Market That the Monster Company Operates in - Case Study Example

Monster, Inc Monster is an energy drink produced in different countries all over the world, the products has been under various innovative measures to ensure that the customer satisfaction is attaining to ensure that there is customer sustainability. The overall distribution methodologies of the monster is because, the company aims at reaching out the overall demand of the customers in different parts of the world. The ability of a company to offer its services to almost all the countries in the world is what leads to the global expansion of the company. Market that the Company operates in The concepts used clearly designed and outlined enhance the achievement of the company’s objectives and profit maximization. This makes the company’s approach to the marketing criteria a global methodology (Pederson, 54). This makes the customers all over the different geographical regions have the access to the company’s product. Through the customers’ access to the products, this results to the customers’ loyalty towards the company thus the company achieving its maximum profitability. With the company’s mixed marketing strategy, it has been able to expand its extensive services to the customers all over the globe. The overall supplies of the monster drinks in the countries steadily increase yearly showing the extensively increasing company’s domination in the countries (Pride and Ferrell, 57). The company’s venture into the different countries such the Western and Eastern Europe, North America, Australia among other countries is a clear indication of the company’s global marketing of the monster drinks products. For a company to gain overall increase in its product sales in a venture country there must be the competitive advantage of the company over its rivals. Pederson (54) affirms that with the availability of the branches, the customer satisfaction is usually attained. This is because; the clients can easily and efficiently get the products of their choice hence enhancing their loyalty through the satisfaction. Customer’s loyalty makes it more appealing to the company as it makes it more likely of the customer’s return. The subsidiaries have also provided jobs for the local community in the located areas. This henceforth makes the community in the location have the passion to be associated with the company’s brand name as they are proud of the company However, in enhancing globalization, the company has attained the maximum market share of the energy drinks in the different countries that it has established its products in; this makes it attain the globalization advantage of the products (Pride and Ferrell, 97).. The company’s act of sponsoring of certain sports such as snow skating makes it gain global recognition. Branding with the company’s name of the teams makes the company have an impact on the internal audience of the sports thus familiarity of the company’s product. This results to the company’s gain of market share globally. The monster company’s methodologies applied in selecting the suitable international market is usually based on various factors that are clearly screened. The concepts are thoroughly looked into to ensure that with their adoption the company will continue to achieve its objectives as well as customer sustainability through their satisfaction. The most appropriate markets being selected are put into test to check on their suitability with the company’s venture into their geographical location. Market screening is the steps undertaken in selecting the most appropriate market for the company to undertake. Through the screening, the company is able chose the most appropriate decision concerning their intended objectives. In international market selection, the company carries out detailed universal assessment of the available market opportunities fit for their products. Monster Company identifies the most probable markets inexpensively and rapidly without the consideration of the methods involved during the market entry. With the company’s continued innovation in the products, this has made it much easier for the company to extend its services to clients of all standards. This is enhanced by a wide variety of monster energy drinks thus being satisfying to the different levels of individuals with different technological advancements. The wider range makes it more competitive with the other competitors as they can be widely found to choose a suitable product from. The continued innovations results to low costs of production of the drinks. Having a list of the most flexible markets, the company is able to choose from the list the most suitable market. The management’s activity of decision-making is usually based on the gathered information after the screening. The information must be real, efficient, materially, relevant, unbiased and comprehensively compiled for an easier decision making as well as promoting quality decision making on the suitable market for the company’s products. Through this, the company’s management is able to choose on the foreign markets that are compatible with the products. Elasticity This is the measure of the responsiveness of the economy from the alteration of various factors. These factors maybe; demand, price, and income among other economic related factors. Demand elasticity This is the responsiveness of the economy to changes in the demands of the product in markets. As the demand increase the production of the goods is increased to cater for the increased consumption of the commodity. Failure to this, there would be the deprivation of the products from the market (Pederson, 62). Monster Company ensures that the prevailing market demands of the drinks are always served with numerous drink products in order to cater for the demands. This ensures that the customers get their preferred drink products at any given time they are in need of the product. This creates a confidence in the customer thus earning the customer loyalty on regard to the ever availability of the products. Given the nature of the product and the industry, the elasticity of the products of Monster Inc is elastic in that a small change in price causes a significant change in demand. The figure below shows the companies demand curve. From the figure, a small change in the price of monster drink results in a huge change in demand. This is because of the availability of many substitute products in the market. Income elasticity With the drastic changes in the rate of customer consumption of the Monster Company products, the income of the company is always varying of day to day as the demands of each day vary from that of the other day. This is brought due to the different