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I also sincerely thank to SLM Kandy staff, who rendered their help to complete this report.
2. EXECUTIVE SUMMERY
This report based on the Managing and Global Marketing and this is related of Wijaya Products
pvt ltd has decided to export Pepper Powder to the Russian market.
The first task of this report provides information about the External marketing environment in
Russia. Here, PEST analysis was used to investigate the Russian market. The PEST analysis
mainly focused on the political, economic, social and technological environment in Russia.
SWOT analysis was conducted to investigate the internal and external environment in Wijeya
Products Company. Here, the strengths and weaknesses of the internal environment of Wijaya
Products company and the opportunities and threats posed to the company by the external
environment were investigated.
In the second task, information about three entry strategies are mentioned with the advantages
and the disadvantages of each strategy Out of the three discussed strategies the most suitable
appropriate strategy has been brought out.
3. Table of Contents
1. Acknowledgement
2. Executive Summery
3. Table of Contents
4. Introduction
5. Task 01
5.1 Company Overview
5.2 Products of Wijaya Products
5.3 Company Sales, Market share and Profit
5.4 SWOT Analysis
5.5 Industry Competition of W. products according to Porter’s Five Forces
5.6 New Market to enter – PESTEL Analysis for Russia
5.6.1 Political Environment
5.6.2 Economic Environment
5.6.3 Social Environment
5.6.4 Technological Environment
5.6.5 Environmental Factors
5.6.6 Legal Factors
6. Task 02
6.1 Exports
6.1.1 Direct Export
6.1.2 Indirect Export
6.2 Franchising
6.3 Joint 9Venture
6.4 Advantages & Disadvantages
6.4.1 Exports
6.4.2 Franchising
6.4.3 Joint Venture
7. Task 03
7.1 Market Segmentation
7.2 Target best Customer
7.3 Positioning the Customer
8. Marketing mix
9. Conclusion
10. References
4. INTRODUCTION
Sri Lankan Spices are a brand that has revolutionized the international market as well. Sri
Lankan Spices offered to the international market has created a good image among foreign
customers. Wijaya Pepper powder is the main icon of the Wijaya Products pvt Ltd. Wijaya
Products Ltd launched its flagship brand, Pepper Powder to the market in 1989. Currently, the
Wijaya Pepper Powder brand is also making a revolution in the international market (Anon.,
2020).
By the year 1989, there was a small paddy and chilli processing unit belonged to Kothalawala
family at Thudugala Junction, Dodangoda. In fact, the business was carried out at a very small
scale merely as a social service Mr. Aruna Kotalawala. Being a young undergraduate in the
faculty of science at the University of Colombo at that time. Understood that the business was
running at snail’s pace and decided to convert the same to a commercially viable venture.
Thereafter, the business was expanded step by step introducing various products and new
technology. The new ground spice formulations were introduced to the market and the
distribution network was widened. As a result, the demand for Wijaya Products increased
rapidly as a young entrepreneur, he realized the future market trends for the Wijaya Products
and decided to construct a factory complex incorporating the state of art technology for mass
scale production of high-quality spice mixtures, pasta. pappadam etc. At the moment, more
than 850 employees are working in the various departments of the organization. The secret
behind the successful story of the company is the dedication and commitment of the
Management and the employees at all levels to manufacture highest quality products and
market same at a reasonable pricing.
Vision - Being one of Sri Lanka’s leading manufacturing and marketing company of Spices &
Condiment Products in Sri Lanka, we strive to become a world renowned Manufacture,
Distributor & Exporter in the main items we produce.
Mission - We always believe that we are the business & happy because of our esteemed
customer’s satisfaction through feedback. We are always committed to improving the quality
of our products by introducing the state of the art technology, skilled employees, and
encouraging them to challenge themselves.
5.2 Products of Wijaya Products
Wijaya Products is a premium and unique Spice brand which is available in supermarkets and
local groceries as well. Wijaya Products Spices are unique because the Spices are products
using 100% natural ingredients therefore, they are being used to add tastier to the food.
