Market Research Planning for Snowball - Case Study Example

Name: Course: Tutor: Date: Topic: Planning for Research 1.0 Executive Summary Strategy is a term previously used by the military to show why and how the plan will be implemented as far as all the other factors are concerned. These factors include competitors, customers and technology. . Marketing on the other hand encompass company culture, promotion, product development, positioning and all the sales functions. It is actually a decision on what to sell, whom to sell to, when to sell and where to sell a product or service. Any business is driven by the customer needs and preferences. The main aspect of business planning starts with the aim of provision of products and services to the target customers. There is need therefore to look in to the market before planning on products and finance involved. The international marketing strategy should address the market demand and how to meet the customer needs and preferences. After market identification, there is need for product development, promotion and branding. Snowball is one of the market leaders in manufacturing and distribution of feed block supplements for livestock farmers in Australia; however it has less market avenues abroad. The report has looked in to the marketing environment, here political, cultural, economic, social, cultural, technological and legal elements analyzed through situation analysis. The market plan has nine sections, these includes the product description, corporate mission, vision and goals, situation analysis, SWOT analysis, target market, marketing mix strategy, implementation, control and evaluation. This report has brought looked into the situation analysis of the Animal Feed Supplement market in Australia, through SWOT analysis, the strengths, weaknesses, opportunities and threats of the business has been identified. Opportunities available for Snowball business to expand its marketing and strategic coverage to global markets have too been noted. The environmental analysis of both external and internal factors will enable Snowball business set the objectives and quotas in the global market and select a country to market its products overseas. Snowball will adopt the 4Ps marketing strategy which looks in to the price, place, product and promotion to effectively market its products overseas. The implementation will finally be done with proper controls and regular evaluation enforced. This will guarantee full implementation of the marketing plan. 2.0 Product Description Snowball is a major manufacturer and distributor of Feed Supplements for dairy cows, sheep, horses and goats. Feed supplements are nutritious animal feeds that are sold in West Australia in millions of dollars. 70% of the sales currently are from dairy feeds while the remaining 30% of the sales are for other livestock. These feed supplements are a combination of scientifically formulated livestock feed rations that have become the most conventional product in West Australia. Snowball has developed to one of the leading animal feed and nutrition manufacturer and market leader in Australia.  Snowball offers high quality proteins, vitamins, mineral and medicated supplements packaged in different sizes. Snowball provides products for four groups of animals; these are sheep, horses, goats and cattle with the major category being the dairy and beef cattle. The products are also developed based on customer needs; this therefore has enabled snowball manufacture forage, growth and nutrition products. The products are in different forms; this includes loose minerals, pressed blocks and poured blocks. Snowball products have been manufactured according to the industry standards. The brands have been in the market for long and most of the customers are aware. This includes both local in international markets. The main competitive disadvantage is that there is lots of cost and challenges involved in delivering to the foreign markets. Snowball Company is located in Perth City; West Australia. Australia is an Island between Antarctica and Asia. It is found in the Southern Hemisphere; the island is located in the east of Indian Ocean, South of Coral Seas and west of the Pacific Ocean. The continent is relatively dry and flat. The map below shows the specific location of the main office of Snowball Processing Plant. Snowball Main Office: Perth- Australia The snowball products are as follow:- a) Loose Minerals This form has innovatively produced macro-minerals such as calcium, potassium phosphorus and magnesium together with other minerals such as iodine, cobalt, manganese and zinc. These minerals are provided to supplement the natural minerals obtained by animals from fodder and other feeds. b) Pressed Blocks This is a mixture of dry feeds, minerals and vitamins together with a small amount of molasses compressed together in to a block. These blocks are easy to store though not very much long-lasting compared to other forms, it is best suited to retail outlets. c) Poured Blocks Poured blocks are produced by combining dry feeds and molasses using a binding agent. This binding agent hardens the mixture in a container. Poured blocks have a very high moisture content compared to other forms; this therefore increases its volume, freight cost and weight. 3.0 Corporate vision, mission statement and corporate goals 3.1 Mission Statement Vision The Snowball’ vision is to maintain market leadership in the production and distribution of high quality animal feed supplement that meets the customer needs, industry regulations and market approved standards. Mission The company strives to manufacture animal feed supplements that are scientifically formulated and innovatively produced to be the product of choice. Snowball is committed to continuous quality improvement of its products, embrace quality assurance and adopt new production technologies. 