reasons for the consumption of the drinks. The income of the users may also determine the income elasticity of the company’s thus making it have a variant pattern of the income levels. The time of the day determines the income of the company from the sale of the drinks. This is because, the drinks vary in their benefits. This makes the usage pattern to be totally different thus having designated periods of their usage. Cross elasticity With the cross elasticity, it shows how the products can be used to serve the purpose of other products. The Monster Company products can serve this as there are numerous products that can be the compliment of each other. Through this, the products can be said to be complimentary to each other. This makes them much interrelated in their usage with their slight differences not a big deal to the consumers. This creates the alternatives once there is a run out of stock of one product type during the other lust. The products from the Monster Company are elastic since the changes in the economic system such as incomes increase or decrease influences their consumption rates. The products are also compliments of each other as they can be used for same purposes though having the slight differences in their contents. The products are also normal goods due to the fact that their consumption would increase with the increase in the income levels and not the vice versa. This makes the products normal in the consumptions and thus being elastic in the elasticity of the income variations in the prevailing markets. Demand and Supply of the product The strategic plans of Monster Company has been put in place to ensure that its competitive advantage is regained over the rivals to make it have its sales back to the later. Without prior planning, the company mat result to the cases of bankruptcy thus being brought down to its failure to respond to the increases rates of competition. The competitors move to join with other companies in their distribution is in a move to totally dominate the market channels and attain the full competitive advantage over the others. As the company faces numerous competitions from its rivals, it would mean that the dominance of Monster Company into the market is limited and totally under threat. The company ought to react in the plan to retain its status in the markets both locally and internationally. With the retention of the global market would at times be difficult and expensive, the company can apply preventive measures to help it in retaining the global market. The increase in marketing strategies of the company, as well as rival companies will cause an increase in demand. An increase in demand results in a demand under fixed supply results in a reduction in price. Therefore, monster Inc will have to diversify its products in order to stay relevant in the market. Diversification will be an effective strategy since losses from one product can be compensated with profits from another product. In the company’s past undertakings of about a decade, the company has made numerous changes through expert’s innovation. Such innovations have made it much easier for the company to have the innovation pace that the competitors has. Modernizations of their machines have also contributed to the great changes in the development of the company brand name. This has made it broader in the type of services to be provided in the markets. A wider variety of products ensures that there is customer satisfaction as they choose their satisfying appliances. With the companies urge to have their products reaches the customers all-over the globe, the required tools in facilitating this are usually done without difficulties. . Monster Company’s ability to be able to decide on a strategic position of the business and its location of the branches has greatly played a substantial role in the growth and development of the company. Through this, the company has been in the move to cater for the rising number of customers as well as their satisfactions. The company’s strategy in ensuring the market does not run out of stock is the most significance role of the marketing team within. Monster Company. The team is mandated with the responsibility of making sure that the sales of the products do not go much far below the set limit. This concept of checking on the value of the remaining already circulating volume of goods thus being able to constantly control their release of the goods from the store is used in regulating on the scarcity and density of the products. However, with the company’s increase in the demands for its products, it has been in the move to launch the various products with different satisfactory levels for the different levels of the customer needs. Through this, the Monster Company has ended up having variety of products that are in the move of customer satisfactory. The different customer preference on the taste of the products to use is ho w ever respected and given the privilege of having the choices to those from which they achieve their satisfactory. South Africa: Gross Domestic Product The gross domestic product (GDP) of the country can be described in different ways; the GDP is attributed to the measures the national outputs as well as the incomes. Therefore, the GDP can be said to be the same as the expenses of the all the goods and services produced within the localities of the country in a given period of time. It’s also related to the total value that is added by the industries in all the production levels including the taxes but deducting the subsidies incurred on the products. However, the amount of income generated by the production undertaking such as the compensation of the employees, import free subsidies, production taxes as well as profits from the gross operations incomes. Therefore, the employment level in a country greatly influences the country’s GDP thus being a crucial factor in the determination of the GDP within a particular country. With the increase in the production activities, the number of job opportunities increase thus increasing the income level which also determines the GDP of the country. Simultaneously, the more the developed country is the higher the GDP and vice versa. The GDP in the developing countries is usually high compared to the developed countries globally. The GDP of South Africa is a bit higher compared to the countries around South Africa and the geographical location. South Africa’s GDP in 2012 according to statistics was said to be 384.31 billion US dollars. This GDP represents an average of 0.62 percent of the overall GDP in the world’s economy. According to reports by the World Bank Group, the overall average GDP of south Africa since 1960 till 2012 has been