Business Strategy of New Zealand Market for Funk Cider - Sample

Question: Discuss about the Business Strategy of New Zealand Market for Funk Cider. Answer: Introduction In this competitive business market, business organisations emphasise on expanding their business in host countries to gain competitive advantage and for sustaining their position. Funk Cider, a cider company is aiming towards expanding their business in New Zealand. The ciders manufactured by Funk Ciders are non-pasteurised, no preservatives and contains less sugar ("Funk Cider - Cider Australia", 2017). According to market research, it has been seen that the target New Zealand market prefers ciders as it is much healthier compared to alcopops. Based on the present market requirement, this will help Funk Cider to grab a foothold in the beverage industry. This assignment highlights and discusses all the essential features of launching a new product in the host country. Business Strategy Business strategy will provide an opportunity for Funk Cider to evaluate various aspects of the host country before launching the new product. Product Positioning According to Lei Moon (2015), the positioning of the product is significant as this helps the company in defining their product in the customers eye. Therefore, the companies emphasise on creating an identity or image of their product according to the demand and expectation of the targeted customers. In this competitive market, it is important for the companies to position their product appropriately in the mind of the targeted customers. Moreover, this provides an opportunity for the business organisation to to influence the perception of the market about the product. Appropriate product positioning will provide an opportunity for Funk Cider to differentiate their product from the market followed by identifying the targeted customers and articulating the main attributes of the product. Funk Cider can use the benefit of their product in order to differentiate it from the existing competitors and position their product in the mind of the potential customers effectively. In products of Funk Ciders are non-pasteurised, contain less sugar content and lacks preservatives. Instead, the products are manufactured with heritage and unique yeasts, fruit infusions, barrel ageing and ferments. Therefore, the products of funk Ciders are much healthier compared to the existing products in the beverage industry. Report suggests that customers of New Zealand are looking for healthier alternatives rather than alcohols. Therefore, Funk Cider can use the benefits and properties of the products to position their product in the eye of the potential customers. Moreover, the price and quality of the products of Funk Cider can also be used to place the product distinctively for the targeted customers. Pricing Strategy As commented by Baker (2014), pricing strategy is one of significant component of the marketing mix that provides an opportunity for the business organisation decide a particular range of price for the product. This helps them in achieving the desired profit by increasing their sales in the end. According to the unique marketing objectives and goals, companies use distinctive pricing strategies. Premium pricing, penetration pricing, economy pricing and price skimming are some of the pricing strategies used by the companies in accordance to their marketing goals (Li, Xu Li, 2013). Based on the marketing goals of Funk Cider, penetration-pricing strategy is best suited. According to the penetration pricing strategy, Funk Cider will be able to set the initial price of the cider comparatively low. As this is new product, initial low price of the product will help in attracting the target customers initially word of mouth. However, penetration-pricing strategy works on the expectation that customers will change to the new product due to comparatively lower price. Therefore, Funk Cider will be able to create large customer base due to price along with the healthy properties of the product. Moreover, this pricing strategy will provide an added advantage over the competitors, as they will not be able to set low price for their products thereby, eliminating the competitors. On the contrary, Funk Cider may encounter challenges in terms of sacrificing their profit at the initial stage. Therefore, if Funk Cider is unable to create enough customer bases, the sales and prof it of the company will be compromised in the end. Distribution and Logistics A product is launched to the market and reaches the targeted customers through a series of distribution channel and appropriate logistics management. As asserted by Rushton, Croucher Baker (2014), the intermediaries and channels allows the product to reach the targeted customers is defined as distribution. In accordance to the marketing objectives and goals, companies select the appropriate distribution channel. On the other hand, logistics provides opportunities for companies to manage the functions of the supply chain including outbound and inbound transportation, warehousing, and handling of materials and fulfilment of the orders. Logistics will help Funk Cider in managing their overall business operation effectively by implementing levels of planning and execution. Moreover, logistics will help in fulfilling the sourcing, procurement, production, planning, resource handling, scheduling, packaging and assembling thereby, delivering to the potential customers. An effective logistics management for Funk Cider will make the manufacturing and assembling of the much faster thereby, fulfilling the demand of the customers. Therefore, the products of Funk Ciders will be readily available in the market for the customers. Moreover, effective logistics management will help Funk Cider in removing the unnecessary steps in the supply chain making the operation and execution much faster. Furthermore, Funk Cider can reduce the use of financial resources to achieve the desired results. According to Babin Zikmund (2015), distribution channel provides a pathway for the finished product to reach the targeted customers. According to the type of business type of Funk Cider, direct distribution channel will be most effective. This will allow Funk Cider to manufacture the product and directly sell to the customers. This will cut the intermediate costs for Funk Cider thereby, getting the entire profit. Promotion and Advertising Promotion and advertising are the key factors of the marketing mix that helps in communicating the product of the company to the targeted customers and increase the sales. According to Eastman, Ferguson Klein (2012), promotion is defined as the two ways communication process that allows the company to communicate their product with the potential customers. On the contrary, advertising is defined as the strategy of increasing the sales of the product. Both promotion and advertising needs selected and conducted appropriately, as these determines