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Situation Analysis

Discuss about the International Marketing for PESTEL and SWOT Analysis.

Wine as a product reflects the country’s position contributing to a multicultural hub resorting to luxuries in wine and beer. Wine in the Fiji market constitutes to be used in celebrations and serves as a key component in attracting buyers. Although, the product that has not been still been imported from Australia is Coonawarra Red Wine which is a South Australian Wine from the ‘terra rossa soil’. The indigenous wine produced in Australia is one of the prized products that was started to celebrate the “ridge of the earth” (Anderson & Aryal, 2015)

On the other hand, the study analyses the market for South Australian Coonawarra wine in the market of Fiji depicting that the market is best fit for the wine as per the normal trend in the market. However, to evaluate the market for wine, it is important that situation analysis of the product be carried out. Conversely, situation analysis will be carried forward based on PESTEL, market and competitor analysis of the wine market in Fiji.

The situation analysis taken here is to justify the market for South Australian wine in Fiji so that a long-term evaluation is done that only suits the market and business environment but also to the customers that constitute to be one of the mainstay of the analysis.

The business environment determines to keep a check on the circumstances for the current market as well as analyze the environment for the future perspective as well. However, the business environment can be effective if the systematic factors are followed to gauge the environment (Kotler et al., 2015). In this case, Fiji’s wine market will be studied on the political, social, economic, legal, environment and technological factors.

Political factor – Politically, Fiji is a recommended market for Australian companies as well as product in the market. However, doctrinally, political culture of Fiji with Australia is financial stable as there are bilateral relations that exist between the two (Austrade.gov.au, 2016). However, Australia’s travel restriction have also been lifted in 2014 as announced by Ms. Bishop (Department of Foreign Affairs and Trade, 2015). Additionally, steps have been taken towards Fiji’s transition towards a democratic state that not only builds confidence in the system but also welcomes the international community.

Economic factor – Overall, the environment terms to be favorable the relation between the two countries has been old as well as strong. Moreover, the Australian investments in Fiji accounts for 2.3 billion dollars in 2014-2015 and two way trade in services has been on 1.7 billion dollars annually. However, a new policy has been announced in 2013 to enhance the engagement to build stronger cooperation, political and economic relations between the two. Economically, according to 2016 budget, the country lays foundation for moderate consolidations over trade. The Australian trade in exports to Fiji accounts for a growth of 14.7% and the imports accounts to a growth of 18.3% in 2015. However, alcoholic beverages exports to Fiji accounted for 8 million dollars in 2015 (Department of Foreign Affairs and Trade, 2015).

Business Environment

Social factor- On the social forefront, the wine market in Fiji is highly dominated with Austrlia and New Zealand accounting for 600 wines constituting to be 35%. However, the brand market for wine attracts 675,000 tourists a year that is enough for the new indigenous Coonawarra Red Wine to make its place in the current market (Wilkinson, 2013).

Technological factor – The technological factor can be helpful in providing through the synergy of advertising as well as promotional and marketing programs. Moreover, the advertisers in the Fijian islands are of the view that public relations and TV and radio advertisement are constituted to be good for the product to reach to masses (Prasad & Asa, 2013). Moreover, technological innovations can further be provided by better hygiene and control of production process that can be established in Australia by Fiji market to suite the palate of consumers that are contemporary in nature. However, this can be established by combining traditions of millennia with innovative approaches to deliver high quality products with sustainable healthy lifestyle (Contò et al., 2014).

Environmental factor – The environmental factor highlights that the energy waste in the land of Fiji has been comparatively less because the traded wine is tested for geographical authenticity and quality as being a multicultural hub and for the safety of tourists (Guides, 2015).