ranging 112.0 USD Billion. According to the Financial Times (2014), the country is expected to expand its GDP by 2.7 percent. From the figure, it is evident that South Africa records the highest GDP in the top five countries; Algeria, Libya, Egypt, Nigeria and South Africa. In 2011, the Country’s GDP reached 401.8 USD Billion with a record lower than the then set record in 1960 with 7.3 USD billion. According the past information on the country’s GDP, the country has been gradually improving the economic incomes thus having the extended impacts on the GDP. This shows how developing the country is progressing. This shows that with time the country will have the modernized technology fully put into place for its operations. The table below shows the growth rate of the country’s GDP from 1980 to 2011. From the table, it is evident that the country has maintained an average positive growth rate of about 4 percent over the years. The country has had some negative growths in 1983, 1985, 1993, and 2009. With the country’s score being 62.5 in regard to the economic freedom, this makes the country among the tops a hundred freest countries in the world with South Africa number seventy five. Being free in the economic status, the country is able to manage and control the economic status thus promoting three its growth, with economic growth, the GDP also gets to rise. With the continued improvements in the corruption freedom and investment improvements there has been the economic growth as the monetary, fiscal, and labor freedom has also been facilitated (Aron and John, 75). For over the last 20 years the economic freedom of South Africa has improved with 1.8 points. This is due to the freedom from various factors that are limiting factors to the growth and development of the economy in a country such as corruption. The highest score was in 2003 and since then there has been slow but gradual growth in the score. This has been influenced by the failure of the structural reforms that diversified the economic base within the county’s economic progress. However, this has also got some impacts on the country’s GDP as economic growth influences the GDP in both directly and indirectly ways. The World Economic Forum in 2013-2013 ranked South Africa the second in accountability of the private institutions worldwide. The global competitiveness report also reported that, South Africa was also ranked third the development of its financial markets; this shows the confidentiality of the country’s economic status thus encouraging and enhancing effective development and growth into the country’s economy. Increased accountability and confidentiality promotes the investors into the country to executive their investment opportunities. The securities exchange of the country is also in the JSE ranked number twenty in the world due to its size. This indicates how large the investment of the country in the security exchanges is fairing. With a large market, the incomes are also high thus improving the economic status of the country. Cuevas and Secil (140) affirm that with the countrys increasing GDP records the future GDP of the country is expected to increase progressively without any hindrances. This is because, the GDP is dependent of the economic growth of a country ad since the economic life of South Africa is increasing yearly, the GDP is also expected to keep on rising with the rise in the economic level. The economic crisis that took place in 2008 had a great impact on the economic status of the country. Following the crisis, the country’s economy was deteriorated affecting the DPI of the country. This was due to a decrease in the purchasing power of the currencies thus making lose their worth. The crisis also resulted to decrease in the individuals’ savings as there was less to be enough to spend and to save at the same time. The crisis was also a triggering factor of the loss of the prices of goods and services globally. This resulted to low costs of goods and services thus low or no profits for the sales. This resulted to losses thus hindering the continuity of the production processes of some industries that lead to their closure. With the closure of some industries as well some businesses, there were increased cases of unemployment thus poor living standards due to lack of adequate resources to take a worth living livelihood. Inflation Inflation is the percentage change in the prices of goods and services in a given market in a specific period of time in respect to the prevailing economic status of the country. In March 2014, the South African inflation rate was recorded at 6 percent by the South African tacticians. This shows that the prices of the goods were not quit high through the year and they were at least affordable to the citizens (Aron and John, 57). The inflation rate interferes with the financial management of the country leading to poor planning and allocation of the available resources. The inflation average rate since 1968 was 9.46 percent until 2014 when the rate changed to 6 percent while in 1986 the rate attained (20.90 percent) was a record lower than that of 2004 with 0.20 percent. The most essential sectors in South Africa are the transport, housing and utilities as well as food and nonalcoholic beverages. The consumer price index (CPI) of the essential things vary from one to the other, that of the housing and utilities was 24.5 percent of the total weight, food and the nonalcoholic beverages was 15.4 percent of total the weight, transport 16.4 percent and lastly all the miscellaneous services and goods were allocated differently and accordingly (Cuevas and Secil, 90). In the future, the inflation rates are expected to be low due to the measures that are being put in place to regulate the economic status of the country, with the tactician’s activities, the inflation rates are expected to reduce and get into the control by the government. With regulated inflation rate, the economic growth and development expected to stabilize thus in cases of the economic disequilibrium. Works Cited Aron, Janine, and John Muellbauer. Some issues in modeling and forecasting inflation in South Africa. London: Centre for Economic Policy Research, 2009. Print. Cuevas, Alfredo, and Secil Topak. Monetary policy and relative price shocks in South Africa and other inflation targeters. Washington, D.C.: International Monetary Fund, 2008. Print. Pederson, Jay P.. International directory of company histories. Detroit, Mich.: St. James Press, 2012. Print. Pride, William M., and O. C. Ferrell. Marketing. 14th ed. Boston: Houghton Mifflin Co., 2008. Print. "South Africa cuts growth forecast as deficit narrows - FT.com." Financial Times. N.p., n.d. Web. 26 Apr. 2014. . Read More