3.2 Corporate Goals 3.2.1 Human resource The Snowball employees will also be assured good working environment and attractive remuneration. The employees will be natured to be innovative in product development in order for Snowball to maintain market leadership. Snowball embrace a healthy work force, this has been achieved by seeking professionals in all lines of production. The management positions have maintained highly qualified nutritionists, research and development experts and supply chains managers. The snowball dynamic culture fosters good international relations and multicultural business environment. 3.2.2 Quality Assurance The company ensures quality assurance right prom raw material sourcing, performance analysis, manufacturing and final delivery. 3.2.3 Legal Compliance The company has ensured practice within the rule of law by benchmarking with the   Australia’s Feed Industry Code of Good Manufacturing Practice. The Snowball customers will be treated as required by the Trade Unions, they will receive good customer service and a permanent customer relation. 3.2.4 Financial Goals Snowball Company overall feed supplements and nutrition industry has an annual total sales of approximately $500 million worldwide. The company currently has an annual growth of 1.6%. The company expects to venture in to the global market and increase the annual sales to $750Millions by 2018. The company also expects to expand its market share by 15% through the use of networked dealers overseas. 4.0 Situational Analysis 4.1 Political factors Marketing strategy should consider political ideology while identifying target market to market products overseas, this is because political ideologies which the host country subscribe to will directly affect the product marketing and distribution. 4.2 Economic factors The animal price directly affects the feed supplement consumption and price, when the animal price reduces, the farmers tend to reduce the amount of food supplement consumed and this is done to reduce feeding cost. Snowball will only enter markets where livestock headcount is contently growing; this mission must be achieved as the company also strives to maintain average return on investment. Communication and transport network is very important in market selection. There are 13 ports of entry in Brazil for both shipping and receiving company products through water transport. The number of airports is also considerable. 4.3 Cultural factors The Demographic and Socio Cultural Trends in the animal feed and nutrition industry is dynamic, the peoples diet constantly change, consumers are getting more sensitive on cholesterol free products, there might . The marketing strategy need to identify the language used by majority of the residents in the target market in order to re-align the marketing strategy accordingly, this may include hiring a translator to communicate the marketing information. Religious believers and way of living is diverse in the world. The products in the market should go in line with the religious views of the target market. Some product may be offensive to some religious institutions and people. Pig feeds in this case will not be marketed in the Muslim community because it is not required. Education levels and nature varies considerably in the international market. The type and medium of communication will be determined by the nature and level of education in the target market. 4.4 Technological factors The new byproducts used to make products feed supplements are arising as different organizations identify alternative raw materials for supplement production which are relatively cheaper. Corn and soybeans for instance are now being used to make feed supplements instead of the Mexico’s imported molasses which has been very costly. This development has been fruitful especially now when raw materials demand is exceeds supply hence pushing the price high and increasing the cost of production. Technology in Brazil will determine the mode of transport and products delivery, marketing strategy will look in to the technology adopted at the port to ensure there are appropriate cranes to offload products from the ship. 4.5 Environmental Factors Snowball Company is operating in a sub-group specializing in feed supplements within the animal feeds and nutrition industry. The overall feed supplements and nutrition industry has total sales of approximately $85 billion worldwide where feed supplement is the component. The feeds and nutrition industry is a mature industry with the current annual growth being 1.6%. Feed supplements is a growing field and competitors are still few hence nature of competition is oligopoly. The regulations are moderate though it is constantly changing due to the concerns of food safety. 