compared to other media and yet it can be a lot more effective. According a survey by new media trend watch there were 88,494,756 internet users in Brazil. This actually represented 45.6% of the total population. \ Use of internet in the country has been growing a rapid pace as web and social media has become a part of the everyday routine of the people. According to a research by IBOPE Nielsen online number of internet users in the metropolitan cities of Brazil is matching up to the global standards. Add to that almost every six in ten internet users said that they accessed internet while watching television. The internet adoption level which was 42% at the end of 2012 is expected to reach 48% by the end of 2016. Year Adoption Rate (%) 2011 39 2012 42 2013 44 2014 46 2015 47 2016 48 (Forecasted) Table 1: Internet Penetration Brazil, 2011-2016 (Source: e-marketer) When it comes to the demographic profile 54% of the total using internet happened to be male. Also another encouraging sign for Ghazal Company would be the age group of the internet users. According to the findings of the same research conducted by e-marketer on average 57% of the total respondents belong to the age group of the 24 to 54, which happens to be main target market segment of Ghazal Company. Age Group % of Usage 10-15 75% 16-24 81% 25-34 67% 35-44 48% 45-59 30% 60+ 12% Table 2: Internet Usage as per age group in Brazil, 2011-2016 (Source: e-marketer) Due to the increase in the number of internet users spending on online ads by the marketers has also been increasing. The e-marketer research report stated that in the next year the budget on online ads is likely to touch the $4billion figure. Competitors Although the Brazilian seafood industry has all the potential to become a giant in the respective industry; as of now the industry has not been able to match up to the increasing local demand. However, there are certain companies which can be a potential threat to the Ghazal Company. The main competitors have been identified as TECOPESCA located in Campinas; BOM PEIXE INDUSTRIA E COMERCIO LTDA. Located in Rua Joao Franco de Oliveira and South American & Overseas Fish Products located in the city of Sao Paulo. Among these TECOPESCA produces products such as ATUM POUCH, CANNING ATUM, and Cavala. South American and overseas food products provide frozen fish products. Among these BOM PEIXE and TECOPESCA would be the main competitors provide wide variety of shellfish and fish products. Both these companies are quite known for their product quality and delivery. Both these companies have a strong distribution network. Intermediaries Intermediaries or middle men are those who would deliver the end product to the customers; this is directly related to the channel and distribution of the company. Since, Ghazal is a foreign firm looking to enter Brazil the channel and distribution along with the mode of entry would of great importance. The company has already decided to enter Brazil through exporting. However instead of going for direct exporting it is suggested that the company should go for piggybacking or complementary exporting. In case of complementary piggybacking the firm mainly uses the distribution network of another local firm. In this way the foreign firm can reduce the risk and complexities by saving cost and time. In case of piggybacking the local firm having established distribution network is called carrier and the foreign firm using the distribution network is called rider. In this way the products manufactured by the company would come to Brazil in bulk. Those products would be then sold through the marketing and sales channel of the carrier. Ideally the products should be available in retail outlets. A part from this the products can also be sold over the online medium through the website of both the local and foreign firms in partnership. Here it should be added that although South American and overseas food products is being tagged as a potential competitor; but since the company exports products from China, Argentina, Norway, etc. it can be a perfect candidate for a channel partner. The company has a strong distribution network and also has strong understanding about the customer psychology and customer insights too. Macro Environmental Analysis Macro environmental factors are those that are beyond the control of an organization and yet those factors tend to have serious impact on the modus operand of the businesses. These factors include political, economic, social, technological, legal and environmental factors Political Factors Presently the fiscal policy of the country is limited. The country is relying on the monetary policy and interest rates have been cut down to 10.5% since 2001. Due to the shortage of food supply and increase in domestic demand are greatly impacting on inflation. With domestic consumption rates boosting and the probable hike of oil prices, inflation would continue to become a challenge. One of the major factors to be concerned with for major foreign investors like Ghazal would be corruption. When foreign businesses are looking to invest in government contracts, cases of bribery have come to the picture. Many new domestic entrants are being forced to commit bribery. Another factor that is in directly related to the political factor would be infrastructure. Many geographical areas that have been provided aquaculture farms