Blackmores Limited's Expansion of Market in Kuwait - Case Study Example

Reference: 7 Elzeney D, 2008, Oil, Politics, and Economics: Kuwait's Balancing Act, pub, Stimson Publication Report 7 Roos M, 2001, Complimentary Healthcare Markets, International Market Research Reports (IMRR), pub, STAT-USA 7 Introduction: Company, Product and history of internationalization: Blackmores Limited is a company that is involved in the development and marketing of health products. The range of these products is inclusive of vitamins, herbal and mineral nutritional supplements (Official Blackmores Website, 2009). The company is based in Australia and has operations in Malaysia and Thailand. It also sells through independent distributors in South East Asia and in New Zealand. The underlying feature in the research and development of products is to ensure the combination of ‘scientific evidence with traditional knowledge’ so that people can be ensured a natural approach to health products. The products that the company has on offer differ in variety and range from medicines for pains, brain health, cold flu and immunity, digestive health, energy medication stress relief, weight management, women’s health and pain management among other things. The company is a big brand name in Australia and New Zealand but has seen rapid growth and development in countries of South East Asia including Hong Kong, Malaysia, Indonesia, Thailand and Singapore. In all of these countries the marketing and distribution plan has been different (Data Services International Report, 2003). In Hong Kong for example, the company has been in operations for a period of over 15 years and yet there is no official office in existence, while Singapore on the other hand there is not just an official distributing network in place there is also an office with over 40 employees. Executive Summary: The following assessment will seek to analyse materials from a variety of secondary resources in order to quantify an international marketing plan which would be a reflection of the decisions that have been made during the formulation and implementation of the brand’s management and marketing team in the initial phases. The underlying idea in the project is the creation of a set of recommendations using policy orientations from Blackmore’s management and applying them to the theories about an appropriate marketing mix given Kuwait’s culture. Country profile: Kuwait is a small desert country that exists on the northwestern tip of the Persian Gulf. It is a small desert country occupying 17,818 sq km (6,880 sq mi). it is however a country that is strategically located, bordered on the North and West by Iraq and south and West by Saudi Arabia. Given its small size and strategic location Kuwait does not come across on first sight as the perfect location for business expansion (Elzeney, 2008). It however is perfect by virtue of the fact that it has huge oil reserves; moreover the Gulf War of 1991-92 ravaged the country and made it an ecological disaster area. There are serious land and air quality degradation issues which in turn increase demand for health products in humans. Market segmentation and initial research: The products that are on offer from Blackmores are largely non prescriptive medication by nature. What this means is that a big part of the product line that the company would try and sell in the new market is drugs that would fall in the category of self medication, complementary medication like energy and health medication- vitamins, calcium etc among other things. In this case the best scenario which Kuwait has to offer is that herbal and complementary medicines are allowed to be sold in pharmacies as over the counter medicines without restriction. Moreover, there is a strong culture that the country has which embraces trust in self medication over prescriptive medication which in some cases might lead to trouble but is good news for Blackmores as this shows that there is a market for the products that are on offer (Roos, 2001). The country began regulation of herbal medication in 1989, but with products that maintain a proper standard of quality there are no problems of sanction. The country also has a strong culture of allowing imports with little or no hassle, because the other than the primary export product i.e. oil, there is very little that the country has on offer on the basis of home turf production. Competition would therefore not be as fierce as many of the other countries in Asia. The structural model of the effects of marketing mix elements on brand equity is defined in line with the existing theoretical findings. The marketing mix to be considered here is product-herbal and natural medication; pricing-the price that the consumer has to pay for the making avail of the medication; promotion-the manner in which the product is being brought into the limelight making it desirable for the customer and place-the medium and the manner in which the customer is being reached (Belch and Belch, 1995). As is evident from the documentation that is available in the form of press releases and matter that is available on the company website the bulk of business that Blackmores does is on the basis of a retail outlet strategy (ASX Release, 2009). The sale of product through the internet is limited, marketing strategies in the past in Australia where the parent company originated and is located believes in marketing the product as the singular one which is made from natural ingredients with little or no side effects. The idea is deliver in house values and adapting these to the