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Felivaru Fisheries Maldives Ltd
This is an international marketing plan prepared as a requirement International Marketing Module of the Bachelor of Business conducted by the Faculty of Management and Computing. The aim of the report is to prepare an International Marketing plan for a local product produce by a company in Maldives. Thus, we require selecting a local business operated in Maldives and prepare an International Marketing Plan for one or more of the selected company‟s product. This International Marketing Plan has been prepared for Felivaru Fisheries Maldives Ltd (FFM). The plan has been prepared in order to market a new product that has been developed by this company, which is a soft drink (Kurumba Fani). The report therefore will consist of information regarding the product being marketed, the potential foreign markets available, alternative ways of marketing in these markets and the best market to export the company‟s products. In the first section of this report the company profile, its vision, mission, objectives and core values of Felivaru have been discussed. This section would also provide you with information regarding the current products of the company, its quality assurances, and the new product that our group is about to promote in the international market. Moreover we have also outlined the potential that the company has in going international and the advantages that the company can gain by marketing the new product in the foreign markets. Here we will address the attractiveness of the market in terms of the demands of the customers, the increase in health concerns and the feasibility of going international for the company. Following this section, there will the situational analysis of the company where we have used models such as SWOT and PESTLE analysis to examine the internal and external factors that will affect the marketing of the product in the international market. We also have analyzed indepth the three potential markets (Germany, United Kingdom and Italy) that Felivaru can enter into and through this analysis we have discovered that Germany is the most attractive market. The third section of this report focuses on the alternative market strategies that the company can adopt. In this section we have looked into the alternative mode of entries, alternative target markets and segmentations, the positioning strategy and the alternative marketing mix. Subsequently, in the fourth section the report we have developed the marketing objectives and
strategies for promoting the product in the German market. And then we have identified the market segmentation and looked into the trends in the selected market. Likewise, we also have generated the marketing mix for promoting the soft drink of Felivaru. The financial plans for marketing the product in Germany have been looked in the fifth section of the report. The main areas that we have covered in this section include the sales forecast breakeven analysis and sensitivity Analysis for marketing the product. The next section of the report specifies the implementation and control of the international marketing plan. We have developed an implementation plan, and control Mechanism of the marketing strategies that we have established.
5 Products 2.0 The need to go international 1.The key areas covered in the section are: 1.4 Core values 1.0 Company profile 4|Page .0 Company Profile 1.1 Vision 1.3Objectives 1.2 Mission 1.
1. the factory in Felivaru has been in operation for over 32 years. a fish-canning factory was first opened as a joint venture with a Japanese company in 1977. through our constant ISO.certified and HACCP compliant system. Felivaru Fisheries Maldives Ltd (FFM). In Maldives. Recently. which will enhance customer satisfaction. Through the highest quality canned tuna and cooked lions for local and export market. Although the company has been established recently. Felivaru has a high reputation of achieving. maintaining and adding high standards to its products. The government acquired the plant in 1982 however. 1.1 Vision To become the leading Fish processing and Distribution Company in Maldives. came into operation under a presidential decree as limited liability company with hundred percent government shares. for both local and international markets. through maintaining high quality and achieving total customer satisfaction.2 Mission We are committed to quality fish products.3 Objectives 5|Page .Felivaru Fisheries Maldives Ltd (FFM) is a 100% government owned company established in the June 2010. and afterward it was transformed into MIFCO in 1993. FFM has been able to create a competitive advantage against its rivals. to process and can fresh tuna. Marubeni Corporation of Japan came to a partnership with Maldives Nippon Corporation in 1979. which later became the Fisheries Projects Implementation Department (FPID). We are also dedicated to becoming the most profitable leading global provider of a variety of healthy fresh and frozen fish products. due to poor conditions of the buildings and equipments a new factory was opened in 1986. produced from sustainably caught fish. The Maldives Fisheries Corporation was formed in the same year. 1.
Developing the Maldives fishing industry in a sustainable manner which would provide maximum socio-economic benefit for the people. 1.5 Products 6|Page . Long-term objective is to maintain a sustainable profit gain. Focus on the survival of the company by means of increasing the production capacity (target is to increase the capacity for 2 times the current capacity).4 Core Values Selling the highest quality and superior products available in Maldives Satisfying and delighting our customers Supporting team member happiness and excellence Creating wealth through profits & growth Caring about the community & the environment 1.
headed. disemboweled. Salt and vegetable oil are added and cans are hermetically sealed. The cooked tuna fish. Fancy. scorched and packed with a covering of oil or brine in hermetically sealed can and achieve commercial sterility by application of heat. Table 1 Export products of Felivaru Local Product 7|Page . is skinned.Export Products Canned Tuna: Felivaru canned tuna is Steak in Brine: Tuna cooked in steam and cooled. Standard and local pack. Salt and water are added and cans are hermetically sealed Steak in Vegetable Oil: Tuna cooked in steam and cooled. Chunks in Brine: Tuna cooked in steam and cooled. This is the major process involved in manufacturing of canned tuna. trimmed of all blood met. specified as premium.
Felivaru Meerukurimas( Seeni Sambol): Prepared by frying onion in cholesterol free vegetable oil followed by mixing with other ingredients. Felivaru Skipjack Steaks: Tuna is gilled and gutted followed by removal of skin and bones and the lions. Felivaru Valhomas (Boiled & Smoked Tuna): Tuna is gilled and gutted. Felivaru Rihaakuru with Bondi: Careful cooking of the fish and extracting the juice of the fish.0 The New Product “Kurumba Fani” 8|Page . Ras-ain Seeni Sambol (New) Ras-Ain Ban‟bukeyo Bon‟dibaiy (New) Figure 1 Local products of Felivaru Refer Annex 1.
(Refer Annex 2. According to the Assistant General Manager Mr. It is the liquid found inside a coconut seed. mainly in Southeast Asia. dried fish and frozen fish. which is the round. Coconut water is an nutritious drink which is beneficial for the health. „Kurumba Fani‟ is novel for Felivaru. and the Caribbean.0) Figure 2 Nutritional values in coconut drinks Figure 3 Health benefits associated with coconut water How Kurumba Fani is processed in Felivaru 9|Page .7 calories or 70 kilojoules per 100 grams). "fruit" of a coconut tree.Coconut water is also known as coconut juice or „Kurumba Fani‟ in Maldives. The product is mainly consumed by the staffs of the Felivaru Company and they are getting a lot of positive feedback from these consumers. such as Hawaii. It is naturally fat-free and low in food energy (16. Felivaru. currently the product is only sold in the Felivaru shop located in LH. which has not been yet introduced either locally or in abroad. „Kurumba Fani‟ is totally new to the market. Mohamed Areef. Coconut water mostly has been a popular drink in the tropics. the Pacific Islands. Although the company exports to the EU markets its existing products such as canned tuna.
due to its natural hydrating qualities. Finally. encouraging people to choose coconut water. The demand for this newly emerging soft drink is due to the isotonic benefits associated with the coconut water.0 The need to go international There is an increasingly health conscious market emerging in the global markets. With these alternative beverages on the decline. the prepared „Kurumba Fani‟ is put in bottles. as a more natural alternative for the sports beverages. the sports markets have a high potential in the global market. And these two ingredients are blended afterwards. great taste and nutritional benefits. There are a growing number of coconut water brands in the market. The worldwide consumption of sports drink is expected to grow up 33 percent by 2012. mixed with coconut water. emerging companies are seizing this opportunity and filling that demand.The coconuts are cut and its water is put into a container. energy drinks and flavored water. Similarly Felivaru is also going to respond to this market demand for a healthy beverage and the growing popularity in all natural coconut water 10 | P a g e . Then the labeled bottles are packed in a paper box. and then it is sealed and labeled as a product of Felivaru. After that the coconut meat (white flesh) of coconut is removed and grinded with sugar. Figure 4 Kurumba Fani Production Process 2. Specifically.
While. wholesome. The „Kurumba Fani‟ is naturally good for consumers. As a result of this Felivaru will be able to export this new product at a lower cost and sell it in these markets at a premium price. as entering the global market has its opportunities as well as barriers. Maldives is still getting the tax exemption from the European Union for another 3 years and this creates an advantage for Felivaru in exporting this product to the EU countries.0) Section Two SITUATIONAL ANALYSIS 11 | P a g e . there are a lot of things that needs to be considered. nutritious and support health and well-being.drink. The standard of food in Felivaru is confirmed by the Campden BRI of UK and food safety management system is in accordance of the Hazard Analysis Critical Control Point (HACCP). (Refer Annex3. reflecting the possibilities of entering the market and successfully marketing the product. We believe that the growing demand for healthy and natural drink in the global markets increases the potential for „Kurumba Fani‟ to be internationally marketed. Felivaru is the first establishment in the country to be recognized for compliancy to EU requirements. In addition to this. The three markets for „Kurumba Fani‟ have been selected carefully. going international.
0 SWOT Analysis 2.8 Culture of Germany 3.8 Culture of UK 4.7 Demographic Trends 3.11 4.4 Consumer Price index 3.15 Beverage Market of Germany Consumer Trends Competition Communication systems Porter‟s five forces competition Porters Diamond model of Germany 4.13 3.3 Current exchange rate 3.14 3.9 Language of UK 4.1 Background Information of UK 4.10 3.10 4.This section will cover areas about: 1.4 Consumer Price index 4.5 Foreign trade 4.6 Foreign Direct Investment 4.0 In-depth analysis of UK Market 4.6 Foreign Direct Investment 3.9 Language of Germany 3.2 Economy of Germany 3.1 Background Information of Germany 3.11 3.12 Beverage Market of UK Communication systems Porter‟s five forces competition 12 | P a g e .0 Potential market analysis 3.0 In-depth analysis of Germany Market 3.12 3.3 Current exchange rate 4.7 Demographic Trends 4.2 Economy of UK 4.5 Foreign trade 3.
15 Beverage Market of Italy Consumer Trends Competition Communication systems Porter‟s five forces competition Porters Diamond model of Italy 6.13 Porters Diamond model of UK 5.13 5.4.11 5.6 Foreign Direct Investment 5.10 5.4 Consumer Price index 5.1 Background Information of Italy 5.5 Foreign trade 5.2 Economy of Italy 5.1 Screening for Market Selection 13 | P a g e .0 PESTLE Analysis of Three Markets 7.14 5.3 Current exchange rate 5.9 Language of Italy 5.0 In-depth analysis of Italy Market 5.8 Culture of Italy 5.12 5.0 Market Selection 7.7 Demographic Trends 5.
Coconut is cultivated in the island where the processing plant is located Fertile land available for cultivation of palm trees. Opening of a new processing plant in Felivaru Producing the packaging bottles in the factory itself by importing raw materials Expanding company‟s market in to new areas. EU countries are trade exempted Coconut water represents one of the fastest growing beverage categories.0 SWOT Analysis of Felivaru STRENGH Years of experience in exporting products to foreign markets Low cost of processing and packaging. The company is approved by ISO standards The company‟s existing processing plants can be used for production of the soft drink. WEAKENESS Huge competitions in the global market Short preserved life span of the product Lack of brand awareness Felvaru have little or no experience in selling softdrinks. especially lack of marketing department creates difficulty in marketing the products offered The OPPORTUNITIES SWOT analysis THREATS Felivaru will have the opportunity to introduce the product to the market without paying the duties as. The company has been recently. due to high competition among lager players such as Coca cola and Pepsi Positive Figure 5 SWOT Analysis of Felivaru Negative 14 | P a g e External factors Quality of competitor products may be high Internal factors . separated from MIFCO and has been formed as a new company. The bottles in the future will be produce from Felivaru. The power of existing suppliers will be strong Existing core business distribution will be much stronger Competitors distribution channels may be much stronger in those markets Brand loyalty towards existing companies The risk of distributing the product to the international market compared to the local market Threats of new entrants. As a result the company is has not yet been well structured There are very few departments in the company.1. Felivaru has a good relationship with EU countries through its past and present transactions of fisheries products. thus have an opportunity to further lowering the costs.
However.0 Potential market analysis The Maldives has a tropical climate with warm temperatures year round and a great deal of sunshine.2. These tourists are from international countries like Italy. The PESTLE Analysis of these three countries is identified in the next part of the report. China. Dubai. Spain and other countries like UK. Germany. Thailand. Felivaru has a good relationship with EU countries through its past and present transactions of fisheries product as well as. Brazil. The locals make use of all the parts of the tree for different purposes. Italy. Germany. We have found that these western countries have an increasingly health conscious market making the coconut water drink potentially attractive. through secondary research it was identified that there are markets in USA. The vast quantity of palm trees explains why it has been known as the National tree of the country. the competition is high as large companies such as Coca-Cola and Pepsi-Co are leveraging these newly emerging markets. India. So entering to those markets are risky. and United Kingdom and so on. Since there are markets in those countries. Taiwan. In most of the resorts Kurumba is provided as a welcome drink for the tourists and the majority of them enjoy it. Further. Hong Kong. Italy and United Kingdom since Felivaru can market the products to those countries without paying the duties. 15 | P a g e . especially the young coconut is well-known as a healthy drink among Maldivians. The markets that we have chosen to export Kurumba Fani are Germany. The warm tropical climate as a result enables to grow coconut palms in large quantities. France. Vietnam. Felivaru has trade exemption to EU.
Roman Catholic 34%. Germany is a strong advocate of closer European economic integration. unaffiliated or other 28. Since the age of industrialization Germany has been one of the key driver. Economy Currency Euro GDP (2010) $2. and beneficiary for the globalised economy. the G8 and the G20 countries. innovator.5 trillion GDP growth rate (2010) 3.6% 16 | P a g e . and is among the founding members of EU.1Background Information of Germany Germany is the most populous country in the European Union with an estimate of 81.3%.114 km² People Nationality British Religions Protestant 34%.8 million inhabitants in January 2010.0 In-depth analysis of Germany Market 3. Muslim 3. the economy of Germany is the fifth-largest in the world in purchasing power parity (PPP) terms and it is the largest economy in Europe. Today.3. Table 2 General overview of Germany Country Capital Berlin Government Type Federal Republic Location Central Europe Population 82 million Education Literacy 99% Climate Temperate and marine Language German Geography Area 357.7%.
