Bettys & Taylors International Marketing Strategy - Case Study Example

Bettys & Taylor’s International Marketing Strategy EXECUTIVE SUMMARY I. INTRODUCTION Bettys and Taylors of Harrogate Ltd. is a merging of two family-owned local food businesses, one of which started as early as 1919. Known then as Bettys, the business started out as a specialty bakeshop, but has eventually emerged into becoming a carrier and provider of many products such as cakes and confectionaries, gourmet teas and coffee. After its acquisition of Taylors in the 1960s, the business has even expanded into many brands in various locations in North Yorkshire, and has reached many other customers through their website. Bettys and Taylors takes pride in what they call “catering to many of life’s simple pleasures (Bettys and Taylors of Harrogate Ltd. 2009). It operates only six coffee shops within Yorkshire, but has an equally flourishing business supplying brand specialty tea blends to about 30 destinations worldwide. The owners have always kept its tea shop operations just within the city as it wants to preserve the brand image, and the quality of the products, believing that keeping a small network would enable them to focus on every detail. One of the driving forces behind Bettys and Taylors Tony Wild was once quoted saying: “that culture is central to our success and the starting point for what we have identified as sustainable growth. You ignore that at your peril, however tempting it might be to open in London, Edinburgh or anywhere else” (Bettys and Taylors of Harrogate 2009). Now on their 91st year of operations, Bettys and Taylors sees opportunities, not within the UK, but in another country. After successfully supplying gourmet tea products in many other locations worldwide, the owners feel that it is time to take the signature Bettys and Taylors homegrown tea shop and confectionaries to another level by finding the best country for branch expansion. With this, this paper aims to tackle and provide a plan for a successful international market penetration for this highly successful local brand. 1. STRENGTHS AND WEAKNESSES Bettys and Taylors is a strong and sustaining business. Its market presence for the last 90 years can attest to that. The owners’ strategic management decisions have contributed to the stability of the business, and its expansion activities are often calculated but always successful. It has been conservative in its operational plans, but has wisely moved into global trade by preferring to be distributors and suppliers rather than engaging in retail. This way, operational costs are managed while business relations are maximized for higher profits. The business strength lies on its dependence on local partnerships. It enhances local industries while achieving business objectives. As such, it has the much needed support of local suppliers and the trust of its human resource, having been recognized as an employer of choice. Furthermore, it has been recognized by The Sunday Times as one of the Best 100 Companies to Work For (Working for Bettys and Taylor 2009). Bettys and Taylor’s weakness is basically its being confined in terms of operations to North Yorkshire. In the past many decades, it has decided to just limit expansion within the city to be able to exercise control over quality and operations. The business is being sustained fairly well by its global distributorship, but it has yet to achieve maximum potential and will only do this if it decides to expand either in other cities within the UK or in key cities worldwide. II. ANALYSIS OF CHOSEN MARKET Bettys and Taylors are considering four options for their expansion plans: 1. New Zealand New Zealand is 11th among the countries that help promote services, policies and institutions according to the World Economic Forum’s Global Enabling Trade Report of 2009 (NZ Scores Well in Overseas Trade 2009). It is highly suitable for foreign investors because it is a relatively safe country with strong commercial standing. New Zealand has a free-market philosophy with an innovative, confident and flexible business scene. Small businesses for niche markets are the ones that frequently thrive in New Zealand. Investments and businesses range from biotechnology, food, information and technology and also tourism and education services industries (Immigration New Zealand 2009). It has a friendly outlook towards foreign investors that want to penetrate the New Zealand market. At present, New Zealand presents a commercial advantage for food and beverage products that are geared towards healthy and convenient lifestyles. According to the webpage Investment in New Zealand, many global food and beverage companies are enjoying the advantages of investing in New Zealand (Investment New Zealand 2009). Foreign investors continue to forge partnerships with New Zealand and consequently gain a clear commercial advantage for ones company and investors. 