Market Entry & Planning: Singapore as Foreign Market to Enter for Nerada Tea, Australia
Introduction
Nerada Tea is in the limelight due to its brand image in its local market. Due to high-quality tea products for customers, the company has gained and sustained success. However, due to growing demand in different countries, the company management has selected a particular market “Singapore” to expand the business. Of course, an appropriate market entry strategy and a comprehensive marketing plan will be needed to make the difference. Thus, the study revolves around market entry and marketing strategies along with some key recommendations. In the contemporary business era, company management needs to change or modify its marketing and competitive strategies to be relevant and lucrative in the new market.
Overview and Main Issues
Nerada Tea is serving customers through high-quality Tea products. In the Australian Tea market, it seems pertinent to sustain the business with a limited product portfolio. However, in the new market like Singapore, the company cannot survive with a limited product portfolio. Due to the diverse demand of customers, the company has to remake the product strategy. Accordingly, price, promotion, and distribution strategies are to be shaped. Thus, rebuilding the strategic marketing process is a central issue. It is also a big challenge for the company. Also, the economic, financial, and cultural variables may compel the company to enhance the internalization or localization process. These are some issues or challenges, which are to be tackled to sustain the business in the new market.
Market selection entry strategy
The management of the company has selected Singapore as a new market for its business. However, there is a need for an effective market entry strategy, which can also be aligned with the product segment. The best option for the company is to acquire any local firm. A merger or acquisition is the best entry strategy, which can help the company to reduce the business risks, share resources, and develop a diverse product segment. In the presence of immense competition, the company can start well and make a difference in no time. Instead of focusing on standardization, the company will be focusing on differentiation. The best way to differentiate the business is to enable product differentiation. For Instance, if the company wants to differentiate the business, then it must have to add new features and values, which have never been experienced a before in this market. Also, the pricing strategy can be used to justify differentiation. The company will also use a differentiation strategy to facilitate different customer segments. The company will enhance targeting by integrating behavioral segmentation, lifestyle segmentation, and ethnicity-based segmentation. Depending on the needs of these segments in the new market, the firm will react accordingly with its diversified tea products (Opentextbc.ca, 2016).
Product Strategy
The appropriate product strategy of the company aims to influence customer adaptation. The company wants to retain one of the levels of the product. For Instance, the company will sell its tea products with some core values. The customer will make a buying decision and consume the product due to its taste and ingredients. Taste and ingredients are two prominent quality elements, which are to be sustained in the new market. The quality and taste can make different tea products convenient, which can also create a positive impact on buying decisions (Khan, 2014). The company will use demographic and behavioral segments. The benefit of integrating these segments is increasing customer traffic. These customer segments show their assertiveness in the buying process. Another advantage is effective targeting. In the demographic segment, the company can direct multiple targeting as compared to standardization, the company will contain adaptation. Due to changing trends in the coffee and tea industry, adaptation is the best approach to justify the differentiation as well. The company can also use attractive packaging to justify the distinction (Gordon, 2012). Unique packaging material and design can be used to attract customers and increase brand recognition. Also, labeling ingredients is the best way to facilitate and interact with people who are health conscious (Richter, 2012).
Pricing strategy
Importance of pricing decisions in the international context is visible. The company will use a skimming pricing strategy in this market due to high or moderate rate income levels. Economically, the company is quite strong, and people always want to pay high for quality and uniqueness. Therefore, the nature of the pricing decision is based on the consumer factor. Apart from it, competitor and technology factors can also create an impact on the pricing strategy. For Instance, Nerada tea is using advanced technology to improve its processing. Thus, the cost of the tea is comparatively high as compared to other company’s ion this new market. Competitors are also changing the pricing strategy due to new trends and demands in the market. Thus, it seems better for the company to start with high and increases its market share. Another reason regarding the skimming pricing strategy is the increasing tariff barriers. New tax and duties may contribute to the changing business environment, and on the other hand, the company has to keep its margins (Johansson, Hallberg, Hinterhuber, Zbaracki, & Liozu, 2012).