the success of the company and the product. Appropriate advertising will help Funk Cider to create awareness and desire about their product among the customers thereby, increasing the sales. Among the various types of advertising strategies such as repetition, claims, association, bandwagon and promotion, promotion is the best-suited option for Funk Cider as the customers will be able to interact physically with the product before purchasing. Among the various promotional strategies, free trails in crowded places, buy more save more, coupon giveaway will help Funk Cider in communicating their product with the potential customers. As the product of Funk Cider is new to the market, free trails to the customers will help in spreading awareness about the product and communication with the potential customers will be easier. Moreover, Funk Cider can also give away coupons about the products to the customers in the marketplace thereby, raising interest about the product among the customers. Additionally, physical presence while dist ributing the coupons or providing free trails will provide an opportunity for the employees of the company to interact personally with the customers. This will create deeper impact on the mind of the customers as they can target the psychology of the customers who are looking of healthier alternatives in terms of beverages. Estimated Sales Mix According to Ingram et al., (2012), the sales mix is defined as the variety of products that is sold by the company. A company sells variety of products of a particular type for the customers. For example, a retailer might have five $600 products, three $1200 products and two $6000 products. This is considered as the sales mix of the retailer. According the price range of the products, the company requires less investment in $600 products. As a result, the amount of profit will be relatively small on these products. However, $6000 products require high investment thereby, returning higher profit on the sales. Therefore, the sales mix will be determined based on the price of the products and the current sales. Evaluation of the sales mix of Funk Cider will provide an opportunity to determine the estimated sales of the product. This is because the sales mix of Funk Cider influences the breakeven point and analysis of the cost volume profit. Funk Cider might sale ciders of different flavours among which the sales of some flavours will be sold more compared to the others. Estimating the sales mix will provide an opportunity for Funk cider to determine which of the product is more profitable compared o the others. Therefore, managing the sales mix effectively will help Funk Cider to maximise the profit of the company. Production Strategies The broad and long-term plan of action for the companies highlights the production strategies. As commented by Johnsson (2013), production strategies provide an idea of the actions or plans that the production department of a company needs to undertake in order to accomplish the organisational aim and objectives. Therefore, production strategies provide a pathway or guidance for the production department of the company. The top management decides the organisational objectives thereby, deciding and implementing the production strategies for long-term achievement. Implementing appropriate production strategies will provide opportunities for Funk Cider to decide the investment plan required the production, followed by verifying the technology to be used for production and evaluating the business strategies, competition priorities and competition advantages. Production strategy will help Funk Cider to analyse the products of the fellow competitors thereby, making their product unique and stand out. This will create a unique identity of the product in the eyes of the targeted customers. Moreover, this will also allow Funk Cider to segment the market that will make it easier to emphasise and target the potential customers. As Funk Cider is new in the host country, production strategy will also help in setting a comparatively low price for the product. Evaluating the competition priorities of the production strategy will enable funk cider to determine the quality, price, delivery, product mix, and service and eco-friendly product of the fellow comp etitors thereby, gaining competitive advantage. Management Considerations Launching of a new product in the host is considered a tough job as it includes different aspects in terms of in-depth research of the host country and the working environment, scheduling, focus, testing and positioning as these determines the success of the product (Hollensen, 2015). Therefore, Funk Cider needs to take into account factors of sales force as the management consideration for the launch of their products. Personnel Sales Force Factors The main factors that Funk Cider needs to take into account as a part of their management considerations are stated as follows: The organisation and the staffs need to have full knowledge of the product. This will provide an opportunity for Funk Cider to answer any queries regarding the product confidently thereby, engaging the attention of potential customers by effectively communicating the product. Knowledge about the customers are also important as this will provide an opportunity for Funk Cider to implement specific marketing and promotional strategies, business strategies according to expectations and demands of the potential customers. The personnel employed by Funk Cider to selling the product needs to well aware of the area as this will act as added advantage. The personnel need to have strong personality and positive attitude towards the customers. This will help in engaging and attracting the customers. Conclusion In this assignment, it can be concluded that the various business strategies and management considerations are discussed that needs to be evaluated while launching a new product in a host country. Research has showed that people of New Zealand are looking for healthier drinking alternatives. Funk Cider is a beverage company manufacturing healthier products therefore, wants to expand their business in New Zealand for fulfilling the demand of the customers. Funk Cider used the beneficial properties of their product to attract the customer along with keeping penetration pricing strategy, as it is new to the host market. Effective management of distribution and logistics will decrease the use of financial resources and achieve results efficiently. Free trails of the samples and coupons are used as advertising and promotional strategy. Personnel sales factors need to be considered for the success of the launch for Funk Cider. References Babin, B. J., Zikmund, W. G. (2015). Exploring marketing research. Cengage Learning. Baker, M. J. (2014). Marketing strategy and management. Palgrave Macmillan. Eastman, S. T., Ferguson, D. A., Klein, R. (Eds.). (2012). 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