40% of the world economy).5% within the years 2010 and 2011. Gross Domestic Product According to the World Bank. Figure 6( Source: Germany. there are trade associations and chambers working to support businesses operating in different industry sectors and regions (German Business Portal.Interest Rate 1.2 Economy of Germany The German social market economy supplements a free market economy by providing a “safety net” of social programs and legislation looking out for those least able to protect their own interest.60% Exchange Rate 1.National Statistical Data.30 $EUR 952 billion EUR 798 billion 3.25% Exports Inflation Rate 2. 17 | P a g e .National Statistical Data. Apart from the legal framework surrounding the market of Germany. 2011). 2011). (5.43 Government Budget -3. in 2010 the Gross Domestic Product of Germany was worth $3347 billion. 2011).60% Imports Jobless Rate 7. It is expected that the economy will grow by 4. This will be as a result of the increasingly important role played by the exports to the emerging markets (Germany.
Germany like other European Union member states of the Euro Area has euro as their official currency. 3.National Statistical Data. 2009).42 Table 3(Source: Germany. 18 | P a g e . the average exchange rate has been 1. 2011).4 Consumer Price index There was a rise in the consumer price index of Germany by 2. Figure 7 (Source: Federal Statistical Office (2009).National Statistical Data. (Germany. Over the last year the Euro exchange rate has been depreciated 3.44 Previous 1.3 Current exchange rate In Germany. The rate of inflation measured by the consumer price index amounted to 2.18 from 1975 to 2011. 2011).1% in February 2011(Federal Statistical Office.3. Country Euro Area Indicator Exchange Rate Reference Apr/2011 Actual 1.29 percent.1% in March 2011 compared with the same month a year earlier.
The exports of Germany in 2010 were worth 951. The principle of foreign trade and payment is favored by the legal framework for FDI in Germany.6 billion euro. it has also been the world's largest exporter from 2003 to 2008 and in 2009.3 billion euro (Federal Statistical Office. 3. In fact. Companies discover that Germany is a secure and rewarding investment location. which accounts for one-third of the national output. 00 companies already operating in Germany 19 | P a g e . There are more than 45. In the last five years alone the Germany‟s FDI stocks rose by 47 percent reaching approximately EUR 503 billion in 2009.5 Foreign trade The country‟s economy is heavily depended on exports.3.6 Foreign Direct Investment There is a positive attitude towards foreign direct investment (FDI) in Germany. 2009).7 billion by remaining as the second largest exporter and third largest importer of goods.9 billion euro and imported goods 797. The foreign trade balance gained a “surplus” of 154. There is no difference between the Germans and foreign nationals with regard to investment or establishment of companies by the German law. generated a trade surplus of $189. Figure 8 (Source: Federal Statistical Office (2009). In almost all the industry the market is open for investment.
Germany. 2011).0). Source: FDI Data.(FDI Data.7 Demographic Trends The main three trends that characterize the demographic development of Germany are low birth rate. Figure 10 Source: (Federal Statistical office: Pocket Book. 3. 2009) 20 | P a g e . increase in life expectancy and an aging society. FDI results are based on Greenfield (incl. expansion and joint venture) investment project announcements. there are a range of investment incentives that are offered to investors in Germany (Refer Annex4. 2009) Figure 11 Source: (Federal Statistical office: Pocket Book. Figure 9 Note: Data refers to period 2003-2009 (100% = total FDI projects). (2011). In addition to this. Germany.
Figure 12 Sources :( Federal Statistical office: Pocket Book. 2009) Figure 13 Sources :( Federal Statistical office: Pocket Book. it is becoming normal to have one-child families. Germany. life expectancy rate has been rising continuously and currently it is 77 years for men and 82 years for women. 2008 Table 4 (Sources: Federal Statistical office: Pocket Book. As a result the ratio of young people in the overall population is decreasing while elderly people‟s ratio is rising (Facts about Germany.There has been low birth rates over 30 years and there has been increase in the level of immigrants to the country as a result it has prevented the overall population from being decreased Simultaneously. 2011). Germany. Living arrangements in Germany There has been an increase in the number of children who are born outside marriage. 2009) 21 | P a g e . Germany. 2009) House hold Income Percentage shares of the income groups in all households of the respective size.
2009) Employment One of the central elements in Germans‟ lives is work. Germany.Expenditure pattern of households Percentage shares of the expenditure items in total expenditure. Germany. Figure 14 (Sources : Federal Statistical office: Pocket Book. Service sector offers most of the jobs in the country. Figure 15 (Source: Federal Statistical office: Pocket Book. 2005. 2009) 22 | P a g e . most of the areas of their life focuses on work or is determined by it.
3.8 Culture of Germany
The German‟s gives high importance to individualism, masculinity, and uncertainty avoidance as indicated from the diagram below indicating the Geert Hofstede analysis for Germany. The nation‟s belief in equality and opportunity for each citizen, as well as its ability to change and adapt rapidly, is represented by the low rank they have scored in power distance and long-term orientation (Geert Hofstede Analysis Germany 2008). (Refer Annex5.0).
Figure 16 ( Source: Geert Hofstede™ Cultural Dimensions, 2009)
Power Distance Index (PDI) 35
Individualism (IDV) 67
Masculinity (MAS) 66
Uncertainty Avoidance Index (UAI) 65
Long-Term Orientation (LTO) 31
Table 5 (Source: Geert Hofstede™ Cultural Dimensions, 2009)
3.9 Language of Germany
The official language of Germany is Standard (or High) although many other dialects are spoken throughout the country. Along the North Sea, Baltic Sea coasts Germany‟s offshore islands Low German is spoken along. There are some features in the language that is common with Dutch and even English. The immigrant population in Germany speaks a number of languages including Turkish. Moreover, approximately 60,000 people in eastern Germany speak Sorbian which is a Slavic language (Germans, 2011).
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3.10 Beverage Market of Germany
The Food and Beverage market of Germany is the Europe‟s largest with more than 82 million consumers, generating retail sales of EUR 150 billion in 2007. This market is the country‟s fourth largest industrial sector. There are 5,700 companies, employing around 517,000 people to generate a turnover of EUR 147.4 billion in 2007. The industry growth rate is 2.4 percent, and the largest segments of the industry by sales are meat products (22.6 percent), dairy products (16.1 percent), alcoholic beverages (10.9 percent), and confectionery (8.9 percent) (The German Food and Beverage Industry – At the Forefront of Health and Wellness, 2008). (Refer Annex6.0).
Figure 17 Source: The Food & Beverage Industry in Germany-Issue 2010/2011, (2011).
3.11 Consumer Trends
There has been an increase in demand for healthier and organic foods in Germany. In recent years, the consumer trends in food and beverage market have been influenced by a numerous changes in the society. The ageing population of the country is raising the demand for health, wellness and functional products in order to prevent or overcome conditions such as diabetes,
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high blood pressure and Cholesterol (The German Food and Beverage Industry – At the Forefront of Health and Wellness, 2008). The factor that affects the choices of consumers for foods and beverages are shown in the diagram below. (Refer Annex6.1).
Innovations in the industry (functional foods/personalize d foods) Growing health concerns
Increasing environmental consciousness
Factor that affects the choices of consumers for foods and beverages
The need for convenience
Figure 18 Source: Market Analysis Report (2010)
Consumer Purchasing Power In addition to this, the consumer market of Germany is affluent and they enjoyed a disposable income per capita of EUR 19,114 in 2008. Out of this sum, EUR 17,166 was allocated for total private consumption. Consumers spend from their private consumption on food products around EUR 2,500 per year or 15 percent. Therefore, the50+ “best agers” segment is the largest and most affluent consumer group (The Food & Beverage Industry in Germany, 2011).
The food and beverage market of Germany offers a lot of opportunities for businesses as the industry is not only driven by a commitment to deliver the best, but also as a result of a desire to dynamically respond to changing consumer wants and needs. The increasing health awareness, aging population, and following increase in demand for health and wellness products have
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they also develop an integrated internal system with important advances from land mail satellite communications. Currently the country is in the third place in worldwide telecommunication. depending on the size of the later. Some of the communication services provided in Germany are indicated in the table below: Table 6 Post offices Telephones Email and the Internet Media The postal services are provided all around the country and it offers and excellent service. coaxial cable.13 Communication systems The communication systems in Germany are modern and technologically advanced. Südzucker AG. and magazines) and 6 percent from radio). (newspapers. Vion Food Group. there is freedom of press. Further. although sending packages to another country can be expensive. 22 percent from written press. Leading companies in the food and beverage market of Germany includes famous brand names like Dr. The usage of internet is very high and in recent years email accounts have been increasing. The internet access is via a university or school and all major cities offer numerous internet cafes. The media is plays an important role in the country‟s culture. satellite system). 3. further some pubs and coffee shops also offer internet access. Kraft Foods Deutschland GmbH. and Nestlé. Oetker Group. after USA and Japan. The media is the main channel through which people obtain information (51 percent of Germans obtain new from TV. There are large selections of telephone services connected by modern networks fiber-optic cable. 26 | P a g e .encouraged a number of previously niche market actors in becoming significant industry players. The prices are variable. and the quality of journalism is high.
Few and huge coconut water producers and suppliers in Germany. Figure 19 Porter’s five forces competition in Germany Refer Annex 7. the suppliers can exert bargaining power over the buyers by threatening to increase the prices or to reduce the quality of the product. Substitute The bargaining power of buyers would be lower. making the barriers to new entrants moderate Suppliers Competitive rivalry Buyers High Bargaining power of Suppliers Low Bargaining power of buyers There are fewer suppliers so. Cocowell. So the threat of substitute products is lower.0 27 | P a g e . as the buyers would be facing fewer alternatives among the market. therefore the competitive rivalry is high. Low The threat to substitute There are few substitute products. such as Zico natural.3.14 Porter’s five forces competition in Germany High Competitive rivalry Potential entrants Moderate Threat of new entrance There are few competitors dominating.
6 percent Chance Firm strategy. structure and rivalry Factor Conditions * Skilled labor force. Figure 20 28 | P a g e .3.15 Porters Diamond model of Germany * Terrorist attack * tax may be levied on the export from Maldives * Germany has laws and policies to promote competition * DANONE Waters has invested EUR 15 million in a distribution center at Duisburg harbor * The Food and Beverage market of Germany is the Europe‟s largest with more than 82 million consumers * The retail prices of food and nonalcoholic beverages raised by an average of 2. * National security * Support from central bank Government * Government policy is to encourage competition * Openness to foreign investment * German law provides foreign investors national treatment. with a good command of English and other languages * Developed scientific and technological infrastructure * The German financial and money markets are almost entirely free of exchange controls Demand Conditions Related and Supporting industries * No difference between the benefits granted to overseas investors and those granted to local investors.
).6 billion Inflation Rate 4. Table 7 General Overview of UK Country Capital London Government Type Constitutional Monarchy Location Western Europe Population 62.61 29 | P a g e . which is the third largest in the European Union and the overall population density of the country is one of the highest in the world. Roman Catholic.184 trillion Growth Rate -0. Scottish Gaelic Geography Area 243. scientific and political influence (UK. which are England.2 million Education Literacy 99% Climate Generally mild and temperate Language English. Welsh. km People Nationality British Religions Church of England (Anglican).00% Current Account -10 Annual growth rate (2009 4.d. military. UK was the world‟s first industrialized country and the world‟s foremost power during 19th and 20th centuries.60% Imports $473. Northern Ireland.0 In-depth analysis of UK Market 4.50% Exports $351. 2009) $2.2 million. The country has a population of 62.1 Background Information of UK The United Kingdom is a constitutional monarchy and unitary state.4. Church of Scotland (Presbyterian). cultural.3 billion GDP (at current market prices. and Wales. Irish Gaelic. The country consists of four countries. Scotland. The UK today remains as a great power playing an important role in leading economic. n.8% Jobless Rate 7.000 sq. Muslim Economy Currency Pound sterling Interest Rate 0.90% Exchange Rate 1.
While the largest proportion of the GDP is derived from the banking. the industry continues to decline in importance (United Kingdom. And the latest statistics indicates that the Gross Domestic Product (GDP) contracted 0.2 Economy of UK The economy of UK is partially regulated by free market economy. also it is the sixth largest economy in the world. diversified and provides extensive social welfare service leading to high level of standard of living. the country is a EU member it is not part of the Euro zone. which is highly developed.National Statistical Data. 2011).National Statistical Data. 2011). Although.0). 30 | P a g e . insurance and business services.60 percent in the fourth quarter of 2010 over the previous quarter. The country‟s economy is one of the major international trading power. Figure 21 Source: United Kingdom. Gross Domestic Product The economy of slightly began to recover from the recession with the GDP growth in the fourth quarter of 2009 and the first quarter of 2010. The second largest economy today in the European Union is UK after Germany and France. (Refer Annex8.4. the growth will probably remain subdued due to ongoing household deleveraging and tighter fiscal policy. However.