4.6 Legal environments The animal feeds and nutrition industry is characterized by regulatory and political dynamics. Regulations for feed import and export is key, there is also regulation in ingredients used in feed processing. The regulations are now strict bearing in mind that consumer protection is occasioned by diseases cause by consuming port, meat and milk infected by diseases. International marketing in Brazil is well established. The regulations in Brazil require that feeds Import into Brazil should be certified prior to importation to show that no animal product was used to manufacture the feeds. The product must be free from animal products. Registration of patents is a requirement in Brazil; same applies to United States of America and Australia. This enable the company protect products rights. Unlike Australia and United States, Brazil has not emphasized ISO certification in feeds manufacturing. The country is currently undergoing improved and more regulated animal feed and nutrition industry due to food sensitivity world over 4.7 Competitive audit. Major Competitors in the Industry include Cargill of the United States of America, Charoen Pokphand of Thailand and Nutreco of Europe. This can be managed by maintaining good customer service. The company believes in not only quality but also good customer service and working relations. 5.0 SWOT ANALYSIS The SWOT Analysis has been done to identify the key strengths, weaknesses, opportunities and threats facing Snowball Company. Strengths: The product brands developed by snowball are reputable and capture customer preferences. Snowball products have been rated high in terms of quality and conformity to the animal feeds and nutrition regulations. Snowball had diversified products package to suit various customer groups with varying preferences. Weaknesses: Snowball Company highly depends on domestic market. Negative effects on the domestic market directly affect snowball production cost, profit and volume. Snowball still relies on molasses as one of the major ingredient in feed processing, most of the competitors have moved to alternative cheaper ingredients in form of byproducts. Negative effects on molasses market have a direct effect on snowball production cost and volume. Snowball has not established a stable international market and overall global presence. Molasses in Brazil is relatively cheaper and accessible unlike United States. This cheaper molasses will enable snowball operative in a more sustainable operation margins in a less competitive environment. Opportunities Snowball has a manufacturing plant at Perth city, a capital city of Western Australia. , this facility is near the port hence making overseas shipping possible. The emerging use of various byproducts that are relatively is supplementing molasses; the emerging byproduct when fully utilized will ease production and reduce cost. There is a major ongoing research, this when completed will create new line of products that will improve snowball existing products. New market in the global arena will increase the annual sales considerably. The new products by snowball is now developed however, there is an opportunity to develop the new channel of distribution for the new products. The lower cost of molasses and cheap Brazilian labor reduces the cost of production. Threats The abolishing of molasses business in the united state is likely to be disastrous to the snowball business because this is a raw material in the feed supplement production. There is already a great pressure on the availability of molasses impetrated from the United States. There is an increasing trend on lose of consumer confidence in beef and dairy products consumption. This is caused by believes by a portion of consumers on the relation between cancer and beef or dairy products consumption. Continuous research and product development by competitor threatens Snowball‘s existing products. 5.1 SWOT Analysis Conclusion SWOT analysis is one of the best strategies used in marketing planning strategy. the report has provided through SWOT analysis the current snowball market and products, the strengths have been identified and listed for appreciation and exploitation, weak areas of snowball business have also been identified listed and avenues of managing them sought. Opportunities have been identified; these are to be implemented in order to exploit the market fully. threats have also been listed, proper mitigating factor are therefore to be put in place to prevent the company from losses in case of an eventuality. Market analysis of products, competition and global market involvement has been well done, having conducted a thorough market evaluation of Snowball products, it has been concluded that there is actually a large global market for its products. The strategy has provided avenues for a decision for Snowball to venture in to Brazilian Markets. Snowball has been operating in Australia but great opportunities have given room for market penetration to other global markets. 6.0 Marketing Objectives Currently, the snowball company has not gained vast experience in the international market. The company however has constantly begun intensive research to identify opportunities in the global market. This is the main strategic plan for snowball. Snowball international involvement is still low; the company directly exports products to Asia and Africa. The exported products make only 2% of the annual sales. On the other hand, the snowball competitors have already established overseas distributors, export agents and even joint ventures in Asia, Africa and United States of America. The current snowball strategy is therefore how to establish the business oversea; the company has identified the need to compete in the international arena however the defined strategy to achieve it is still lacking. Global strategy development will start with the industry and country research which will then enable the company to perform the entry mode strategy. 