Introduction to Marketing - Research Paper Example

HOMEGROWN [KENYA] LIMITED INTRODUCTION Home grown [K] limited is share holder of the flamingo holdings. It’s the leading exporter of fresh horticultural produce in Kenya. It mainly exports flowers and assortment of edibles to market in the United Kingdom. The products are processed from various produce which include snow peas, snap peas, French beans, rhyme, asparagus, baby corn, baby onions, Chinese cabbage, carrots among others. Its vision is to be the best in all its action. Its mission is to run a profitable business whereas meeting the customer quality and quantity specification. The company also has its own firm from which it grows its raw materials for export. Some of the raw materials are also imported processed and exported, e.g. the rhyme, this is because the environment conditions which prevail in Kenya are not conducive for rhyme growing though it’s a vital ingredient of some of its products. The company markets its product through some leading supermarkets in the U.K. e.g. Marks and Spencer and Tesco supermarkets. The major competitors in the market include; Vegro Kenya limited, Everest, wilhan, wamu investments and Indu farm who are all fresh produce exporters. PESTLE ANALYSIS Political environment In every business the political arena is a key determinant of firm future, this is because the firm can either continue to invest in the country or withdraw if there’s political environment. Politics of a certain region affect the producers of a certain produce. In our case though Kenya has had a peaceful business environment for the past decades, there are some regions which had tribal clashes and this affected the operations of the company. Tribal clashes in the rift valley province made the production cost of the firm to rise so high were it not for the company’s big capital base then the company could have ceased its operations. There was rise in the wage rates, cost of transportation doubled and security had to be beefed which all came along with costs. Political environment affects the operation of the firms in all the developing countries, Kenya being one of them, during the year of election. This is because due to the high poverty rate, a lot of funds are distributed to the poor citizen who are casual workers in many firms, this diverts their attention thereby making the production cost to be very high. The company does export its products to the United Kingdom where the political environment has been very conducive for it to market its customers; political environment affects the effectiveness of a business marketing strategy such as promotion, pricing, product cycle and where to place its products in the market. ECONOMIC ENVIROMENT The economic environment of a business affects the marketing strategy and product mix. The economy of the country has been stable, there exchange rate of the dollar against the local currency has been dropping and this has affected the exporters negatively. This is because they have been earning less than they were getting earlier when the exchange rate was high. This means that the profits have been lower assuming the costs have been constant this has there fore affected the investment decision of the company like making decision on how to promote and to price the products. The government also gives the exporting companies subsidies therefore encouraging them to develop new products into the markets. The government can also control the minimum wages paid to the workers, this usually affects the costs of the firm making it to have limited resources for promotion of its products. The government also can control the prices in the market by setting the price to protect the consumers. If these prices are favourable, the firm can develop new products because this will be an incentive. SOCIALOGICAL ENVIROMENT This has affected the development of the company new products, the company being the largest exporter of fresh produce in Kenya has created a positive image to the customers, hence encouraged the firm to develop more new products into the market. The social relationship between the senior employees and the junior employees has been so good; there the juniors can easily shares their ideas about development of new products and how to improve in other fields. The firm also welcomes the customers comments and this improves their relationship, this is because the customer will either be complaining about a poor product or commend them. TECHNOLOGICAL ENVIROMENT They use a very high level of technology in most of its operations. Most of the work during preparing of the produce is done manually depending on the customer requirement; the other work is carried out by machines. The work done by machines includes labelling, check weighing, cleaning of the raw material and metal detecting. The technology makes it easy for the firm to adapt to changes in market requirement since they are digitally controlled; this is because the changes will be done instantly without need to employee new employees. Sometimes when there are major changes in the firm some machines become obsolete. These changes in technology make it hard for the company to change to produce new products. LEGAL ENVIROMENT The legal environment the company affects its external and internal actions in many ways. Since the firm adheres to the by-laws set by the government and works within the workers ethics as lay down by the ministry for labour, therefore it doesn’t face many legal restriction on development of its products and in growth. The legal framework in the market sometimes controls the quantity of the products being imported and therefore hindering the developments of new products since this is a disincentive. Registration of new product in to them market is also costly and this usually restrain a firm from developing new products but instead they try to improve the products they already produce. ENVIROMENT The environment within which a firm is operating affects its operations in one way or another the firm usually grows its produce in large scale. This means that the effects on the environment will also be large, the firm operates in an environmental friendly manner, and it doesn’t pollute it uses integrated pest management and organic fertilizers. There is minimum disposal of the waste in to the environment or into drainage channels. There are laws which govern the firm against polluting the environment; these laws ensure that the emission into the air and water are within the limits set by the government and this controls the firm. SWOT ANALYSIS The strengths The company produces a variety of products, this enables it