Tamburlaine is an Australian wine company which produces the organic wine and it has a plan to enter into market of Panama or Namibia. Looking at the economic, cultural, geographic, cultural and social framework it is observed the potentially for wine in the market of Panama is more than the market of Namibia. The company can export the wines initially in the market of Panama.
Overall information of the chosen product
The product that has been chosen is the organic wine and the organic wine is made of purely organic elements and no elements of fertilizers, synthetic pesticides are present in the wine. Only thing is that the wine contains sulphur dioxide which prevents the spoilage of the wine and the early oxidation (Wines, 2014).
Tamburlaine is known as the largest organic wine producer of Australia. The winery was formed in the year of 1966 which is considered as a well established winery of the Pokolbin district. Tamburlaine further expanded the production of the company and also the quality of the product after the acquisition takes place in the market. Tamburlaine acquired vineyard land which was known as an orange wine region and almost 70% of the wine production was coming from orange itself (Wines, 2014).
The upper middle class and the high class society have been targeted by the wine producer for penetrating the international market. In this case, the market has been divided by following the demographic segmentation process.
Australia is a well known country for many aspects and export of wine and production of wine is an important part of the Australian economy. Tintara is one of the oldest surviving wine companies of Australia which can provide tight competition to the company Tamburlaine.
Marketing Strategies of the company in Australia
The marketing strategies of the company Tamburlaine is based on its product approach. The company is the largest wine producing company of Australia and it is obtaining huge number of awards for producing pure and organic wine products. In the domestic and in the international market both the company has able to create a distinct approach in front of the customers. The positioning strategy of the company is formulated in a way so that, the customers are provided with best quality and organic products. The company tries to offer different varieties of product and want to establish in the market as a brand of quality wine manufacturer.
The two possible countries Panama and Namibia
On the basis of the market environment, growth opportunities and Cage framework the best suitable country will be chosen for the analysis.
Analysis of Panama
Panama is the right place for the investors to invest because looking at the economic and social potentiality of the country. From the political point of view also it is observed that the government of Panama is investment friendly and the two projects named “Canal expansion 34 projects and the Panama Pacifico redevelopment project” can help to grow the infrastructure in the market of Panama. For these two projects many foreign companies are interested to invest in the country.
The market environment for Panama is positive as the government of the country is supportive enough to conduct the import related activities and different American companies are present in the market for importing wine in the market. The social aspect of the country is also signifies growth of the wine product in the Panama market. The Ministry of security of the country Panama is responsible to manage all the import related endeavours of the country. The infrastructure development is activity of the government for providing support to the foreign companies and this is the reason the foreign direct investment in the country is increasing to a large extent. The unemployment rate of the country has been reduced to 4.5% and the rate of inflation also reaches at 5.9%. The growing per capita incomes of the consumers have enhanced the demand for the high end wine products in the market. The international wine especially, the US wine is able to cover a significant market in Panama (Dettenhofer and Hampl, 2009).
Due to the growth in the economy the society of Panama is observing upper middle class segments that prefer the international alcohol and wine. Alcohol consumption is socially acceptable in the framework of Panama and the demand for wine is there in the market.
Various competitors especially, the US exporters are the competitors of the company and apart from that. Ea Breeze Winery and Panama city, Beach winery are the major competitors of the company, Tamburlaine. The major competitors of the company will be “Panama Jack” and International wine products holdings. Apart from that any other liquor company can compete with the new entrants.
The market of Panama is observing a high growth from the year 2013 onwards and in 2013 it was 4.70 and in 2014 it was 6.60. The per capita income of the country is increasing a certain extent and the foreign direct investment also counts for $2.8 billion in a year of the country. Secondly, the company can get the benefit of lower tariff implemented by the government of Panama.
Analysis of Namibia
The company can face the competition from two major competitors named, Weber burg Wine and the Tokara wine. Weber burg is known as boutique based winery which obeys the model of French classic traditions. The company is able to provide elegant and stylish wine to the customers. Tokara is another competitor which provides quality and award winning wines, olive oils and brandy (Jacob, 1988).
