Export Marketing of American West Beef Company - Business Plan Example

Export Marketing Plan of Beef Table of Contents Table of Contents 1.0 Introduction 2 1 Product 2 2.0 Target Market 2 3.0 Market Entry Requirement 4 4.0 Export Penetration Strategy 5 5.0 Export Marketing Strategy 6 5.1 Product 6 5.2 Price 6 5.3 Promotion 7 5.4 Place 7 6.0 Sales Forecast 8 7.0 Pro-forma Income Statement 9 Conclusion 10 10 Works Cited 11 1.0 Introduction 1.1 Product American West Beef Company intends to export a product to Singapore which bears the tariff number or HTS Code 0201.30.3550. It can be described as Meat of Bovines. The meat of Bovines is separated from their bones and is available boneless, finely processed either fresh or chilled. Statistics reveal that the value of the product exported worldwide was approximately US$19,162,542 in March, 2012. Furthermore, the data shows that as compared to the exports from the previous month there had been an increase by 16 per cent in March, 2012 (Zepol Corporation). 2.0 Target Market Singapore’s economy can be described as a mixed economy that is considered to be one of the most open and competitive markets in the world. In 2011, the World Bank Ease of Doing Business ranked Singapore as one of the best countries for doing business. The era in between 1960 to 1980 had been dominated by the manufacturing industry that attracted numerous multinational companies (MNCs) as well as Foreign Direct Investments (FDI). This golden period of Singapore has led to develop the country as one of the most technologically advanced and growing economies in the world (Stanley St Labs). Though the country implies hassle-free market policies, government intervention is mostly viewed in production sectors like labor, land and capital resources. The economic system of Singapore has been modeled throughout the world because of the equal roles of the market and the state in deciding government policies (Stanley St Labs). This model has been successfully implemented as the domestic market is comparatively small and the country has to rely on imports of products from various countries. Thus, the country opened its domestic markets to external markets in order to thrust the economy to grow. However, the government was aware that inviting external companies in the country would lead to negative effects of depending on external markets. Therefore, the Singapore government drafted policies and regulations to safeguard the country from any kind of agitations in the global markets. Apart from strong regulatory policies, the countries favorable taxation system, skilled taskforce and a huge natural seaport has attracted many companies and businesses to commence business in Singapore (Stanley St Labs). The population of Singapore, surveyed in 2010, revealed that the country has approximately 5.165 million people, out of which 2.795 million encompasses the country’s labor force (Stanley St Labs). Moreover, it has an unemployment rate of 2.2 percent that is comparatively lower than most of the countries. The country actively takes part in international trade that comprises mostly imports of food, energy and other necessities, which are scarcely available due to non availability of natural resources (Stanley St Labs). Singapore has experienced a growth of 15.56% in Gross Domestic Product (GDP) from 2009 to 2010 that approximately translates to US$222.699 billion. Moreover, it has the third largest per capita income US$56,521.73 in the world (Stanley St Labs). 3.0 Market Entry Requirement The American West Beef Company should ensure that packaging rules in Singapore are maintained while their Meat of Bovines is packed. It should ensure that the packaging is done while keeping in mind the environment friendly factor. Moreover, the company should ensure of few other basic policies required for exporting from the US (Export.gov). Commercial Invoice: A commercial invoice is a bill that is meant for the buyer. It includes the basic description of the product, its cost, thus, making the task of the government easier to impose the taxes and custom duties to fix appropriate price of the product (Export.gov). Bill of Lading: The bill of lading is a contract between the owner of the goods and the transporter. It consists of two types, a straight bill which is non-negotiable and shipper’s order bill that is exchangeable. The shipper’s bill can be traded, bought or sold whilst goods are in shipment (Export.gov). Certificate of Origin (CO): The Certificate of Origin (CO) is a statement of origin that is generally printed on the company’s letter head. It is not mandatorily required by all countries, though it is advisable to American West Beef Company to verify whether CO is required at Singapore or not (Export.gov). Electronic Export Information (EEI): The Electronic Export Information (EEI) is mandatorily required in the US for shipments above US$2,500. It is required to be filed electronically via the AES Direct online system, a free service provided by the Customs and Census (Export.gov). Custom Form 3461: It is an Entry/Immediate Delivery form provided by the US Customs. The form consists of details of the consignee and the consignor, arrival date, carrier or vessel code and US Port of loading among others (Customs of Boarder Protection). 4.0 Export Penetration Strategy The American West Beef Company may recruit export agents for positioning the product in the Singapore market. The roles played by the export agents are limited to packing and marking of products. They may purchase the products directly from the manufacturer, thereby selling them in the Singapore markets in their own name, through their own developed contacts or channels. Thus, the risks and the losses associated with the product are solely borne by the agents. It is further the agent’s duty to control the marketing strategies and choose the appropriate promotional strategy. The approach at times may affect the future sales of the product that may arise for the inefficient efforts of the agent to promote or position the product. However, the manufacturer has the upper hand as the positioning and promotional activities required are less compared to the agents (Unz & Company). The agents are not the representatives of the company as misunderstood in many countries. They are small firms who intend to buy the products from the manufacturer at the lowest possible price. Later, the small firms add certain amount of value after incurring all the expenditures, thereby generating profit from the sale of the product. Initially, American West Beef Company may sell Meat of Bovines through the export agents as the market development possibilities for the product may not be known. Later, if the sale grows, the company can increase its higher fixed cost alternatives, such as cost of the meat, to independently market and sale their products (Eur-export). 