have alternatives to export. When the demand of one product goes down, this comes with decrease in income, but since there are many products, the decline in demand is not likely to be felt since there are many products. Sine the firm produces many products, the raw materials demand different environmental condition, this makes the firm to have many farms in different climatic regions, this distribution of farm make it continue with production even if some field in one region is affected adversely by adverse climate. The firm has a fast mover advantage since it began early before other companies entered in to the exporting business. The firm also a very large market share since it’s the biggest exporter in Kenya. Thus makes it have influence in the labour market. The company has been in business for many years therefore it has built a strong capital base. It has many fixed assets as well as current assets. The firm owns large tracts of land in different regions, this makes easy for it to expand at an advantage over the in case their market grows in future The farms also make the firm to be competitor since cost of raw material is lower than if it bought from other firms. The employees provided with transportation to and from work, they are also given bonuses and overtime above their normal wages. This gives the workers motivation to give the firm good services. They are also given frequent training to enable them become more efficient in their work this makes them to perform better. The employees are also provided with quality lunch at subsidized cost. The company has many branches in other countries; this makes it to continue with its operations even if there are difficulties in one country. The company has qualified management which makes it best decisions concerning it. Issues concerning directing, planning, controlling and organizing are carried out professionally. The company has a high technology security system consisting of the CCTV, this is used for monitoring the employees, and this is also used as a security system against theft. This enables the premises to be safe The company employs high technology in most of its operations making it efficient in most of its operations. WEAKNESSES The company pays low wages to most of its employees. The casual workers are paid on performance related pay, meaning that those workers who are new are very discouraged. The firm also maintains the old casual workers some of whom have become less productive as they grow older. The company also has very few permanents employees as compared to the number of casual employees therefore these casuals can leave any time they fell dissatisfied with the firm since there are no contracts for these labourers. Another weakness is that the firm does business in perishable products. The horticultural products like the flowers need special storage care to maintain their quality, this forces the company to invest heavily in specialized cold rooms to maintain the products and the raw materials, these investments require a lot of capital. OPPORTUNITIES The firm can increase its market share by improving the quality of the already existing products. This can be done by hiring quality assurance managers to add value to the already existing products. The improved products will lead to an increased sales volume in\n the market. The firm can also increase the number of products in the market. This is because it has many kinds of raw material it can access both locally and by importing. The production of new products will enable firms to command a bigger market share. The new products can be invented by the line managers or be upon the advice of the customers depending on their tastes and preferences. The company can also begin to sell its products in the local market; this will begin by promoting the products locally and doing some market research as about the tastes and preferences of the local market, by doing so it will increase its sales volume which will be reflected in profit and loss account in form of income. THREATS One major threat is that there many competitors who are coming up. Competitors are coming up with new and better products into the market; this is making the future of the company to be a bit dark unless it does something about it. These competitors are also buying land and developing them hence posing a major threat. There is the increase in the restriction of the markets by the European market, these are inform of quatas, there is the set quantity set beyond which the company cannot sell its produce there. There is also the European Good Agricultural Practices, [EUREPGAP]. These are regulation on the food being exported to the European markets to ensure that they are safe and have been produced in safe environment. These requirements are being upgraded day after day therefore making the market of the products in future to be faced with a lot of uncertainties. There is also the problem of employees becoming scarcer due to the fact that there are many companies gaining entry into the business. The employees are also demanding higher wages since there is high demand for labour. This is forcing the company’s variable costs to increase with time. The company has been farming in its own field for many years; therefore these fields are becoming exhausted with time therefore forcing the firm to look for new fields to meet its demand. The government also has imposed high taxes on the exporters of and this increases the cost hence making the firms to incur higher costs. CONCLUSION The company should look at the weaknesses and the threats deeply to come up with means and ways to counter them. Meanwhile it should also invest in opportunities so that it can be at better competitive advantage than its competitors. REFERENCES: Stephen C. Harper (2003), Business and Marketing, McGraw-Hill Publishers, New York Robin Wood (2001) Managing Complexity, Prentice hall publishers, UK Stratton (1999) Economics: A New Introduction, McGraw Hill Publishers, UK Home grown official website (2007) retrieved on 7th May, available at www.homegrown.co.ke John Pheby (1988) Methodology and Economics: A Critical Introduction, Macmillan publisher, UK Wikipedia the free encyclopaedia (2007) retrieved on 7th May, available at www.en.wikipedia.org Brian Snow (1997) Macroeconomics: introduction to macroeconomics, Rout ledge publishers, UK Douglas McGregor (1960) The Human Side of Enterprise, McGraw Hill publishers, New York Willem H. and Richard M. (1985) International Economic Policy Coordination, Cambridge University press, UK Matthew B. and D. Henderson (1991) Monetary Policy in Interdependent Economy, MIT press, UK Read More