National Statistical Data. 2011). is currently worth in terms of the USD.National Statistical Data. The consumers have switched their supermarket for search of the best prices. the British Pound forward rate is quoted today but for delivery and payment on a specific future date (United Kingdom.3 Current exchange rate Over the last year the British Pound exchange rate (GBPUSD) has appreciated 6.4.National Statistical Data. Although the British Pound spot exchange rate is quoted and exchanged in the same day. The average exchange rate of UK has been 1.29 in 2015 (United Kingdom. The British Pound spot exchange rate specifies how much the GBP.28 percent. Further with less money to spend. The consumer price index average in UK in 2009 was at 119. 31 | P a g e .07 according to the International Monetary Fund. 2011).62 in may 1972 and the lowest exchange rate was 1.64 Previous 1. 2011).76 since 1972 until 2011.National Statistical Data. 2011) Figure 22 (Source: United Kingdom. Country Euro Area Indicator Exchange Rate Reference Apr/2011 Actual 1. The Index is expected to go up to 134.61 Table 8 (Source: United Kingdom. consumers compensate by bringing changes to their grocery buying habits and opting to stay in more.4 Consumer Price index The consumer confidence has been lower due to this economic downturn as shoppers are prioritizing value.05 in February of 1985. The highest rate recorded was 2. 4.
2011) 4.8% while imports grew by 111. the imports and exports of UK totalled 1.6 Foreign Direct Investment Foreign Direct Investment In 2007. The country tends to lead the Europe in drawing attention of foreign investment with 26 percent of all FDI inflows into the EU. which was equivalent to 4.3% of world trade. as a result during 2008 to 2009. exports by UK declined by 22.5% over the decade of 1998-2008.1% in USD and imports by 22.5 Foreign trade The United Kingdom today is the world‟s 5th largest trading nation. UK‟s exports of goods and services increased 99. The While the country is highly depended on foreign trade.256 billion USD in 2009. UK was the second largest receiver of foreign direct investment. UK is mainly attractive to foreign investors due to its 32 | P a g e . the financial crisis led to a large slump in trade flows across the world. Figure 23 (Source: UK Trade Performance over the Past Years.4.9 billion. with exports worth 38748 and import worth 41191Million GBP in February of 2011. according to the United Nations Conference on Trade and Development (UNCTAD) the nation received $223. However.5% in USD.
Figure 24(source: Population Trends. 22 per cent of the population will be aged 65 and 18 per cent aged 16 or younger. by 2031. smaller pack sizes. UK does not discriminate between foreigners and nationals in establishing and operation of private companies. its relatively low rates of taxation and inflation. and 80 per cent of disposal income. economic. 2009). Simultaneously. and healthy product formulations (Population Trends. This is an important data for us since the old generation represents a significant marketing opportunity for the food and grocery industry. the proportion of those aged 65 and over had also risen to 16 per cent compared to 13 per cent in 1971. And as the trend continues. With people aged 50 and above making 34 per cent of the population. 4. 51 per cent of food and grocery industry. 2010). 33 | P a g e . regulatory stability. Some of the key demands from this group are for clearer labelling. Both local and foreign-owned companies are taxed alike (UK Investment Climate 2009.7 Demographic Trends The office for National Statistics reported that the proportion of the UK population under the age of 16 had declined from 25 per cent in 1971 to 19 per cent in 2008.long-term political. 2010). Except in a few cases.
Living arrangements in UK In UK there has been an increase in the number of households which is faster than the population over recent decades as a result of the trend toward smaller households. 2010). Figure 25 (source: Population Trends. ready-prepared food.00 per week in 2008 to £683. this will impact the shoppers‟ needs.00 in 2009. The households within the age group of 30 to 49 received the highest gross weekly income (£873 per week) out of which 79 per cent was obtained from wages and 34 | P a g e . Further. During 2007. with the decline in the average household size in UK. approximately two thirds of households in the UK were one or two person households. including smaller pack sizes. And it may also increase the possibility of people „grazing‟ on snacks and smaller meals throughout the day (Population Trends. As the single household increases there will be more demand for the smaller convenient portion sizes and convenience options. There has been increase in the number of people living alone in UK. the number of single households has increased to almost three in ten (29%) in 2009 in comparison to 14% in 1961. 2010). and eating out. House hold Income The average gross weekly household income has shown a decline from £713.
and food and non-alcoholic drinks (16 per cent).40 per week) but £5. Further in 2009. 2009: Figure 26 (Source: Family spending: 2010 edition. 2011). fuel and power (£57. during 2009. The second highest spending was in recreation and culture (£57. the average weekly household expenditure in was £455. Those households in the lowest income group spent a huge proportion of their total average weekly expenditure on housing. Percentage of gross weekly household income by source of income.00 less than the previous year. Moreover. £52. the social security benefits were the second largest form of income (14 percent) (Family spending: 2010 edition.00.20 was spent as average weekly expenditure on food and non-alcoholic drinks.90 per week). Apart from the wages and salaries which formed the largest proportion of income (66 percent). which was a decline from that of 2008 which was £471.salaries. compared to those in the highest income group (8 per cent in both cases).30). 2011). The highest spending was on transport similar to the last year (£58. fuel and power (23 per cent). following this was the expenditure on housing. Household Expenditure In UK. there has been an increase in the household expenditure with the size of the 35 | P a g e .00.
90) (Family spending: 2010 edition. The British tends to be very reserved and private people and for them privacy is extremely important (UK . The Diagram below represents the Geert Hofstede cultural dimensions of UK. Culture. 2009: Figure 27 (Source: Family spending: 2010 edition.8 Culture of UK The culture of UK has become very diverse especially since the World War II with increasing number of immigrants settling in the country.Language.household. 2011).90) had the lowest average weekly household expenditure while the highest was among the households containing three or more adults with children (£710. Expenditure on selected items as a proportion of total spending by age of the household reference person. (Refer to Annex 9. 2011). 36 | P a g e . The retired one-person households who were mainly dependent on the state pension (£148. Customs and Etiquette. 4.0). 2010). As a result of the mixture of ethnic groups and cultures it is quite difficult to define “Britishness” today and there is controversy within the nation regarding what really constitutes being a Briton.
37 | P a g e . Gaelic and British Sign Language are among other native languages in UK. 2011). Ulster Scots. Welsh. Irish.7 % and 2.Figure 28 (Source: Geert Hofstede™ Cultural Dimensions. Cornish. but enjoyment wasn‟t far behind either (The 2010 UK Soft Drinks Report. There was an overall growth of 1. Overall sales in the UK totaled £8. according to figures in the British Soft Drinks Association‟s 2010 UK Soft Drinks Report. For the consumers value was as top priority.9 Language of UK The main language spoken in United Kingdom is English (being spoken monolinguals by more than 70% of the UK population). The immigrants in UK have also brought in many foreign languages from across the globe.4bn in 2008. 4.140 million liters. (2009) Country United Kingdom Power Distance Index (PDI) 35 Individualism (IDV) 89 Masculinity (MAS) 66 Uncertainty Avoidance Index (UAI) 35 Long-Term Orientation (LTO) 25 Table 8 (Source: Geert Hofstede™ Cultural Dimensions. (2009) 4.2% gain in value with total soft drinks consumption as 14.5bn across all channels 2% up on the £8. per person.10 Beverage Market of UK The soft drinks market of UK did well in the year 2009.
UK soft drinks consumption. 2011). 2011).UK soft drinks sectors annual percentage change. Sports drinks are targeted at a range of sporting and outdoor recreations. sports and energy drinks have forged a defined role. While. There also has been an increase in the efforts in nutrition labeling. 2003 . 2003 – 2009 Figure 29 (Source: The 2010 UK Soft Drinks Report. 38 | P a g e . reformulation and new product development. making a real difference for consumers.2009 Figure 30 (Source: The 2010 UK Soft Drinks Report. Although at a slower rate the sports and energy drinks continued to indicate growth in 2009. increasingly for individual consumers and occasions.
2010). UK communication Systems provides for TV.Language. broadband and other communications needs to customers throughout the country. There is mobile phone and telephone coverage in most of the areas. Television broadcast viewing and listening has remained comparatively stable although people are also using the internet (Communication Market Report. and there also are some multimedia phone booths which are located at main railway stations and airports.4. radio. The media have freedom and the ability to report on all subjects. CCTV.11 Communication systems In UK more than seven in ten people (71%) today have broadband connection at home. 39 | P a g e . There are internet cafés and centers in most of the urban areas. Customs and Etiquette. AV. This encompasses with both understatement and direct communication (UK . Looking into the communication styles used in UK we can see that there in an interesting mix of communication style. The country has many years‟ experience in the Satellite and Aerial Installation industry. 2010). Culture. while 92% of people have digital television installed in their home. satellite.
Substitute Due to the high competition in the industry buyers will be having high bargaining power over Feliveru‟s coconut water as there are have the more alternatives available in the market. Threat of new entrance High Threat of new entrance Consumers might be fascinated by other products already in the market. so the bargaining power of suppliers is might be low. High The threat to substitute The threat of substitute is high as UK‟s soft drink sector comprises variety of similar drinks Figure 31 Porter’s five forces competition (Refer Annex 10.).12 Porter’s five forces competition Potential entrants High Competitive rivalry There are many prospective competitors in UK.4. 40 | P a g e . Suppliers Bargaining power of Suppliers Low Bargaining power of Suppliers Competitive rivalry Bargaining power of buyers Buyers Threat of substitutes Bargaining power of buyers High There are several suppliers in the UK market. both local and international.
400 people working in the soft drinks industry. Many consumers consume energy drink as UK plays sport games and gives importance to sports resulting demand for the drink. As there is mixed culture. It represents 3% of those employed in Great Britain‟s food and drink manufacturing sector and 31% of the beverages sector. So there is high rivalry as there is high number of suppliers providing soft drinks to the market. structure and rivalry Factor Conditions There are workers. Demand Conditions Related and Supporting industries Related industries for coconut drink can be: Transport and distribution channels Companies providing coconut drinks within UK Oil industry Government As the consumption of soft drinks in the market is increasing. Chance Firm strategy. due to this consumption level might decrease Increase in the oil price In United Kingdom. efficient and capable workers and those who have potential. There are 11. South East England has the most number of suppliers of soft drinks compared to Wales and Scotland.4. there is possibility of purchasing soft drinks.13 Porters Diamond model of UK Due to the recession resulted a negative impact on economy. As UK consumers consume readymade meals. the country is trying hard to increase this industry by introducing new products to the market. many consumers believe coconut water is a healthy drink also it is marketed as one. who are skilled. Figure 32 Porters Diamond model of UK 41 | P a g e .
50% Current Account -10 GDP per capita (purchasing power parity.10% Imports $408. Italy has been a democratic republic since 1946 and its state is centralized with each prefect of the provinces being appointed by and answerable to the central government. Successfully rebuilding the postwar economy.6 billion Inflation Rate 2. Euro Interest Rate 1. 2009) $1. 2009) $29.0 In-depth analysis of Italy Market 5.48 42 | P a g e .8 trillion Growth Rate 0.3 million Education Literacy 98% Economy Currency . Italy is the 5th highest population density in the Europe.5.9 billion GDP (purchasing power parity. km Southern Europe People Nationality Italian Religions Roman Catholic (majority) Population 60. Italy became a member of NATO and the European Economic Community (later the EU) and as well is a member of the G8 group of leading industrialized companies.225 sq.25% Exports $402.500 Jobless Rate 8. Table 9 General Overview of Italy Country Capital Italian Republic Government Type Republic Location Climate Generally mild Mediterranean Language Roman Catholic (majority) Geography Area 301.60% Exchange Rate 1.1Background Information of Italy Located in the southern part of Europe.
90 in Match 2009.2 Economy of Italy Since the end of World War II. The main driver of the Italian economy is the manufacture of high-quality consumer products.5. The economic growth averaged only 0. Italy‟s economy has drastically changed. the economy is divided into a developed industrial north. welfare dependent and has high rates of unemployment.60 in April 2008 and lowest record was 0. Today. 43 | P a g e . the GDP of Italy expanded 0.0% in 2008 which was largely due to the global economic crisis. the average exchange rate has been 1.10 percent. its impact on the exports and domestic demand and as the Euro Zone and world economies slowed.29 percent. 2011).20 percent and the lowest record of -2. The Euro spot exchange rate indicates how much the EUR is currently worth in terms of the USD. Gross Domestic Product The Gross Domestic Product (GDP) from 1981 until 2010 in Italy had an average quarterly growth of 0. 5.0% in the GDP in 2009. over the previous quarter (Italy GDP Growth Rate. This was mainly as a result of the decline of 1.18 from 1975 to 2011.3 Current exchange rate Italy as a European Union member state of the Euro Area has euro as their official currency The Governing Council of the European Central Bank makes the decisions regarding the interest rates of Italy. The Euro spot exchange rate is quoted and exchanged in the same day whereas the Euro forward rate is quoted today although for delivery and payment on a specific future date (Italy . The agricultural south is less-developed. The highest exchange rate recorded was 1.8% in the period of 20012008 and there was a decrease of 5.36 percent reaching highest in the history in 1983 to 2. dominated by private companies. (2011). In the fourth quarter of 2010.National Statistical Data. which are produced by the medium-sized enterprises. The Italian economy has changed into an industrial state from an agriculturally based economy. In Italy.64 in February 1985Over the last year the Euro exchange rate has been depreciated 3.
4 Consumer Price index The National Consumer Price Index (CPI) for Italy rose by 0.2% in March compared to the previous month and by 2.4 +2.3 101.5 +2.1 +0.8% in comparison to the same month of 2010 (Consumer price indices.2 +2.0 +0. 2011) Consumer price indices of March 2011 Indices Percentage changes on the previous month Percentage changes on the same month of the previous year CPI (base 2010=100) HICP (base 2005=100) National CPI of Food and non-alcoholic beverages division 102. 2011) 5.National Statistical Data. Nevertheless.8 Table 11(Source: Consumer price indices. In addition to this the EU Harmonized Index of Consumer Prices HICP which has been developed to facilitate the comparison of inflation between Member States has increased by 2.4% in March 2011 compared to the previous month and by 2.9 billion in 2008 to $369 billion in 2010.42 Table 10 (Source: Italy .3 +2.Country Euro Area Indicator Exchange Rate Reference Apr/2011 Actual 1.5% in contrast to the same month in 2010.9 113.44 Previous 1.5 Foreign trade Italy‟s global trade volumes largely declined due 2008 recession and the export fell from $546. 2011) 5. The imports of Italy were also 44 | P a g e . the nation‟s economy has been relatively strong and it is ranked 8th place in the world for export volumes.