5.0 Export Marketing Strategy 5.1 Product American West Beef Company is renowned for providing the premium beef from its trusted and reliable producers. The raw materials they use are destined to meet the highest standards in terms of quality. Moreover, the packaging is time-tested that guarantees the consumers that the product is in the appropriate condition for consumption (American West Beef Company). Though the company may decide to place its product through export agents, it should ensure to the consumers that they will partner with agents who match their standards, in order to sustain their products value to the Singapore customers. 5.2 Price The American West Beef Company may initially quote a competitive price for the agents so that the end user may acquire benefit from having quality meat in standard prices. The company may not price higher, else a medium price will be able to attract consumers from all groups, either richer or poorer. Reports revealed that the per capita income of Singapore is much higher compared to developed nations. Moreover, its unemployment rate is comparatively lower. Thus, it can be assumed that majority of the population are working with organizations that are offering substantial pay scales (Export.gov). Therefore, a medium price level will generate sales, thereby increasing the demand of the product among the agents. This phase can proof to be profitable to the company as it can increase the cost and provide lower margin to the agents. 5.3 Promotion Although the American West Beef Company intends to export the products through export agents, it is their initiative that could generate sales of their meat product. Once a US agent is contracted to export the products, it is the export agent’s role for promoting and placing the product in the Singapore market. Thus, American West Beef Company does not require much effort or costs to incur for promoting the product. Therefore, they can develop ways to promote the product in a cost effective but highly influenced way. This type of promotion can be done through internet. Internet has become the life blood of new and young generations. The social networking sites are used mostly by the current generation to share information about their personal life and whereabouts. It has also created an opportunity for people to keep in contacts with friends and family without paying any cost. Thus, the American West Beef Company can create a profile in the socializing sites that will provide information about the quality and specialty of their offered product. This strategy will also help the company to forecast the future sales, with the responses from the Singapore younger generation. 5.4 Place The small market size of Singapore has influenced selling and positioning of products through wholesalers or representatives. Therefore, the export agents that will partner with the American West Beef Company may recruit local people to represent the agent’s enterprise. It may also look to position its product through wholesalers that will be responsible for making the meat available to the consumers through the retailers. If the future sales tend to increase, the American West Beef Company can start up a joint venture with a Singapore company who are enthusiastic to new opportunities. The strategy for doing business jointly will remove the extra profit earned by the export agent, thereby reducing the rate of the product. Thus, the US based company would be required to maintain a healthy relation with the Singapore based company to flourish the joint venture business. Furthermore, the company should be aware that nearly 1,500 American companies are home to Singapore, thereby increasing the competitiveness amongst them (Export.gov). Thus, Singapore people expect the after sales service to be well effective for them. Therefore, the US Company should respond to enquiries promptly either by the partner company or by the citizen of Singapore. 6.0 Sales Forecast The following sales graph is based on the first year start-up estimates only. It can be assumed that the sales of Meat of Bovines will develop in large volume after the launch of the product in Singapore market for at least six months. This is due to the competitive nature of Singapore’s market and their enthusiasm to grab business opportunities for a new product. Thus, initially the American West Beef Company may sale its product through export agents, in the later stages the company can partner with a Singapore company to do a joint venture business, thus increasing the sale of the product. 7.0 Pro-forma Income Statement Categories 2013 2014 2015 Sale of Products 1 million units 2 million units 3 million units Cost of Goods Sold US$500,000 US$1300, 000 US$2000, 000 Gross Profit US$75,000 US$150,000 US$500,000 Conclusion The Singapore market’s nature of inviting external business entities may help the sale of Meat of Bovines to prosper. There are certain advantages provided by the government such as 99% duty free in imports other than addictive products like tobacco, distilled spirits, wine and luxurious items such as motor vehicles and gasoline (Export.gov). The main challenge faced by American companies is the strong competition from local and foreign suppliers. Furthermore, the US style of doing business can facilitate to attract potential investors to set up companies in Singapore. Therefore, American West Beef Company can see the growing market trends of the product and partner with Singapore based company to increase the sales. Thus, the initial six months are crucial for American West Beef Company to provide good margins to the export agents so that they remain motivated in promoting and positioning the product. It can be assumed that if the product is positioned appropriately by the export agent, the quality that the US Company provides will definitely attract young generations. Moreover, the per capita income gives the company an opportunity to later increase the prices according to its demand, thereby increasing the chances of generating more profit. Works Cited American West Beef Company. “About Us.” Web. May 11, 2012. Home, 2012. http://www.americanwestbeef.com/about-us. Customs of Boarder Protection. “Forms.” Web. May 11, 2012. CBP Form 3461, 2012. . Eur-export. “Factors Influencing Market Penetration Method”. Web. May 11, 2012. Distribution, 2012. . Export.gov. “Common Export Documents.” Web. May 11, 2012. International Logistics, 2012. . Export.gov. “Doing Business in Singapore.” Web. May 11, 2012. Singapore, 2012. http://export.gov/singapore/doingbusinessinsingapore/index.asp. Stanley St Labs. “Singapore Economy.” Web. May 11, 2012. World Economy, 2012. . Unz & Company. “Developing an Export Strategy.” Web. May 11, 2012. Basic Guide, 2012. . Zepol Corporation. “Meat Of Bovines, Boneless, Processed, Fresh Or Chilled HTS Code: 0201.30.3550.” Web. May 11, 2012. HTS Exports, 2012. . Read More