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Organic Food Industry in Australia

Question:

Discuss about the Comanagement of Purchasing and Marketing.

The business marketing and management depends on the size of the business and industry in the operational location. According to Wee et al. (2014), the effective marketing management process requires the adequate resources for improving the customer opinions and developing the customer base. The well managed marketing procedure helps in increasing the brand value and organizational profitability (Kotler and Keller 2016). The organic food industry in Australia is considering the blooming market in terms of collecting revenues. Currently, it has been observed that the people in Australia have been concentrating on consuming the healthier food (Domegan et al. 2015). Therefore, the organic food producers have been paying attention to the healthy and consumable foods that improve the health of the Australian customers.

The study is focusing on the marketing and management procedure of Green Press holding Pty Ltd., which is the organic producer company in Melbourne. The company is focusing on producing the healthier foods for the target customers. The study will present the discussion about the purpose of the organization to operate in a competitive business scenario. It is necessary to understand the target customer of the company to strengthen the competitive position. The development of the marketing strategy and the selection of the target market are necessary for the company to determine the sequential marketing procedure.  

According to Wagner and Eggert (2016), organic food refers to the foods that are produced by maintaining the organic production standards. The organic foods are generally certified by the authority or regulatory body. The organic agriculture minimizes the external inputs and it even avoids the use of pesticides and synthetic fertilizers. Currently, the people in Australia, irrespective of the generations, are much concerned about the healthier diet. Even if they do not consume the healthy food, they tend to consume the health drinks or healthier dairy products. The organic food sector in Australia has been experiencing the sustainable growth through 2010-2012 (Jolink and Niesten 2015). It is estimated that in the year of 2012, the total value of Australian organic industry was almost $1.27 bn. Australia has captured the leading position in considering the largest area of certified organic land. In fact, it has been notified that over one million people in Australia have been purchasing the organic beverages and foods. Therefore, there is the high scope of earning profitability by selling the organic food in Australian market.

Green Press Holdings Pty Ltd. is a vegan and organic food store located in Melbourne. The company has been offering the natural gluten free, and vegan foods to the customers in Australia. James, Lindsey, and Miles established the business in the year of 2013 (Greenpress.com 2017). The major purpose of the company is to establish the healthy food culture among the old and young generation of the Australian Society. The founders exclaimed that instead of consuming the dairy products separately for consuming the protein food, people can adopt the healthier diet. The founders together undertook the proper market research from where they get the idea that people are largely consuming the unhealthy foods (Baudry et al. 2017). Therefore, it will be quite beneficial if the company starts producing the healthy food and selling among the target group of customers. The founders came up with the greater idea of producing the tasty and interesting healthy foods. The company even soon came up with the ideas of producing the tasty salads and cold pressed juices. The idea worked well since there were no stores of these organic foods in Melbourne. Green Press Holdings Pty Ltd. became the first organic juice cleanse store in Melbourne. Apart from these healthy foods, the store even offers the mouth-watering desserts.  The brand has the significant value in the Australian market. The Australian customers are looking forward to consume the healthy products to improve their health (Rödiger and Hamm 2015). Hence, the marketing strategy has been focusing largely on establishing the brand value in the Australian market.

Green Press Holdings Pty Ltd.

The 5c’s of marketing involves the five key areas that determine the decisions of the company to conduct the business operations in the competitive market. This 5c’s of marketing includes the customers, company, collaborators, Context, and Competitors. The study will follow the 5c marketing of Green Press Holdings Pty Ltd. The components are described further:

Green Press Holdings Pty Ltd. aims to provide the healthy food to the customers who are concerned about their health. It has been noticed that the Australian people are mostly consuming the junk food. In fact, it is also seen that these customers are consuming the dairy products for protein. The survey report proves that almost 65% of the consumers in Australia have been purchasing the organic products (Nasir and Karakaya 2014). In the year of 2011, the major retailers produced the organic foods in a larger number. It is generally representing the market shifts as the mainstream of organic food purchases. It has been observed that the women are the main purchasers of the organic food. Producing the organic fresh is the entry point of the first-time consumers. However, there are some of the considerable barriers to purchase the organic products based on the price and availability. The consumers usually face the trouble in accessing the organic products that are higher in price. The prices of these products are kept higher due to the nutritious values and ingredients. Many of the customers have the high regard for the Australian product integrity. The Australian certification of the organic products is quite commendable for every consumer in Australia (Mohamad, Rusdi and Hashim 2014). Therefore, it can be predicted that the demands of the organic food products are quite higher in Australia.