Currently Wijaya Products has more than 15 varieties of spices which they produce.
5.3 Company sales, market share & profit
It is said that they have met extraordinary level of growth since that they have built up the
organization in 1989 up to now. According to the Retail news | FMCG news | Grocery news
its sales has multiplied every year.
Wijaya Pepper powder has a unique taste in it is add to the cooking, where other competitor
brands are lack on this.
Unlike other companies within the Spices sector, Wijaya is able to fully manufacture all of its
own product, rather than relying on third party brand label producers. This allows the
company to employ cutting edge manufacturing equipment to completely control &
guarantee the highest level of quality.
5.4 SWOT Analysis
SWOT Analysis is a strategic tool that can be used to compare the competitiveness of a business
organization. SWOT can analyze the internal environment as well as the external environment.
It consists of strengths, weaknesses, opportunities and threats.
Strengths Weaknesses
Strong brand name. Increase in production cost.
Quality of the product. High price of the product.
Unique flavor of the product. Self-Contained distribution system.
Skilled employees. Imitators.
Strong Control Over Supply Chain.
In House Production and No Outsourcing.
Efficient Production Management.
Large distribution networks.
Opportunities Threats
Broad market share.
Use of advanced technology. Fierce Competition.
Product diversification. No Collaboration with International
Companies.
Low inflation rates.
Expand of E-Commerce Sector.
More attention to distribution networks.
SWOT Analysis can identify the strengths, weaknesses, opportunities and threats of the Wijaya
Products company. This will enable to develop the strengths and overcome the weaknesses
within the organization. Furthermore, SWOT Analysis helps to make the most of the
opportunities available in the external environment and to successfully deal with potential
threats from the external environment.
5.5 Industry competition of Wijaya products according to Porter’s five
forces
The Five Forces model is widely used to analyze the industry structure of a company as well
as its corporate strategy. The five forces are frequently used to measure competition intensity,
attractiveness, and profitability of an industry or market.
Wijaya products has strategically positioned and focused on pepper product as their main brand
to cater to even to the abroad countries as a main spice exporter while maximizing the Wiyaja
products strong brand identity among the market. Considering about the competitive rivalry
towards Wijaya products is a moderate threat where the brand remains until it sustains by
customer satisfaction. As exporters in spices into abroad countries it has around 3 companies
where it has a competition. They are; Benthota Agri products, Chandan Holdings and Chagrow
holdings.
There are substitutes in the market which grown parallel to Wijaya products.
But as a quality product, Wijaya pepper powder have granted the main attraction among the
consumers in the market. Also Wijaya products is producing spices for the local market by
using the natural spices. It has a good competition towards the spices in today life’s, there are
so many brands who produce spices in the market but as a strong brand name Wijaya products
has the best products for an affordable rate to the customers on their purchase scale. So these
facts prove the threatens of substitutes is low.
Considering the threats from the new entrants to the companies to produce spices to the market,
there are so many entry barriers overcome. So as a main exporter who exports spices into
Russia, Wijaya product doesn’t have a threat on new entrants and Wijaya products still remains
as the best brand image as a Sri Lankan quality pepper powder production company for the
past few years.
Bargaining power of customers - low threat
Customer power reflects to supplier power. It has two aspects such as important
size and attractiveness. First one is the important size and attentiveness of suppliers
and second one is about the differentiation in the resources being supplied. Spices of Wijaya
products has made out its own plantation with high quality and most of all it may remain in the
market with a unique taste. This means the company can make out a vast number of production
because they have its own resources in-house to be made. So the bargaining power of suppliers
will be a low threat.
By clustering these strategies of Porter’s five forces, can grant a new market to increase their
global operations as well as this can make a huge change in revenue for a long lasting market
for Wijaya pepper powder product. This will be a great advantage to categorize these forces
and to figure out the medium of threat to focus on the market to sustain the product in it.
