International Marketing Plan - the Australian Olive Oil Industry - Case Study Example

International Marketing Plan Instructor Date The ability of a firm to penetrate and establish itself in a foreign international market has been quite difficult for most industries. Doole and Lowe (2008), affirm that most companies perceive this step as a start-up venture that acts as a threat to their global capabilities. The Australian Olive Oil Industry as a new entrant in a new country market, views this approach as an extension of their export business. The industry is focused on generating enough knowledge and innovative ideas from the already existing market in France. Through this strategy the industry seeks to increase their industry value by improving their already existing products and services and using this as a means to increase their revenues. The Australian Olive Oil Industry ventures into this business opportunity placing its focus on managing risk and investments. As a result the industry seeks to carry a critical evaluation of the competitive nature in the new market as a means to improving its production performance throughout its value chain. A market research will assist the industry in understanding the vast demands of consumers. Hence the industry ensures that the adopted supply chain in the domestic and global market meets these demands as well as increasing total value and profitability (Hartline, 2010). This predicts the industry’s future as one that is product driven and focuses on sustaining a production base to strengthen growth and development. Consequently, quality production at the farm level will put pressure on the processing investments, import replacements and export activities. All these activities put together will enhance the industry’s value and make major contributions to Australia’s success. In participating in a new market, Australia Olive Industry will have to join in the market indirectly. This due to the nature of the global marketing scenario whereby an industry is forced to participate through an indirect link which can be in form of a local distributor, independent agent, or suppliers as opposed to the domestic markets where there is a controlled marketing subsidiary (Hartline, 2010). This strategic marketing move allows the industry to have some control in operating internationally and reaching out to its customers. Hartline (2010) further affirms that the marketing management is required to constantly take part in market research in order for their industry to identify any upcoming challenges and provide solutions. International Marketing Objectives This plan provides detailed information and initiatives that will ensure the Australian Olive Industry thrives in achieving its vision and objectives. Information gathered from past international market research studies are used to provide the industry with applicable strategies which will assist it in planning and in the growth of the industry. Consequently, this plan seeks to assist the industry in increasing its value and size as it expands into foreign markets. The growth of the Australian Olive Industry makes it possible for the objectives of this plan to protect and advance it through fostering a stronger industry voice. Through the extensive research carried out it is evident that, the industry has gained development support during its rapid growth over a short period of time (Australian Oil Federation, 2010). It is therefore important for the industry to secure its position as an export market through the adoption of new varieties of crop protection, management practices and extension activities. As discussed in the mission statement the Australian Olive Industry with the relevant stakeholders are committed in providing customers with high quality products (Harding, 2008). Thus it should focus on a marketing strategy that will allow it to increase its revenue income to up to 50% in the next 2-3 years. In order to prosper in achieving its goals, the Australian Olive Industry is required to come up with a follow up strategy that will assist it in monitoring their progress. Doole and Lowe (2008), through this way the industry are able to acknowledge and meet consumer preferences as seasons change. One of the major objectives is to penetrate through the France market base and use the success of its current products in attracting consumers in this country. According to the Australian Oil Federation (2010), the industry needs to take up innovative ideas and invest in product development and make sure that the industry is able to access suitable technologies to improve their products. The Australian Olive Industry should use the market research gathered to improve the image, availability and quality of their products among consumers in France and globally. The follow up strategies adopted during the market research should be determined through marketing survey and the industry’s marketing management system. An additional objective involves the evaluation of the industry’s financial capability in using the value chain to deliver improved competitiveness and higher value. The company is required to provide an estimated figure which it is likely to spend while doing its market research as well as the financial investment needed for it to successfully penetrate the French market base. Conclusive numbers should be drawn and an estimated figure provided to stakeholders before venturing into the new market. Additionally the industry needs to invest heavily on advertisements to create awareness about their products and introduce consumers to them. This can be done through print media, the internet, television and through sales persons in supermarket chains. International Marketing Strategy The purpose of an international marketing strategy is to highlight and explore the core factors that contribute to an export marketing plan (Hartline, 2010). This marketing strategy seeks to assist the Australian Olive Industry in; exploring the concepts of price and value to consumers in France, compare the global marketing around Europe to the local marketing in Australia, and finally evaluating the marketing mix in terms of export marketing. In selecting the most suitable marketing strategy, the industry first has to identify the preferable entry technique into the market. The marketing entry strategy must be aligned with the industries objectives in ensuring that the required value chain activities take place and go hand in hand with each other (Cateora, Gilly & Graham, 2010). A market entry strategy therefore means that the Australian Olive Industry as an exporting industry will be required to deliver olive products to France and distributing them to consumers there. However as an industry seeking to venture into international markets, the Australian Olive Industry