Essay on "L Marketing Tassal Is a Tasmanian Company"

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[EXCERPT] . . . .

l Marketing

Tassal is a Tasmanian company engaged in the farming of Atlantic salmon and the subsequent production of frozen salmon entrees. The firm is increasing production and looking to expand overseas in order to increase its sales. Tassal has targeted the Hong Kong market, both for its sophistication and acceptance of ready meals, and as a gateway for future expansion into the Chinese market.

The Hong Kong market for ready meals is growing in most segments. At the low end are Chinese producers; at the higher end are international producers. The economic situation is not good in Hong Kong at present, but the market is still growing despite this. There are few barriers other than intense competition to the Hong Kong market. The best demographic on which to focus is the approximately 1 million wealthy Hong Kongers, the vast majority of whom are Chinese. This market is familiar with Western food because of its colonial past and the international nature of modern Hong Kong.

Tassal should enter the market via exporting. This allows it better access to distribution, and involves on low sunk costs. To reach this market, distribution is important -- Tassal's meals must be sold in the higher end shops where the target market buys its prepared food. In Hong Kong's advertising-dense market, the best for Tassal to be noticed is through point-of-purchase displays and promotions. It is important for the marketing to be placed in such a way that when the consumer forms the intent to purchase, they are able to do so immediately. The message should focus on the healthful benefits of the product and the clean, unpolluted image of Tasmania. If the Hong Kong entry is a

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success, long-term growth can be facilitated by forming a joint venture with a local firm to process and freeze the salmon that are sent up from Tasmania. This would give Tassal increased capacity and allow them to expand into the rest of greater China.

2. Introduction

Overseas expansion is a risky undertaking at the best of times. Even when foreign markets seem similar to the domestic market, the differences can be surprising. This case examines the possibility of Tasmanian salmon meal maker Tassal expanding into Asia. The beachhead for this move is to be Hong Kong. The city-state was chosen for a number of reasons, including a high ex-pat population, its familiarity with Western cuisine, the market's transparency and the wealth of the city relative to most other Asian markets. Tassal believes that lessons learned in Hong Kong can help to prepare them for a broader launch into the rapidly growing and increasingly sophisticated mainland China market.

3. Description of Brand

Tassal, so-named for its primary business of "Tasmania Salmon" was founded in 1986 as an aquaculture firm dedicated to farming Atlantic salmon raised with eggs imported from Nova Scotia. The firm's sole product is salmon, which it markets in a wide range of frozen meal preparations. These include both smoked salmon and a number of different marinated preparations. Over the past two decades, Tassal has grown its presence in the Australian market. The firm has done so by tying the Tassal brand to salmon consumption, encouraging consumers to equate salmon consumption with Tassal consumption. The firm is focusing its future growth on increasing its capacity and building the market for salmon products.

3. External Environment

The current economic environment is relatively unfavorable for expansion into Hong Kong in light of the global economic downturn. As with most developed economies, Hong Kong has suffered as a result of the downturn, and the government was forced into massive stimulus measures in order to stabilize the situation. The overall economic picture, however, is better in the medium-term. The government of Hong Kong predicts an average medium-term growth rate of 3.5%, inclusive of the near-term weakness (Government of Hong Kong, 2009). Inflation is expected to stabilize at 2% increase per annum of the consumer price index.

What makes Hong Kong such a compelling story in terms of its economic situation is that it is an ideal economy in which to test the Asian waters for Tassal. It is one of only a handful of first-world Asian countries, is one of the world's freest economies (Taipan Publishing Group, 2009) and it has strong trade links with Australia. The currency is stable and liquid, being the 9th most traded currency in the world (Taipan Publishing Group, 2009).

Hong Kongers are wealthy and has substantial disposable income. In addition, the city is uniquely positioned with close trade links to major south Chinese economic powerhouse cities such as Shenzhen and Guangzhou. Having a presence in Hong Kong gives Tassal a good springboard into the burgeoning Chinese economy.

There are few political or legal obstacles to expansion into Hong Kong. The Hong Kong market is open, in particular with regards to food in general and seafood in particular, owing to the city-state's lack of food self-sufficiency (CIA World Factbook, 2009). Hong Kong is a stable nation, with a limited democracy. It is little impacted by the volatility associated with the Chinese economy, as it runs on a completely different legal and political system to its mother nation.

