Tropexo Ifruitrop International Marketing Plan - Focus on Tropexo

18/05/2009

TROPEXO IFRUITROP INTERNATIONAL MARKETING PLAN. FOCUS ON TROPEXO [NEW BRANCH IN UK] THE DOCUMENT TITLE]

Table of Contents

1. Introduction. 3

2. Market Choice. 4

3. Objectives. 5

4. Environment. 6

5. SWOT Analysis. 9

6. Consumer target: Segmentation and positioning. 10

7. The market and competitors. 10

8. Market Entry Strategy. 11

9. The product. 14

10. The Price. 16

11. Channel of distribution. 17

12. Promotion. 17

13. Implementation / Future 18

14. References: 19

Additional reading: 20

15. Appendix. 21

1. Introduction.

For the last several decades, Ifruitrop, based in Ivory Coast, has been a producer and exporter of tropical fruits. Using the effect of globalisation of taste and evolution of technologies, it exported its products in European and Middle Eastern markets. Until now it used an indirect channel of export, e.g. a middle man in foreign countries. However, it recently decided to internationalise through new channels.

The stimulus to change the company's strategy came from its CEO, who has found new opportunities in the European market. In addition, the home market is saturated and the company is reaching excess capacity, which cannot be sold through usual export channels nor on the home market.

To assess whether or not they should "stay at home", Solberg's (1997) arguments are judged and applied to the company. (Figure 1)

Figure 1: The nine strategic windows. Source : Hollensen, S. (2007) Global marketing. 4th ed. England: Pearson Education Limited.p6

According to Solberg's (1997) explanation of "industry globalism", it has been agreed that the industry in which Ifruitrop competes is potentially global. It is more difficult to judge the company on the level of preparation for internationalisation. Even if the company cannot be considered "immature" (i.e. previous international experiences), it cannot be considered as a full "adolescent" yet. This places the company between windows 4 and 5, and both windows consider internationalisation as a good opportunity.

Although the firm is willing to take risks, it is well aware of commercial and political danger that might arise. After assessing future sales against potential risks, the firm decided to go abroad.

2. Market Choice.

Due to exchange rate fluctuation, a country with a stable currency is preferred. Today, the most stable currencies are the English Pound and the Euro. As a result, countries outside the Euro area are avoided.

In order to save costs, and be able to compete on price, most products will be shipped. Consequently, countries non-coastal countries are avoided, as well as countries with a relatively small market (i.e. small populations) or ones in Eastern Europe (i.e. already served by Asian exporters).

In addition, according to recent market research conducted by Euromonitor International survey, Mediterranean populations prefer traditional or Mediterranean food. Ingredients of these types are produced in southern Europe.

In accordance with the same report, even if Germany has the largest proportion of foreigners (9% of the population), the majority of these come from Turkey, Greece, Italy or Asia. In addition, Germans generally prefer Mediterranean cuisine or regional cuisine and are price sensitive. This makes the company unable to compete in this market, because first is no real demand for exotic products, and the company is unable to compete at a price level.

Although the Finnish market has potential, the local agriculture is heavily supported by the government. In addition, Finns prefer processed food rather than fresh food. Finns consume 267 Kg of fresh food per capita per year, while the French consume 421 Kg and English 361 Kg.

This leaves the choice between the English or French markets. To identify which one provides the "best opportunity", a market attractiveness/competitive strength matrix has been applied (figure2).

Figure 2: The market attractiveness/competitive strengh matrix. Source: adapted from Hollensen, S. (2007) Global marketing. 4th ed. England: Pearson Education Limited.pp. 252

As revealed by the matrix, the British market is the primary market. The company has a higher competitive strength in the UK. In France, the market is dominated by the Companie Fruitiere, and France has a strong link with its overseas territories, which provide most of the exotic fruits and vegetables at a price at which the company is not able to compete.

The different challenges faced by companies expanding abroad are, first, to be prepared for the risk. They have to overcome language barriers and learn how to efficiently deal with exchange-rate contracts. Moreover, they should be aware of delivery time when ordering from overseas. Shipped goods require customs clearance, adding more time to delivery. Cultural differences can be difficult to deal with, and management of local employees can add difficulties. However, taking risks can pay off.

This strategy is for a time period of a minimum of three years. It will take the company some months to install their office in London and start trading; and it will take at least two years to penetrate the market.

3. Objectives.

Although their primary mission is to increase profits and achieve a better economy of scale by exporting their products through a new branch in the chosen market, their current business activities remain.

The company plans to enter new foreign market segments, which are more and more aware of the importance of healthy eating and ethnic foods, with exotic fruits and vegetables available year-round at competitive prices and the highest quality possible. In addition, a costumer care service will be initiated in order to differentiate the company from competitors.

Nevertheless, the branch will never grow into providing