Promotion strategy
The international communication process can be different. Due to cultural differences, the company has to localize its business, especially the marketing process, to enhance the visibility of better interactions. Singapore contains low content culture, as people perceive and make decisions due to verbal communication. People value the interpersonal relationship in this new market, and promotional strategy will be based on this factor as well (Shaw, 2012). Market acceptability can be achieved through adopting local norms and values, which are also to be reflected in products segments and marketing process. The company will use social media channels to promote its products. It is a useful and cheap way to grab customer traffic and turn it into an immense range of customers. Adaptation/tailoring promotion is the best option to exist or sustain in the disruptive business environment of Singapore. Sales promotions, direct marketing, and sponsorship are several IMC methods, which are quite relevant (Gelder & Woodcock, 2003). The company will use push strategy, as through different advertising and promotion techniques on different media channels, awareness can be created to make the product more compelling (Gelder & Woodcock, 2003)
Distribution strategy
The role of distribution in the international marketing mix is also visible. The company will use the direct distribution channel in this new market. To be profitable in the new market, the most important thing for the company is to reduce the intermediary costs. The company will open its tea shops in commercial areas. The alternative to this distribution channel can be a website, as a customer can customize product menus, make orders, and pay accordingly. These are two options regarding direct distribution, and the company expects customer traffic at both. The company will manage its warehouse for raw materials. However, standards to keep raw material safe and secure will be the same. The purpose is to retain the quality and standardize the procurement process (Paley, 2007). With the direct distribution channel, the company will go with the supply chain management process. The most important thing is to acquire farmers locally and build relationship to reduce the cost of material procurement (Kumar & Nambirajan, 2013)
Competitive strategy
In international business, a competitive strategy can lead to a competitive advantage in the market. The company will adopt and execute the transactional strategy, which is based on the combination of global and multidomestic strategy (Opentextbc.ca, 2016). The company will retain some team products in the new market along with some new product interventions. The combination of old and new will help to integrate with local preferences (Salavou, 2015). It seems a competitive strategy, as people due to differentiated local taste will be converted. The national competitive advantage can be gained through demand conditions. The demand for domestic and international ingredients may change the strategic intent of the company (Porter, 2008). VRIO analysis can show the possible competitive advantage of the company through several resources and capabilities (Lin, Hua-Ling, Ya-Jung, & Kiang, 2012). Resources and capabilities of the company must be valuable. These resources and capabilities should be exploited by the company and made rare to create the positive impact on the competitive advantage (Chatzoglou, Chatzoudes, Sarigiannidis, & Theriou, 2018)
VRIO Framework
| Resources and Capabilities | Valuable | Rare | Inimitable | Organized to Exploit | Impact on competitive advantage |
| Product Portfolio | Yes | No | No | Yes | Temporary |
| Technology Advancement | Yes | Yes | Yes | Yes | Sustainable |
| Strong Distribution | Yes | No | No | Yes | Temporary |
| Brand Image | Yes | Yes | Yes | Yes | Sustainable |
| Financial Condition | Yes | No | No | Yes | Temporary |
Recommendations
- In the localization process, the company must have to evolve with time. In the disruptive business environment, the company can bring flexibility in both internal and external business environment to integrate with new trends. For Instance, in every element of the marketing process, new trends must be considered to make effective strategies (Erdogmus, Bodur, & Yilmaz, 2010).
- In the promotional process, the company should not avoid traditional media channels such as television and many other sources. Still, many people avoid using social media channels. Limited advertising on these channels can help to increase traffic in the new market (Sikdar & Vel, 2010).
- Despite containing a merger or acquisition as a market entry strategy, it seems essential for the company to carry further strategic alliance. For Instance, despite containing a long product life cycle, the company should be involved in sustainable business projects to create and sustain the brand image.
Conclusion
In the end, it is to conclude that Nerada Tea has the potential to expand in the new market and gain success in an intense rivalry. In this comprehensive analysis, market-entry, marketing, and competitive strategies have been illustrated along with some key insights. Each plan has been presented with a pertinent rationale. However, in changing business conditions, the company must change strategies to be relevant and lucrative. Singapore is a new destination ort this tea maker and the success can be attained by proper planning and execution. These strategies can also be included in a whole business or marketing plan.
References
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