Describe about the International Marketing for Case Study of MADE Groups.
The new fashion statement is Go ORGANIC! Everyone is on the run for eating and drinking healthy. It not just benefits people but the environment too. However, this is not so recent as one may think. The idea of diet and eating healthy goes back to the 1990’s when a Scientologist and entrepreneur repackaged a diet called the Master Cleanse.
Founded in the year 2005, the MADE Group is a company established by three schoolmates who had the vision to find a market that had a gap, generate new ideas for the market and take an action to fill the gap. The company is often termed as a ‘Homegrown Innovation’. In the past one decade, the company has come a long way. MADE Group started with an enhanced range of water beverage and gradually spread their wings to other beverage lines. The company now deals in five categories, has an exceptional sales team, possesses a state of the art manufacturing unit and flaunts a strong network of direct distribution networks. MADE Group has over 20,000 retail distributors at hand across Australia and has 4 offices that it runs. The visionaries of the company strive to expand the supply of their products to other potential countries (MADE Group Official Website, 2016). The first country that it plans to expand is Singapore for its exclusive range of Cold Pressed Juices. A company and product analysis has been done in the following few paragraphs to understand the viability of the expansion at the current stage. (Newman, 2010)
Company and Product Analysis
The MADE Group has an experience level of 10 years and the range of Cold Pressed Juices is among the first few brands that it had launched in the Australian market. The company aims at innovating itself and the brands in the beverage industry so as to fill the gaps that are posed in the market with the rapidly changing demand of the market.
The product is the range of Cold Pressed Juices that are made from slowly squeezing the fresh fruits and vegetables while eliminating the harmful bacteria. The product does not require pasteurization to be preserved. It has been made from 100% locally grown fresh fruits and vegetables. The juices are available in many different names and flavors. Some of these include Ginger Ninja, The Works, Summer Greens, Unearthed, Cacao Kapow and Berry Beats. It is known that the aroma and overall quality of the juices are excellent and offers excellent flavors. It satisfies the need of the focal shift of the new generation towards healthier drinks and juices that are more organic in nature. It satisfies the needs of individuals of all age groups. It is not restricted to a particular target market; however, it can prove to be extremely beneficial for the Youth, elderly people and professionals alike. The performance of the product has been plausible until now. Since its inception it has received an excellent feedback and hence the company has been planning to expand its market of cold pressed juices in Singapore (Anonymous, 2016).
Until now the company has used retail distribution to market the product largely. The company has always worked towards ensuring the product’s sale in the market and are competitive in terms of quality and pricing. This factor is indeed one of the distinctive factors that have changed the face of the company over time. Apart from this, there have been no major promotions done in the retail market. The company indeed has sufficient resources to go overseas with a considerable amount of success achieved in the past, a professional team of marketing and sales staff and state of the art manufacturing unit in Melbourne. In the past three years, the company has been able to launch a number of brands in the home market. It has been able to get investors and grow the company to a large extent with innovation and competitive methods of production and sales into the Australian market.
Comparative Country and Product Market Analysis
Singapore is one of the few countries that has shown a remarkable amount of improvement and development in a very short span of time. The economy of the country is expected to reach to $342 billion by the end of 2018. Some of the primary drivers of the economic growth include domestic market, external factors, investments and private consumption and expenses of the people. The pharmaceutical industry and the petroleum industry have been attracting a number of investments across the globe. The PESTLE analysis of the company shall assist in understanding the country in the best possible manner (Lucintel, 2013).
PESTLE Analysis of Singapore
Political Factors: the political risk associated with Singapore are quite low. It is a democratic country and the people enjoy the minimum amount of political risks. The country is stable and the government works towards giving more business opportunities to companies across the globe. However, there is no freedom of speech for opposition parties in Singapore.
Economic Factors: Singapore has a free market economy. The development is fast paced and the per capita income of the people is the highest in the ASEAN. The country is corruption free and this factor helps industries grow and flourish at an exceptional rate. However, certain economic problems include increasing cost of labor, less number of individuals who can work as laborers and decline in productivity of the people as a whole. The government is active and an imperative player in the overall economic condition of the country.
Social Factors: the country is like any other Eastern country. It still works around traditional family values. However, the youth of the generation is trying to follow the Western ideas and culture. Individuals tend to work hard in order to fulfill the materialistic desires that they possess. Literacy rate in the country is very high. With the compulsion to learn English and Chinese in schools, the country has been receiving a large attraction from foreign companies and countries across the globe.