The main risk within the legal/political environment is the use of "safety" concerns as a trade barrier. In 2007, some Australian seafood shipments were turned back by China (Wall Street Journal, 2007). This did not affect Hong Kong, but with other agricultural products facing similar barriers it is a risk that Tassal should consider. The frozen nature of the products and the strict quality control afforded by Tassal's aquaculture model give the firm the ability to mitigate this risk.

The cultural/social environment of Hong Kong is exceptionally favorable for Tassal for a number of reasons. Hong Kongers are known for their love of food and the city-state is considered one of the world food capitals. While salmon is not considered to be traditional Cantonese fare, Hong Kongers have considerable culinary influence from the days of British rule and from the large expatriate community. As a result, Hong Kongers are open to trying new types of foods and are relatively familiar with the Western diet. This is evidenced by the high-profile presence and popularity of Western-style luxury grocers such as CitySuper in the city-state.

There are few geographic issues with the Hong Kong market. The city is small and one of the most-density populated places on earth. The process of shipping from Tasmania to Hong Kong is straightforward. Hong Kong is home to one of Asia's largest and most important ports, due to a combination of natural gifts and the rapid increase in the export of Chinese goods (Hong Kong Port Development, 2009). The journey from Australia is relatively short compared to other major developed markets, again making Hong Kong a natural choice.

Technology has little impact on the ready-meal business, in particular with respect to frozen fish meals. The main technological concerns for Tassal are with respect to developing safer and more efficient fish farms. This is, however, a domestic issue, largely unrelated to expansion overseas.

Salmon is a rich fish, but unlike in Western countries, there is no move in Hong Kong towards "healthy" lifestyle choices, save in the ex-pat communities. Hong Kongers are fans of conspicuous consumption, including with respect to food. That said, there is some indication that nutrient value is an important factor in purchasing decisions (Market Research Centre, 2006). The city dwellers have always led hectic lives, which provides a strong market for convenience foods. Frozen, ready-made meals have increased in prominence on the Hong Kong food scene in recent years. However, the bulk of these increased sales has come from firms in mainland China, who are leveraging their ready access to the Hong Kong market to gain share and build the industry there.

5. Competitor Analysis

The Hong Kong market for imported seafood and agri-food market in Hong Kong was worth 12.5% in 2005. The population growth rate in Hong Kong is just 1.2%. Sales of packaged food and beverages accounted for $5.6 billion in 2005 and was been expected to grow at 4.3% annually (Market Research Centre, 2006). This indicates that the packaged food industry is growing more quickly than the population, hinting at the market growing as a result of shifts in consumer tastes more than through organic population growth.

Chinese firms dominate the Hong Kong seafood market. China controls 90% of the freshwater fish market. Suppliers of all imported seafood, including saltwater species, are more fragmented. Chinese firms hold a 23.7% share, American firms have an 11.3% share, and Japan has a 5.1% share, the same as Australia and Brazil. With packaged foods, the market is heavily fragmented. The market leader, with over 1000 products, is the domestic firm The Garden Co, which holds just a 4.5% share of the market (Market Research Centre, 2006).

The frozen ready-meal market is dominated by Unilever. The company holds a 52% market share for its Knorr, Bertolli and Lipton brands.… READ MORE

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Quoted Instructions for "L Marketing Tassal Is a Tasmanian Company" Assignment:

“

********Requested *****: *************

********Requested *****: *************

********Requested *****: *************

********Requested *****: *************

Subject: International Marketing

Words: 3500

References: Use some quality Peer-Review articles, and other resources.

Please write in the format as listed down the bottom (list 1 to 8 such as executive summary, intro, description, external environmental...etc) see below

Background:

You are the newly appointed International Marketing Manager for a small to medium-sized manufacturing company that has been successful in its local market. The company enjoys a significant market presence in its current local market, is well structured and positioned, and is expected to maintain its market status in the local market for the foreseeable future.

You are required to investigate the possibility of expanding into an overseas consumer OR business-to-business market with a view to long-term growth, and where the company has currently NO market presence. In this report you will investigate and an***** opportunities that exist in a SINGLE overseas market for a SINGLE brand where either the country-of-origin OR the destination country must be Australia.