are quite a long distance away from roads and feed blenders. This is causing operational and feasibility challenges of these projects (Henry, 2008). Economic Brazil is one of the emerging economies and a part of BRIC nations along with. By 2013 the country is expected to witness a GDP growth by 3.50%. As a result various foreign firms belonging to various diverse industries are looking to invest in Brazil. As on 2012 the FDI ranking given to the country happened to be to 8 and hence Brazil is likely to attract foreign investment. In 2009 the country witnessed large decline in FDI and as a result government introduced a number of measures. By 2013 the FDI is expected to touch more than $55 bn. Service sector makes majority of the contributions to the country’s GDP with 64$. Rest goes to the agriculture at 8% and other industries with 28% (Kolb, 2008). Social and demographic Factors The total population of Brazil as on 2012 is over 196.7 million. Also majority of the population belongs to the middle class. Such trends are likely to increase the consumer demand. The official language of the country is Portuguese. Educations wise 30% of the population is still do not have the privileged to have education. When it comes to education Brazil is has fallen behind other fellow emerging economies like China and India. From case specific perspective 43% of the population belongs to the age group of 24-54. This of great significance as, this also happens to be the prime target market segment. From social perspective seafood has been a part of the cultural recopies of the Brazilian people; this includes traditional foods such as “Bacalhau”. Technology The government spends round about 2% of the total GDP on the research and development. This would ensure technological advancement and progress. As per reports 750,000 new IT professional are likely to be there in the country by 2020. It also forecasted that 300,000 of those professional may have to serve in the technology export market. The government is also planning for steady advancement and improvement in the area of rural telecommunication. The country is looking to become up to date with the technological developments. As per industry reports Motorola is also planning to invest $99 million in research and development in Brazil. The country also holds highest level of patent applications in South America. From the perspective of Ghazal, this is of great significance as technological improvements; especially in the rural would help companies like Ghazal to lay out efficient , technology integrated in bound and out bound logistics (overall supply chain). Legal Companies look to become corporate entities with detached legal personalities. Registrations with trade board creditors usually do not seize the asset of the partner to pay the debts of the company (Belch and Michael, 2005). Only minority participation can be seen in the domain of financial institutions and insurance companies. Legislations and Taxations in the country vary from one province to another. This increases compliance costs and complexities. Therefore the company is looking to make reforms in taxation forms. When it comes to the tax incentives for foreign investors capital gains are usually earned by local players are taxed at a higher rate. Capital gains on stock and derivatives are traded in future exchanges and stocks are excused. Foreign investors are excused from the withholding of tax mainly due to the participation in investments funds. From the perspectives of regulatory side though, one of the major weaknesses would be the legal frame works concerning the utilization of water for aquaculture. Brazil is a member of WTO, American Integration Association, and the Market of Southern Cone. Under the agreement of Market of Southern Cone; tariffs need to be abolished; movement of labour and products has to be in restricted and overall macroeconomic policy has to be harmonious and co-ordinate in nature. However, one frequent complaint related to the industry has been the poor bio safety standards of production. Also the lack of transparency and public information with reference to the industry in discussion may act as a potential barrier to the investment of foreign companies like Ghazal. Environmental Government of Brazil has strict policies for protection of environment and stopping of deforestation to reduce carbon footprints and start eco friendly combustion tactics. The company has signed pacts with developed countries. Also, the country has developed Amazon basis to reduce deforestation. Such environmental regulations are understandable considering the fact that according to the Kyoto Protocol, Brazil is one of those countries where the degree of emissions of green house gases is quite high. Brazil has a target to reduce emissions by close to 40% by 2020. Here it needs to be said that by 2012 the country has been able to reduce deforestation by 70%. From the perspective of the current study one of the major environmental concerns for the industry would be underdeveloped feed industry and high prices (Kotler, 2001). From a case specific perspective, the country has a scarcity of seafood. Despite of having a large coastline the country has lacked the fishing resources. As a matter of fact some of the coast lines of the country are treated as barren. Conclusion To conclude the above analysis it can be said that