is likely to face three major challenges. These include; marketing issues whereby the industry is faced with a dilemma on which and how to manage and implement their marketing strategies, how to penetrate into the market whether to partner up with intermediaries or do it directly and on investment and control, the industry is likely to debate whether to find a global partner or form a joint venture with an already existing business (Cateora, Gilly & Graham, 2010). All these forces mentioned need to be considered when choosing a suitable market entry. Foreign Market Entry Strategy The nature of risk involved in a business venture, approach used and the capability of an industry to achieve the set objectives, will determine whether it will choose a direct entry or a joint venture. Cunningham (1986) determines that there are five strategies that may be adopted by industries as a new entrant into foreign markets. He further explains these strategies as; Technical Innovation Strategy, this is perceived as an element of innovation process. Industries will normally take up this strategy as a way to improve their products and for competition purposes. Availability and security strategy, this strategy identifies all the risks involved in a business venture and thereafter countering the perceived risks. Product adaptation strategy, an industry modifies their own product in order to meet the needs of the consumers. Total adaption and conformity strategy, in the development and growth of a product, there is customization done to these products by an industry. Low price strategy is a pricing strategy in which an industry offers its products at a rather low price so as to stimulate demand which is referred as a penetration price. As an agricultural product the production and marketing of olive oil products are intertwined. Thus the resources and information required for coming up with a market entry will be huge and attracting high financial costs. The Australian Olive Industry will need to get assistance from the Australian government as an investor to contribute financially (Australian Olive Association, 2002). Notably when building a marketing entry strategy, it is vital to understand that time plays an important role. This is because creating and determining a suitable brand name takes quite some time as well as creating product awareness through promotions. On the other hand large amounts of money on transaction costs and promotion campaigns play a significant role. Thus the Australian Olive Industry is required to analyze all these factors to preventing time and money from becoming a barrier to their international trade. The Australian Olive Industry seeks to expand and increase its revenue income. The industry can expand in terms of production line and geographical developments. Therefore it is essential for it to conform to a foreign direct investment as a penetration strategy into France. The industry may make use of the product adaptation strategy which will allow it to expand its products line and make geographical expansions. This strategy according to Cunningham (1986) will enable it to modify already existing products in the France market. Advanced communication and information technology tool, has made it easier for industries in the food department to penetrate foreign markets quite easy. This entry strategy, allows the industry to conduct its operations in a foreign market in a more established and centralized manner. According to Ball (2005), centralization is an opening opportunity for an industry to be in control of its coordinating activities while increasing operational efficiencies. However the industry may develop its own consumer segmentation plan this will determine how branding and product development will adapt to the already existing market segment. Making a direct entry and coming up with an adaptation strategy, will act as driving forces for the industry. These two forces, will contribute to the homogenization of the food, brands and other products produced by the industry. On the other hand, the industry is likely to explore and enjoy the economies of scale in France thus enabling it to establish itself as it identifies its products with consumers. Cunningham (1986) affirms that an industry that uses modern technologies and financial networks is a stepping stone for the industry to expand its product line and market them on a global scale. Marketing opportunities are made available through product line and geographic developments but the risks involved tend to outweigh them. Thus in penetrating through Europe it is better for the Australian Olive Industry to focus and concentrate its efforts solely on France. This will allow the industry to reduce its operational options and conform to preferred organizational structures. However for the Australian Olive Industry to be successful in entering France it is important for it to first conduct an extensive research on potential competitors and consumers in the industry. Consequently, this will enable the industry in determining the important factors for it to take into account during its entry to France. Some of these factors that the Australian Olive Industry needs to evaluate include; localized knowledge, price localization, export subsidies, trade barriers and competition. International Marketing Programs Marketing programs are put in place in order to provide an industry with the opportunity to examine their current domestic marketing strategies and how they can be aligned to meet that of the global standards (Hartline, 2010). Thus the Australian Olive Industry should analyze its domestic marketing strategy, how it has evolved over the years and how the domestic plan on the industry on a local basis should be changed in order for the foreign markets to positively receive it. Before the industry embarks on its mission to venture into France, it should first educate itself and the staff members about France and its people history. Learning about the customs and business etiquette of France’s population, will ensure that the industry through product promotion reaches out to consumers in the expected way within their society. Australian Olive Industry should understand the significant difference between its currency and historical data. Therefore it should collect all relevant historical data on France’s currency value in terms of fluctuation on their import and export timelines. This way the industry will avoid relying on speculations by locking in currency rates and delivery dates prior (Doole & Lowe, 2008). On the other hand the industry should study the laws governing business practices in France. The laws and jurisdiction governing the olive industry in Australian tends to differ with that in France. Thus it is crucial that the Australian Olive Industry is