Legal factor – Legally, there are two regulation on which the Australia can deal in the Fiji market is Free Trade Agreements as well as Export Grants. The EMDG’s are highly preferable for Australian exporters in Fiji as it not only helps in removing communication costs from the expenditure category but also illustrates the provision for the reimbursement of in-country travel while excluding ineligible expenses from the trade between Australia and Fiji (Austrade.gov.au, 2016). In addition, the wine products from Australia are regulated under tax such that in Fiji Import Excise Tax is of 15% mounting up with 15% value added tax in the region (Wilkinson, 2013).

According to market analysis, Fiji has the largest supplier as Australia for imported wines by a large margin comprising it to be 66% (Wilkinson, 2013). The wine market in Fiji is high competitive as there has been a constant influx of new brands in the market. Pricing seems to play a major role in deciding which brands to carry. However, Coonawarra wine being a new band in the market will savor the taste for the tourist market, as it is constituted to be one of the popular indigenous product in Australia.

The tourist market in Fiji is the main market segmentation that needs to be focused on because the sales were generated through the public in various events as well as celebration that take place such that the branded vine was mixed with the Fiji Bitter beer. However, according to market analysis, wine constitutes to be one of the staple yet key product category in Australian supplies in Fiji (Guides, 2015).

According to competitor analysis, the market of wine is highly competitive as apart from Australian supplies, Victoria Wines is one of the greatest distributor that deals with the premium market of wine. However, there are no reliable statistics but according to Hindle, 52% of all imported wines were received in a period of six months in 2012. The other competitors that govern the market of wine are Jim Barry, Rockford, Glaconda, Yalumba, Henschke, Vasse Felix and other wine that can be stretched to early 1990s (Victoriawines.com.fj, 2016).

Market Analysis

On the other hand, Victoria wines sells the popular white wines like Sauvignon Blanc, Chardonnay, Australian Shiraz and Pinot Noir sales are increasing over time as they are the competitors with company driven price advantage over New Zealand and Australian wines (Wilkinson, 2013). The other key distributors that terms to give competition in the market are Yee’s Cold Storage Seafood, Punjas Wines & Spirits, Motibhai, P. Meghji, Tappoo and Lawhill Ltd.

The Coonawarra red wine is considered one of the asset that the Australian wine market such that many wine known producers follow the suit Yalumba and Penfolds. However, the various wines that Coonawarra red wine possess are  Shiraz, Malbec, Petit Verdot and Merlot in Australia. Moreover, the excellent red wines specifically “Cabernet Sauvignon” is the secret to the red magic of “Terra Rossa soil” that has been cellared up to 60 years (Grey-Smith et al., 2014). In addition, the wine market in Fiji will be benefitted not only by the new brand in the market but also by the vibrant, sophisticated and by the passionate community that supports the spirit of Coonawarra red wine in Australia. Moreover, this old wine in South Australia embraces innovation while salutes the long tradition in Australia. As a result, product of wine brand is termed to be valuable for the tourism market in Fiji and will provide rich taste to the tourists (Coonawarra.org, 2016).

The market SWOT according to the win market for Coonawarra Red Wine can be given under two heads that is internal and external analysis. The internal analysis comprises of strengths and weaknesses whereas external analysis comprises of opportunities and threats.

Strengths

Weaknesses

·         The wine market at Fiji has strong recognition and with Coonawarra indigenous red wine strong presence, it is going to increase the popularity in Fiji market (Hall, 2013).

·         The trade agreement with Australia seems to be the mainstay of the wine market (austrade.gov.au, 2016).

·         Fiji has large tourism market that will help in adding competitive edge to the Coonawarra wine.

·         There is lack of domestic wines that can attract market

·         The wine products from Australia and New Zealand has lower wine value in the Fiji market (Wilkinson, 2013).

·         There is no concentration of one wine product as the market penetration has been on different wine products.

Opportunities

Threats

·         Fiji has a growing wine market.

·         The changing tourist needs.

·         There are many wine substitute in the wine market of Fiji.

·         High as well as intense competition.

·         There is growing trade of other alcohol beverages like tropical cocktails in Fiji market (Hall, 2013).

·         Various taxes imposed on imported wine like import excise duty, turnover tax and value-added tax (Austrade.gov.au, 2016).

