International Marketing - GOON Drink - Case Study Example

International marketing (GOON Drink) Student’s Name: Instructor’s Name: Course Code: Date of Submission: Executive summary This analysis was aimed at presenting the concept of international marketing and in particular penetrating a product into a foreign market. In this analysis, the product that has been considered is the GOON drink which is the most famous product in the country. Despite the product being commonly used by the travelers, it can still be targeted among different market segments include the youth, party goers and students and all people who are lovers of alcoholic drink that is prepared from whole meal. On the market situation, number issues such as economic, cultural, geographic, demographic, and political as well as legal have been identified as some of the important factors that can influence the success of the product in the new market. This is because they tend to shape the market. Three potential market destinations namely New Zealand, United Kingdom and the Netherlands, have been identified. However, New Zealand has been chosen as the best among the three and this is because of the trading block which it’s found in and the geographical location that it’s placed. Since it has been established that market entry among other challenges will be a big issue for this product and it’s from this angle that it partnership has been recommended as the best strategy to do so. Table of Contents Executive summary 2 1.0 Introduction 4 1.1 About the report 4 2.0 Product overview 4 3.0 Market segmentation 5 4.0 Target markets 6 5.0Key economic, cultural, geographic, demographic, political and legal issues 6 6.0Potential destination for the chosen product 7 7.0 Recommended country 8 8.0 Challenges in placing the product in this country 9 9.0 Strategy for entry 9 10.0 Conclusion and recommendation 9 References 10 Emerson C. (2012). Australian Export Awards celebrate 50 years of innovation, Media release, 27th November 2012, available at: http://trademinister.gov.au/releases/2012/ce_mr_121127.html 10 GOON. (2012). Australia’s most famous drink. retrieved on 4th December 2012, available at: http://timmey.hubpages.com/hub/Australias-Most-Famous-Drink-GOON-backpacker- travel-drink-alcohol 10 OECD Factbook. (2012). Economic, Environmental and Social Statistics, retrieved on 3rd December 2012, available at: 11 1.0 Introduction No doubt that in the current world of business, competition is very stiff and markets are becoming saturated. The entry to new markets and across border is considered the best option for the investors, manufacturers and service providing companies like banks and insurance firms. When the local market for a given product or service becomes saturated and cannot expand significantly to sustain the business, preference is given to penetrating to other global markets where market opportunities for the product or service still exists. The entry to markets in other countries has been facilitated with the advancement in technology which has made communication easy and liberalization of world trade by removal of trade barriers that previously hindered foreign investment in some industries (Harkness and Mohler, 2003). 1.1 About the report The intention of this report is to present the product that will be exported or rather be placed in the foreign markets from the local market. The report will further discuss the market situation that the product will be placed to determine its suitability in meeting the business objectives. The product that has been chosen for this case is called GOON. The GOON product is the most famous drink in the Australia market. This is a drink that is commonly used by the Backpackers on almost a daily basis. 2.0 Product overview The product was invented in 1965. GOON is a kind of wine that was developed by an Australian mate called Thomas Angove who prepared the drink and patented it in a carton kind of box. The first drink was first packed in 4.5 liters. However, today the packing has been optimized since it is packed in the plastic space-bag which is then carried in a carton box as shown in appendix 1 below. The GOON drink exists in two major brands namely first class and second class brands. The difference is that unlike the latter, the first class brands are taken without mixing it with any other juice. This drink controversial in away in that on one side the drink is a cheap alcoholic drink that even if taken as ice cold or as a mixture can be very taste. On the other side is that the product can be disgusting especially when the drink is taken and are some fish or egg remains in the glass. However, the lovers of this drink argue that this is a sign of a whole meal. This product has been chosen since it can be consumed in different forms given the choice of the user meaning that the product itself contain multiple brands especially if it is to be taken in a mixture (GOON 2012). 3.0 Market segmentation Market segmentation entails the process of trying to map different potential markets and group them according to similar characteristics that they posses. The segmentation of the market for GOON product will be based on two major aspects namely the needs and the customer profiles. The first and important feature for this product is that it is preferred by the travelers because of its convenience to carry and use. So the first and most important segmenting basis is the prevailing need for the product (Hofstede 2001). On the other hand, this venture will prefer to segment the market in relation to location, demographic, psychographic and behavioral. 4.0 Target markets The GOON product in Australia is used by different people in Australia and has shown very positive responses. The target market for the product apart from the general travelers include the students, party goes and lovers of soft but a product that can easily make one become very drunk at a very affordable price. This product is sold at $10 in 4.5 liters cheaper than drinking water. This means therefore that the product can be aimed at any target market including the low earners. 