5.6 New Market to enter - PESTEL Analysis for Russia
PESTEL Analysis is a framework that can be used to analyze the macro environment. PESTEL
Analysis use to analyze external environmental factors affecting business, which the business
entity cannot control. Here, PEST analysis analyzes the external environmental factors such as,
Political, Economic, Social and Technological factors that affecting to business entities
(Jurevicius, 2013).
5.6.1 Political
Russia is governed by the Russian president and prime minister. That is, with the approval of
the president, the government of Russia operates under the leadership of the Prime Minister.
From January 2020, the Russian government will not impose tariff on the importation of
personal goods. Currently, the Russian government has tightened the existing rules for imports
based on the COVID – 19 pandemic situations. This situation has become a threat to Spice
export to the Russia.
5.6.2 Economics
According to 2020 Index, Russia’s economy has become the 94th free economy in the world
(Anon., 2020). Over the past few years, Russia’s GDP growth rate has been low and the
unemployment rate has been relatively high. At present, GDP growth rate of Russia is 0.3%.
compared to previous quarters, the GDP growth rate has slowed sightly (Anon., 2020) The
unemployment rate is also slightly higher than in previous months. At present, unemployment
rate of Russia is 6.4%. Inflation rate in Russia has fallen to 3.1% by 2020 (Anon., 2020).
5.6.3 Social
At present, the total population of Russia is approximately 146 million. But it can be seen that
the population of Russia is highly concentrated. About 80% of the total Russian population are
cultural Russians. Currently, the middle class in Russia is growing very swiftly. A large
percentage of the total population of Russia prefers foreign brands. Russian consumer demand
for British brands is very high (Rahman, 2019). Thus, the interest of the Russian people for
foreign products can be seen as an opportunity to export tea to Russia.
5.6.3 Technological
Russia is one of the technological advanced and digitalized country in the world. Russia has
heavily invested for technological innovation and digitalization. With the development of
digital and telemedicine, the Russians were able to gain various advantages, such as ease of
obtaining the advice of qualified specialists and the use of artificial intelligence technology in
clinics. Artificial intelligence is widely used to improve the efficiency of public services in
Russia (Suetin, 2018).
5.6.4 Environmental
Russia is one of the most visited countries in the world. Rich cultural heritage, scenic beauty,
ancient cities, museums, and 23 UNESCO World Heritage Sites are some of the factors that
attract millions of tourists to Russia every year. However, Russia faces some grave
environmental challenges. For instance, damages caused by landfills, water pollution, air
pollution, deforestation, soil erosion, and nuclear waste are to name but a few. According to a
recent survey conducted by Moscow’s Higher School of Economics (HSE), 94% of Russians
are concerned about the country’s environmental challenges (Anon., 2019).
5.6.5 Legal
A weekly work schedule in Russia includes 8 hours per day and 40 hours per week. Employees
are entitled to 28 days of holiday per year. With Russian employment law being very strict
about overtime work, employees are required to make a written request should they intend to
work over time. The most common reason for job termination in Russia is redundancy. In the
event of dismissal during the probation period, the employers must provide the concerned
employees with a three-day notice (Manea, 2019).
6. TASK 02
6. Entry Modes
Entry modes are the direct or indirect tactics used by a company to transfer products
manufactured in the domestic market to the international market. There are many types of entry
modes available a business organization can use to enter the international market. They are
exports, franchising, licensing, joint ventures and contract manufacturing Entry mode is one of
the most influential problem in international market entry strategy. According to Barua (2014)
cited in Sharma & Erramilli (2004) explained entry mode as “Structural plan that tolerates a
firm to implement its product market strategy in a host country either by carrying out only the
marketing operations (e.g. via export modes) or both production and marketing operations
thereby itself or in partnership with others (contractual modes, Joint ventures, wholly owned
operations)”.
6.1 Exports
Export marketing is the practice by which a company sells products or services to a foreign
country. Products are produced or distributed from the company's home country to buyers in
international locations. It can also be divided into two main Direct Export and Indirect Export.
6.1.1 Directly export
The manufacturer firm directly sells to the importer or distributor located in the foreign market.
