Strategic Marketing Planning of Goodman Fielder Limited - Case Study Example

Title: Strategic Marketing Planning Name: Registration No: Course Code: Institution: Date of Submission: TABLE OF CONTENTS Introduction to the company 3 PESTLE Analysis 3 Political 3 Economic 4 Social 4 Technological 4 Legal 4 Environmental 5 Porter’s Five Forces Analysis 5 Figure 1. Porter’s Five forces Model 5 Table 1. Descriptions of Porter’s five forces model 6 Supplier power 6 Buyer Power 6 Competitive Rivalry 6 Threat of Substitution 7 Threat of new entry 7 Competitor identification and analysis 7 SWOT Analysis 8 Strengths 8 Weaknesses 8 Opportunities 8 Threats 8 Evaluation of Strategic Positioning and market attractiveness 9 Market Segmentation Analysis 9 Potential market opportunities 9 References 10 Introduction to the company Goodman Fielder limited is an Australian company involved in production of packed food products such as bread, dairy products, margarine, oil and ingredients. The company operates in Australia as well as in New Zealand (Anderson & Business Expert Press, 2012). The products of the company are mainly consumable products during meals such as mayonnaise, frozen pastry, desserts, sauces and vinegar. The annual turnover of the company is estimated to be $ 2 billion and the number of brands of the company is estimated to be 28 where there are 1000 lines of products and 23 markets are served by the company products. The company has an effective distribution network composed of 30000 stores such as supermarkets and route outlets. Since March 17 2015, the company was acquired by Wilmar international and First pacific. Goodman Fielder limited is based in Sydney, Australia and the total number of employees is estimated to be 5000 (Baker, 2010). Products of the company are manufactured in over 40 plants located in Australia, New Zealand, Fiji and New Caledonia. PESTLE Analysis There are a number of Political, Economic, Technological, Legal and Environmental factors affecting the performance of Goodman Fielder limited. Political An example of a political factor that affects the performance of Goodman Fielder limited is the imposition of taxes in the activities of the company such as products produced by the company. This results into lower profit margin for the company. In addition, there are a number of restrictions regarding areas of operation such that the company cannot set up stores in particular areas which would otherwise result into an increase in profits of the company (Fisher, Pride & Miller, 2005). There are also stringent restrictions on employment of skilled workers, thus affecting the ability of the company to hire competent employees. Economic While the economy of Australia and New Zealand has been stable most of the time, it is found that during situations of inflation, all companies in Australia have been affected negatively. This has resulted into a reduction in profits earned by the manufacturing companies such as Goodman Fielder Limited. There are also economic conditions such as improved economic performance of other countries such as China which results into depreciation of its products when exported, this results into difficulty of exporting the company’s products. There are also high interest rates for the acquisition of loan facilities from financial institutions. This results into inability of the company to borrow a large sum of funds from these institutions to facilitate its functions. Social The main social issues faced by Goodman Fielder limited in the distribution of its food products is changes in lifestyle with customers developing likeness for emerging products. This makes the company incur heavy losses in the effort to redesign its products in compliance with changes in social trends (Fyall & Garrod, 2005). In addition, media has been involved in creation of awareness about the right food materials to be consumed with the focus on newly introduced products from competitors of Goodman Fielder limited. This has affected the ability of the customers to purchase the products from Goodman Fielder Limited. Technological A technological factor affecting the performance of Goodman Fielder is the improvements in production methods that are used by its competitors. This affects the performance of the company in terms of the level of output compared with its competitors. Technology issues also include development of new information and communication methods that facilitate communication thus enabling the company perform its transactions easily as well as coordinate its tasks. Legal The main legal factors affecting the performance of Goodman Fielder Limited is the legislation by the government on the amount of products the company can introduce into the market to prevent monopoly (Hillestad & Berkowitz, 2013). This prevents the company from producing to its capacity. However, the legal policy that the company can setup stores in any location provides the company with the opportunity to access markets that are likely to provide demand for its products. Environmental The environmental issues facing the performance of Goodman Fielder limited is the need to conserve the environment