2. China China is well known for its trade practices. Since the olden times, Chinese people traded innovative products to the market. With China opening its doors to the international market by implementing legislations that are friendly to investors, it is now highly feasible for non China nationals to bring their products to this country. China is now considered to be a liberal and open Market. The World Bank’s Doing Business report cited China as having improved dramatically in terms of implementing processes involving foreign entrepreneurs wanting to invest in the country. China now averages at 35 days in processing business requirements and permits, compared to the world average of 45 days (Datamonitor 2009), a feat which is indicates a relatively hassle free business scenario. Since China’s opening to world market, it has been known to be one of the fastest growing economies globally. The current government is still currently working on improving and implementing reforms in politics, economy, and social policies among others, indicating that it continues to attract foreign investors in the land 3. United States of America The United States remains to be the most dominant global power in terms of politics, trade, economics, technological and cultural affairs, and still is the largest economy in the world (Datamonitor 2009). The US has the friendliest laws, having been cited in World Bank’s “Doing Business” Report as the fourth country that is easiest to do business in, next to Singapore, New Zealand and Hongkong/ China (Datamonitor 2009). It is a fact that foreign nationals find it a rewarding venture to enter the US market due to the friendly policies and the scarcity of red taping for those who wish to apply for a business in any of the states (Starting a Business in the US as a Foreign National 2009). The US offers a comprehensive legal framework for Business entities. The downsides however are the high tax rates and the differential federal tax rates being implemented. Market-wise, it is believed that there is so much room to grow for distributors and manufacturers of the tea beverage. In 2003, total sales for both conventional and specialty types of teas reached a total of $5.1 (Tea Drinking in the United States 2009). During this decade, consumption for healthy beverage rose, with supermarkets retailing new ready-to-drink tea brands and shoppers actually becoming attracted to these products that come in unique flavors and forms. Benefits of such beverages have been highlighted commercially resulting to higher demand for the product (The State of the US Tea Industry 2009). Now more than ever, the market welcomes more variety for this healthy drink. 4. Germany Germany is known for its robust democratic set up. It is politically stable, and the government has gained the utmost trust of its constituents due to its implementation of “transparent and fair” elections (Datamonitor 2009). It has a warm reception for start up businesses. It takes an average of 18 days for a business to be set up in Germany, in contrast to the global average of 38 days. It provides a strong and comfortable business climate that encourages trade and entrepreneurship. Germany is known to be Europe’s leading country in terms of economy and trade. It is the world’s fourth largest economy and has a very competitive tax structure (10 Reasons to Choose Germany 2009). Germans do not engage in price wars, but focus more on maintaining product quality and excellence (Germany: Culture of German Management Part 1 2009). That’s how confident businesses are in this country. III. STRATEGY Bettys and Taylors entry to a global market signifies its readiness to face calculated risks in order to penetrate international opportunities. As it is, the management feels that it would most likely be able to succeed in Germany, where it is relatively much more manageable to enter, invest and thrive as a food business. 1. MARKET ENTRY STRATEGY There are but one too many competitors in Germany and the entry of another food business would not really create such a big bang unless there is a targeted strategy to be facilitated by Bettys and Taylors. There is so much promise in entering a food business, but the trick is to find a way to encourage people to sample, and eventually to do repeat purchases from the store. Bettys and Taylors will bring to Germany its signature Tea House-type of shop. It will include in its menus the best of North Yorkshire’s cake and confectionaries line up. Management will spend funds on research to specifically determine the tastes and food choices of Germans, who are also known for their sumptuous food and preference for bread and cakes. Food is such a part of German Culture. The story of Hansel and Gretel originated from Germany, and this fairy tale depicts of discovery of food and candies. Sausages and Dumplings are best associated with Germany, and the German’s staple food would be potatoes. Germans have so much passion for eating that they might as well be known as race that tends to eat heavy and hearty meals. With this in mind, Bettys and Taylors management will capitalize on the fact that the market will welcome varied choices for food, and would definitely patronize what complements their usually protein-laden meals with sweets, confectionaries and healthy tea drinks. 