International Marketing and Bargaining Power of Suppliers - Case Study Example

1.0 Competitive Analysis 1.1 Porter's Five Forces 1.1.1 Threat from New Entrants (High Threat of new entrant) The costs of starting up a pet business in Melbourne is very high which means that new entrants would not only require meeting the legal requirements as provided by the authorities with regard to pets but also be armed with a large war chest (English & Moate, 2011). The pet ownership in Australia is very high and thus inclined to seek services related to their pets. Many residents of Melbourne busy schedule which makes it imperative for them to have their pets taken care of (Brown, 2000). Research figures indicate that a majority of Australians keep pets whether in the rural areas or in large towns and cities (Toribio, 2009). This means that Melbourne is a lucrative market for pet services. With such situation it means that many companies would be interested in making an investment in the Australian pet industry. With people being attracted more to the life in the urban areas as opposed to rural areas and this means that demand for pets is likely to rise over time. Hence, threats of new entrants getting into the pet industry are high. However, Petopia is differing from other pet service providers because Petopia offers a range of holistic services and is also a one stop hub for busy pet owners. 1.1.2 Threat of Product Substitutes (Low threat of product substitutes) Residents in Melbourne engage in many recreational activities (Lee & Park, 2005). However, there appears as though no activity which would act as a substitute to pets. This is evidenced by the fact that as a nation progresses people tend to find new ways of recreation and pet keeping is one of the best ways so far especially for the older members of the society. The clients in the City of Melbourne have a wide array of choices as to who their service providers will be. The city has a high number of providers of pet services and Petopia is just but one of them. Therefore, clients have many choices at their disposal. There exists a threat of clients moving on to other service providers. The service providers each have a unique service they provide but Petopia prides itself in providing holistic services to pet owners. 1.1.3 Bargaining Power of Suppliers (Low threat of bargaining power of suppliers) The business of taking care of pets necessarily requires certain inputs which the industry players use in offering their services. The company, being an old player in the pet services market has established relationships with suppliers. There are many suppliers of the products required. This translates to the fact that no single company can claim to control the pet market and the competition between the providers of these products means that prices of the inputs required cannot rise to unmanageable levels to the disadvantage of the Company. With this state of affairs, it is apparent that the suppliers of products required for care of pets are many and hence the suppliers' bargaining power is low. Australians, just like any other society appreciates services which would be referred to as ‘one stop’. This kind of approach by Petopia gives it an edge over its competitors who only provide a few services. 1.1.4 Bargaining Power of Buyers (Medium bargaining power of buyers) With a number of companies being established to offer services for pets, buyers of this service find themselves having more options from which they can make choices (Groenewegen, 2005). Petopia shall endeavour to provide value added services. These services includes pet transportation with personalise air-conditions at the rear of the vehicle and with good safety featured bunk to transport them, amongst others to ensure that the Company becomes the pet services provider of choice in Melbourne and the whole of Australia. 1.1.5 Rivalry among Competitor (High threat to Rivalry among Competitors) Since the demand for pet services is high and bound to go even higher, there are already many competitors and more are bound to get into the market (Wood, Giles-Corti, & Bulsara, 2005). The market is likely to see many tactics being employed by various competitors in order to gain an edge over the other players. Petopia has a competitive edge over the others having been a player in the business for a long time and having a vast experience. 2.0 Marketing Strategy 2.1 Mode of Entry The proposed mode of entry is premised upon a number of fundamental factors. These factors include demand and supply. In Australia, many people keep pets and hence demand for the service is high (Burnett & Bath).The Singapore and the Australian governments have an agreement on trade. Petopia shall set local branches 5 major states in Australia through in order to cater to the mass market in the entire Australia. 2.2 The Imperative Political and Financial Considerations Australia is a politically stable country. It is a country which has good legislation with regard to setting up of businesses in Australia with potential investors being saved from the bureaucratic red tape. The Australian government also has trade agreement with Malaysia which enables business men from the two countries to set up businesses in either country without undue restrictions (Burgemeister, 2003.Petopia has the financial capabilities having conducted profitable business for a long time in Singapore. 2.3 Target Market Australia does have a relatively comprehensive statistics on the country's pet industry. Some of the data with regard to the pet Industry in Australia is collected by the Australian Bureau of Statistics. Some other data is collected by private entities such as the Australian Companion Animal Council among other management firms. Some of the most recent statistics indicate that above 67% of all households in Australia own a pet (Polonsky & Mintu-Wimsatt, 1997). The most favourite pets by Australians are dogs and cats. It is estimated that cats and dogs form pets to above 50% of all households in Australia (Australian Bureau of Statistics, 2012). The estimated number of pets in Australia was thirty 8 million. Of these pets, about 2.5 million were cats, dogs accounted for slightly fewer than 4 million. The other pets which are kept by Australians include; ornamental fish, birds amongst others. Australians also spend a lot of money on pets (Frost, 2005). Statistics indicate that the annual expenditure on pets could go beyond 4.62 billion dollars. The highest amount in the previous figure was spent on dogs which accounted for 59% of the overall expenditure on pets. Cats took about 25% on the overall amount spent on pets. The remaining 15% of the money was spent on the remainder of the pets. More than 2 billion Australian dollars was spent on pet food alone. The statistics also estimate that an excess of 40,000 people are employed in the Pet Industry in the Whole of Australia (Australian Bureau of Statistics, 2012). The statistics present on the pets in Australia do not present the true state of affairs in Australia (Franklin, 1994). With regard to dogs, the statistics presented refer only to dogs which have been registered. The statistics with regard to cats only account for cats which are owned. There is evidence showing that a large number of cats are "semi owned" which means that they do not have a single owner (Parslow et al, 2005). These cats are cared for by people and they do not a fixed place where they stay and hence move from one house to another and occasionally run wild. Estimates indicated that more than 20 million fish are brought into Australia in a given year and based on this; the figures released on fish ownership cannot reflect the true figure (Australian Bureau of Statistics, 2012). 