Brazil is one of the emerging economies along with countries like India and china. The country has seen steady growth in GDP over the years; and such growth is likely to continue in future also. By 2013 the country is expected to witness a GDP growth by 3.50%. By 2013 the FDI is expected to touch more than $55 bn. The total population of Brazil as on 2012 is over 196.7 million. Such trends are likely to increase the consumer demand. Also majority of the population belongs to the middle class. Brazil is a member of WTO and there are various taxation related incentives used by the company to attract the foreign firms. Brazil also has strict environmental policies to reduce deforestation and emission of green house gases. However, while analyzing the external environmental factors a few problems were also found which need to be highlighted. One of the major factors to be concerned with for major foreign investors like Ghazal would be corruption. When foreign businesses are looking to invest in government contracts, cases of bribery have come to the picture. Due to the shortage of food supply and increase in domestic demand are greatly impacting on inflation (Ferle, C., and Edwards, S., 2006, p.81). With domestic consumption rates boosting and the probable hike of oil prices, inflation would continue to become a challenge. From micro environmental perspective one of the major opportunities for the company would be the steady rise of the internet users. On average, people belonging to the age group of 24-54 accounts for 57% of the total internet usage. This age group also happens to be the main target market segment of the company. Ideally the company should target a niche market segment belonging to the age group of 24 to 54 and the upper middle income group ($4,036 to $12,475). From social perspective seafood has been a part of the cultural recopies of the Brazilian people; this includes traditional foods such as “Bacalhau”. The product should be positioned as a healthy, quality easy to process product. This would mean that there would great chances of success if the company uses the digital medium properly. Also another key factor the company needs to look after is the mode of entry. Already the country has decided to enter the Brazilian industry through exporting. But direct exporting can be a bit too risky as the company would have to lay out the distribution channels on their own. This may open up the company to potential risks. Hence it suggested that the company should adopt complementary exporting or piggybacking. In which the company can use the distribution channel of a local firm having a well designed distribution channel in the host country. This would reduce the cost and time. From a case specific perspective, the country has a scarcity of seafood. Despite of having a large coastline the country has lacked the fishing resources. As a matter of fact some of the coast lines of the country are treated as barren. Add to that there has been a rise in the consumption pattern of the country. Probably due to such circumstances a total of over $450 million imports of sea has not been good enough for the country. Hence the import of sea food from UAE may turn out to be perfect foil to meet the gap in demand and supply (Burgemeister, 2003). SWOT Analysis Strengths One of the major strengths of the company would most certainly be the quality of the products. In UAE the products of Ghazal Company is quite famous for its quality. Also the company is ISO certified. Strong Financial performance in the domestic country has helped the company to reach economies of scale; which most certainly is a major strength. Also skilled employees, leadership and vision are the strengths of the company (Burgemeister, 2003). Opportunities The emerging economy and increase in consumption pattern provides a great opportunity for the company. Also the lack of supply of seafood provides a great opportunity to the company. Majority of the Brazilian population belongs to the age group of 24-54 which is the target group. Rise in the number of internet users provides opportunity for digital marketing. Presence of retail giants like Wal-Mart and Carrefour is also a major opportunity. Weaknesses Low brand awareness is most definitely a weakness for the company. Also the company does not have own storage and transportation facility in Brazil. Threats Strong cultural differences along with inflation are the major threats of the part of the company. Also the presence of companies like TECOPESCA and BOM PEIXE INDUSTRIA E COMERCIO LTDA is a major threat. Reliance on the channel partners for the overall distribution is also a threat. Also the complexities in the legal framework regarding the use of the water for aquaculture are a threat. Lack of public information in this sector is also a major threat. Marketing Strategy Marketing Objectives Besides the development and execution of customer oriented marketing operations the company should look to achieve a cumulative growth rate of at-least 1.5% over the course of next year. In the first year the company should focus on brand awareness as well as distribution. A part from effectively using the distribution channel of the carrier firm the company should look to make a strategic alliance with at least one major organized retail firm in Brazil to strengthen the marketing distribution channel (Laage-Hellman, 1997, p.34). At