Through the years there have been many changes in the population trends.affected due to the recession as a result the imports declined from $546. (Refer Annex 11) 45 | P a g e . Italy‟s exports were worth 29828 Million EUR and the imports were worth 33461 Million EUR. Outsiders are discouraged to invest in Italy due to factors like the large role played by the public sector.d).6 million in 2010from 50. As a result. Exports and Imports (n. In 2009. (2010). the government did not put comprehensive efforts to sell Italy to foreigners as a desirable investment destination in terms of portfolio or direct investment. 5. despite of the high levels of emigration. Italy has its closes trade ties with other EU countries. which experienced declining fertility and mortality rates after World War II. In February 2011. cluttered commercial law system.6 Foreign Direct Investment Italy‟s government encourages foreign investment and has made progress in addressing the structural economic disincentives that discourage investment. and greater economic dynamism. the perception of corruption and latent economic nationalism. However. 5. with whom the country conducts around 59% of its total trade (Italy. In the 19th century to the latter half of the 20th century.9 billion in 2008 to $358. Italy‟s overall demographic trends were fairly consistent with those of other advanced western European countries. in 2009 Italy remained as a challenging place for foreigners to invest.7 billion in 2010 (Italy Trade. There was a trade deficit equivalent to 3633 Million EUR reported on February 2011. leaving structural reforms for later on.2 million in 1960. (2011). the population of Italy grew. the Italian government proposed to foreign sovereign wealth funds to invest in shares of Italian parastatals and some banks. innovation. The government‟s economic team has increased its efforts to reduce the global recession‟s effects on households and businesses. In addition to this. in 2009 Italy slightly fell behind in virtually every international NGO ranking in terms of regulatory transparency and ease of doing business Italy-Investment Climate.7 Demographic Trends The population in Italy has grown to 60.National Statistical Data.
beverages. (2011). Total consumer spending however. Main Types of Households: Couples with children 44% Singles 25% Couples without children 20% Single Parents 8% Others 3% Table 12 Source: ISTAT – Italian National Institute of Statistics (2011) House hold Income/ Expenditure pattern of households In 2008 the consumer spending in Italy on food. majority of Italians continue to live in small cities and towns.9% in 2009.3% in 2009 consequently with a positive growth of 2. later marriages. Milan. signifying an outperformance by the food.1 percent between the months July and September in 2010 from 12.8 percent in the previous quarter. this maybe the reason for Italians having smaller families.Figure 33 (Source: (Italy. This may have been as a result of the unchanged disposable income and the increase of 0.National Statistical Data.5%. this may be because Italians are having fewer children and marrying at a much later age. contracted by 1. beverage and tobacco sector. According to Italy‟s national statistics agency Istat the household saving rate of Italy has shown a decline to 12. Combined population of Italy‟s three largest cities Rome. and tobacco contracted by 1. and Naples accounts almost 20% of the Italian population. As unemployment is stable and not declining.8 percent in consumption expenditure of households in comparison 46 | P a g e . Moreover. Living arrangements in Italy Italian population is aging.
The spending power of households between January and September has declined by 1. and uncertainty avoidance shows a high score (Geert Hofstede™ Cultural Dimensions. (2009) Country Power Distance Index (PDI) 50 Individualism (IDV) 76 Masculinity (MAS) 70 Italy Uncertainty Avoidance Index (UAI) 75 Long-Term Orientation (LTO) Table 13 (Source: Geert Hofstede™ Cultural Dimensions.8 Culture of Italy Italy has made quite a contribution in the advancement of world culture and the experts in the country have made large contributions in almost all cultural spheres. which is a high score indicating that the Italian‟s emphasizes on individuality and also masculinity. (2009) 47 | P a g e . 2009). Figure 34 (Source: Geert Hofstede™ Cultural Dimensions.2 percent compared with the same period in 2009 (ISTAT – Italian National Institute of Statistics (2011). indicating that Italy is working to de-emphasize the differences between its citizen‟s power and wealth. 5. According to Geert Hofstede cultural dimensions UK has scored 50 in power distance. The nation scored 76 in terms of individualism.of the previous quarter of 2010.
2004 – 2008 US$ Food and Beverage Market Value (US$ in billions) Food and Beverage Expenditure per Capita (US$) Wine Market Value (US$ in billions) Wine Expenditure per Capita (US$) Table 14 (Source: Italy. which enjoys equal recognition with Italian in the province of Alto-Adige. Many dialects are considered by linguists as separate languages. which is legally recognized in the Alpine region of the Val d'Aosta. 5. is spoken by 600.48 40.39 38. Culture. mainly in the southern part of Italy. Food and beverage market value and expenditure per capita. It accounts for about 12% of GDP also had a total sales value of US$168 billion in 2008. and French.13 2666. Italy‟s food and drinks industry is the country‟s second-largest manufacturing sector.97 2887.Country Brief.44 695. Albanian is spoken by 0.9 710.Language.27 48 | P a g e . German. Customs and Etiquette. one of the dialects.22 2845.84 679.2% of the population.). The other northern minority languages include Ladin.41 41.77 2781. Friulian.5. Also around 50% of population speaks a regional dialect as mother tongue.56 2007 165. (n. Due to the changing lifestyles.30 2719.9 Language of Italy Italian is the official language of Italy.d. where 93% of total populations are native Italian speakers. as too are Croatian and Greek (Italy .97 38. which is 1% of the entire population. Slovene. Italy is still a traditional country when it comes to food and food habits.91 2006 161.69 2005 157. 2004 154. demographics and increasing demand for quality and affordable food prices there has been effect on the type and price of the food and beverage in the market. Most of the value-added manufacturing is concentrated in the northern half of the country.21 711.83 668.83 39.000 people in the north east of Italy.Farmining is remanined as underdeveloped sector in the southern regions. 2010).10 Beverage Market of Italy Italy is the fourth largest food and drinks manufacturer in the European Union.36 2008 168.
12Competition According to a study published by Pianeta Distribuzione and conducted by the Maastricht University.Italy November 2010. although the impact will be felt most keenly in discretionary areas. before growth of less than 1% in 2011 (Food Retailing . Also there has been a growth in acceptance of private label products by Italian consumers. Datamonitor survey showed that around 50% of consumers are now making value based food purchasing choices. 2011). Consumer purchasing power Italians prefer healthy good quality food and are willing to pay for it but at the same time large propotion of the market for low price products.d. As there is an increase in female participation in the workforce it is likely to raise demand for convenience and packaged food as well as eating outside. Economic recovery in Italy is forecast to be slow. The retail sector is forecast to remain flat in 2010.5. Because of the changing lifestyle there has been changes occuring in the food and beverage market (Italy.). with GDP growth of around 1% expected for 2010 and 2011 with only a small increase in growth thereafter.11Consumer Trends Most of the products with potential in the Italian market include organic foods. Most of the consumers prefer healthy convenient products for breakfast. coupled with rising unemployment. 5. cutting expenditure and trying to save some money in case times get tougher. (n.Country Brief. Italians place a lot of importance on the following areas: Price compared to assumed product value Quality 49 | P a g e . Due to the changing food habits and two working parents are increasing the demand for frozen and easy to prepare products. functional foods and low fat food products as consumers prefers healthy foods. when consumers make the purchasing decisions. Austerity measures. are likely to continue to put pressure on consumer spending over the next few years.
while cable and pay TV services are relatively low. Telecom Italia maintains monopoly over local telephone calls (Television and radio in Italy. Price Innovation Product shelf life Product safety Brand image Product labeling Product packaging In order to stay competitive in the Italian retail sector.13 Communication systems Italy is the fifth largest market in the world for both communications services and television. This law formalized the liberalization of the mobile telecoms services by opening the market to new competitors. 2011). in Italy was liberalized by law that Italian government implemented in 1997 in order to comply with the EC directives. stores must offer at least the following: Figure 35 Increase of services/ quality of assistance Price Unique product line Assortment New formats Increase level of food & saftey Increase prcesence of local and regional food products 5.5% of the country's GDP. 50 | P a g e . In the Italy economy telecommunications area accounts only 1. specifically mobile and personal communications. The telecommunications system.
• Radio IOL is dedicated to pop music as is a station called Musix. and an average audience share of about 45 percent. • The new law states that those in charge of managing and providing public communications services. even if it is using internet. • Currently most public telephones are operated using a prepaid calling card (scheda telefonica). • By 1954 it was also the only television network transmitting news and prime time programmers. which publishes the daily newspaper La Repubblica and the weekly L'Espresso magazine Telephones • In Italy most people have cellphone. NZ and South Africa work in Italy while roughly only 50% of phones from the USA and Canada work in Italy. phone or fax. particularly for non EU countries are high. • All cell phones from the UK. Italia Radio is part of the Gruppo Espresso. Fax and Internet • In Italy nearly all the offices enjoy of a fax system. also there are many payphones scattered around the city and public telephones. • There are approximately 80 daily newspapers published based on different areas. • And roaming rates.Telecommunication methods include: TV and Radio • In 1924. need to make photocopies of the passport of every customer coming to use them. Australia. Newspaper • The Italian press is mainly located in Rome and Milan. Figure 36 (Source: Television and radio in Italy (2011) 51 | P a g e . RAI (The national network) began to transmitting and was the only producer of radio news and programmers. the largest of which are La Repubblica and Il Corriere della Sera which publish regional and northern editions. but the cost of faxing from these places is usually fairly high.
So the intensity of competitive rivalry will be very high in the industry. High Substitute The bargaining power of buyers will be high though there are many substitute products which are available in the market and as Italy is a net food importer. there are many substitute products available in the market.14 Porter’s five forces competition High Competitive rivalry Existing companies in the soft drink industry is facing intense competition from domestic and from global brands which leads to increase in promotional cost and falling profit margins. Threat of new entrance Competitive rivalry Bargaining power of buyers Buyers Threat of substitutes Bargaining power of buyers High Bargaining power of suppliers will be low as there are many suppliers in the Italian market who have less power in this market where they are integrated with the companies who are importing beverages to the Italian market. 52 | P a g e Figure 37 Porter’s five forces competition in Italy Refer Annex 2 . There is high competition. there are many substitute products available in the market. So. Suppliers Bargaining power of Suppliers Low Bargaining power of Suppliers Potential entrants High Threat of new entrance Threat of new entrants is high in this market as the people of Italy are becoming more health conscious. The threat to substitute The bargaining power of buyers will be high though there are many substitute products which are available in the market and as Italy is a net food importer.5.
Labor force of Italy was 25.Companies operating in Italy can sell their products to any party in the Italian market Figure 38 Porters Diamond model of Italy 53 | P a g e . clarity.5.Due to the recession soft drinks are having a flat year .Customers are more selective in their purchases by focusing more on primary needs spending very less on premium products -soft drinks have a market share of around 50% .15 Porters Diamond model of Italy .People involved in high technology industry is less . Italian economy has changed from agricultural based economy to an industrial economy - .05million in 2010 . structure and rivalry Factor Conditions Demand Conditions .Demand for private labeled products are increasing Chance Firm strategy.Plastic Related and Supporting industries industry Government -Steel and metal industry -Agriculture -Support from banks -Good transport and distribution channels Any product which is imported to Italy must meet all the Italian and EU food safety and quality standards and also the labeling and packaging regulations .Laws of Italian might go beyond the EU requirements and as Italian‟s regulatory environment is more complex in different instances it lacks the transparency. efficiency and certainty -due to aging population entrepreneurship activity is also declining.
the It is governed by a democratic parliamentary system with its seat of Government in the UK‟s capital. a member state of the EU and the progenitor of the British Commonwealth of Nations. 54 | P a g e . The judiciary is independent of the legislature and the executive. and which is mainly democratic in nature recognizes individual freedom and preaches liberalism in al spheres of human life. Germany ranks middle in corruption among industrialized countries UK The stability of the political system in UK low. the capitals of Northern Ireland. shippers and other trade participants. Italy is strong supporter of the North Atlantic Treaty Organization (NATO). the judiciary system is reliable although it is often slow. London. The UK plays a prominent role in international relations and associations as one of the five permanent members of the United Nations (UN) Security Council. sellers. Due to the revision of the Incoterms 2010. ITALY There is low political risk in Italy. Edinburgh and Cardiff. made enforcement of contracts easy. The Independent judiciary system. Taxation in Italy is quite a complicated affair because there are numerous taxes that each citizen has to pay and the government is improving the situation. Political acts of violence against either foreign or domestic business enterprises are particularly rare.0 PESTLE Analysis of Three Markets Table 15 Political factors GERMANY The political risk is low in Germany and the stable political environment attracts foreign investors. Scotland and Wales respectively. there was a change in the commercial terms used in international and domestic contracts for the sale of goods. but with three devolved national administrations in Belfast. and therefore jurisdictional functions can be performed only by magistrates and judges cannot be dismissed.6. specially the rights and obligations of buyers. It levies no duties on goods from other EU countries and applies common EU customs tariffs (020%) on industrial products imported from third countries and variable levies on agricultural goods.