6.1 Segmentation Profile While looking at the international market, Snowball reviewed various countries to select the beast market for its products. The factors considered in clued the size of livestock population in the country, overall trend of livestock products production in the country. The following countries were considered for review:-  Brazil  Asia New Zealand  United States Each of this identified country was screened in order to determine the best option for internationalization of Snowball products. The following factors were thoroughly evaluated:- Trademark and patents protection policy Roads and communication networks Tariffs and duties Countries and citizens attitude toward foreign investments Livestock population Gross national product. Country location and shipping cost Brazil and United States prove to best most preferred options to internationalize snowball products and market overseas. All the other identified countries had less opportunities to make snowball products successful compared to Brazil and United States. The country for investment was selected through macro screening evaluation methodology; here factors such as livestock population, climate, government regulations, vegetation and land use were evaluated as factor that may affect both production and sales of snowball products. The countries political, cultural and legal system was also evaluated to come up with appropriate conclusion on which country to invest in. Selection was narrowed down through weighing to give a relative score of each country. Brazil was select after the evaluation; this is because the country has a high population of livestock hence it will be more appropriate for Snowball to venture into this market with its block feed and loose mineral supplement. Similarly, Brazil in our analysis had the highest potential because it has no competitors in the Block Feed Supplement Business. Currently, the country is buying all the supplements in terms of minerals. Livestock statistics for Brazil for the period 2000-2005 Livestock No. 2000 2001 2002 2003 2004 2005 Cattle nos. 169,900,000 176,400,000 185,400,000 189,500,000 192,000,000 192,000,000 Sheep nos. 14,800,000 14,600,000 14,300,000 14,600,000 14,200,000 14,200,000 Goat nos. 9,400,000 9,500,000 9,400,000 9,600,000 9,100,000 9,100,000 Buffalo nos. 1,100,000 1,100,000 1,100,000 1,200,000 1,200,000 1,200,000 Horse nos. 5,800,000 5,800,000 5,900,000 5,900,000 5,900,000 5,900,000 Source- FAO Database 2006 7.0 Target Markets Snowball Company targets both domestic and foreign markets. This includes the current and prospective market for the snowball products. To enable snowball company reach various customers for its products, there is need to lay appropriate strategies that will facilitate proper communication and product promotion. Brazil is the biggest country in South America. The county accounts for 58% of the whole continent. Brazil has 27 governing states; the currency for Brazil is trading at a lower value making business in Brazil affordable. According to the National Household Survey of 2008, the Brazils population was approximately 190 million. Brazil is therefore a home of over 190 million people most of them being native Brazilians. According to the Brazilian Institute of Geography and Statistics, more than 80% of the residents in Brazil are urban dwellers. Brazil production cost is estimated to be slightly lower compared to United States of America and Australia; this makes operation in the new market cost effective and worthwhile. Sao Paulo - Brazil Brazil is a major beef exporter; it is rated third in the world after the United States of America and Australia. The country export both canned beef and frozen meat. This therefore puts Brazil to a better position to provide market for dairy feeds snowball company has therefore identified this potential market for international involvement. Brazil has a high market potential, the overall market is estimated at around $500 million. Total sales potential once Snowball operates in Brazil is estimated to reach $200 million; this is arrived at by looking at the total market potential in respect to the desired market share of 35%. The market share is fixed at 35% because there are few competitors in feed supplement business in Brazil compared to Australia. The beef cattle are also slaughtered at an average slaughter age 4 years at the rate of 21%. This is lower than the one for United States which is at 2 years and 37 percent in the United States (Dyck and Nelson, 2003). Making a strategic entrance in to the Brazilian market will enable Snowball connect with a large foreign network of dealers in the animal Feeds and Nutrition Industry that will assist the business increase its sales overseas. Before venturing in to the market, a thorough research is conducted, this research will allow snowball grow and become the major competitor in the market. Competitive Analysis  Competitors identified in Brazil were only two in number. A comparative analysis for each of the competitor to snowball was completed. The block products produced by snowball were unique and none of the competitors in Brazil produced it. The competitors produced loose mineral and complete feeds. Availability of molasses as a byproduct has placed snowball in Australia to be more competitive in this field because other countries use molasses for alcohol production and not feed supplements. Given that there is no competition in Brazil, there is an opportunity for snowball to hit the 100% mark of desired market share once the market is ventured. The market share may eventually reduce as other competitors enter the market following the success of snowball. The table below indicates the balance sheet and income statement for Snowball business in the next three years. Balance sheet and income statement 7.2 Customers according to:- 7.2.1 Geographics 7.2.2 Psychographics Snowball has conducted a research to evaluate the global readiness and determine