2. PRODUCT STATEGY Germany is also known for its bread products, which includes rolls and loaves. Germans take pride in their baking skills and culture (BBC Home 2009) Knowing this, Bettys and Taylors will have to incorporate local ingredients rye and sour dough into their ingredients, and create food products that are both similar and different from traditional food products being sold in the area. There is also an untapped market for tea products. Germans are globally known for their beer and malt products, and are recognized to be one of the world’s enthusiastic drinkers. But there is relatively low presence of health drinks in the market, and most of the tea being distributed is imported from China and other countries. Tea Houses are actually very rare, and Bettys and Taylors will maintain their brand positioning as a specialty store catering to a niche market. Tea products are positioned to be health products that are easily accessible and affordable. 3. PRICING STRATEGY Bettys and Taylors will honor and adhere to German’s regularized prices, meaning it will not, in any way, engage in price wars and shall maintain quality of its products by purchasing only the best raw materials. Product quality will not be sacrificed by adjusting in raw material costs. This way, customers will be provided with only the best products there could ever be. 4. DISTRIBUTION STRATEGY Bettys and Taylors will build its first store in Hamburg, Germany’s second largest city and a place where trade and commerce is highly advanced. Hamburg has about 60 similar establishments, and is basically considered to be the major trade hub for all sorts of products going to and from Northern Europe. This city is considered to be Germany’s largest trade city with more than 32,000 trading companies and over 125,000 employees in it (Hamburg Welcome Portal 2009). This is essentially the best place to start a business in the region. Bettys and Taylors Tea Shop will be located at Central Hamburg where various shopping malls and other commercial destinations may be found. While it will operate as a full service tea and bakeshop, it will also distribute its special house blends of tea, coffee and confectionaries in other parts of the city and the rest of Germany. Retailers shall be sourced out so that other distribution channels may be tapped. These retailers include supermarkets, specialty shops and other food houses that wish to offer the signature products of Bettys and Taylors. This way, owners would not only be able to maximize the niche market being tapped, but would also be able to touch base with other potential markets as well. 5. PROMOTIONAL STRATEGY Bettys and Taylors targets to implement the following promotional plan to launch and introduce the service: ABOVE THE LINE ADVERTISING A successful launch is always accompanied by a tri-media campaign to ensure that the target market is reached. However, due to the limited advertising and promotions budget, it chooses to advertise mainly via radio plugs in local radio stations in Hamburg. Repeat exposure via radio advertisements would spark interest among listeners. Among the three mainstream media, radio is considered to be the most cost efficient as it requires the advertiser a fixed advertising cost, yet it allows the product to be continuously stimulating the consciousness of its listeners. BELOW THE LINE ADVERTISING To maximize the costs allotted for advertising, Bettys and Taylors will utilize more below-the-line media to reach its target market, which are as follows: MERCHANDISING Strategic merchandising is the key to promote the new business. Billboards and signage, announcements in key points within the city play a vital role in the company’s promotions plan. Bettys and Taylors will ensure that the brand, as well as the delivery details is displayed in two major billboard sites in two main entry points to the city. It will also display mini billboards and signage in public places such as shopping centers, supermarkets, subways, train stations and bus stations. Billboards should contain the brand name Bettys and Taylors, as well as a short description of what is being offered. An