Technological Advancements: internet and increased connectivity has proved to be a boon for the citizens of Singapore. The residents are connecting with the world at an increasing rate and are seen to be active on social media largely. The IT infrastructure in Singapore is plausible. It is known for a fact that 70% households of the country have internet and the demand for ecommerce and eB2C models are also on a rise in the country. The spread of internet in the nation has previously invited a number of multinational companies to set up their infrastructure in the country. Furthermore, the government is moving towards an electronic government era as well (Anonymous, 2015).
Legal Factors: businesses in Singapore require licenses and have to abide by regulations in order to set up. There are e commerce policy initiatives that have been launched and cross border engagements are seemingly invited. A large number of legal and technical infrastructures have been made to support the industries. Some of the most important laws include Electronic Transactions Act, Tax Issues and Import and Export Procedures, Content Regulations and Evidence Act etc.
PESTLE Analysis of Thailand
Political: According to World Bank’s report on Worldwide Governance Indicators in 2010 Thailand has failed on almost every parameter. The political frame is extremely unstable and ranks considerably low on voicing opinions as well as accountability. Government policies, regulations and their effectiveness is poor as well. Thailand has a coalition government which has been working towards the growth of the country through a distinct promotion of trade and investment in the region. Furthermore, the government is fighting corruption religiously and has been working religiously towards the upliftment of the standard of living of the people in general. The government has been offering tax incentives to promote eco-car production and usage. Thailand is gearing up to increase the amount of renewable approach that has been used. Sustainability is the new approach that is being taken up by the government along with a number of steps taken to improve the economic conditions.
Economic: Thailand has seen an incredible amount of improvement in the overall GDP of the country between 2004 and 2010. The industrial sector has contributed to approximately 44.7% of GDP with a steep increase from 53.1 billion in 2002 to $119.5 billion in 2010. A considerable amount of increase in private investments and the need for highly skilled laborers in the country. Thailand has a strong banking system; however, the fiscal deficit of the country is worrisome. Although the GDP of the country has improved over time but the expenses have also skyrocketed that are causing high fiscal deficit. Hence, it is becoming difficult for the government to lay focus on the social welfare and economic development of the country as a whole.
Social: Significant amount of inequality is evident on economic grounds in Thailand. Thailand has a literacy rate of 95.7% as of 2010. During the span of 2006-2009 the government has spent about 4.3% of Thailand’s GDP on educating their citizens. A highly educated workforce is evidenced by the high literacy rate in Thailand. However due to the geographical location of Thailand where most of it is surrounded by water, the medical experts have warned the residents of Thailand about the outbreak of diseases such as typhoid, cholera and gastrointestinal diseases.
Technology: Thailand has grown in leaps and bounds owing to their technological innovations in a span of 5 years, from 2005 to 2010. The US Patent and Trademark Office’s permission for patents to Thailand has grown from 25 in 2005 to 60 in the year 2010. However, Thailand’s skilled workforce is extremely low thus the number of people working on technological innovations are affected. The total ratio of enrollment in tertiary training is only 45. If Thailand seeks to increase its skilled labour force the education in tertiary sector also needs to go up.
Legal: Thailand has revised their tax reforms in order to encourage people to invest and their consumption to increase in order to support the market productivity. These reforms are expected to influence tax revenues and increase business investments too. Thailand’s Foreign Business Act strictly prevents international investment among all sectors, most importantly in the service sector. Thailand has severe restrictions on foreign equity ownership. According to a report in 2010 by World Bank, it stated that Thailand was among 87 stringent nations with regard to allowing foreign investments.
Environmental: As an initiative to protect the environment, the Cabinet in 2010 decided to impose tax on industries causing pollution. The rates will be fixed based on the amount of pollution present in the air, water and industrial waste as well.
It would therefore be safe to say that Thailand may not be the ideal place to do business if MADE seeks to expand. (Naranlala School, 2013 and Datamonitor)
Similarities and Differences between Australia and Singapore
Choosing a business jurisdiction in order to invest into a new economy is not just risky but also requires a lot of careful strategic planning. The key concerns for entrepreneurs while choosing a place to expand their business is to check the political stability, tax system, the market economy, ease at which business can be done and business friendly atmosphere. According to International ranking Singapore is very beneficial for the investors which offer many monetary benefits. Understanding the similarities and differences between two economic cultures is effective in understanding consumer behaviour which can help to consider the profitability of any company who is looking forward to expanding.
Singapore and Australia are both very good for starting new businesses. According to a report published in the year 2015, Singapore was ranked #1 by World bank for Ease of doing business and Australia ranked tenth. The 2014 report for Best Countries for business awarded Singapore the 8th ranking and Australia the Sixteenth rank. Singapore and Australia are World’s freest economies that allow business activities at an increasing rate. Singapore and Australia are the top most locations for Asian expatriates.