company’s product preference in comparison with other competitors’ products. The company also wanted to establish the entry strategy. Through a survey where questionnaires were distributed, we were able to determine whether the company was ready for global market or not. The results findings indicated that 85% of the evaluation supported the readiness for the global market. Snowball Company is therefore ready for global 8.0 Marketing Mix Strategy 8.1 Products Strategy Through diversification strategy, Snowball is currently seeking new products and markets. This will be achieved by the fact that the company has been involved in contestant innovation of product improvement and new product development. The production strategy for Snowball is geared towards promoting high quality products and consistent use of technology to achieve customer satisfaction. Total quality management and great organizational objectives has been adopted by snowball to attain International Standards Organization (ISO) certification in its production operations. This attainment will ensure all production processes in all the sites are continuously improving in order to maintain high quality and uniformity. The company understands the animal farmer’s pressure in the current market. The company therefore has developed a variety of products that suits various farmers’ requirements. The products such as lactating dairy rations enable farmers maintain their cows in the right condition for optimum production. This is assured irrespective of the season and environmental condition. Snowball products are innovations after extensive research which result in scientific formulations to give the right ration that ensured optimum performance. All the products produced meet the Feedsafe standards. The rations are even customized to meet the customer preferences as well as that of the nutritionists. There are feeds with high levels of protein and fiber; these feeds are well suited for all the remnants. The company has also formulated high quality diet for horses, the horse feeds have all the nutrients required. The company manufactures best trusted brands in Australia. This is supported by dedicated workers who are accredited nutritionists. Through farm consultations our products have been customized to meet the customer preferences. 8.2 Price Strategy Price skimming will be used by Snowball as it enters Brazilian market; this is because there are no block feed supplements to compete in the market. Given that raw material and ingredients used in product processing may fluctuate from time to time, Snowball will use a cost-plus pricing. Pricing will therefore be set using the assumed long-term cost. This price is then adjusted considerably as the cost rise. The set fixed cost and variable cost will enable snowball sell to the dealer at 80% of the retail price, this will give the dealer a considerable margin to operate. The appropriate pricing will entice the dealers to go for snowball feed supplements since the set price is relatively lower compared to Brazilian feed supplements. 8.3 Place Strategy The snowball products will be sold via already existing dealer network. Snowball is currently marketing its products through well established outlets and dealers. This strategy was adopted in order to maintain the traditional customers through renowned dealers. The strategy has enabled the company maintain low cost of new channels establishment. The terms used will be directly adopted from the current market. 8.4 Promotion Strategy Snowball will try to reach the end consumer via an array of media including print advertising, TV advertising and social media. Advertising will use animal farmer’s magazine together with a publication of animal feeds nutrition and ingredients requirements circulated to all dealers. The publications will contain an elaborate illustration of food safety and benefits of snowball products in the market. A company website will also be used to enable users browse and access the products detail and even interact with snowball staff on queries concerning the new products. The dealers will also be given attractive incentives to sell snowball products; this will entice them to increase their efforts in both marketing and promoting snowball products. The dealer’s accounts will be established and maintained by snowball sales staff. The highly qualified nutritionists will also be used to educate consumers and assisting them set up proper feeding program. Continuous evaluation will be conducted by regularly meeting the dealers who will give their strategies and activities, this will enable snowball pool the dealers market knowledge that can be used in distribution or identifying other new dealers in the markets. Publicity of the company products will be done though trade shows. Snowball together with the Brazilian Feeds and Nutrition Industry will used a well organized tradeshow to reach out to the consumers of the products. This opportunity will be used by snowball to exhibit the products and send a word round on the benefits of the snowball products. REFERENCES “Developing a Marketing Campaign’, 2009, Accessed 21 April 2014, http://www.4hb.com/0107flmarketingcampaign.html. Dyck, J. and K. Nelson (2003). Structure of Global Markets for Meat, Agriculture Information Bulletin Number 785, Economic Research Service, U.S. Department of Agriculture. “Marketing Plan for the TOTO Brand”, 10 August 2011, Accessed 19 April 2014, http://www.academon.com/marketing-plan/marketing-plan-for-the-toto-brand-147918/ “Marketing plan”, 27, January 2008, Accessed 22 April 2014, http://www.paperdue.com/essay/marketing-plan-32631 Read More