able to understand the country’s laws before their contract is made legal. The industry should send a marketing management group to France before it penetrates. This strategic move will give it an added advantage as it should be able to understand the business protocol in France and prepare to adapt to it. Consequently a visit prior the investment will enable the industry to understand what their competitors have been doing in the same industry and in acquiring their market share (Hartline, 2010). Marketing mix 1. The product strategy The Australian Olive Industry is not only restricted in producing cooking olive oil products only but also health and beauty olive products. Apart from producing high quality, Extra Virgin Olive Oil, Organic Olive Oil and Extra Light Olive Oil the industry is also committed in producing natural skincare oils and soaps for consumers (Australian Oil Federation, 2010). The industry has managed to impress its consumers through its ability to constantly meet and exceed consumer expectations with their various products. In France the industry should anticipate meeting new consumer needs in terms of producing healthy olive products for the elderly population. The Australian Olive Industry should see to it that it manages to acquire a large market share and increase profitability by obtaining consumer trust. As a new player in the olive industry in France, the distinctive nature of its products and with consumer trust, the Australian Olive Industry will have a competitive advantage. 2. The Place Strategy The use of direct marketing strategies by the Australian Olive Industry should assist it in thriving as an export business entity in France. The nature of their products which include a long life shelf, nonperishable and its compact packaging will allow the industry to ship their products from Australia directly to consumers in France via international postal services. Consequently the industry should establish their branch in France where consumers in that country can easily purchase their products. The ability of the Australian Olive Industry to distribute its products to different clients in France within the same period of time is a guarantee that it will generate huge amount of revenue through distribution alone. 3. The Promotion Strategy The Australian Olive Industry should adopt the use of other advertising mediums as a means to promote their products. The industry should take advantage of customer reorder and use direct-mail and trade journal advertising while focusing the promotional expenditures in improving and promoting new products. Moreover the industry should make use of social media and create a link whereby consumers can directly interact with them and make their orders as they consult about a product. This way the industry is able to address consumer concerns and directly post to their home pages on new products and discount offers. 4. Pricing Strategy The industry should provide high and quality specialty advertising products that are customized according to consumer preferences. This will ensure that the value of a specific product and its intended purpose can be reflected on its price tag (Senauer, 2001). However the Australian Olive Industry should be careful and play this role paying close attention to the price elasticity of their products. As a result it should be sensitive to the overall consumer preferences and demands to avoid over pricing their products and chasing away customers. Evaluation and Control There is an action plan put in place which will ensure that the industry is able to meet and fulfill consumer demands. High qualified marketing personnel are issued with the role of taking up marketing initiatives which include conducting a comprehensive market research. The team comprises of highly motivated and professional individuals in the Olive Oil industry who are coupled up with a wide range of experiences. The research conducted will evaluate consumer preferences which will assist the industry in producing what consumers want and need. In measuring the performance of the business in the France market, five performance procedures will be used as measurement tool. These tools include; annual plan control, profitability control, efficiency control, strategic control, and marketing audit (Drummond & Ensor, 2007). Annual plan control This refers to all numerical and managerial objectives outline in the marketing plan of an industry. It is further subdivided into five categories; 1. Sales analysis, the Australian Olive Industry should come up with a strategic plan which will assist it in measuring its variables in terms of sales registered by their products. Secondly, the industry should implement a preferable method of collecting and analyzing data collected. As a result through this analysis the industry will manage to compare and contrast sales target set and actual sales made and thereafter implementing ways to account for losses and improve the sales performance of the industry in France. 2. Market share analysis, this gauging tool is put in place making comparisons of the market acquisition of an industry with that of its competitors. The Australian Olive Industry, should adopt the use of this analytical method in determining the total sales in the domestic and global market. This strategy will allow it as an industry in understanding what it can do in order to improve their sales and compete favorable with other competitors in the market place. Moreover the industry will also identify any social or political factors that are a contributing factor in the performance of their products in the market place. 3. Customer satisfaction, this is termed as the most crucial factor in determining the performance of a product in the market place. The Australian Olive Industry should come up with an open link of communication that allows it to interact with their consumers. Consumers act as critics to the products produced by the industry and therefore their feedback plays an important role in the success of a product in the market place. The industry should encourage an active participation of consumers in sharing their thoughts and feelings about the products whether positive or negative. As part of their marketing drive, The Australian Olive Industry should include customer loyalty surveys to gather consumer attitudes towards their products. Thus it will be able to determine whether consumers are satisfied or more improvements are needed for their products. 4. Expense to sales analysis, in achieving its sales goals in France the Australian Olive Industry should have a clear understanding of the costs underlying their products both hidden (taxed cost) and the explicit costs. 