Australia has a high tax burden and ranked 35th in the 2014 Best Countries for Business index while Singapore was in a much better position with very low tax burden, ranked 5th in the report.
Singapore is a highly IP protected country while Australia isn’t. According to a report by World Economic Forums on Global Competitiveness, Singapore was the second most competitive economy in the world. Singapore’s political condition is considerably stable with the government working at providing more business opportunities globally. Australia on the other hand poses extremely difficult terms for doing business. The labour regulations are extremely restricted in Australia. Government bureaucracy is highly inefficient and a problematic tax regulation makes it highly difficult for any organisation to do any kind of business activities. One of the main problems seen in Australia is the regulation for tax rates; however Singapore has very simple and low tax rates.
Considering the economic condition of Singapore it would be safe to say that Singapore indeed is an extremely beneficial place in terms of profitability and ease of business as well. Since the government of Singapore favours new businesses marketing for MADE would be highly effective. The cold press juicer market at Singapore is not highly established providing a great opportunity for MADE to comfortably operate and be highly productive and competitive (Anonymous, 2016).
Product Market Analysis
Although Singapore is among the smallest countries in Asia; however, it has a population of 5 million and it is one of the biggest importers of food products. According to experts, the country imported agricultural products and food and drinks worth US $12.1 in 2011 (Switzerland Global Enterprise, 2013). The rise in the consumption of food and drinks has been seen due to an increasing number of working women and the rise of the middle class population in the country. Furthermore, there has been an increase in the amount of disposable income that an average consumer has had. The expenditure done by the average number of people has grown considerably. The country is expected to grow further with respect to a potential increase in the disposable income in the years to come. ( Orissa International, 2013)
The expenditure of the average individual on food and drinks in 2011 was recorded as US $7.8 billion which has increased by a whopping 8% since 2006. Apart from this, it is interesting to note the that the retail industry of the country has over 3,000 supermarkets, stores, hypermarkets, departmental stores etc. that sell drinks. Apart from this, there are another 1,300 specialty drink outlets. It is recorded that the majority of the sales happen in supermarkets that is up to 60% etc. An increasing number of people are moving towards supermarkets (Anonymous, n.d.).
The market of Singapore is beneficial for the product lifecycle. The retail industry of the country is on a growth spree. The cold stores are easily available and after a detailed analysis of the economic and political sectors of the country, setting up a manufacturing unit should not be a problem. The market is at an excellent phase in the product lifecycle. 90% of the food and beverage products in Singapore are imported from other countries which makes it one of the leading importer of all times. (Economic Freedom, 2016)
The main sources of fruit juices supply to Singapore comes from Malaysia at 27%, South Korea at 4%, Indonesia at 16%, USA at 14% and China at 7%. It is noted that the Singapore industry already has a competitive market with local brands also competing for a considerable amount of market share. Pokka Singapore is one among all. Also, a number of juice brands from Malaysia have also ventured into the country over time (Switzerland Global Enterprise, 2013).
Foreign brand for cold pressed juices is Juice Junkie and JOOB and local competitor of MADE Group is KARMIC Cold Pressed Juices
KARMIC is a small sized organisation operating in Melbourne, Australia. They produce a range of cold pressed juices and smoothies which have a shelf life of 3 days. Joob is a small scale company, providing 100% organic juice cleanses as well as simple cold pressed juices. The company uses the Norwalk Juicer which is considered to be of high credibility. Juice Junkie has been operating in the Singaporean market, providing detox juices, juice bars and smoothies since 2013. Their inception was in USA and they finally spread their wings in Singapore markets. They operate online as well as sell their products in stores.
There are a number of competitors in Australia. Melbourne itself has a trail of cold pressed juice companies providing 100% organic juices.
The competitors of MADE are KARMIC Cold Pressed Juices, Greene Street Juice and FEAST Juice. Feast Juice makes cold pressed juices and the profits made from their produce goes to a number of social and environmental initiatives. They also use their vegetable waste from the smoothies to make organic fertilisers for their produce. KARMIC uses a whopping 8kg of unadulterated fruits and vegetables to make a 2 day detoxifying juice and the fructose value of these juices are below 5% in order to reduce sugar consumption for a healthier body.
MADE is an established name which has been in the market for the last 11 years.
The products at MADE are steadily squeezed by slowly eliminating the harmful bacterias. Unlike other companies MADE does not use traditional heat pasteurization. Companies like JOOB though minimum, yet they do use heating process to extract the juice out of fruits and vegetables whereas MADE does it heat -free!