Please do not select well known brands from global organisations. For example, Heinz, ConAgra, Masterfoods. You must select a brand that is NOT distributed in the destination country. Brands available in specialist grocery stores with very limited distribution (e.g., Asian grocers) are acceptable on the condition that the manufacturer is not the exporter of the brand. In other words, they use distributors to bring the brand into the country.

Brand and Country Choice:

Please choose a brand manufactured by a small to medium-sized locally based organisation. Please refer to the *****˜assessment: major project folder***** for examples of products and brands within the *****˜ready***** meal category. Snack foods and fast-food restaurants are not considered *****˜ready***** meals.

It is strongly recommended that you consult the GMID database (Global Market Information Database) prior to selecting a brand and country (packaged food category under *****˜industries*****“ access is available through the Deakin University Library). This database provides product, product category, consumer behaviour and industry-specific information. The Factiva database may also contain some industry and company reports.

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Proposed Format of Report

Please note, the word limit for each section is an estimate only.

1. Executive Summary (Approximately 500 words) (Not included in the word count)

An executive summary is a brief account of all the major points (findings, conclusions and recommendations) related to your investigation. Your executive summary is best prepared after your report is completed.

2. Introduction (Approximately 100 words)

Outline the key areas/issues you intend to discuss in the report

3. Description of the Brand (Approximately 100 words)

Briefly describe your chosen brand.

4. External Environmental Analysis (Approximately 700 words)

Justify your choice of country i.e., provide the rationale. The external environment analysis relates to the destination country. Your rationale is likely to include external environmental factors including:

*****¢ Economic/Financial

*****¢ Political/Legal

*****¢ Cultural/Social

*****¢ Geography/Infrastructure/Climate (e.g., terrain)

*****¢ Technology

*****¢ Lifestyle (e.g., obesity, eating habits)

You do not have to address all the key factors. Only address issues which you believe are relevant to introducing the brand into the new market!!!!

5. Competitor Analysis (Approximately 600 words)

Briefly identify the competitive environment for your brand. Competitive factors include:

*****¢ The nature and size of the market

o Market share statistics

o Description of the major competitors (local and international *****“ at least three)

o Structure of the industry e.g., concentration of local and international companies in the product category

o Growth potential

o Any other distinguishing characteristics of the competitive environment

6. Market Segmentation and Target Marketing (Approximately 300 words)

You must choose only ONE target market to enter. The target market can be either consumer or business-to-business. Identify how you intend to segment the market and the rationale for choosing those segmentation variables (e.g., demographic, geographic, psychographic). Please note, it is not necessary to use every segmentation variable. The rationale will assist in determining the attractiveness (potential market size) of your chosen target market.

7. Market Entry and Expansion Strategies (short and long term) (Approximately 700 words)

Recommend marketing entry strategies for the expansion of your brand into the chosen international market in the short and long term and justify your choice of strategy. You need to identify at least one strategy to initially enter the market and another strategy for future expansion (e.g., within the same country or region). Possible market entry strategies include:

*****¢ Exporting

*****¢ Licensing

*****¢ Franchising

*****¢ Joint ventures

*****¢ Strategic alliances

*****¢ Acquisition

*****¢ Greenfield operation

When choosing your market entry strategies, please keep in mind the type of brand, your target market and the external environment of the chosen country. For example, some countries have strict policies regarding joint ventures, acquisitions and greenfield operations.

Please do not confuse market entry with distribution!!!!

8. International Marketing Mix (Approximately 900 words)

The following factors should be discussed and your marketing strategy recommendations should be supported by relevant secondary sources of evidence. Attempt to an***** whether you can standardise the product levels or are you required to adapt to local needs and wants.

1. How would you position the brand in this market?

2. For your target market, what is the country-of-origin attitude likely to be for your brand?

3. Do you need to modify the product/brand in any way for this target market (e.g., labelling, size of chocolate bars etc.)?

4. How would you promote this brand (public relations may also be included) to your target market? Please take into consideration both strategy and tactics.

5. What are your pricing objectives and strategies?

6. How would you distribute this brand to your target market?

9. Conclusion (Approximately 100 words)

Outline your major findings and recommendations.

Reference list (Not included in the word count)

References cited in the report only should be included. Marks are awarded based on depth and scope of research.

Appendices (Not included in the word count)

Appendices should include supporting evidence only. Tables and graphs which are important to the discussion should be placed in the body of the report.

If you use appendices please ensure they are numbered and referred to within the report.

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