Major strategies of direct exporting are distributor, piggyback, Broker or Internet
6.1.2 Indirectly export
Here manufacturer only take care of production. Another firm located in the domestic country
takes care of all the exporting activities.
So, based on the above two export mode approaches the direct export is the most suitable export
entry mode strategy for Wijaya Products. Because the Wijaya Products is not in a position to
start a firm and to the indirect export in Russia therefore, Wijaya Products can hire reputed
distributor in Japan and export the popcorns directly to the market.
6.2 Franchising
A special form of license in which a home company makes a total program of operations
available to an overseas Company.
This means the entire system is transferred from one country to another.
This includes sharing of the Brand Name, Logo Products and the entire operations procedure.
The Franchisor is to produce the proposed form of the agreement. The company needs to act
and develop the Franchise contract because the company can make terms for that Some are as
follows,
Understand and protect the brand and other intellectual property
Appropriately structure the franchise
Effective plan
Get the right commercial terms
Prepare the offer and see how this may attract franchises
For Example: KFC, Burger King, Mc Donald’s have given their franchise around the world
Joint venture is not expressly regulated in Russia under any specific legislation, and are
governed by a combination of,
Contract law.
Tax law.
Competition law.
Issues including employment, real estate and intellectual property.
Types of joint ventures in Russia,
1. Limited Liability Company.
2. Non-Public joint Stock Company
Example:
After overwhelming years of success Sony and Ericson announced that they will part ways.
Ericson decided to move away from the joint venture, Sony Ericson which has grown to
become a leader in the mobile industry.
The Ericson took of the stake of the Sony in joint venture Sony Ericson.
6.4.1 Export
Table 1 Advantages & Disadvantages of Export
Advantages Disadvantages
Advantages Disadvantages
Advantages Disadvantage
STP stands for segmentation, targeting, and positioning in marketing. STP Marketing
simplifies the marketing process. It is simple to comprehend and implement in the
workplace.
STP Marketing's primary goal is to attract customers, and not just any customers, but
the appropriate customers that will be interested in our offer. To select viable target
markets, market segmentation is the practice of separating a market into smaller
groups with comparable product needs or recognizable qualities.
Targeting, also known as target market selection, is the proactive decision by a firm of
an appropriate market segment (or segments) to massively aim the firm's marketing
offers and actions towards this group of related people. Positioning, also known as
product positioning, is the perception of a company's major benefits and usefulness by
the target market in comparison to competing product offers.
To divide our clients into groups with similar features and needs, we must employ
market segmentation. This enables us to cost-effectively modify your strategy to meet
the demands of each group, giving us a significant advantage over competitors who
take a "one size fits all" strategy.
There are many different ways to segment target markets. For example, we can use
the following approaches:
- Country
The Wijaya Products Company is a Fast Moving Consumer Good that produce the
best quality spices with a unique taste. It has now grown widely upto a standard to
export it into other countries. In this we are discussing about the geographic
segmentation in Russia to launch the Wijaya Pepper powder.
There are so many importers of Pepper powder in Russia because of the high demand.
The high demand creates according their hotel industry. They use more pepper into
their foods.
- City
Russia as a highly attracted country in tourism, Moscow is the best selected place and
the highly recommended place to visit by tourists. Moscow includes so many hotels to
supply a luxury accommodation to the visitors. As well as Moscow is famous for tasty
foods. When considering about food they all use spices on each of their food. So, out
of them pepper product is the main product that they prefer in their foods.
7.2 Targeting
Target Market
Create a value proposition that clearly explains how our offering will meet this requirement
better than any of our competitors' services, and then develop a marketing campaign that
presents this value proposition in a way that our audience will appreciate. Product Positioning
is the hardest thing out of all as the company needs to position its product to the target market
to make the product their first choice when they are going to purchase a product. A Marketing
Mix Can be used by the company to position its product to the target market. Based on the
above information the positioning of Wijaya Product has been an easy task. Positioning means
clearly differentiate from the competitors and focused around a single, appealing idea.