Singapore is an open minded economy with a great impact of the western values upon the youth. Therefore their consumption habits are obviously on the similar lines therefore cleansing juices will make waves in the Singaporean market. It is also preferred by people who drink alcoholic drinks since these juices help to detox your body and it might be a great choice for a healthier lifestyle.
Since MADE produces organic juices that are free from bacteria and pure unadulterated juices, it can be consumed by any age group. With the recent fad on diet and organic drinks, MADE products would make considerable growth among the working professionals who are constantly on the lookout for a detox. (Pleasant, 2014)
MADE’s Competitor Juice Junkie had its inception in 2013 and has been selling 100% Organic Cold pressed juices ever since. They have a store at Duxton Road and for all internet savvy people they operate online as well. They have a range of products from juice bars, to nut smoothies. They have a nutrition section at their store where a nutritionist assists in offering advice on the most appropriate drink. They are considerably small with a limited market presence.
MADE on the other hand is a larger organisation and operates on a larger scale than most of it’s competitors in Singapore therefore the chances for success are high in Singapore. (Juice Junkie)
Market Selection - Justification and Opportunity Statement
The market selection is of Singapore. The country Singapore has been chosen because the country is more developed as compared to Thailand in general.
MADE would have a lavish opening if the management considered to expand in Singapore. The reasons are very obvious and encouraging. Most of the cold pressed juice companies at Singapore are comparatively new as opposed to MADE which started its business in the year 2005. MADE has many more years of experience, market presence with a superior method of production. In addition the market at Singapore is extremely favourable for Businesses that have something fresh to offer. Moreover the cold pressed juice companies have a limited global presence. These are companies that are confined to limited geographical space and also have lesser shelf life while Made has used technological expertise to increase shelf life of their juices and smoothies.
About 70% of Singapore’s population uses the internet. This can help MADE make a favourable impact through social media networking sites first and then approach the Singaporean market to see the feedback based on which a thorough strategy can be planned. The major area where MADE can really make its mark is the experience factor. MADE has survived through the critical economic conditions at Australia and Singapore gives a much more comfortable platform for MADE to flourish. Considering the PESTLE Analysis of Singapore one may conclude that Singapore is an extremely favourable place for business operations.
The social, economic, political and technological conditions will highly favour MADE in being a success in Singapore. One of the major ways that MADE can build its image in Singapore is by creating online presence. With a high number of people using technology, advertisements through the internet can make a great opening into the Singaporean market. Heat free pasteurisation is a great marketing strategy that can be used in order to gain popularity. MADE has already made its footing in the Australian market which gives them a higher possibility to make a greater impact in Singapore. B2C Markets may be highly beneficial too. MADE can initially try to sell their products through ecommerce and then slowly move into directly selling their products in the Singapore markets.
After completing creating online presence, MADE can slowly move into direct forms of business dealings such as exporting the goods to Singapore and directly selling their products to local stores and supermarkets.
MADE can export their products by venturing with the Singapore government since Singaporean government is extremely cooperative in terms of business operations and they welcome such initiatives. Since Singapore has low taxes on companies operating there it would be very profitable and cost effective for MADE to get more returns in the Singaporean market than the Australian market. Singapore is the number one economy that allows trade with ease. Their trade policies have very few barriers making business operations extremely smooth. Their superior custom procedures and high quality travel infrastructure enables movement of goods easy and safe.
Another major advantage of Singapore market is its Bureaucracy. It is by far the simplest bureaucratic government with least hassles and free from red- tapism and corruption which helps the economy to function without any selfish ambition. Government regulations are least burdensome with transparent policies to favour companies. Singapore is the most favourable country for trade which will help MADE to enter the market easily and succeed in their business endeavours. (Australian Collaboration, n.d.)
MADE Group is dedicated to maintaining public health of its customers therefore their aim is to always provide fresh, organic and superior quality juices. They also seek to make a difference to the health of the people around by decreasing the burden of environmental pollution. Several steps have been taken within the production unit such as using light weight PET plastic bottles that reduces the use of plastic almost by 50%. The process of blow-moulding bottles reduces the transportation of incoming packaging materials by more than 90%. MADE bottles can be reused which reduces the volume of plastic production. The usage of LED lighting also reduces power consumption and efficiently uses energy. MADE has made successful addition to some of its products and are continuing to flourish with their range of products.Early this year they revised their Rokeby Farms product and introduced Protein Breakfast Smoothies. (MADE Group)
With regards to their expansion to the Singaporean markets, MADE may achieve immense success because though there are small organic stores selling cold pressed juices with limited online presence, MADE is a bigger name and longer experience. They have a larger operating facility of 10,000 m2 and in order to maintain environmental loyalty, operated under HAPP certified management system.
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