Green Press Holdings Pty Ltd. is largely focusing on providing the organic foods to the Australian customers. After the establishment in 2013, the company has been concentrating on producing the foods that are free from gluten and the natural ingredients. The SWOT analysis of the company will be effective enough to understand the company potentiality.

Strengths:

  • The processed organic foods
  • Healthy ingredients with nutritious value
  • Brand value
  • Knowledge about customer needs

Weaknesses:

  • Lack of product variations
  • Lack of proper availability
  • Ineffective distribution channel

Opportunities:

  • The increasing demands of organic food consumptions
  • Increasing market value
  • Enormous growth in the organic food industry
  • Consumers are interested in healthy living

Threats:

  • High prices of the organic food
  • Emergence of the competitors
  • Lack of proper suppliers


The above analysis highlights that the company needs to pay attention towards their distribution process by ensuring the proper resource allocation factors. The investments of the adequate capital resources are necessary for the company (Rosin, Stock and Campbell 2013). Moreover, it is also necessary to keep the focus on the competitors who are the major threats for the company in maintaining the sustainable position.

The company is collaborating with the farming sectors and the suppliers of the natural foods. It is essential to use the healthy ingredients for preparing the organic food with high nutritious value. The involvement of the proper suppliers and the distribution channels is necessary to reach to the target customers. However, the lack of proper availability and the high prices of the products are the major barriers for the selling the organic food to the target consumers in Australia.

Due to the increasing demands of the healthy diets, the Australian organic food market is surrounded by many of the consumers. The major competitor Green Press Holdings Pty Ltd. is Right Food Group. Right Food Group provides the high quality organic foods to the Australian customers (Austorganic.com 2017). The company has even undertaken the proper supply chain management process for associating more distributors. Moreover, the company is also utilizing the adequate resources and a number of ingredients to make the healthy food and sell these foods to the Australian market. The improvement in the distribution and supply chain management process, association of the necessary suppliers, and marketing process is necessary to draw the attention of the customers. In fact, the involvement of these factors will be beneficial for the company to gain the competitive advantage in current business scenario.

5C’s of Marketing

The company even needs to concentrate on the other factors associated with the organic food industry in Australia. The demographic influences are much prominent in such cases. It has been observed that the women are the main purchasers of the organic foods in the Australian market (Marian and Thøgersen 2015). The women and the young people are more likely consuming protein and healthy food for their daily lives. They are more likely concerned about the healthy diet that is free from the junk food materials. Hence, the influence of the demographic feature is quite visible. On the other hand, it has been noticed that the Australian government is much concerned about the organic products in the Australian market (Pecoraro and Uusitalo 2014). It is necessary to eliminate the use of the pesticides and gluten while producing the organic foods. Moreover, it is also needed to be considered that the quality of the organic foods is needed to be higher in quality. These legal standards have been influencing the organic food sector in Australia.

In order to develop the marketing strategy of selling the organic food products, it is necessary for the company to understand the acceptability or suitability of the business in the business market. It has been noted that the Australian market has been facing the significant growth in the organic food industry. It is essential to keep the track of the responses of the customers to understand their needs and demands. The market survey is the preferable means of understanding the basic demands and needs of the customers. On the other hand, Ali, Alamand Ali (2015) opined that it is necessary to keep the track of the competitor and the industry position in a particular business location. Similarly, it is even essential to analyze the market feasibility of the organic food in Australia.