. Followings are some different ways which Wijaya Products need to position its brand based
on the Marketing Mix which is also the 4p’s.
8. Marketing Mix
Price;
- Price is the cost consumers pay for a product. This must link the price to the products
real perceived value, but they also must consider supply costs, seasonal discounts and
competitor’s prices. In some cases, business may raise the price to give the product the
appearance of being a luxury. Alternatively, they may lower the price so more
consumers can try the product.
- Likewise, Wijaya Pepper powder is comparatively high priced since because of its
unique quality and taste other than the competitors. Here it is priced by looking at the
customer’s taste, price of the substitute products, technology used, currency rate in Russia.
Considering about the grams of Pepper power, suggest to mention three ranges as;
1. Small pack (Sasha pack) – Price: 2.5 dollars – 182. 99 in Russian Ruble
2. Medium pack (Budget pack) – Price: 5 dollars – 365.98 in Russian Ruble
3. Large Pack – 10 dollars – 731 in Russian Ruble
Product;
Product wise Wijaya Products has positioned its brand as a high quality and a fully
natural product. Wijaya Pepper Powder is manufactured using grade 1 pepper seeds
produced in Kandy and Matale Districts to offer the best quality product to our valued
customers in Russia.
Medical Values – Black pepper contains antibolic properties and improve overall
designation by reducing gas, disarrhea, constipation and colic. Pepper helps to fight
tooth decay and provides relief from toothache. Also black pepper is a powerful
antioxidant.
Place;
Placing has been done as the Number 1 pepper spice brand which is made by Sri Lanka.
So this can be placed in Super Markets in Russia because it’s very rare to find small
grocery shops. As we export our Wijaya pepper powder into Russia we need to have a
separate location to store them, so we can purchase a land for a warehouse. It will be
easier to build a warehouse near a
main airport in Russia so it can easy
to transport the pepper powder stock
into super markets. When placing
our product in Russian super
markets we need to select the best
stall in the super market where it
grabs the customers first attraction
when they enter to the store, so we
have included a price for that in our
budgets. If there is any exhibition or a food fest we can place a stall in it as well
Promotion;
Promotion is done through magazines, sign boards, billboards where most of them are
below the line activities
Wijaya Pepper powder adopts various advertising and promotional strategies to create an
increased demand in the market by associating with life style, gender and behavior and mainly
targeting value based advertising. Wijaya products is highly based on Television promotions.
When we are considering about the promotions all the promotions have to be clearly focused
on one common goal of making the product aware to the target audience of the promotions.
Following strategies could be used to make the promotions active and well-focused on the
Wijaya pepper product which we export and to launch it on Russian market.
By performing report, it can be concluded that Wijaya Products is a Spice brand which is still
only depend in the Sri Lankan market. but, the Spice market in Russia were big there are lot of
competitive brands available in the market against Wijaya Products also the Pestle environment
of Russia can either impact positively or negatively to the Wijaya Products and as well as all
strengths, weaknesses, opportunities and threats can moderately impact on Wijaya Products.
By the way brand awareness, perceived quality, corporate image, sales volume and profitability
are the key objectives for Wijaya Products to success in future and also the target group of
Wijaya Product need to be between the 20-50 age group and taste, quality and nutrition are the
benefits these targeted group going to buy from Wijaya Products.
Also the entry mode strategy conclude that as a first time exporter direct importing is the best
option for Wijaya Products to enter into the Russian market and finally the marketing mix
strategy conclude that the Wijaya Products Pepper powder pack of 100g pack is the suitable
product for Russian market and that might be sell in the market using a premium range of price
where product should need to distribute only for selective places and by using Tv-commercial,
social media, billboards, flex banners, company blog, etc.… will help to promote the Wijaya
Pepper Powder Product in Russia .
10. REFERENCES
Roy, E., 2017. Direct or indirect exporting: which is the best fit for your business?. [Online]
Available at: http://www.tradeready.ca/2017/topics/market-entry-strategies/direct-indirect-
exporting-best-fit-business/
[Accessed 08 11 2020].