5. Financial analysis, this evaluation method measures the performance ratios of the products sold. This is done in terms of calculating the profits to sales, profits to assets, assets to worth and profits to worth ratios turnover. Profitability control Enough money, time and human resources should be put in products that yield or increase profits. The Australian Olive Industry should therefore identify what specific products are likely to prosper in France and attract a lot of revenue for the industry and focus on those products. Efficiency control The industry should evaluate and analyze the reactions of consumers towards their products in the domestic and international market. The different reactions from different consumer from different geographical regions will be a determining factor of how well the product is going to succeed in a foreign market. Strategic control Strategic control weighs the overall strengths, weaknesses, opportunities and threats of products in a foreign market. Thus the strategic control will use efficiency control mode to measure the relevance of a long term marketing plan of an industry. Marketing audit Australian Olive Industry should ensure that their marketing plan is flexible enough to adjust to France’s market strengths by being compatible with changing priorities, economies, fashion, preferences, current events and market changes. Implementation All members’ part of the human resource team are tasked with specific roles and each one of them is required to work towards implementing the organizational strategies as outlined. However head of marketing will solely be responsible of monitoring and evaluating sales made. There will be annual sales target set aside and equated appropriately depending on the industry’s operational regions. Additionally a well calculated marketing program will be put in place to monitor the efficiency of each of the concepts discussed in the marketing mix. Through the organization’s management, it is believed that the Australian Olive Industry will achieve its set goals and objectives while satisfying consumer needs. Penetrating into the France market provides the Australian Olive Industry with an opportunity to invest globally (Sweeney 2002). Performance Standards and Financial Controls This area explains how the analysis and the evaluation of the marketing plan will be conducted. The control part in this specific area is an informing piece on which steps the industry should take in managing the variation occurring between the marketing plan and the actual performance of the business venture (Abdikeev, 2010). In this section a detailed financial control strategies are suggested alongside set performance standards. This will be done in terms of budget allocation of finance and how it is disbursed. The suggested steps include; 1. The overall budget for market analysis and evaluation, consumer survey and new verses current product research financial expenditure will be equated to 60% of the intended annual promotional budget of the following year. This means that the industry should set aside a specific amount of money that will solely cater for market and product research without the company suffering financial constraints. Hence of these projects should be allocated a specific amount of money to ensure their research projects run smoothly without any financial setbacks. 2. Budget allocation to each of these projects should be sub divided in different portions. 20% of this financial expenditure will be directed to the evaluation and analysis of the marketing study, another 30% will be allocated to the development of an extensive consumer survey and marketing information system while the rest 50% will be disbursed to the development of new business ventures as well new product implementation. The Australian Olive Industry should have a clear and concise financial report that points out clearly how much money is needed for a specific kind of project. 3. Project managers are required to report back to the finance department with a detailed financial expenditure report. The industry should ensure that each financial report accounts for all personnel salaries and direct expenses incurred during the period in which the project was carried out. Thereafter the marketing director, will be required to draw up a conclusive and standardized reporting form of all the projects conducted. This ensures that there is a follow up on how the budget money allocated to each project is spent and accounted for. 4. The marketing director is committed to the project budgets and is responsible for any changes that might occur in this budget projects. He or she has a major role to play in ensuring that project managers are able to account for any misplaced monies on the budget. Consequently the marketing director ensures that each project within the business analysis team receives their fair share of financial aid as required. Moreover the marketing direct has a task of reporting back to the industry’s president on the project proceedings after every fortnight. 5. Rebranding and the introduction of a new product will be analyzed and evaluated after every three months to establish its capabilities to thrive in the market and attract increased profits. Expenses incurred during the implementation of product development will be disbursed in every three months for two years. Afterwards gross income accumulated within this period will be compared to it. Monitoring strategies will be put in place to ensure that the marketing plan is brought to life. Therefore a group of project manager will be positioned and provided with the necessary resources need to push for the implementation of this marketing plan. The project management team will be called upon to provide a clear time frame, human resource needed, and financial aid required for the marketing plan to be a success. An annual follow up activities on the planned and planned strategies to compare and contrast the outcomes during the first two year of implementation and on a quarterly basis thereafter. Project managers are allowed to provide any necessary changes they deem fit for the marketing plan to remain relevant in executing the plans outlined. References Abdikeev, N. M. (2010). Business Performance Management Systems. Moscow: Infra-M. Australian Oil Federation. (2010). Australian Oilseed Industry Review 2015. [Online] Accessed from www.australiaoilseeds.com/AOFplan2010 [4th January 2015] Ball, D. (2005). Too Many Cooks. Wall Street Journal. Cateora, P., Gilly, M. & Graham, J. (2010). International Marketing. New York: McGraw-Hill/Irwin Cunningham, M. T. (1986). Strategies for International Industrial Marketing. Croom Helm. Doole, I. & Lowe, R. (2008). International Marketing Strategy. Thomson Learning Drummond, G. & Ensor, J. (2007). Strategic Marketing Planning and Control. Taylor & Francis. 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