Discuss about the Intellectual Foundations and Avenues.
The aim of this report is to provide a market feasibility report for the Australian fruit grower in international market. The report seeks to present an analysis of the rationale behind the selection of the country along with the appropriate mode of entry. Further, the report presents an environmental analysis of the target country along with an analysis of target customers and product positioning.
AussieFruits is an Australian fruit grower company that is aiming to expand in the international market Management. The company is well known for quality and variety of its apples, pears and exotic fruits like grapefruit, macadamia and avocados. The company works closely with Australian Horticulture Trade Association to expand its business in international markets. The company aims to provide the freshest fruits at best possible prices to its customers.
Choice of Country: Rationale and Entry Mode
Australia already has a commendable share of exports in international market by exporting to countries like U.S., Thailand, Indonesia, Canada, Japan and New Zealand. However, large presence in these markets leaves little space to exploit opportunities to expand and penetrate these regions. As a part of international expansion, the company can choose to expand in India. This is because India is emerging as a thriving market for fresh fruits with a growth rate of 15% along with even higher expected increase in imports as well as consumption of fruits (Samiee, et. al. 2015). The changing lifestyle and expanding income of urban Indian consumer are the major reasons behind this increase. Further, the demand for exotic fruits like avocados, dragon fruit, kiwi, custard apple, macadamia nuts, etc. is also on rise. The market for exotic fruits in India is valued at $ 30 billion (Arora, 2016). Thus, the expected growth in demand and consumption of fruits in Indian markets provide immense opportunities for AussieFruits to expand their business and achieve growth and development Management.
For a company seeking to enter international market, there are many modes of entry to choose from. However, the company has to choose the entry mode that best suits its requirements with regards to extent of risk that the company wishes to take, the amount of investment, market knowledge, product line, prior experience, size of company as well as competition in the new market (Terpstra, Foley and Sarathy, 2012). In context of AussieFruits, the company can use strategic alliance as a mode of entry to Indian markets.
The company can form strategic alliances with well known super markets in India like Big Bazaar, D-Mart, Tesco HSC, Reliance Fresh and Hypercity to launch its market offering in Indian markets. Using this mode of entry is beneficial for the company as it will allow them to expand into Indian market more quickly that too with less financial resources and time commitment (Terpstra, Foley and Sarathy, 2012). Further, the company can benefit from the already established stores of its partners thereby leading to almost no infrastructure investment. However, the company may need to compete for the shelf space for its products alongside other products imported from America and Europe belonging to same category (Australian Trade and Investment Commission, 2017).
For any business to succeed, it is of prime importance to gain an in-depth understanding of the business environment in which it operates. Environmental analysis refers to analysis of the political, economic, social, competitive and legal environment of the country so as to develop a sound marketing plan. Information regarding these environmental factors affects the profitability of the proposed investment and the company’s marketing efforts (Ferrell and Hartline, 2013).
The current economic environment in India is ripe to enter the fresh food market. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) in its 2014 report estimated a 136% increase in agrifood demand in India (Majaro, 2013) . Further, the repost also considers that population growth in India can attribute the rise in demand and consumption of agricultural produce with fruits constituting upto 24% of agricultural exports. Additionally, the increase in income level and a move towards healthy living has led to diversification of diets to include greater quantity of fruits, vegetables and dairy products for Indian consumers (AHEA, 2015).
With regards to legal requirements, the Indian Government uses Food Safety and standard Authority of India (FSSAI) which is an authority that regulates the formation and implementation of law related to locally produced and imported food products (Armstrong, et. al. 2015). As the producers and exporters of food items are obligated to follow the bylaws that govern requirements related to packaging, labeling, use of color and additives, weight and measures of the product along with shelf-life. Apart from FSSAI, the importers are liable to comply with the regulators requirements of other authorities like Retailers Association of India, Forum of Indian Food Importers, The Federation of Hotel and Restaurant Associations of India and similar other bodies (Australian Trade and Investment Commission, 2017).
For a marketing plan to be achievable, it is necessary to clearly define the target customers of the company. Target customers refer to the group of people, whose demands and needs the company wants to fulfill and these people are most like to buy the product or services offered by the business organisation. Before selecting the group of people as target market, they need to be evaluated on the basis of their accessibility Management, attractiveness, size and growth (Cant et al., 2009).
For AussieFruits, the target market is urban consumers that reside in metropolitan areas of India. The company can target the affluent and aspirers class in urban areas that currently constitute 21% of Indian households and their share is expected to increase to 31% by 2025 (Singhi, Jain and Sanghi, 2017). The rising income of these household groups provides them with adequate purchasing power to spend on items that are not just bare necessities. Further, a rising demography of health-conscious people and the enhance exposure to different culture has inclined the interest of Indian consumer towards health living full of nutritious fruits and vegetables. Additionally, the growing culture of restaurants offering exotic cuisine in their menu has also expose Indian consumers towards these exotic variety of fruits that is expected to fuel their consumption (Arora, 2016). Thus, the most appropriate target market for the company is affluent and aspiring class of urban Indians.
Product positioning is another important element of marketing plan as it helps in communicating the value of the company’s market offering to its target market in the best possible manner. The product positioning requires carefully crafted messages that are generally communicated based on the needs of target market, competition and the available communication channels. The aim of product positioning is to create a favourable impression of the company’s product among the consumers (Horner and Swarbrooke, 2012).
Australia is best known for maintain high quality and safety standards in its food products. AussieFruits can position its products based on their quality and freshness. Further, the company can also promote its products by increasing awareness regarding the cumulative health and nutritional benefits along with their usage in different cuisines to attract health conscious people as well as food lovers (Czinkota and Ronkainen, 2013). For this the company can use different channels like in-store promotions, you tube channels, and social networking sites.
The role of marketing plan is of critical significance for businesses that seek to expand their business outside the domestic boundaries. It allows for the in-depth assessment of appropriate country along with choice of entry mode to reap maximum benefits and profitability from expansion.
From the market plan of AussieFruits presented in the report, it can be concluded that India provides the best growth opportunity with its growing purchasing power of affluent and aspirant class along with a move to healthy living. The changing lifestyle and rising income of this segment of consumers will support the demand and consumption of exotic fruits like avocados, grapefruit and macadamia. Further, the company can use strategic alliance with Indian retailers and supermarkets to obtain a shelf space and access the target market. The quality, freshness and nutritional benefits of the products can be used to position the Australian fruits in the new markets. However, the company needs to be vary of the regulatory and legal requirements of authorities like FSSAI, Forum of Indian Food Importers and the like in order to secure a stable business with the Indian market.
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