constantly changing and evolving market, so as to attract consumers by the promise of health solutions that are singular different and superior to others. Marketing and Ad campaign recommendations: It is this therefore that needs to be the basis of the marketing campaign that has to be launched in Kuwait. The practice that Blackmores has adopted by which it ensures the bulk of its sales through retail and over the counter transactions can continue. The major focus of advertising needs to be here as well. The pricing from the time of product launch till about a year-until the product creates space for itself in the market needs to be highly competitive. It would be fair to say that the objectives of the marketing and the d campaigns would mostly be to lure the customers towards the product and create a niche in the market. Ads therefore need to be focused on the local pharmacist, innovative measures like internet marketing etc can be set aside usage of the print and TV media needs to be focused on. The basic focus however would still be the grocers and the druggists in order to ensure the creation of demand. Beside this a jingle campaign over the radio and audio media can also be made use of. Local icons like musicians can be made the face of the new campaign launch. Logistics and strategy: This would still lead to a large burden of the distribution and logistics department of the company as the number of broken packs would be large due to the thrust on retail selling. The cardinal rule of international marketing applies: facilitated by technological aid, the concept of business integration (Doole and Lowe, 2007). It is for this purpose that the concept of a buy out or a local merger with a firm like Mag Alayser Herbal merger must be contemplated. Setting up of a big logistics network would be an added cost. A merger would mean usage of an existing logistics network and access to an established market without the burden of added costs. This would also help in knowledge management as it would give the company access to local talent. The marketing mix: The marketing mix to be considered is the product, place, price and promotion. The product that is to be marketed is in congruence with the culture and health product patterns of the country. The fact that the Blackmores medication is made of natural herbal products needs to be highlighted in the promotion. What needs to be done in order to capitalize on the existing opportunities is the utilization o appropriate marketing mix and intonation marketing theories along with a clear focus and vision to manage the logistics and distribution variable. It is necessary for any new brand entering a market with set local players to offer the customer certain unique products which ensure value for money. This is doubly important in a product related to the health industry. Blackmores should definitely make use of its position of one of the top in the Australian market to gain credibility and leverage over the local players. Moreover the idea of forgone a partnership with a local player in order to effectively understand and tackle competition needs to be utilized as well. The promotion strategy should be based primarily on internet marketing other than the focus that necessarily needs to be placed on Assessment of Viability: The herbal and natural medication market in most Asian countries always has a large scope for growth and development. The same is true for Kuwait. The country and its culture are positively inclined towards Complementary and Alternate treatment lifestyle and medication choices. The laws that relate to herbal and natural medication and its regulation and exports are lenient. Import duties are low compared to other countries. Moreover setting up base first in Kuwait would give Blackmores access to the more lucrative markets of Saudi Arabia and Iraq without bearing the burden of advertising spends in the more costly nations. The greatest risk that Blackmores would have face is the intense competition and the inherent aversion in the local grocer and pharmacist to act as the advertiser. Recommendations and Concluding Remarks: In conclusion it may be stated that there is definitely some scope that for the further expansion of complementary and herbal medication market in Kuwait. In conclusion therefore it can be reiterated that Blackmores has the capability to become one of the most important player in this segment for the market in Kuwait, all that is needed is a correct blend of marketing and product strategizing. Reference: Blackmores, website, accessed June 15, 2009, < http://www.blackmores.com.my/AboutUs/StudentStudyCentre.aspx?PageId=154> Blackmores Finds Opportunities in Crisis, 2003, pub, Data Services International, Blackmores Limited Elzeney D, 2008, Oil, Politics, and Economics: Kuwait's Balancing Act, pub, Stimson Publication Report Roos M, 2001, Complimentary Healthcare Markets, International Market Research Reports (IMRR), pub, STAT-USA Belch G and Belch M, 1995, Introduction to advertising and promotion- An integrated marketing communication perspective, p304 ASX Release, 2009, Blackmores announces healthy revenue growth, Third quarter announcement, accessed June 15, 2009, < http://74.125.153.132/search?q=cache:FoiQR8HSHQoJ:www.bourseinvestor.com.au/redir/pdfpre.asp%3Fd%3D00946300%26f%3D20090423%26y%3D0%26s%3D45316%2520%2520%2520%2520%2520%26sd%3D44KB+Blackmores+marketing+strategy&cd=5&hl=en&ct=clnk&gl=in> Doole I and Lowe R, 2007, International Marketing Strategy: Analysis, Development and Implementation, Published by Cengage Learning EMEA, pp431-433 Read More