The excise duty in the Namibian market has been increased from last few years. The restriction is implemented in the packaging, process, advertisement and distribution of the products. From the environmental perspective also the humidity of the country can be act as a hindrance for storing the wine products. The economic development of the country is sluggish in nature and most importantly the inflation in the market has reduced the disposable income of the country. The health conscious society has increased the consumption of wine.
The consumers are changing with the dimension of the environment and most of the consumers have understood the value of organic products. The company is offering the organic wine and looking at the healthy aspects of the consumers the products of the company would be suitable in the context of the country Namibia.
The major competitor of Tamburlaine wine is the Namibia Wineries and apart from that Namibia Breweries is considered as a competitor of the company. The local company like the wine runners which is a family owned business is also considered as a competitor of the company as it provides premium quality wine to the customers.
The Namibian people are becoming more health conscious and they prefer the wine products instead of having the alcohol items and the beer. Most of the customers and households of Namibia from the lower income group though prefers the traditional alcoholic products but the niche high income group prefers the wine (Jacob, 1988). The company Tamburlaine can grab the opportunity which lies in the Namibian market. Secondly, the Namibian economy after facing the economic crisis has observed a slight increase in the GDP share in their economy and it is increasing by 5% growth rate according to the data of 2012. The reason for the growth is the large number of housing project in the market of Namibia. The consumption expenditure of the household will increase with the increase of the GDP growth share of the economy.
Identification of the most suitable country to enter
To understand which country will be selected the CAGE framework can be discussed and on the basis of CAGE analysis the company will take the decision regarding their entry.
The cage framework describes the cultural, administrative, geographical and economic distances which the organizations generally take into account while entering into the market.
The cultural distances are lot between Australia and Panama but it is also clear that the country Panama is not that much of traditional that it would not invite any other company to expand into the market. The US wine manufacturers are able to import the products easily in the market and the society is fare enough to adopt the Australian wine culture (Dettenhofer and Hampl, 2009)..
From looking at the administrative point of view the country is progressive enough to accept the foreign investment in terms of entry of a country. The infrastructural development and the warehousing development for storing the wine are some supporting activities by the government of Panama (Dettenhofer and Hampl, 2009).
Looking at the geographic location it is clear that the country is not able to produce enough amount of wine because of the climatic environment and storing the wine in huge amount the government is considering huge amount of steps.
Economic point of view it is clear that the country is growing and developing after recovering from the economic crisis. The growth of the country can be grabbed by the company.
Namibian culture is very traditional culture which is reflected in their drinking habit also. The traditional drinks are the most favoured drink for the maximum customers of the country. Very few customers from the rich income group prefer the international wine and alcohol (Gottschalk, 1988).
The administration is tough enough for an international company to enter into the market. The recent increase in the excise duty has tightened the regulation of the market.
The geographical location is not a hindrance for the company for enter into the market. But it is known as one of the sunniest countries of the world and people does not prefer in such a hottest weather.
The sluggish growth of the economy and the high unemployment rate is a hindrance for increasing the purchasing power of the consumers (Gottschalk, 1988)..
Suitable country selection
The best country on the basis of the above Cage framework and the market environment analysis is Panama.
Strength: The strength of the company is that is the largest producer of wine in the Australian market and the company has already achieved various awards for producing the quality wine and the brand of the wine is popular in the international market also.
Weakness: The Company is focused too much on the product approach but in the competitive environment it is difficult for the company to position itself as the quality player in the market for the long term. The company needs to create its own brand through undertaking various marketing strategies.
Opportunities: The opportunity lies in the emerging market because the demands for the alcoholic products and wine have been increased to a large extent.
Threat: The domestic and the international players of the wine market and the premium pricing strategy of the company can act as a threat for the company.
Market entry strategy
Initially, the company will start exporting their product in the market of Panama and when the wine will be popular in the market the company, Tamburlaine will open their own stores to sell the products (Madhok, 1997).