The current report derived from the Australian Organic Market is reflecting the industry and consumer trends. The obtained information from this report is presented below:

  • It has been noted that the number of certified organic operations in Australia faced the growth by 5%.
  • The number of exported organic foods from Australia experienced the growth of 17%.
  • Between the years of 2015 to 2016, most of the bakery items experienced more growth than the four-fold exports.
  • There is the significant growth observed in exporting the meat, health drinks, cosmetics, and dairy products (Yadav and Pathak 2016).
  • Currently, Australia has occupied almost 53% of the organic farmland all over the world.

The research report signifies that the increasing the rate of the organic foods in Australian market will be beneficial for Green Press Holdings. On the other hand, it is estimated that the fresh and processed lines in market intelligence was reached up to $1.15bn. However, despite of the enormous suitability, there are still some of the barriers associated with the development of the organic industry. 

In order to establish the proper marketing strategy of the organic food business, it is necessary to provide the preferable recommendation regarding the market segmentation. The market segmentation of Green Press Holding Pty Ltd. is provided further:

  • Target market: It has been noticed that the women are the major purchasers of the organic foods in the Australian market. On the other hand, the young generation is also using the dairy products to consume healthy diet. Hence, the target group of customers would be the women and young females and males.
  • Value Propositions: It is necessary to keep the track of the strategies utilized by the competitors. The company requires providing the value added products or the services to the target customers (Teng and Lu 2016). It is notable that ensuring the product variations would be much preferable for the target group of customers. The company is even paying attention to the taste of the products. Hence, concentrating on the food items with proper taste and variations would be much demanding to the customers. It will even serve as the value proposition of the products offered by the company.
  • Market Positioning: It is necessary for the company to set the position of the market by achieving the proper competitive advantage. It has been observed that the price of the organic food products is the major barriers for the target customers. Hence, it is essential for the company to establish the justified pricing strategy that can be affordable and accessible for the customers from different income level. It will be much helpful for the company to establish the market position in this competitive scenario.

The above analysis would be helpful in understanding the needs and requirements of the target customers. The obtained idea from the above analysis will be used for the further analytical part.

The evaluation of the marketing mix provides the insightful idea about the business operational process (Kotler and Keller 2016). It is essential for the company to pay attention towards such criteria.

  • Product: The target customers tend to consume the diary products for the protein. The ingredients added to the food are natural and healthy for the people. Moreover, the company pays attention towards the taste of the products, which are the major criteria for the consumers (com 2017). Therefore, the company is concentrating on the basic demands and needs of the consumers for selling the organic food products.
  • Place: The Company is largely focusing on offering the services to the Australian market. Therefore, it is essential to keep the concentration on the market analytics and feasibility. The organic food sector in Australia has been experiencing the sustainable growth through 2010-2012. In fact, it has been notified that over one million people in Australia have been purchasing the organic beverages and foods. Therefore, there is the high scope of earning profitability by selling the organic food in Australian market.
  • People: It has been observed that the women are the main purchasers of the organic food. Producing the organic fresh is the entry point of the first-time consumers. However, there are some of the considerable barriers to purchase the organic products based on the price and availability. The consumers usually face the trouble in accessing the organic products that are higher in price. Hence, the company needs to keep the focus on the proper pricing strategy to satisfy the customer needs.
  • Promotion: In order to increase the brand awareness, the company needs to select the proper promotional media (Yusuf, Xie and Trondsen 2015). For example, the advertising strategy, social media pages, and organic food festivals will be much preferable for the promotional aspect for the company.

The above recommendations will be much beneficial for the company increase profitability in the organic food market if Australia.  

SWOT Analysis

Conclusion

The study provides the insightful ideas about the organic food market of Australia. Green Press Holdings Pty Ltd is the organic food provider in Melbourne market. Currently, the consumers in Australia are much concerned about the healthy diets. The organic food industry in Australia is considering the blooming market in terms of collecting revenues. Currently, it has been observed that the people in Australia have been concentrating on consuming the healthier food. The adequate market research and resource allocation is necessary for the company to gain the profitability in this competitive market.