The inflation rate in Italy was last reported at 2. Unemployment rate: 8.Organization for Economic Cooperation and Development (OECD).) Italy also has a sizable underground economy. primarily in small and medium-sized family-owned firms. where the market is able to govern its own forces within certain limits while it prevents the excessive accumulation of market power.5 percent in March of 2011 The currency exchange currently is 1. some decisions are made by the government on behalf of society. Economical Factors GERMANY The German economy is aligned to the principle of a social market economy. and tax increases. overall. because of the exchange rate.4% (2010 est. The currency of UK is Pound (£).3 per cent in 2010. which by some estimates accounts for as much as 15% of GDP The economic downturn that has touched almost even country in the world has caused problems in Italy as well. currently the exchange rate ITALY Italy's economic strength is in the processing and the manufacturing of goods. UK The inflation rate in United Kingdom was last reported at 4 percent in March of 2011. a housing shortage. and the market is very competitive even for the highest quality products. 55 | P a g e . however. Due to the absorption of the eastern German population and economy resulted in marginal effect on living standards in the regions of the western sector and rise in unemployment. UK has a mixed economy and most decisions are made by the market.) 7. fell by 1.4 per cent between Pricing is always an issue.8% (2009 est. February and March 2011 compared with a rise of 0. A large downward pressure to the change in CPI inflation came from food and nonalcoholic beverages where prices.42 US dollars to 1 Euro.
The concept of consumerism was first applied to users of UK health care in the late 1970s and early 1980s. For the people whose income does not exceed a certain level.1% in the three months to November 2008. savings of up to a fixed amount kept in a bank or savings institution for six or seven years are granted a generous bonus by the government. Job losses among large employers have a significant local effect on spending The Government‟s Family Spending Survey 2007 56 | P a g e ITALY The life in northern Italy is not as big as the life in southern Italy.9%).49940. per capita consumption of ready meals in the UK was nearly 16kg in 2002 Islam was the second most popular religion after Christianity. Italians prefer to do business with people they know and trust . Sikhs. other religions like Hindus. Health and wellness considerations remain important to consumers in Germa UK Lifestyle and demographic trends of UK consumers of consuming ready meals have become very popular. The family is the centre of the social structure and provides a stabilizing influence for its members. There are more Catholic churches per capita in Italy than in any other country. There is emerging market for the health conscious products and services as the population ages and younger consumers are encouraged to consume lighter foods.of UK is 1£. Social factors GERMANY The ratio of young individuals in the overall population of Germany is decreasing while the ratio of elderly people is increasing. Buddhists are there in UK. with more than 1.$0. Every major city has a professional soccer team.5 million Muslims in England and Wales. The north also is more urbanized and has more industries than the south. Italians like a wide amount of sports. an annual increase of 0. Soccer is the most popular sport in Italy. UK Government figures report that unemployment is now increasing (6. Jewish people. The north is a lot richer.
57 | P a g e . companies in the Food and Beverages industry have used e-business mainly to improve their internal processes and procedures. supporting public research and education and sustaining the competitiveness of the business sector.2% of total family expenditure). Technological factors GERMANY Personalized functional foods and Nutrigenomics are two innovative options that Germans‟ beverage market reflects on. UK agro-food production and processing technologies are amongst the most advanced in the world. e-business activity in the Food and Beverages sector is quite low. but especially among young people are using the Web more to research products and services and to keep with brand offerings IITALY Italy‟s science and technology policy aims at improving the effectiveness of the national system of innovation.355 per family on food and nonalcoholic drinks (10. Internet usages has risen in all age groups. except for the large international companies. Compared with other industries. recently. wave and tide power are potentially a vast electricity resource for the UK. UK Off-shore wind.suggests expenditure of £2. but the growing complexity of the sector is pushing companies to adopt more effective solutions as they face new strategic challenges.
from the financial systems. The United Kingdom. as member state of the European Union. Consumer Protection issues are dealt with when complaints are made to the Director-General of Fair Trade ITALY Trademark protection is available for all new names. Corporations do not depend on a certain number of shareholders. designs or symbols that identify a product in market.Legal factors GERMANY The German banking system and the financial services industry are stable and well developed. Profits generated by business premises belonging to a foreign company are also liable to pay trade tax. UK There is the General Product Safety Regulations 2005 in the UK legal system. Foreign enterprises would have to engage in business directly with the domestic customer in German. is bound by the consumer protection directives of the EU. Corporations are more regulated by German Business and Company Law and require more review and information. partnerships or individuals. There are restrictions on transferring personal data outside of the EU. regardless of their nationality or place of residence. Environmental Factors GERMANY UK ITALY 58 | P a g e . and may be formed by one or more persons including corporations. Many forms of debt financing are possible.
Air pollution from industrial emissions and inadequate industrial waste treatment and disposal facilities is main environmental issue in Italy. The Export Market Attractiveness and firm‟s competitiveness have been identified in the next part of the report. 59 | P a g e . food packaging was done in tin cans and cardboard boxes. The analysis‟s results indicated that the most appropriate foreign market that Felivaru can enter is the German market to exports its soft drink.1 Screening for Market Selection After the market analysis was done using various analysis models we have used the market attractiveness grid. steel and aluminum. In the late 19th century. Environmental Protection UK is a UK environmental NonGovernmental Organization (NGO) working in the fields of air quality. 7. It changed in the 20th century to glass. plastic. German consumers are increasingly keen to buy ecofriendly products as the interest in preserving the environment intensifies.0 Market Selection 7. noise and land quality. There is an Environmental Protection Act 1990. paper. firm‟s competitiveness grid in order to identify the most attractive export market for the soft drink of Felivaru.
UK has labour capacity of 81% in the service industry. There are many IT educated people.Firm’s competitiveness in UK ASSESSMENT CRITERIA (1) # MANAGEMENT RELATED Adequate of management resources deployed Span of international contacts/alliance Effectiveness of institutional support MARKET RELATED Sophistication of market intelligence - RATING (2) -0 COMMMENTS + ++ - - - Felivaru deals with fishing contractors in UK - In any economy today organisations are doing lots of research before entering or finding distributors Networks are laid in every industry today Effectiveness of distribution network - - - Appropriateness of pricing approaches Advertising/promotion capability - - - - Advertising will be very costly in UK as pound is the third most strongest currency in the world TECHNOLOGY RELATED Product design/development capabilities - - - - Technologically very capable in any industry. Adequacy of technological investment Customer service/ support capabilities Breadth of product line PRODUCTION RELATED Cost competitiveness of operation Adequacy of scale of operation Consistency of quality control Effectiveness of logistics capabilities Control of key inputs supply Packaging and labeling - - - - - Beverage market is at an average level - 1 1 Have many legislation for quality control - Felivaru has the capacity to supply to its demand Already have regulation regarding packaging and labeling 45 4 Overall Assessment 8 7 21 60 | P a g e .
0 COMMMENTS + ++ - - - - Imports from 2004 to 2008 shows a increase of 46% Predictability of imports Degree of market segmentation Degree of customer concentration - - - - - The import rate of beverages are low - Because imports are increasing it means that customer demand is also increasing All the imports must be accompanied by a Validated catch certificate(s)..UK’s Export Market Attractiveness ASSESSMENT CRITERIA (1) # MARKET CHARACTERISTICS Growth of imports RATING (2) -. Close substitutes like soft drinks and other beverages are entering in the UK market Sensitivity to quality/performance - - - - Availability of close substitutes - - - - - Sensitivity to imports - - - - Have to follow the imports legislation COMPETITIVE CONDITIONS Concentration of domestic industry Concentration of exporters Complexity of distribution system Threat from domestic or foreign new entrants FINANCIAL AND ECONOMICAL CONDITIONS Industry pricing practices Industry payment terms - - - - Exports are decreasing in UK. - - - - - - Currency parity - - - - Imports tariffs and charges - - - - As £ is stronger than Mrf It will be a negative effect when it comes to payment A weaker pound pushes up the price of goods imported into the UK Third country import charges are at 13% Need for concessional financing Foreign exchange conditions Cost of doing business - - - - 61 | P a g e .
- - - - Barriers to entry not elsewhere identified There is low barriers to entry in the beverage market LEGISLATIVE AND SOCIOPOLITICAL CONDITIONS Political stability Trade legislation Consumer or environmental legislation Registration and licensing legislation Cultural affinity Foreign investment legislation Labour legislation and practices - - - - - Since there are many regions in UK. there cultural differences There are labour legislation made by the UK government and it practiced in most of the companies . - Intellectual property protection Overall Assessment 2 5 11 24 6 0 # The most important issues in determining the attractiveness of the market.  Assessment criteria rates from --(very negative) to ++ (very positive) where 1 is very negative and 5 is very positive 62 | P a g e .
so it can be marketed. demand for the market There are conditions while doing the packaging and labeling 4 67 3 Overall Assessment 2 6 7 22 63 | P a g e . investing in new technology Felivaru has a capacity to supply.0 COMMMENTS + ++ There is an growing relationship with Felivaru.. There is average level of support provided by the institutions. There are many legislation for quality control and consumer protection. There are various professional distributors.Firm’s competitiveness in Germany ASSESSMENT CRITERIA (1) # MANAGEMENT RELATED Adequate of management resources deployed Span of international contacts/alliance Effectiveness of institutional support MARKET RELATED Sophistication of market intelligence Effectiveness of distribution network Appropriateness of pricing approaches Advertising/promotion capability TECHNOLOGY RELATED Product design/development capabilities Adequacy of technological investment Customer service/ support capabilities Breadth of product line PRODUCTION RELATED Cost competitiveness of operation Adequacy of scale of operation Consistency of quality control Effectiveness of logistics capabilities Control of key inputs supply Packaging and labeling RATING (2) -. Germany encourages to use the innovative development Germany tends to consider. Lots of sports events are held every day.
Sensitivity to imports COMPETITIVE CONDITIONS Concentration of domestic industry Concentration of exporters Complexity of distribution system Threat from domestic or foreign new entrants FINANCIAL AND ECONOMICAL CONDITIONS Industry pricing practices Industry payment terms Currency parity Imports tariffs and charges Need for concessional financing Foreign exchange conditions Cost of doing business Very few competitors . - - German are getting more health and wellness conscious.Germany’s Export Market Attractiveness ASSESSMENT CRITERIA (1) # MARKET CHARACTERISTICS Growth of imports RATING (2) -..0 COMMMENTS + ++ - - Predictability of imports - - - Degree of market segmentation Degree of customer concentration Sensitivity to quality/performance Availability of close substitutes - - - The beverage market of Germany is expanding. there are lots of imports The beverage market of Germany is growing. so the imports will be more. Germans considers value for money There are very few suppliers and producers in the marker with a similar product. - The distribution channels of Germany are not difficult German beverage market is growing. - No restrictions are imposed on import and export of capital It is moderate The recent change in exchange rate - - - - - 64 | P a g e . The German market is getting more health conscious. - - - .
Barriers to entry not elsewhere identified LEGISLATIVE AND SOCIOPOLITICAL CONDITIONS Political stability Trade legislation Consumer or environmental legislation Registration and licensing legislation Cultural affinity - - Lower barriers to entry - - - The political environment id stable. 5 7 22 5 45 65 | P a g e . - - - - Foreign investment legislation Labour legislation and practices Intellectual property protection Overall Assessment - - - - 6 Due to different religion many cultural behaviors people combined Difficulty is entering the market due to bureaucratic legislations.
Firm’s competitiveness in Italy ASSESSMENT CRITERIA (1) # MANAGEMENT RELATED Adequate of management resources deployed Span of international contacts/alliance Effectiveness of institutional support MARKET RELATED Sophistication of market intelligence RATING (2) -. Deals with less contractors in Italy market - - - Effectiveness of distribution network Appropriateness of pricing approaches Advertising/promotion capability TECHNOLOGY RELATED Product design/development capabilities Adequacy of technological investment Customer service/ support capabilities Breadth of product line PRODUCTION RELATED Cost competitiveness of operation Adequacy of scale of entering to specific operation Consistency of quality control Effectiveness of logistics capabilities Control of key inputs supply Packaging and labeling - - - - - Italy has many advertising medias available to chose from - - 6 1 There is very low technological advancement 4 Italy is unable to have constant quality control among products 5 Italy also has packaging and labeling policy 51 Overall Assessment 6 22 66 | P a g e ..0 COMMMENTS + ++ Many organizations are doing market research before entering to the markets.
Increasing demand leads to increase in customer demanding Customers of Italy are seeking more healthy and quality products There are other soft drinks and beverages available in the market - . As majority are roman so there are 67 | P a g e . - - - - - - - - If euro is stronger than Mrf It will be a negative effect when it comes to payment Currency parity - - - - - A weaker euro pushes up the price of goods imported into the Italy.Export market attractiveness of Italy ASSESSMENT CRITERIA (1) # MARKET CHARACTERISTICS Growth of imports Predictability of imports Degree of market segmentation RATING (2) -..0 COMMMENTS + ++ - - - Number of merchandise are imported As Italy’s women in employment are increasing there are possible market segments. - Degree of customer concentration Sensitivity to quality/performance Availability of close substitutes Sensitivity to imports COMPETITIVE CONDITIONS Concentration of domestic industry Concentration of exporters Complexity of distribution system Threat from domestic or foreign new entrants FINANCIAL AND ECONOMICAL CONDITIONS Industry pricing practices Industry payment terms - - - To some extend goods are exported It is difficult to enter the market for new entrants because of completion. Imports tariffs and charges Need for concessional financing Foreign exchange conditions Cost of doing business Barriers to entry not elsewhere identified LEGISLATIVE AND SOCIOPOLITICAL CONDITIONS Political stability Trade legislation Consumer or environmental legislation Registration and licensing legislation Cultural affinity - - - - - - - - - There is low political stability in Italy.
4 Alternative price Alternative promotion Alternative place / Distribution Alternative product 68 | P a g e .2 Alternative target market and market segmentation 1.4.3 1.3 Alternative positioning strategy 1.1 1.4.1 Alternatives Mode of entries 22.214.171.124 Alternative market entry strategy 1.4 Alternative marketing mix 1.2 1.Section Three ALTERNAIVE STRATEGIES This chapter will cover main areas about: 1.