2.3.1 Primary Target Market For Petopia, the products shall be targeted at residents of Melbourne. These residents own pets and therefore need to have services (Zasloff & Kidd, 1994). The targeted group consists of people who are very busy and they are unable to properly take care of their pets and those who believe in holistic healing as well as owners who have high spending power. The combination of the high spending power and little time on the clients’ hands makes them perfect target group. The company shall target to sell the idea of pet ownership amongst the populace that is not inclined to own pets. The Company shall also provide information to potential clients and existing clients on what care ought to be accorded to their pets. The Company aims to be the pet service provider of choice (McGee, 2005). This is due to the quality of services which are aimed at ensuring clients do not just visit the Company just once. 2.3.2 Secondary Target Market Market Participants/Suppliers The Company has always had dependable suppliers of its products. The Company also has intentions of sourcing for local suppliers. This is to be achieved through advertising through the local media and through research over the internet. The company shall have the parental control from Singapore. The Australian subsidiary shall maintain some element of autonomy. 2.4 Market Positioning Petopia intends to be the leading provider of pet services. The Company takes cognizance of the fact that there are many players in the market and therefore intends to put in place mechanisms which shall catapult it to the first position among the market players in the pet industry (Wilkinson, McAlister, & Widmier, 2007). The Company shall offer value added services and put in place mechanisms other measures to ensure that it succeeds in being the best service provider. To achieve some of the objectives the company shall have to conduct thorough market research and this will ensure that the services offered are going to be the ones that clients wish to have. The company shall set up its business premises in areas close to residential areas where access by clients is easy. 2.5 Marketing Objectives Petopia's objectives are defined by the huge love of pets in Melbourne as well as in Australia generally. The company also feels that the demand for pets is bound to increase. The Company wishes to rely on its huge capital base and reputation coupled with many years of experience in the pet industry (Groenewegen, 2005). Having a huge capital ensures that the Company shall hit the ground running and be in a position to have more resources for advertising its services. The Company therefore shall set goals which are specific, measurable, achievable, realistic and capable of being achieved within a given time to be established. 2.6 Marketing Mix The company shall be involved mostly in providing services to pets. The company would also be concerned in providing products necessary for good care of pets. In this regard, Petopia would be involved in ensuring the health of pets is properly taken care of by providing experienced veterinary doctors for this purpose. The company shall also deal with issues of inoculation of the pets and cleaning and grooming. The company shall also endeavour to provide high quality feeds for pets and in addition provide products such as decorations for the pets. The current pet industry in Australian is a far cry from what Petopia has offered. The services by Petopia have always been world class and comprehensive. Pet owners do not have to visit different suppliers for other products required. 2.6.1 Expected Service The company shall endeavour to provide services which have been certified and shall put in place measures to ensure quality control. Having been in business for a long time gives the company an upper hand having established what is best for pets. A company gets to know how to do and not do things through experience. The company shall also follow the laid down legislation on how pets should be cared for. The company shall be guided by any law which may provide for insurance of pet. 2.6.2 Price Strategy The price of the services offered can fluctuate over time. The prices would therefore depend on the price of inputs and other attendant costs to the process. The company shall also be influenced by the kind of charges levied by its competitors and therefore ensure that it comes up with prices which shall be attractive to its clientele. The competitors are the other players in the pet industry in Australia. 2.6.3 Place (Distribution) Strategy The marketing strategy adopted by the Company shall involve emarketing. The Company shall have a website which shall show the kind of products offered by the Company and the costs. The Company shall also endeavour to attend fora where pet lovers attend and be in a position to market its products and services. The Company shall also depend on the informal means of promotion and shall therefore ensure customer satisfaction so that they may direct other customers to the Company. In addition to use of the internet for passing information to potential clients, the company shall open a number of outlets to offer its services. 2.6.4 Promotion Strategy The Company shall use some money for advertising. The Company shall also offer special terms to a given number of clients per month. The Company shall come up with a strategy of rewarding loyal customers as well as those who introduce their colleagues to the business. The Company shall come up with branded items such as arm band and tee shirts which shall increase its visibility among members who are potential clients. A key element of promotion that the Company intends to implement is use of customer satisfaction to draw other clients to the business. The company shall also engage in corporate social responsibility by supporting worthy causes. The Company shall use Melbourne dog show to showcase its prowess in the pet industry. References Australian Bureau of Statistics, (2012). Year Book Australia No. 82. 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