the end of the first fiscal year the company should look to capture at-least 3% of the whole Brazilian market share. Also the company should have a benchmark when it comes to customer satisfaction. It may be stated that out of the total customers acquired only 15% or less should have customer complaints. In the next year the company may look to focus on getting at least 25% less customer complaints than the previous year. Marketing Mix Product The product should i.e. dried fish should be positioned as a product which would tasty, healthy in nature; and it can be easily processed. However, the company can also look to achieve product differentiation by adding new products to the line. But initially it may not be a reality. Hence the company may have to rely on attractive and differentiated packaging in order to create product differentiation. A part from this the company should also focus on augmentation in the form of credit facility, home delivery, money refund on bad quality, etc (Ghauri and Cateora, 2010, p. 141). . Price The demand for recipes made from sea food is quite high. Dishes made from Bacalhau happen to be a huge hit and hence the prices of Bacalhau are also quite high. The hikes in prices have also been complemented by the recent inflation. As of now prices of Bacalhau is $Cdn 25.00 per pound retail. As per Brazilian standards is quite high. It is suggested that Ghazal Company should use price skimming strategy. In this way the prices initially set would be of higher margin. But with time the prices would be lowered. However, the price range should be between $Cdn 10 to $Cdn 15. Price skimming strategy should be well punctuated by promotional pricing techniques to increase sales within a shorter period of time (Churchill, 2009). Place Place or distribution would be of utmost importance. Already the company has decided to use exporting as a part of the international channel and distribution strategy or mode of entry to Brazil. As it has been discussed before the company should use complementary exporting or piggybacking. However, a part from using the distribution channel of the carrier firm the partnership and relationship of the company with organized retail outlets would be critical. Although the retail market in Brazil witnessed a slowdown in 2012, things are expected to change in 2013. None the less, the relationship of the company with retailer; food retailers to be more specific would be critical. Some of the major food retailers are the likes of the retail giants like Carrefour along with other local retailers like Casas-Bahia, Atacadao, Lojas Amricanas, etc. would be critical. The country also has the presence of major retailer like Wal-Mart. A partnership with a food retailer like Carrefour can do wonders to the company both in terms of branding and sales. Here it needs to be mentioned that the top food retailer in the country is a local firm named cia brasileira de distribuicao. A part from these another highly potential sales channel would be the digital medium. Already it has been discussed about the growth in the number of internet users and how the prime target market segment of the company accounts to the majority of the internet users. Hence it is imperative that the company should have digital presence may be in the initial phase the company would not be providing the luxury of online sales. But, in future online medium must be a part of the overall channel and distribution strategy. Promotion The organization is going implement several promotional strategies, such as online promotional strategy, traditional advertising strategy and Direct Marketing strategy. The organization is going to enhance the company profile within the target areas and industries by increasing brand reputation. Moreover, the organization is going to utilize advanced information technology in the company website in order to attract several potential clients and customers (Oberoy and Hales, C., 1990, p.12). Basis on the budget and implementation of cost schedule, it can be said that, Price skimming strategy should be well punctuated by promotional pricing techniques to increase sales within a shorter period of time. The organization is going to put advertisements on traditional source of media, such as local news papers and magazines and sales brochures. Advertising Start Date End Date Budget Print Ads 1/06/2013 1/12/2013 $4,000 Sales Brochures 1/06/2013 1/2/2014 $4,000 In terms of direct marketing, the organization is going to send out financial and tax planning information letter and tax brochures. Direct Marketing Start Date End Date Budget Tax Brochure 1/06/2013 1/12/2013 $5,000 News Letter 1/06/2013 1/01/2014 $12,000 Financial Planning Brochure 1/06/2013 1/06/2014 $5,000 Lastly, in terms of website marketing strategy, the organization is going to utilize leading online interne networks in order to aware the target clients. Network Start Date End Date Budget Yahoo 1/06/2013 1/06/2014 $10,000 Google 1/06/2013 1/06/2014 $10,000 Depending upon these budgets the sales plan of the organization would be making a good and healthy relationship with the target clients. Implementation of Cost The organization will maintain the concentration with epigrammatic meetings every month. Moreover, the organization will effectively understand their responsibility in order to maintain the brand image and develop customer relationship