1. and/or distributing the product offered. Feliavaru can enter into the German market with its new product and come into a marketing alliance with an existing company in Germany. Felivaru can come into a negotiation with the existing company to charge a fixed price for its assistance or may share in a Figure 39 (Marketing Strategic Alliance between Felivaru and Soft drink producer of Germany) Partner 1 Felivaru Partner 2 Soft Drink Producer of Germany R&D FIN MKTG PROD R&D FIN MKTG PROD Marketing Strategic Alliance 69 | P a g e . advertising. This is because the established company will be helping Felivaru (a newcomer in the Germany market) by promoting.1 Alternatives Mode of entries a) Strategic Alliance The first alternative mode of entry that Felivaru would be considering in exporting its new product Kurumba would be strategic alliance with a local soft drink producer in Germany. This marketing alliance will provide the company with the opportunity to share its marketing activities.0 Alternative market entry strategy 1. percentage of Felivaru‟s sales or profits. This will be a favorable alternative mode of entry for Felivaru since by coming into a marketing alliance with a company who already has a presence in the market will be beneficial for the company.
Thus. this will allow Felivaru to focus on the production of the soft drink. The export agent could be given a commission in return of exporting the company‟s product to the foreign market. This method will allow the company to sell the company‟s product (coconut water drink) to a Maldivian company who will be playing the role of an export agent.b) Indirect Exporting The second alternative mode of entry that Felivaru could consider to sell its product to Germany market is through indirect exporting. Figure 40. In the case of Felivaru. while the agent takes the responsibility of exporting the product to the German market. (Indirect Exporting by Felivaru by selling to a domestic company). it can sell the soft drink to a well-established company like MIFCO who is already has experience in exporting to foreign markets. Maldives Indirect Exporting Germany Company A Felivaru Sells to Domestic company Company B Maldivian Company Sells to Foreign Customer Company C Foreign 70 | P a g e . This will enable Felivaru to use the piggybacking method whereby the company can select an experienced exporter to enter the Germany market.
about 27. It is recorded that in 2006 within more than 91. Coconut water is a drink which is naturally fat free and low in calories.1. b) Baby boomers In Germany there is a population of Baby boomers. 71 | P a g e .2 Alternative target market and market segmentation a) Athletes Germany is the leading market for sports drinks in Western Europe as it has been considered as a sports loving country. It is also high in potassium which regulates the blood pressure which prevents form heart diseases. It helps to keep the body cool and at the proper temperature.000 sports clubs in Germany. the government of Germany as offered employment to the baby boomers in order to decrease their unemployment. for their health and fitness. can be a demanding healthier drink among the baby boomers consideration. has more opportunity to demand for a healthier drink. these are people born between 1946 and 1963 who are aged 50 to 65. Germans consider playing and participating in sports as an integral part in their life. Coconut water is an isotonic products which have a mineral salt concentration to the same of the normal body fluids which helps to rehydrate and deliver energy to the working muscles increasing the metabolism within the body. It is a drink which replaces the lost minerals and fluids during the physical activities. It is evident that there is a huge potential market for a product like Kurumba Fani in Germany. During 2006. These people are with higher disposable incomes and they desire to maintain personal health and fitness. according to the DailyMail. Felivaru Kurumba Fani.5 million people were registered as members.com.
4. Figure 41 Alternative positioning strategies in to the German Market 1.1. postioning based on product attributes • Feliveru also can focus on the nuitritional attributes as a key feature of the product in the mind of consumers. Positioning based on users • Although the drink can be featuered as an energy drink. vita coco pricing. more cometitors are entering in the German market. so Feliveru could price the drink as a value product in the market. Felivaru would be considering these positioning strategies. Value pricing strategy •As there is a growing demand for coconut drinks. These strategies would help to position the product positively in the mind of consumers.4 Alternative marketing mix 1. once it is achived they can set a high price for the drinks Figure 42 Alternative pricing policies 1. as consumers take these two factors to differentiate brand types. like zico.3 Alternative positioning strategy While positioning coconut water in the German market. Penetration pricing strategy •Due to the increasing demand and competition . Positioning based on price and quality • Feliveru would be charging low price and providing quality healthy drink for the market. Feliveru could enter by setting artifically a low price to get market share. the drinks users can also be customers who seek for healthy drinks.4.2 Alternative promotion 72 | P a g e .1 Alternative price Competitor pricing strategy •The pricing of Felivaru's coconut water drink could be determained by focusing on the competitors.
1. It is a cheap way to advertise and able to reach target customers.1% has used internet in Germany. Television advertisements Television advertisements can be shown in the most regularly watched channel by sports people in Germans.4. 79. Billboard Advertisement Billboards could be located in main roads with a large amount of passing motors and high traffic. magazines etc. Therefore large amount of peoples will be able to see it. office buildings and stadiums etc. Online advertisement In June 2010. The product can be advertised on local news papers and magazines which are most popular in Germany. In addition to this. Press advertisement Press advertisement is advertising in printed medium like newspapers.3 Alternative place / Distribution 73 | P a g e . Through this we can able to reach more customers. They can obtain the web site link from the advertisements. Moreover advertisement can be descriptive with informational appeal so that buyers can get more information about the product. it can be placed in shopping malls.
74 | P a g e . They don‟t need to spend much on research and for promotion.4 Alternative product Felivaru can introduce single product like Toddy and it will save money and time for them.Restaurants Distributing Kurumba Fani to restaurants and include it in their menus is one of alternative way of selling our products. This would enable to sell Felivaru product direct to its customers.4. In trade fair customers can taste Kurumba Fani and can buy at the same time. Introduction of Toddy becomes more attractive and convenient for a company like Felivaru. Trade Exhibitions Through trade exhibition Felivaru could be able to attract more customers in one place. Figure 43 Alternative pricing policies 1. Because Toddy is also a natural drink and the company can launch it to same market as Kurumba Fani. Felivaru has experience of export their Tin Tuna to EU countries.
2 Promotion 3.3 Mode of entry for heritage 2.5 Competitor Analysis 2.0 MARKETING MIX 3.2 Target Market 2.2 overall strategies 1.1 Prices 3.1 marketing objectives 1.4 Marketing Trends 2.1 Market Segmentation 2.3 Place 3.4 Products 75 | P a g e .0 Market Segmentation and Market Selection 2.6 3.Section Four MARKETING OBJECTIVES AND STRATEGIES This chapter will cover key areas about: 1.3 Market Access 2.0 Marketing objectives and strategies 1.
it is important that the company develop strong marketing objectives for this new product. Following are the marketing objectives that the company will try to achieve through its marketing strategies: To create brand awareness among key distributors of soft drinks in the Germany market and create brand recognition among at least 2% of the target market. Thus. To have a growth rate of 1.1 marketing objectives The marketing objectives of the company have been determined by considering the fact that Felivaru is going to enter a totally new market.2 Overall strategies The company‟s overall strategy will be based on push strategy whereby Felivaru will be setting up their key distributor of the product and convince them to carry the product. Although the company has been exporting its current products to the international market using distributors.0 Marketing objectives and strategies 1. it will involve personnel selling and trade advertising.5% per year for the soft drink Creating value-laden relationship with its key distributors 1. To achieve at least 1.1. Since natural and organic soft drinks are of high demand in the German market we are assuming that there is a demand for such a product. The push strategy will help the company to generate exposure and a retail channel through which Felivaru can sell its product to the end-users. 76 | P a g e . therefore. the export of soft drink (Coconut water drink) will be a totally new experience for them. This will also enable the company to establish its market and later on adopt a pull strategy.5% of the market by the end of year one.
Considering the limited resources of the company and its lack of experience in selling soft drinks it will be most appropriate for the company to choose among a trusted distributor to undertake the product of the company and sell to the foreign market. and they themselves handle the promotions. and the distributor will bring in their own knowledge in the German soft drink market and will be using that know-how to market the product in the foreign market.Push Strategy Promoting the new product to key distributor Orders to Felivaru Figure 44 Overall Strategy for marketing soft drinks in Germany Distributor Promotes to retailers Retailer promotes to consumer Consumer buys from retailer 1. we have decided on using direct exporting methods through the use of foreign distributer (German distributer). The company will gain an advantage by using a distributor in Germany as it will involve less investment.3 Mode of entry for Felivaru After evaluating all the alternatives available for Felivaru. the customer of the Felivaru will be the distributor that the company will be selecting after careful screening of the reliability and potential of the distributor in sustaining the sales of the new product in the foreign market. This will be an added advantage for the company. 77 | P a g e . The company is already using distributors to export its current range of products. or an overseas sales force. Felivaru sells its existing products to these distributors and they develop the market for the products using their own sales force. since the company already has created good relationship with key distributors for its products. Thus. There will be no need for Felivaru to develop an export department.
The company can in future as it gains confidence and experience in exporting the soft drink to German market, the company can then target the end-users of the company in Germany. However, this will take time and that‟s the main reason why we have decided upon exporting the soft drink to Germany through a distributor in that country.
Germany Company C Foreign
Company A Felivaru
Sells Directly to Foreign Customer
Figure 45 Mode of Entry for Felivaru
2.0 Market Segmentation and Market Selection 2.1 Market Segmentation
a) Demographic segmentation The baby boomer is an attractive market for the healthy products, such as coconut water. According to the German Market Analysis report 2010, baby boomers in Germany are the dominant consumer group influencing the market with 27% of population. It also stated that, this generation earns a monthly average of net income of €2,683. During 2006, according to the DailyMail.com, the government of Germany as offered employment to the baby boomers in order to decrease their unemployment rate of the country. Baby boomers are considered as people who are more family-oriented and who have a level of spending power.
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Consumption of healthy products, which are often organic foods and drinks such as, coconut water is mostly the first priority for this market. These people would be consuming products which consists of minerals, vitamins, and those products with ingredients that usually save from heart diseases, the cholesterol level. b) Behavioral Segmentation Berlin has got a huge market for sports industry, where there are lots of sport events occurring every day. Athletes use energy drinks to get an additional boot for a few hours in during their participation in the physical activity. Coconut water is a soft drink which helps the body to rehydrate and provide energy to the functioning muscles. Artificial energy drinks such as Red bull consists of high amount of carbohydrates, which results in dehydration and gastric. However, coconut water is a natural drink which is low in carbohydrates and it maintains the body temperature.
The coconut water is healthy drink which has lots of remedial benefits; hence the most appropriate target markets selected are baby boomers and athletes living in Berlin, the Federal Capital. Berlin is the largest city of this country with a population of about 3 million people. This city was found attractive for the selected target market since, a large population of Germany lives in this city therefore; Felivaru will be able to capture a greater portion of the baby boomers living in the city. In addition, Berlin hosts the most of the sports events held both locally and
internationally, a larger part of the athletes can be reached form this city. The baby boomer population in Germany is estimated to be increased, according to the German Market Analysis report 2010; the number of people over 65 years is predicted to increase from 16 million to 22 million in 2030 and by 2050 with a raise of about 23 million, (Refer Annex13). It was found that the morality rates due to heart disease and cancer has been declining, therefore the life expectancy is higher even for 65 year olds. Due to this within the next decade there will be a generation led by the baby boomer, where it would be dominating the health sector. As this
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target population considers health fitness as an essential factor during their consumption, we believe that this target market is potential market for a product like, Kurumba fani.
There is a large variety of sporting activities carried out in Berlin, where this city has actually been described as a „city of sport‟. It is recorded that form the 3 million population of Berlin, 500, 000 people are involved in one of Berlin‟s more than 2000 clubs (Sports in Berlin 2009). Within this „city of sports‟, everyday there are lots of sports events scheduled.
2.3 Market Access
To enter in the market of Berlin, Felivaru needed to reach the most superior distributor among all within Berlin. After researching some distributors was identified, and among them it was identified D&F Trading GmbH as the most superior distributor through its services. Moreover, D&F Trading GmbH has good relation with Maldives suppliers and wholesalers as they import products to the country, so without much difficulty contract with distributor was made. D&F Trading GmbH is participating in the public fair for fitness, health and nutrition held in Berlin in 2011. So, through this Felivaru would be able provide sample drinks to the consumers. Also most of consumers visiting this fair would be health cautious people, sport players, which are also identified as the target market. And Felivaru would be able to reach them through this fair.
2.4 Marketing Trends
Despite the economic downturn, there is a growing demand for healthier options in the Germany market as the population ages and further the younger consumers are encouraged to consume lighter foods. The growing demand towards the health sector can be for various reasons which influence the choice being made. The consumers of Germany consider value for money while making the consumption along with the consideration given for the health and wellness.
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there is an escalating demand for the soft drink market of the Germany. This might be because the increase in the number of people who considers health and wellness during the consumption.Within Germany regardless of the economic conditions.5 Competitor Analysis Germany is the largest beverage industry in Europe market for soft.6 Product positioning Felivaru will position the coconut water as a nutritious and also as an energy drink in the mind of the Berlin consumers. 2. While health becomes a vital for the newly old. So that both high and low class people can enjoy the taste of the drink. 81 | P a g e . the number of young people who are interested in preventing illness has also shown growth. Cocowell and Kulau 100% coconut. there are very few suppliers and producers coconut water drinks. as the price would not be very high it would be at an average level. These companies are well established and experienced. However in the beverage market of Germany. the demands for products which are health benefited are expected to continue. These products have shown growth in recent years. Over the years. 2. Moreover the taste and the price would be according to the consumer‟s preference. Consumers increasingly consider the importance of maintaining their physical and mental health and this has driven sales of wellness-linked foods such as natural products and organics. Even though organic products experienced a lower growth rate in 2008 due to the downturn. this sector will remain popular as the German population continues consuming more natural options. such as Zico Natural. large companies producing and supplying coconut water products within the country. so that consumers would be getting constant availability of coconut water drinks in the markets. In order to gain market share Felivaru would be providing advance supply before the stock finishes.
82 | P a g e . awareness has to be created through marketing mix. it is very unlikely to be recognized without promotion especially in the international market. In order to be familiar among German consumers promotional activity has to be carried on. in the Germany market.0 Marketing Mix For the acceptance of Felivaru‟s coconut water.Figure 46 Product Positioning 3.