enticing photo of two of the food store’s top products should be shown also, together with its contact details. The phone numbers, the website and the email addresses should be shown in the advertising materials as well. PROMOTIONAL ACTIVITIES Bettys and Taylors will partner with student organizations to support various school events and activities with the interest to plug and advertise the products and services. The management will allot appropriate funds for sponsorships of student projects that would enable them to advertise Bettys and Taylors among the target market. There will be discount and privilege offerings for frequent patrons, and a loyalty card to ensure repeat purchase among the market. Patrons who call in at least 5 times in one month gets the Bettys and Taylors membership card which entitles them to special privileges and incentives on their next purchase. INTERNET MARKETING Internet Marketing has become popular because Internet access is becoming more widely available and used. Well over one-third of consumers who have Internet access at home report to using the Internet to make purchases (What is Internet marketing 2004). Moreover, statistics show that internet users increase at a rapid rate that in five years’ time, it is predicted that 80% of United Kingdom’s population will have a computer with Internet access at home (Advertising 2007). With this, Bettys and Taylors sees an opportunity thru Internet Marketing. Bettys and Taylors finds the potential of offering their products and services through a company website which lists down the entire menu, and other pertinent details regarding the food service. Customers could even place orders online, and expect delivery within the specified time. Bettys and Taylors will also tie up with other complementing brands such as book shops and magazine stands, and maximize co-branding and cross advertising in these companies’ websites. IV. RESOURCE REQUIREMENTS AND BUDGETS Flyer Inserts are at £ 700 per 10,000 pieces of flyers. Inserts will be done in three of the most popular broadsheets and/or local publication every Sunday starting two weeks prior to launch date until the sixth month of operations. After which, the management will gauge the effectiveness of this effort to determine whether to push through with the strategy or not. Flyers cost approximately £ 110 per 10,000 pieces, or a total of £ 8,580 production costs for flyer inserts alone and another £ 8,580 production cost for flyers to be used for other purposes. Design will be in house so it would not entail any extra cost. Billboard rentals are pegged at £ 5,000 per month or a total of £ 30,000 for the first three months, and additional £ 2,500 for the production costs. Website design and hosting is anywhere from £ 5,000 to £ 8,500 per month. Reference List 10 Reasons to Choose Germany. Retrieved January 4, 2010 from http://www.gtai.com/homepage/business-location-germany/10-reasons-to-choose-germany/ Advertising 2007. Retrieved January 4, 2010 from http://www.weblinx.biz/advertising.htm BBC Home. Retrieved January 4, 2010 from http://www.bbc.co.uk/dna/h2g2/A471340 Bettys and Taylors of Harrogate. Retrieved January 1, 2010 from http://en.wikipedia.org/wiki/Bettys_and_Taylors_of_Harrogate Bettys and Taylors of Harrogate Ltd. Retrieved January 1, 2010 from http://www.fundinguniverse.com/company-histories/Bettys-amp;-Taylors-of-Harrogate-Ltd-Company-History.html Country Analysis Report USA. Datamonitor. January 1, 2010 Germany: Culture of German Management. Retrieved January 1, 2010 from http://www.executiveplanet.com/index.php?title=Germany:_Culture_of_German_Management_-_Part_1 Hamburg Welcome Portal. Retrieved January 5, 2010 from http://welcome.hamburg.de/sectoral-portraits/1642310/trade.html Immigration New Zealand. Retrieved January 4, 2010 from http://www.immigration.govt.nz/migrant/stream/invest/startingabusiness/whatopportunitiesarethere/nzbusinessscene/ Investment New Zealand. Retrieved January 4, 2010 from http://www.investmentnz.govt.nz/section/14248.aspx NZ Scores Well in Overseas Trade. Retrieved January 4, 2010 from http://www.businessnz.org.nz/doc/1699/NZscoreswellinoverseastrade Starting a Business in the US as a Foreign National. Business.Gov. Retrieved January 1, 2010 from http://community2.business.gov/t5/Business-Law-Advisor/Starting-a-Business-in-the-U-S-as-a-Foreign-National/ba-p/3468 Tea Drinking in the United States. Ezine Articles. Retrieved January 1, 2010 from http://ezinearticles.com/?Tea-Drinking-in-The-United-States&id=439958 The State of the US Tea Industry. Retrieved January 1, 2010 from http://www.teausa.org/general/002ga.cfm What is Internet Marketing 2004. Retrieved January 4, 2010 from http://www.what-is-net.info/what-is-internet marketing.html?gclid=COCs9JiE5YoCFQQeTAod5w7UyA Read More