·         The difficulty in finding the right distributor for the Coonawarra red wine distribution (Keys, 2015).

·         Other issues like economic downturn, business cycles and natural disasters can be issues that can affect the market.

The strategic impact and findings of the indigenous Coonawarra red wine distribution will play an important part in the wine market in Fiji. This is because of the certain findings the popularity of wine in the tourist destination in Fiji. Moreover, with growing trend, the domestic wines will be efficient in attracting tourist from abroad. Hence, the change experienced in Fiji in wine market will help in building competition in the market.

Conclusion

To conclude it can be said that Coonawarra red wine, as a wine product in Fiji will be helpful in attracting as well as retaining tourism market in Fiji. Moreover, the wine market in Fiji and Australia has been in a trading business and Australia has been exporting alcohol and beverages to Fiji since a long time now. Being an indigenous wine product, it is about efficient enough to gather market because of the tourists that tend to have developed different tastes for wine. In addition, the market has been growing and with this growing market, the marketing of Coonawarra red wine can prove to be effective.

References

About - Victoria Wines. (2016). Victoriawines.com.fj. Retrieved 1 September 2016, from https://www.victoriawines.com.fj/Who-We-Are

About | Coonawarra Vignerons, Coonawarra South Australia. (2016). Coonawarra.org. Retrieved 1 September 2016, from https://www.coonawarra.org/page.php?id=4

Anderson, K., & Aryal, N. R. (2015). Growth and Cycles in Australia’s Wine Industry: A Statistical Compendium, 1843 to 2013 (p. 610). University of Adelaide Press.

Changes to the EMDG Scheme for the 2016-17 Grant Year - Export Market Development Grants - Austrade. (2016). Austrade.gov.au. Retrieved 1 September 2016, from https://www.austrade.gov.au/Australian/Export/Export-Grants/schemechanges

Contò, F., Vrontis, D., Fiore, M., & Thrassou, A. (2014). Strengthening regional identities and culture through wine industry cross border collaboration. British Food Journal, 116(11), 1788-1807.

Fiji country brief. (2016). Department of Foreign Affairs and Trade. Retrieved 1 September 2016, from https://dfat.gov.au/geo/fiji/pages/fiji-country-brief.aspx

Fiji. (2015). Department of Foreign Affairs and Trade. Retrieved 1 September 2016, from https://dfat.gov.au/trade/resources/Documents/fiji.pdf

Food and beverage - Fiji - For Australian exporters - Austrade. (2016). Austrade.gov.au. Retrieved 1 September 2016, from https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Fiji/Industries

Grey-Smith, U., Robins, N., Stehbens, W., Elson, C., & Norris, Y. (2014). Regional roundup: South Australia. Australian and New Zealand Grapegrower and Winemaker, (602), 18.

Guides, I. (2015). Insight Guides: New Zealand (Vol. 18). Apa Publications (UK) Limited.

Hall, C. M. (2013). Wine, food, and tourism marketing. Routledge.

Keys, T. (2015). Key files: Wine exporting: Understanding the ins and outs-part 1. Wine & Viticulture Journal, 30(1), 11.

Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015).Marketing. Pearson Higher Education AU.

Prasad, N. & Asa, A. (2013). A Comparison Of Effectiveness Of Service Advertising On TV Between Fijian And Chinese Consumers: A Case Of Macdonald‘s. International Journal Of Scientific & Technology Research, 2(7). Retrieved from https://www.ijstr.org/final-print/july2013/A-Comparison-Of-Effectiveness-Of-Service-Advertising-On-Tv-Between-Fijian-And-Chinese-Consumers-A-Case-Of-Macdonald.pdf

Wilkinson, M. (2013). Across the Ditch: Fiji Time. mishasvineyard.com. Retrieved 1 September 2016, from https://www.mishasvineyard.com/wp-content/uploads/WBM-August-13_Fiji-Time.pdf

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