management. Advertising Start Date End Date Budget Department Print Ads 1/06/2013 1/12/2013 $4,000 Marketing Sales Brochures 1/06/2013 1/2/2014 $4,000 Marketing Direct Marketing Start Date End Date Budget Department Tax Brochure 1/06/2013 1/12/2013 $5,000 Marketing News Letter 1/06/2013 1/01/2014 $12,000 Marketing Financial Planning Brochure 1/06/2013 1/06/2014 $5,000 Marketing Network Start Date End Date Budget Department Yahoo 1/06/2013 1/06/2014 $10,000 Web Google 1/06/2013 1/06/2014 $10,000 Web The organization should focus on the increasing billing hour strategy with the target clients to provide them value of money which the organization will get. Moreover, they will concentrate on developing new client base. Differentiation The actual product is the tangible part of the product which can be seen and touched by the customers. One of the parts of the actual product could be the small sliced fishes which would save the time of the customers. Augmented Product refers to the additional bundle of benefits offered by the company (Booms and Binter, 1981, p.21). One of the best ways to go for augmentation would be through after sales service. But due to the nature of product being discussed there would be very little scope for after sales service. Depending upon these actual and augmented products it is very much difficult to implement a product differentiation strategy. The organization can implement several service differentiation strategies, such as providing discounting price level for a special jumbo pack. Moreover, they can distribute their products to the retail giants in Brazil like Wal-Mart. It will provide a huge exposure to the brand. In terms of packaging, the organization can introduce effective packaging differentiation strategy (Rushton and Carson, D., 1989, p.7). The organization should look for introducing different packages according to the size and quantity of products. These kinds of service differentiation strategy will help the organization to increase their brand awareness in the competitive market place. Obstacles and Issues Huge cultural differences along with several economic problems, such as high inflation rate are the key obstacles and issues of the organization. Moreover, the presence of strong and potential competitors like BOM PEIXE INDUSTRIA E COMERCIO LTDA and TECOPESCA are major threats for Ghazal Company. Dependency on the channel and distribution partners for the general distribution activity is also a key challenge for the organization. Moreover, the complexity and difficulty in the legal and political structure regarding the utilization of water for aquaculture can be a problematic issue for the organization (Shostack, 1977, p.21). Lack of public data and information in this particular sector is also a key challenge for Ghazal Company. As the organization is used to offer food products in the Brazilian market, therefore, it can be said that the organization may face several political and legal challenges. If the organization in adequately process the dry fish, then there is a huge possibility that, the government of Brazil may restrict the business operation in Brazil. Last but not the least; environmental issues like increasing carbon emission may pose huge threat to the organization. Therefore, Ghazal Company should control and realize all the challenges and risk factors in order to run their business effectively in Brazilian potential market. Overcoming Obstacles and Issues It is feasible from above study that, there are several external obstacles which may negatively impact the business process in near future. Therefore, several recommendation plans have been provided in order to overcome those obstacles and issues. Firstly, the organization needs to control the quality of product. It is evidenced that, the dry fish market in Brazil is much more matured and saturated. Therefore, the R&D team of the Ghazal Company should monitor and control all the exported food products. In terms of online and internet marketing and promotional strategy, the organization needs to keep all the possible data and information in order to aware the clients. The operating team should constantly monitor and provide the information about the new products. This strategy will help them effectively. In terms of distribution, the organization should implement decentralize distribution strategy. This strategy will increase the efficiency of distribution network within Brazil. This decentralized distribution strategy is both time and cost effective. The organization implements the promotional strategy basis on the traditional culture of Brazil and need to build a healthy relationship with the Brazilian government in order to avoid legal, social and political challenges. Lastly, it has been suggested that, he organization should implement green strategy in their business operation. It will help to bring sustainability in business process. References Belch, G and Michael, G.2005. Advertising &Promotion-An Integrated marketing Communications Perspective. London: McGraw-Hill. Booms, B., and Binter, M., 1981. Marketing Strategies and organization structure for Service Firms. Vol. 81. Brown, L. 2009. Marketing and Distribution Research. London: Ronald Press Company Burgemeister, S. 2003. Market analysis. Berlin: GRIN Verlag. Churchill, G. 2009. Marketing Research. 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