References

Ali, T., Alam, A. and Ali, J., 2015. Market structure analysis of health and wellness food products in India. British Food Journal, 117(7), pp.1859-1871.

Austorganic.com, 2017. Australian Organic Market Report [online] Available at: <https://austorganic.com/wp-content/uploads/2013/09/Organic-market-report-2012-web.pdf> [Accessed 9 May 2017].

Baudry, J., Allès, B., Péneau, S., Touvier, M., Méjean, C., Hercberg, S., Galan, P., Lairon, D. and Kesse-Guyot, E., 2017. Dietary intakes and diet quality according to levels of organic food consumption by French adults: Cross-sectional findings from the NutriNet-Santé Cohort Study. Public health nutrition, 20(4), pp.638-648.

Domegan, C., McHugh, P., Devaney, M., Hogan, M., Broome, B., Duane, S. and Piwowarczyk, J., 2015. Advancing theory and research in social marketing: Interactive management for complex problem thinking.In World Social Marketing Conference, Sydney.

Greenpress.com, 2017. Green Press Holdings Pty Ltd. [online] Available at: <https://greenpress.com/> [Accessed 9 May 2017].

Hemmerling, S., Hamm, U. and Spiller, A., 2015. Consumption behaviour regarding organic food from a marketing perspective—a literature review. Organic agriculture, 5(4), pp.277-313.

Jolink, A. and Niesten, E., 2015. Sustainable development and business models of entrepreneurs in the organic food industry. Business Strategy and the Environment, 24(6), pp.386-401.

Marian, L. and Thøgersen, J., 2015. Adding more value to added-value. An exploration of consumers’ perceptions and attitudes towards improved animal welfare standards in organic meat production processes.

Mohamad, S.S., Rusdi, S.D. and Hashim, N.H., 2014. Organic food consumption among urban consumers: preliminary results. Procedia-Social and Behavioral Sciences, 130, pp.509-514.

Nasir, V.A. and Karakaya, F., 2014. Underlying motivations of organic food purchase intentions. Agribusiness, 30(3), pp.290-308.

Pecoraro, M.G. and Uusitalo, O., 2014. Conflicting values of ethical consumption in diverse worlds–A cultural approach. Journal of Consumer Culture, 14(1), pp.45-65.

Rödiger, M. and Hamm, U., 2015. How are organic food prices affecting consumer behaviour? A review. Food Quality and Preference, 43, pp.10-20.

Rosin, C., Stock, P. and Campbell, H. eds., 2013. Food systems failure: The global food crisis and the future of agriculture. Routledge.

Teng, C.C. and Lu, C.H., 2016. Organic food consumption in Taiwan: motives, involvement, and purchase intention under the moderating role of uncertainty. Appetite, 105, pp.95-105.

Truelocal.com.au, 2017. [online] Truelocal.com.au. Available at: <https://www.truelocal.com.au/business/green-press-holdings-pty-ltd/melbourne> [Accessed 9 May 2017].

Wagner, S.M. and Eggert, A., 2016. Co-management of purchasing and marketing: Why, when and how?.Industrial Marketing Management , 52, pp.27-36.

Wasan, P.G. and Tripathi, G., 2014. Revisiting social marketing mix: a socio-cultural perspective. Journal of Services Research, 14(2), p.127.

Wee, C.S., Ariff, M.S.B.M., Zakuan, N., Tajudin, M.N.M., Ismail, K. and Ishak, N., 2014. Consumers perception, purchase intention and actual purchase behavior of organic food products. Review of Integrative Business and Economics Research, 3(2), p.378.

Yadav, R. and Pathak, G.S., 2016. Intention to purchase organic food among young consumers: Evidences from a developing nation. Appetite, 96, pp.122-128.

Yusuf, M., Xie, J. and Trondsen, T., 2015. Decision Process for Adoption of Innovative Products in the European Seafood Market: The Importance of Supply and Demand Factors. Journal of International Food & Agribusiness Marketing, 27(4), pp.255-272.

Kotler P and Keller.., 2016. Marketing Management 15th Global Edition published by Pearson Education Australia Pty Ltd.

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