The pricing strategy set by Felivaru is competitive pricing strategy. vita coco. by positioning the coconut water as high nutritious drinks in the mind of the consumers. The freight charge is set based on the weight of the bottle and it is 2. equipment‟s etc. In the maturity stage Felivaru could also use value pricing strategy. Figure 47 Factors considered while calculating price for Felivaru Kurumba Fani 83 | P a g e . The following figure illustrates the factors considered when price was calculated for the product of felivaru „Kurumba Fani. labor. As the demand for the coconut drink is increasing and more German consumers are becoming health concern there is high possibility of purchasing the drinks in the market. coco well etc. In Germany they charge $2 dollar per KG. as Felivaru is placing the price by comparing it to the competitors in the market like zico.5KG in 1 dozen (12 bottles).1 Prices The price of the coconut drinks would be on per bottle. foreign currency fluctuations. Factors such as cost marketing and distribution.3. Moreover Felivaru has their own domestic transportation so it cost less for them.43 per dozen.73 including cost of bottle and labeling. For packing of 1 doze is $03. price of competitors and government policy and taxation would be considered while placing the price. There are some other expenses like raw materials (Kurumba). the estimated cost of expenses was $08.
health and nutrition held in Berlin. The fair is opening in 22nd -24th September 2011. 84 | P a g e .3. As this fair is going to be the second largest marathon event in the world. culture of the target market. their behavior. by providing small samples in the fair to taste would allow the consumers to taste the drink before they purchase the drink (BERLIN VITAL Fall 2011. Berlin vital 2011 is a public fair for fitness. Also through theses fairs consumers would be able to touch and taste the drink.2 Promotion Promotion There are certain factors need to consider before identifying the promotional activity for the product.2011). educational and economy backgrounds was considered before deciding the promotion strategy (Sport in Berlin. 2009).000 consumers are expected to visit this fair. Felivaru is planning to reach the consumers through the trade fairs held in Berlin. So. around 120. Trade fairs in Berlin/ public fair As the drinks are distributed to the distributors. instead of showing advertisements in television. There are around 190 national and international exhibitors participating in this fair and this would attract many consumers to taste Felivaru‟s drink. So there is high chance of capturing and attracting a large market in few days‟ time. which cannot be accomplished in television advertisements. places where most of the target market gather. this is also the month Felivaru is planning to introduce the coconut drink into the market. Issues like competition level.
Prime Doner Factory GmbH. As D&F Trading GmbH has years of experience of the company‟s founders and the variety of corporate business activities. beer.K. drinks are sell to the distributors. and Turkish. As they are dealing with beverages it would be an advantageous to select such a distributor. languages spoken by D&F Trading GmbH include German. all these distributors are within Berlin. the turnover has also increased from 5. The company is also partners with D-FOOD & DRINK e. capital of Germany. D&F Trading GmbH is also part of a globally active company group. so Felivaru would be not facing problems in understanding the language as they understand English. producers and suppliers within the Berlin. DDU=Delivered Duty Unpaid and DDP=Delivered Duty Paid.999 K€ which means there is an increase of 4%compared to previous month.000 K€ .3. Furthermore. Felivaru would be using channel 3 (in the figure below) while distributing the coconut drinks to the market. coffee and tea. Inco terms of D&F Trading GmbH include EXW=Ex Works. The merchandise they deal are cocoa and chocolate.9. D&F Visions GmbH. Moreover.3 Place Felivaru has chosen to sell the coconut drink through a distributor known as D&F Trading GmbH. English. documentary credit etc. Also many Berlin consumers would also believe and trust in the brands provided by a well known distributor like D&F Trading GmbH. but they currently comprise 7 independent subsidiaries within Germany. 85 | P a g e . Through these contacts with all well-known brand name manufacturers. liquors and spirits. and Spirit Getranke Market GmbH Beverages. Felivaru can make the payments through Swiss transfer. Felivaru can assure that their product is in the right distributor. Late Night Shop GmbH. In channel 3 manufacture cannot reach the customers directly. juices. Drinkland GmbH. which is located in Berlin. fruit and vegetable. wines. soft drinks etc. Polish. This is the main reason for the selecting this particular distributor. it has the benefit of having the excellent contacts with almost all leading producers and suppliers throughout the Eurasian region. This is an advantage to Felivaru as D&F Trading GmbH has the opportunity of gaining more market share compared to other distributors.
Coconut water is used as a healthy and nutritious drink also as an energy drink by many sport players.Channel 1 Channel 2 Channel 3 Manufacture Manufacture Manufacture Retailer Consumer Consumer Distributer Consumer Figure 48 Felivaru chooses channel 3 for marketing coconut drinks 3. 86 | P a g e .4 Products Coconut water is known as soft drinks in the beverages category. Product brand Felivaru will be using “Felivaru” as its brand name worldwide. Felivaru‟s coconut water would be modified considering the import and product regulation of Germany.
and the labeling is changed according to the context of Germany as Frisch kokosSaft (Refer Annex 14 and 15) Attributes of the product Figure 49 attributes of the product 87 | P a g e . drinks name is known as Fresh Coconut Juice. Labeling of the plastic bottles are done in Felivaru factory.Packaging and labeling At first coconut water is filled and packed in plastic bottles imported from china. and then these bottles are packed in cardboard boxes. In a dozen of these cardboard boxes there are 12 bottles. Also packing foam is used to hold product in the box.
handmade. Design: packed in a unique plastic bottle compared to Zico. quality packaging. long shelf life. tastes of sweetness. Vita coco (competitors) Brand: Felivaru has kept a brand image in the Maldivian market and is prospective to build brand image internationally Expected product Proving a long shelf life for the drink. natural health benefits. (Dozen in a cardboard box. quality coconuts (as raw material). quality packaging.Core product (Benefits) Contentment of having a nutritious healthy drink Actual product Quality: tasty coconut‟s water from coconut palms Packaging: coconut water packed in plastic bottles and then put into a cardboard box with packing foam. value for money Augmented product Credit facility to distributors Potential product Products related to coconut palm like toddy 88 | P a g e . 12 coconut water bottles) Features: brand. nutrition level high product. sweet taste.
4 Sensitivity Analysis 89 | P a g e .2 Sales forecast 1.0 Financials 1.3 Breakeven analysis 1.1 Price Calculation 1.Section Five ECONOMIC EVALUATION This chapter will cover main areas about: 1.
50 0.48 69. break-even analysis band sensitivity analysis of their business in Germany. Their key financial objective is increasing sales through increasing the number of product sell in German by 15% in 5 years.36 01.1 Price Calculation Costs Table 16 Details Packaging Air Freight Domestic Transport Other expenses Price(RF) Per Bottle 04. 1.73 04.67. They mainly focused on sales forecasts. $1.89 because after three years German government will take tax from imports of Maldives.74 = 03. But the company estimated that there is no change for demand of Kurumba Fani.64 to $1.20 130.10 10.09 Price of 12 bottles will be $ 20.79 05. So price of one bottle will be $ 1.35 ($) 20.78 00.43 Total Costs ($) Markup 20% = 16. 90 | P a g e .79. As a result there will be increase in sales in every year. However in 4th year the company will raise the price of Kurumba Fani.0 Financials Felivaru has maintained and estimated their formal records of the financial activities of the business.08 08.09 and it was RF 309.08 Price ($) For 12 Bottle 03.84 Price (RF) For 12 Bottle 57.1.
89 286.600 bottles and the price will be $1.828 Year 4 131.1.000 50. the company estimated that they can sell 86.000 Sales ($) 200. The following table gives the sales forecast details for three years.328 Year 3 114.2 Sales forecast Felivaru has forecasted their sales for five years after starting to market their product ( Kurumba Fani ) to international market.000 100. In first year.000 150.924 and there was an increase of $21.600 1.64 163. They are expecting to raise demand by 15%. 91 | P a g e .64 per bottle. Moreover there was a constant in next three years also. which leads to lift profit.708 1.267 Annual Forecasted Sales 300.000 0 Year 1 Year 2 Year 3 year 4 year 5 Figure 50 Annual Forecasted Sales There is increasing in forecasted sales in every year with 20% margin.024 Year 2 99.464 1.590 1.304 in second year.928 Year 5 151.64 142. In first year forecasted sales was $142.64 187.89 248. Table 17 Year 1 Unite sold Sale price/unite($) Total sales ($) 86.529 1.000 250.
1.1 4 2 Fixed cost 2 0 1 2 3 4 5 6 7 8 9 10 Units us Figure 51 Break-Even Analysis 1 Based on above diagram.3 Breakeven analysis US$ us 16 Revenue 14 us Cost 12 10 8 6 US$ 3. At this point cost or expenses and revenue are equal and there is no net loss or gain. 92 | P a g e . Felivaru has to sell 2 bottles in month order to break even. illustrate that the break –even point for the Kurumba Fani is $3. Moreover it indicates that $ 3.1.1 will be required in a month to reach the break -even point.
Example: decrease in the value of euro exchange rate will reduce the sales revenue. If Felivaru has to charge a price for coconut. also there are companies within Germany dealing in drinks market due. the product‟s manufacturing cost would increase.4 Sensitivity Analysis In the future. to this consumers have many alternatives to choose from so they might shift to other brands. Increase in the fright charges from the airlines would also increase the price of the drinks and this may affect the sales of Felivaru. As there are many companies in the world exporting soft drinks and other beverages to Germany. so the costs of drinks may be increased.1. there may be an increase in environmental concerns among Germans and this may affect the import of coconut drinks from Felivaru as the drinks are packed in plastic bottles and plastic damages environment. If there is an increase in the oil. If Felivaru faces a raw material constrain (less availability off coconuts). in addition this would have an impact on company‟s future sales and production process. fuel there might be an increase in the transport cost in Germany. 93 | P a g e . as a result they would not be able to meet the customer‟s need and expectation. If there is a currency fluctuation both domestic and international market will affect. A negative effect on economy of Germany may also affect Felivaru as consumers might be spending less on consumer goods.
0 Introduction 1.Section Six IMPLEMENTATION AND CONTROL This chapter will cover main areas about: 1.0 Conclusion 94 | P a g e .1 Implementation Plan 2.
1.0 Introduction 1.1 Implementation Plan Phase Task 2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Checking facilities Market Research Phase 01: Before Launching Country analysis Mode of entry Finding distributor Choosing a distributor Training staffs Phase 02: Launching of the product Launching Advertising Promotional activities Phase 03: Monitoring Monitoring the process Return on investment 95 | P a g e .
Return on investment Overseeing whether the company is able to recover the investment made. Launching Arranging a small launching ceremony in the selected market. selecting the best distributor. by negotiating with the distributor. to the factory workers and for those who are working in the office. Finding distributor Doing research from the internet and listing done various distributors in the selected market. Country analysis Analysis will be done on the potential markets and 3 markets will be selected out of which. magazines. Advertising 96 | P a g e . after doing in depth analysis one market needs to be selected Mode of entry Identifying and selecting various mediums on how to enter the selected market. Choosing a distributor After analyzing the listed distributors. whether the company can produce the product. Promotional Activities Participating in related trade fairs and creating awareness though the Felivaru website.Implementation Plan in details Checking facilities Before starting the implementation the available facilities will be checked. billboards. Training staffs Giving training programs. Advertising by means of brochures. Market Research Market research will be conducted in order to find the potential markets for the product. Monitoring the process Checking whether the objectives and strategies are met and whether the company is able to supply the product to cater the demand for the product in the market.
Depending on the demand of the coconut water. 97 | P a g e . This market was found attractive due to the demographic and social changes occurring in the population which intern contributes to the food and beverage market. such as UK and Italy which is the second largest in the beverage industry. the most appropriate market selected was Germany. the company can introduce more products from their product line either for the same market or for a different market. After doing in-depth analysis for 3 markets.Conclusion and Recommendation The report focuses introducing a local coconut water product from Felivaru to an international market. In order to implement this plan successfully Felivaru needs to restructure their organization accordingly to manage and coordinate this diversification. Moreover. Felivaru can also enhance the target market to different other counties.
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Ltd. http://www.co. Industry Overview./2010%20soft % 20drinks%20report.info/GBP/Redaktion/en/PDF/food-and-beverage-industry-in-germany-_20investin-germany. Industry Overview. (2008). retrieved on 24th April 2011. Retrieved on 24th April 2011.bereich=gbp. from http://www.uk/assets/biscore/international-trade-investment-anddevelopment/docs/u/11-720-uk-trade-performance.sprache=en.The Food & Beverage Industry in Germany-Issue 2010/2011. (2011).php?id=17 UK Investment Climate 2009. from www. Culture. Trade and Investment Analytical PapersTopic 3 of 18.). (2011).gtai. retrieved on 26th April 2011. (2010).pdf The 2010 UK soft drinks report.britishsoftdrinks. from.kwintessential.com/united-kingdom/indicators UK ..Language.pdf The German Food and Beverage Industry – At the Forefront of Health and Wellness.gov. retrieved on 24th April 2011.pdf UK (n.pdf 101 | P a g e .tradingeconomics. from. retrieved on 22nd February 2011.com/fileadmin/user_upload/Downloads/Industries/Food_Beverages/1_En glisch/IndustryOverview_FoodBeverages_June2010_GTAI.abcindous. retrieved on 26th April 2011.com/.com/immigration/country_profile.uk/resources/global-etiquette/UK. from.bis. http://www.National Statistical Data. from http://www. from. Retrieved on 22nd April 2011.. ABC Study Links Pvt. http://www.html UK Trade Performance over the Past Years (2011)..com/europe/uk/invest United Kingdom.german-businessportal. from.eubusiness. (2009). retrieved on 24th April 2011.rwb=true.d.property=pdf. Customs and Etiquette. (2011). http://www. http://www.