that as a result of waste products from the company such as smoke which contribute to greenhouse effects. In the process of preserving the environment, the company has incurred costs which affect its profitability. Porter’s Five Forces Analysis Figure 1. Porter’s Five forces Model Five Forces Details Threat of New Entry Time and Cost of Entry Specialist information Economies of scale Barriers to Entry Buyer Power Number of Customers Size of each order Difference between competitors Price Sensitivity Cost of changing Supplier Power Number of suppliers Size of suppliers Service uniqueness Ability to substitute Threat of Substitution Substitute to performance Cost of change Competitive Rivalry Number of competitors Differences in quality Cost of switching Customer loyalty Table 1. Descriptions of Porter’s five forces model The competitive advantage of Goodman Fielder Limited can be understood using the above model as shown below: Supplier power The suppliers of Goodman Fielder Limited include wheat and sorghum farmers who supply the company with these products. Due to increased cost of production, there is a high possibility of a corresponding increase in supply cost of these raw materials. Goodman Fielder Limited has been prepared to meet a surge in cost of supply to maintain its level of output. Buyer Power Buyer power for the products of Goodman Fielder Limited has been observed by the extent to which buyers are willing to switch from products of the company to those produced by other companies (Kendrick, 2006). In order to control buyer power, Goodman Fielder Limited has been involved in intensive promotion of its products as well as market penetration. Competitive Rivalry There are a number of competitors for the market such as Nestle Australia and George Weston Foods limited. These companies pose a great threat to competitiveness of products from Goodman Fielder Limited. Hence, the company has embarked on continuous product improvement by improving the product qualities and characteristics so that it remains competitive in the market. Competitive rivalry is also being countered by entering into locations where competitors have not been pioneered. Threat of Substitution Presently, Goodman Fielder Limited is not experiencing any threat of substitution. This is because the urban residents in Australia and New Zealand depend exclusively on its products for their consumption needs (McDonald, 2007). This has given the company an assurance that its products will remain relevant in the market even in the future. Threat of new entry Threat of new entry is faced by Goodman Fielder Limited as a result of small bakery companies that emerge in particular niches. These companies use similar technologies as those of Goodman Fielder limited and they attract some of the customers of Goodman Fielder. Consequently, the company is striving to safeguard its production techniques from those who are likely to use them to produce similar products. Competitor identification and analysis The main competitors of Goodman Fielder limited include Nestle Australia and George Weston Foods Limited. Nestle Australia is a food and beverage manufacturing company located in Australia and has distribution outlets in New Zealand. This shows that the company competes with Goodman Fielder Limited for customers and the company has to put more effort in enhancing its marketing activities. The products produced by Nestle Australia are highly competitive, thus creating equal demand in a similar manner as those produced by Goodman Fielder limited (McDonald & Keegan, 2002). Another competitor is George Weston Foods Limited that is Australia and New Zealand’s competitive food manufacturer. The company has 58 distribution sites and deals in production of foods of various diverse needs as well as ingredients and retail activities across sugar products, agricultural products and grocery. Due to the similarity of these products to those produced by Goodman Fielder Limited, it creates competition in the market where Goodman Fielder’s products are distributed. SWOT Analysis Strengths The strengths of Goodman Fielder limited include its competitiveness in provision of bakery products and home ingredients in the Australian market where it is classified as number 1. In addition, the company is well established and has an efficient distribution network (Mohr, Sengupta & Slater, 2010). This ensures products are easily distributed to outlet stores to reach customers on time. The company also has an aggressive marketing campaign team which places it in a better position to market its products thus creating high demand. Furthermore, the company has about 28 brands of products with 1000 lines which operate in 23 markets. This ensures a high turnover is achieved at a particular time. Weaknesses The main weakness of Goodman filed limited is that it does not have presence in emerging markets such as in Asia where it can create a high demand for its products. This is because it mainly focuses on Australian and New Zealand markets. As a result, there has been an impact on its profitability (Reed, 2006). Another weakness faced by Goodman Fielder Limited is