5.0 Key economic, cultural, geographic, demographic, political and legal issues There a various aspects that will influence the attractiveness the GOON product in the market and they include the economic, cultural, geographic, demographic, political and legal factors. This is because each market is known to present its own market dynamics which may be very different from the local market where the product is manufactured and already established. To start with, the economic factors include such as unemployment and overall performance of the economy which determines the disposable income that the consumers will have to spend on the product. Preferably, this product is expected to do extremely well in different economies given its price which is really affordable to many. On the other hand, cultural issues may be explained in terms of what the market likes and dislikes (The economist 2012). This is because in some societies some products may be considered unethical to consume thus making it very difficult to penetrate. Geographical location is also an important factor since it tends to influence the logistics and also accessibility. This may end up inhibiting the penetration of the product into far markets like in Europe, Africa and the United States. Further, the demographic factors that are likely to influence the penetration of GOON the product into the foreign markets include age, sex and family size, income, occupation and education, religion and race as well as nationality. The political and legal issues are also mentionable in this case. This is because there are those countries that restrict the usage of drinks that are considered cheap and of low quality. On the other hand, the issue of protecting the patent rights is also likely to affect the business. This is because some countries allow for free competition and this may lead to production of similar products that may threaten the performance of this product in the market (Nisbett 2003). These issues are important in that they contribute to the formation of the business environment that they present opportunities and threats for the business. However, the major forces in the business environment that are likely to influence the performance of GOON in the foreign market include economic, culture and legal issues. For instance, economic factors such as level of unemployment and income per capita influence the spending patterns for the product. On the same line, cultural issues are also very important in that it determines whether the product will be accepted in the market or not. Finally, the legal issues will seek to establish if the quality level of the product meet the required standards. These are more important issues since they are dominant in almost any given market (OECD Factbook 2012). 6.0 Potential destination for the chosen product The three countries that are considered as potential markets for the GOON drink are New Zealand, United Kingdom and the Netherlands. The three countries present different scenarios some of which may be similar to the Australian market while others may be totally different. To start with, the New Zealand, economic environment is similar to that of Australia given its membership to OECD and Asia-Pacific region which allows operation of the member countries to operate under the trade pact. Further, New Zealand is highly ranked in terms of economic performance which creates lucrative market for both first and second class GOON brands. On the other hand, the United Kingdom is a member of the European Union and it operates under policies that are established by the member countries. However, most important in the country and similar to Australia is the freedom to manufacture and market different products as long as they are of the accepted standards (Emerson 2012). However, the challenge that is posed by the market even though the product is easily affordable by the market is the geographical location. The costs of logistics especially on transport will be relatively high and this may result into high investment costs. Finally, in the case of Netherlands, drinking some of products is highly prohibited and it’s expected that the product may undergo very serious scrutiny before accepted. Like the case of the United Kingdom, geographical location is a big issue (OECD Factbook 2012). 7.0 Recommended country New Zealand is the recommended market destination for the GOON drink and this is for a number reason. First and most is that New Zealand and Australia operate in one trading block which Asia-Pacific. This means that the product will be freely introduced into the market. Further, the geographical location of the country favors the introduction of GOON product into the market. Like is the case of Australia, the product can also be sold in different brands given its economic status which favors the majority of the consumers with the product given its affordable price of $10 per 4.5 liters pack. 8.0 Challenges in placing the product in this country Culture is expected to be one of the major challenges that the product will experience in the new market. This could be experienced because of the contents that are used which include some eggs and fish components alongside other fruit flavors. Acceptance may also be a big challenge for the product. This is because there may be superior brands in the market. Finally, legislation especially to foreign-based products may also be an issue (The economist 2012). 9.0 Strategy for entry However, since this is totally new product in this market, it is expected that entry may be a big challenge especially if the product is not considered a very strong brand in the market. With this kind of situation, it is proposed that entering into a partnership with any local company with a strong presence and brand will help the product excel in the market (Emerson 2012). 10.0 Conclusion and recommendation This analysis has taken a dip thought on the GOON drink which is the most famous alcoholic drink in the Australian alcoholic market. Under this analysis, the target markets have been identified and the Key economic, cultural, geographic, demographic, political and legal issues which can determine the success of the product in the foreign market. Different markets pose different scenarios which have different directions for the product. However, the major issue that has been identified is entry into the New Zealand which is the best choice market for the product is entry. It is with this regard that partnership is recommended as the best strategy for entry. References Emerson C. (2012). Australian Export Awards celebrate 50 years of innovation, Media release, 27th November 2012, available at: http://trademinister.gov.au/releases/2012/ce_mr_121127.html GOON. (2012). Australia’s most famous drink. retrieved on 4th December 2012, available at: http://timmey.hubpages.com/hub/Australias-Most-Famous-Drink-GOON-backpacker- travel-drink-alcohol Hofstede, G. (2001). Culture's Consequences. Sydney: Sage. Harkness, J. and Mohler, P. (2003). Cross-Cultural Survey Methods. London: Wiley. Nisbett R. (2003). The Geography of Thought: How Asians and Westerners Think Differently ... and Why, Free Press OECD Factbook. (2012). Economic, Environmental and Social Statistics, retrieved on 3rd December 2012, available at: http://www.oecd-ilibrary.org/economics/oecd-factbook-2011-2012_factbook-2011-en The economist. (2012). Culture: The effort behind the effortlessness. Retrieved on 4th December 2012, available at: http://www.economist.com/culture Appendix 1: GOON brand Read More