International Marketing Objectives of honey manufacturer

International Marketing Objectives of honey manufacturer Australian by Nature plans to enter the US market with its 100% pure honey by targeting the business to business market. This will be done by supplying honey to an existing and reputed honey packer through whom the product will enter the US market. This will lead to a reduction in the marketing costs at the initial stages and also minimise the risk of entering the new market. All this will help Australian By Nature to increase its demand in the market and thereby increase its production capacity. In short term the company plans to attain high brand awareness and brand knowledge. After working with existing honey packers for about 24 months, the companys brand will be well established and based upon that it can start packing the product itself and also start spending money on marketing the product. International Marketing Strategy Drivers for Australian by Natures Decision to enter United States According to Stonehouse et al. There are four main forces of internationalisation which are categorised as market, government, cost or competitive drivers. But these drivers may vary from industry to industry as well as market to market. The main drivers for Australian by Natures decision to internationalise relate to the market, government and cost drivers. As seen from the analysis in Part A above the drivers from markets basically include customer needs, marketing channels and other main countries exporting to US. But based on the above geographic analysis particularly the topography aspects which show that the bees have contracted diseases in USA will lead to a good and in future increased demand of Australian by Nature honey which is 100% pure and will be a huge success in the USA market. The United States and Australia have extended investment relations by forming the Australia-United States Free Trade Agreement (AUSFTA). This agreement will lead to little hassles for Australian by Nature to start exporting honey to US. Going further the company will also face competition from other countries exporting honey in US, but due to its good reputation and being an Australian brand it is always at an advantage compared to its competitors. Large Companies which have high fixed costs are more likely to go global, so that these high costs can be offset by increased sales volume as result of going global; this is because higher sales volume leads to reduction in high fixed costs in turn resulting in economies of scale. This is also a driving factor for Australian by Nature because it will benefit from higher sales by internationalising. From all the drivers we can conclude that United States will be a good country for Australia by Nature to enter and become successful in long term. Foreign Market Entry Strategy As per the environmental and internal analysis done in part A we have selected United States of America as our target country. Not only it is an attractive market for all the aspects of our decision making process, but also bring in different varieties of the product in a market flooded with brands from so many countries with China being one of the main competitor. There are many methods of entry such as exporting, direct sales, franchising, internet, licensing, joint ventures and foreign direct investments. We will launch Australian by Nature honey in US through an Export Distributor. An export distributor is on who will buy the goods from the Australian producer that is Australian by Nature and will resell the product in the US at a profit. In other words the export distributor will be the sole distributor of the product in the country and will supply the goods purchased from Australian by Nature to all the retailers, supermarkets, convenience stores etc. The distributor will be handling all the customer complaints about the product in the foreign country which US in our report. The export distributor will trade under its own name and at the same time maintain an on- going relation with the exporter. Also the distributor will have sale rights in United States. The main reason for selecting direct distribution channel for entering the US market is that it will save a lot of marketing costs for the company in initial stages of the product because the export distributor will be committed to provide all the product support in the foreign country. Another advantage of this type of distribution is that the already well established distributor has existing relationships with all the supermarkets, retailers and convenience stores and based on this the company can rely on the know-how and familiarity of the market conditions to attain the best retail position. In addition to that creating a distribution network in new foreign country is a time consuming process, as well as a costly process especially where it is concerned with launching new products in the foreign markets. Possible Foreign country exit strategy As this is our first move to start operations in international market, we are prepared for a less than enthusiastic market. In case this happens we are going to do more deep market research as to the possible causes of the product failure that may be due to our marketing approach, may be the pricing, the distribution channels etc. If after further approach there is no improvement in the sales of the product in US, we are simply going to downmarket our product. Down marketing the product involves repositioning the product from high end category to a middle one, may be reducing the price of the honey. As a result of repositioning the product will cater to the middle income group also and because of which marketing costs also will be reduced because this type of consumer group doesnt demands expensive advertisements to make them believe that our product is unique from others. But there may be a further possibility that even after the repositioning the product may not be selling well; in that case we shall put off our operations completely from US by simply ending our contract with the export distributor who was the sole distributor of the product in the United States. International Marketing Program 1. Marketing Mix We will now analyse Australian by Natures marketing mix based on the following seven Ps: Product and Service, Place, Promotion, Price, People, Process and Physical Environment. 1. (A) People Providing a good quality product is important when the company is entering the foreign market. The consumers will judge the companys reputation based on the quality of the product. The exceptional expertise, knowledge and skills of the people working in the production of the Australian by Natures will be of significant importance for the success of the product in the foreign market. At the same people involved with the export of honey products will be also very important for the success of the product. The personnel working for the production of the Australian by Nature products are a source of competitive advantage. Australian by Nature must ensure that sufficient personnel have been allocated for the increased production as a result of its exports to United States. Furthermore they should be provided with up to date training so as to handle the increased production or if possible might be new machinery for production. As the more personnel will be required to cater the demands for exports, the company should invest in training them how to effectively handle the exports demands. 1. (B) Promotion As this is the first time that the company will be selling its honey products outside Australia and its initiation of entry in a broader United States market, the promotional activities are very important. This can be done by first building the awareness about the product in the market which can be done through trials and then purchases. Moreover it is also important to establish the brand personality of our product in the new market.