a low market share due to competition. There are other companies that produce similar products which create high competition for customers. Opportunities The main opportunity of Goodman Fielder is that it has the ability to expand into frozen food lines. Another opportunity is that it is able to expand into specialized bakeries that serve its products. The company also has strategic acquisitions which result into a strengthened position. Threats The main threat experienced by Goodman Fielder limited is increased knowledge among consumers about processed products and their willingness to accept products from other companies. There are also emergences of smaller bakeries that supply consumers with similar products thus creating competition for customers (Anderson & Business Expert Press, 2012). There are also emergences of healthy options in a number of processed food categories which create competition for the markets with products from Goodman Fielder Limited. Evaluation of Strategic Positioning and market attractiveness Strategic positioning has been achieved by focusing the distribution in high population areas such as Melbourne in Australia and other bigger cities in New Zealand. This is because the high population provides market for its products and the possibility of waste products is reduced. Market attractiveness has also been facilitated by increased domestic demand for bakery products. As a result, the company’s products are in a better position to increase its sales through distribution of bakery products to the households in towns and residential areas. Market Segmentation Analysis The market segments in which Goodman Fielder operates includes consumers of domestic products and retailers of products produced by the company. Consumers are mainly supplied with home ingredients where the products are supplied to supermarkets in Australia and New Zealand so that consumers can get these products from these stores (Baker, 2010). The main consumer products sold to this segment include brands of milk, specialty cheese and culture products. The other market segment that is highly utilized by Goodman Fielder limited is the wholesale industry. These are businessmen who buy products in bulk from the company and sell them to retailers and consumers. Furthermore, segmentation is done on the basis of gender. For instance, milk products are mainly targeted to women because they are likely to use it as a supplement for their children’s nutritional needs. Potential market opportunities There are a number of untapped market opportunities which when reached through aggressive advertising campaign, the sales of bakery products and other products of Goodman Fielder limited can be improved significantly. For instance, there are an increase in the population of suburban areas in Australia and New Zealand (Fisher, Pride & Miller, 2005). When the company sets up stores in these towns, the sales of its products is likely to be improved. Another opportunity is the increased tourism in Australia and New Zealand. Tourist resorts are likely to provide market for the products of the company as a result of increased demand for the products of the company by those who visit these resorts. There are also a number of colleges and learning institutions that require bakery products for staff and students (Hillestad & Berkowitz, 2013). Thus, Goodman limited intends to enter into contact with these institutions so that they can be supplied with its products. It is expected that if Goodman Fielder Limited makes use of these opportunities, its profitability will be high and it will be able to expand its operations as well as improve the livelihood of its employees, shareholders and the public in general. References Anderson, D. W., & Business Expert Press. (2012). Strategic marketing planning for the small to medium-sized business: Writing a marketing plan. New York, N.Y.] (222 East 46th Street, New York, NY 10017: Business Expert Press. Baker, M. J. (2010). The Strategic Marketing Plan Audit: A detailed top management review of every aspect of your campany's marketing strategy. Axminster, Devon: Campridge Strategy Publ. Fisher, P. H., Pride, M. M., & Miller, E. G. (2005). Blueprint for your library marketing plan: A guide to help you survive and thrive. Chicago: American Library Association. Fyall, A., & Garrod, B. (2005). Tourism marketing: A collaborative approach. Buffalo: Channel View Publications. Hillestad, S. G., & Berkowitz, E. N. (2013). Health care market strategy: From planning to action. Burlington, Mass: Jones & Bartlett Learning. Kendrick, T. (2006). Developing strategic marketing plans that really work: A toolkit for public libraries. London: Facet. McDonald, M. (2007). Marketing Plans: How to Prepare Them, How to Use Them. Burlington: Elsevier. McDonald, M., & Keegan, W. J. (2002). Marketing plans that work: Targeting growth and profitability. Boston: Butterworth-Heinemann. Mohr, J. J., Sengupta, S., & Slater, S. F. (2010). Marketing of high-technology products and innovations. Upper Saddle River, NJ: Prentice Hall. Reed, P. (2006). Strategic marketing planning. South Melbourne: Thomson Learning. Read More