Annex 1. The company‟s reputatiion in following these internationally valued standards will be an added advantage in launching of the new product of Felivaru. UK). Pole and line method is one of the sustainable and effective methods for getting the target species.12 . After adding all the cost the final selling price of Kurumba Fani in Maldives is Mrf. including Waitrose. Sainsbury‟s. Campden Laboratory Accreditation Scheme (Campden BRI. India).0 Quality Assurance Felivaru tuna is caught under a method certified as Dolphin friendly by Earth Island Institute. By means of these high standards Felivaru is able to maintain as highly rated in terms of quality among some of the most prominent retailers of UK. Sri Lanka). UK) and ETI base code (BVQI. Maldives). (costing Mrf. Tesco. In this manner the tuna is caught from pristine waters of Maldives exclusively by pole and line method. HACCP (Campden BRI. The company uses its existing plants and machineries to produce the drink and also at present.00.3. ISO 9001:2008 (LRQA. even though the packaging is done in bottles imported from China.0 The New Product “Kurumba Fani” „Kurumba Fani‟ is produced and packed in Felivaru factory. Their sustainability claim is supported under the certification of skipjack tuna (Katsuwonus pelamis) by Marine Stewardship Council (MSC). This is an added advantage for producing the product as the cost of production will be lower. Co-op. they get the coconuts from palm trees in Felivaru. 2. Grade A on BRC Global Standards for Food Safety (SAI Global. Under the standards of EU compliancy (MFDA. UK). the Felivaru factory has been functioning for more than 32 years which is currently running at a processing capacity of 30 MT per day mainly for canning and cooked frozen loins. 102 | P a g e .79 per bottle) and labor costs charged on hourly rate.
(2008). These incentives can come from a range of different instruments which may come from private sources or public incentives programs available to all companies. there are new opportunities for the coconut water. These supports ranges from cash incentives for the reimbursement of direct investment costs to incentives for labor in addition to this. The discovery that coconut water contains more electrolytes and nutrients in its natural from compared to other formulated drinks has flared a frenzy of industrial interest for the coconut water drink.0 The need to go International The increase in the health consciousness and demand for healthier products has raised the consumer appeal for more natural products. Startup companies in countries like Germany. Vita Coco. There is an annual sales growth of coconut water which range from $40 million to $60 million. incentives are given for research and development projects. 4. the sales of coconut water is on the increase at premium prices. US and elsewhere. The German Food and Beverage Industry – At the Forefront of Health and Wellness. in the $19-billion (€12billion) global market for sports recovery drinks.0 Investment Incentives Germany is an attractive place to invest as it offers numerous incentives for all investors regardless of whether they are from Germany or not. Companies like. During 2009 Vita Coco‟s sales has been increased from $4 million in 2007 to $20 million.3. 103 | P a g e . The incentives programs currently in Germany are shown in the diagram below. Furthermore. Pepsi co and Zico who are engaged in the beverage industry has been successfully running their business by achieving a high sales growth. A wide range of business activities during different stages of investment process are being supported by a large selection of designed programs.
(2008). (2011). 104 | P a g e . 4.4.1Types of Incentives in Germany Figure 10 Source: The Food & Beverage Industry in Germany-Issue 2010/2011.2 Incentives Available at Different Stages of the Market Entry Process Table 18 Source: The German Food and Beverage Industry – At the Forefront of Health and Wellness.
it allows overseas investors to access the market. 2008). reaching an export quota of 24. this a very attractive time to ripe in this market since the consumer trends are expected to improve and the excellent reputation of their products promises higher future sales.0 Beverage Market of Germany The exports generated sales of EUR 36. and they tend to always look for a clear organized system and look for clarity in all dealings Greetings German‟s be apt to get offended if you don‟t shake hands. its distribution channels. Efficiency Efficiency is important for Germans. 6. There are more than 1.500 international and national players currently operating in Germany. culture. Table 19 source: Germany – people.6 billion. whereby they tend to address others in business meetings with the surnames alone. shaking hands.82 billion and EUR 16. It was also expected that the sales of enhanced water and 105 | P a g e . In 2007. language: A guide for businesses. About 80 percent of all the exports are to EU member states. and organic beverages. With the increase in health and wellness movement it has led to a rise in demand f or healthier beverages such as vitamin-enriched fruit drinks. The aggressive style of German business is often just a desire for clarity and directness.0 Culture of Germany Some of the business culture and etiquette of Germany Formality We can say that they have a surname culture. The production value for non-alcoholic and alcoholic beverages reached EUR 7.5. the retail prices of food and nonalcoholic beverages raised by an average of 2.6 percent. For them. As the food and beverage industry is fragmented and consolidated. or as “Herr” or “Frau”. and its technological capabilities (The German Food and Beverage Industry – At the Forefront of Health and Wellness. enhanced water. smoothies. (2006).9 billion in 2007. For investors.6 percent. at the beginning and end of a business meeting is de rigeur. Directness The Germans are quite direct in their speech and writing style.
106 | P a g e . The need for convenience: In the German market. 2008). Growing health concerns: Health has become a status symbol for the newly old and also there has been growth in the number of young people who are interested preventing illness. this is a sector that is well established within the marketplace of Germany. 6. organics. however they seek healthier options after this. Consumers are going for new products in the market and have not indicated a major shift in spending habits on food and beverages. Increasing environmental consciousness: There has been increase in the interest of German consumers to preserve the environment and they are increasingly keen to buy eco-friendly products. to enhance their position in the market place. Source: Market Analysis Report (2010). and packaged foods are experiencing growth. ready meals. Those consumers who are price conscious will be more likely to go for products that have private label. As a result of this. and nutraceuticals have been raised. It is therefore important that the packaging and communication is done in the most appropriate manner. sales of foods such as natural products. Innovations in the industry (functional foods/personalized foods): The main players in the market are investing innovation in personalized foods and nutrigenomics.1The factor that affects the choices of consumers for foods and beverages Affordability/Price: Although consumers in Germany purchases food and beverages considering value for money health and wellness remains as the most important factor. Increasingly consumers are recognizing the importance of maintaining their physical and mental health.functional drinks would increase at an annual rate of 15 percent and nine percent respectively within the year 2008 and 2010 (The German Food and Beverage Industry – At the Forefront of Health and Wellness.
Therefore. Therefore in the Germany market Felivaru would be facing some challenges in competing with few rival companies. the suppliers can exert bargaining power over the buyers by threatening to increase the prices or to reduce the quality of the product. 107 | P a g e . While entering the market. Bargaining Power of Suppliers The Bargaining power of suppliers. Considering the experience Kalau has got maintaining the economies of scale and the product differentiation would be a challenge for the new entrants. As a result. Cocowell is also a well established. such as Zico Natural. The Kalau is an experienced company in Germany who has a variety of coconut products. as there are very few producers in the Germany market who provide coconut water the threat of new entrants would be moderate. is a Brazilian company who has distributors in Germany. However. as there are fewer suppliers in the market. Intensity of Rivalry in the Industry Feliveru would be in a moderate level of rivalry in Germany market as there are few but yet experienced and large companies producing and supplying coconut water within the country. Threat of Substitute Products The beverage industry of the Germany is Europe‟s largest market for soft drinks and spirits. there are few players in the beverage industry of the Germany who producers coconut water drinks. There is an increasing demand for the soft drink market in Germany as the population of this country considers health and wellness as an important factor in their consumption.0 Porter’s five forces competition in Germany Threats of New Entrants There are a couple of companies offering similar soft drinks in Germany like Kalau and Cocowell. for the Kurumba fani in Germany would be high. Cocowell and Kulau 100% coconut. including coconut water. the threat of substitute products for Kurumba fani is low. Likewise. However. the company needs to consider some factors like the competition among price and enhancement of product differentiation.7.
As a result of this conflicts and disagreements in the workplace are considered healthy. The individualism score of UK was a high score of 89. On 2009. The UK scored 35 on uncertainity avoidance which is relatively low. and inequalities between people are reasonably low. Felivaru wouldn‟t be facing pressure on factors like. this was somewhat due to the expansion of finance sector along with the increase in total system leverage. 2010).0 Culture of UK According to the cultural dimension of Geert Hofstede in UK the power distance score is 35.0 Economy of UK The economy of UK was hit with the global downturn and financial crisis hard. as the buyers would be facing fewer alternatives among the market. this means that their culture is relatively open to taking risks and dealing with change. In the business environment the individual might be more concerned with promoting themselves rather than the team.Bargaining Power of Buyer In Germany as there are few key producers and suppliers who provides coconut water. indicating that rank. the government figures from the Office for National statistics showed that UK entered recession due to turmoil in the financial market in the final quarter of 2008 which was also accompanied by rising unemployment (United Kingdom. The public finance was affected a lot by trouble in the finance sector and the tax revenue that the government has been earning declined. so the bargaining power of buyers would be lower. In a micro level this means that in an office the relationship between superiors and subordinates are relatively casual. 108 | P a g e . and more services 8. Therefore. demonstrating that British culture values and promotes individuality. The government of the United Kingdom has significantly reduced public ownership and contained the growth of welfare programs. The country scored 66 for masculinity. price reduction. Thus the government has to step down to support the banks. 9. status. higher quality.
and wholesalers for coconut water drinks. it would be very hard to control the UK coconut water industry for Feliveru as there is high rivalry in the industry. bottled water. Threats from New Entrants: 109 | P a g e . so it will be difficult to survive in this competitive market. As these suppliers are providing same products and are not short in supply consumers can switch to any other substitute in the market if they are dissatisfied with the current product. Threat of Substitute Products: The threat of substitute is high as UK‟s soft drink sector comprises carbonated drinks.0 Porter’s five forces competition in UK Intensity of Rivalry in the Industry: For Feliveru there are many prospective competitors in Uk. sports and energy drinks. According to the International B2B Network there are number of distributors. importers. 2010 ). although a certain amount of gender bias still exist below the surface (Hofstede's Intercultural Dimensions. manufacturers. as there are several suppliers in the UK market. juice drinks and smoothies. which can be used as a substitution for coconut water. There will be a range of choices for the customers to select from thus the suppliers would have to be more customer oriented and try to cater for the needs of the customers. Also these competitors have been in the industry for a long time therefore. 10. Bargaining Power of Suppliers: Bargaining power of suppliers of substitute products like soft drinks would be low. both local and international. Lot of similar drinks are import and manufactured in the country itself so there several substitutes available in the market to chose from. diluting drinks (squashes and cordials) also adult soft drinks.referring that the British society and culture endeavor for equality between sexes.
So it could be said that there will be threat of new entrants that the company might face. The main reason in declining in population is due to the birth rate falling faster than the mortality rate. especially Liguria. life expectancy rose during the second half of the 20th century. Basilicata. the birth rate and average family size are higher in the south of Italy than in the north. Also majority of the population belongs between 20 and 49 years old. But it would be difficult as a new entrant to succeed in capturing these consumers who are already fascinated by other products in the market. For the country as a whole. Feliveru should increase the quality and the taste of the product before exporting to the UK market. in certain northern regions. Bargaining Power of Buyers: Due to the high competition in the industry. with the largest age group between 30 and 34 (Italy. Demographic Trends of Italy In general. as there is high bargaining power of buyers. while populations in Molise. there are many existing buyers. and medical standards. sanitary. and Calabria are declining through continued emigration. (2011). Thus. Therefore these buyers will be having high bargaining power over Feliveru‟s coconut water as these consumers have the option of switching to other alternatives available in the market. 11.National Statistical Data. reflecting higher nutritional. The mortality rate is slightly lower in the south than in the north due to the improvement in medical care and younger population.As consumers are using coconut water as an energy drink and there is a lot of potential for of this product thus it would be advantageous to cater for this segment. 110 | P a g e .
However.12. Benedetto Spa and LGR Holding Spa. the soft drink in the Italy market has increased at an annual growth rate of 3. 111 | P a g e . Nestle S. Instead of preferring carbonated soft drinks people may prefer kuru‟baa fani drink fits the EU standard and the price is different compared to other competitor prices and it will be of high quality.4%.A. Bargaining power of buyers The bargaining power of buyers will be high though there are many substitute products which are available in the market and as Italy is a net food importer. Porter’s five forces competition in Italy Threat of new entrants Threat of new entrants is high in this market as the people of Italy are becoming more health conscious and there is demand for soft drinks and energy drinks no matter what the other competitors are offering. the consumers of Italian market are looking for low-priced and high quality products. Changes in price of soft drinks and reduce in the demand for soft drinks due to recession and as people are becoming more health conscious buyers prefer low priced products. Finanziaria S. However.. To be a low-cost and high quality leader in the market Felivaru can effectively use the information about the needs and preferences of the customers to enhance the value of kurumbaa fani drink Threat of substitutes Between the years 2004 to 2009. there are number of competitors in the industry the threat of substitutes will be high. Bargaining power of suppliers Bargaining power of suppliers will be low as there are many suppliers in the Italian market who have less power in this market where they are integrated with the companies who are importing beverages to the Italian market.6%. there are many substitute products available in the market. There are leading companies in the Italian soft drink market including. The bottled water category led the soft drink market accounting for a share of 51.
Projected Acceleration of Population Aging Figure 11 (Source: The Demographics of Aging…(2011) 112 | P a g e . distribution channels and high capital investment.Intensity of competitive rivalry among firms Existing companies in the soft drink industry is facing intense competition from domestic and from global brands which leads to increase in promotional cost and falling profit margins. So. the intensity of competitive rivalry will be very high in the industry. Competition within the distributing channels will be very high as successful companies in the industry have great access to the distribution channels. 13. This is because consumers are looking for real “value” for their money by choosing drinks with better health value. New companies in the industry will find it difficult to compete with these well established brands. Pepsi holding about 21% and Cadbury Schweppes share of 7%. The soft drink industry is dominated by leading companies like coca cola holding a global market share of around 50%.
14. Product Label in German 113 | P a g e .
Product Label in Dhivehi 114 | P a g e .15.
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