Introduction Iced Tea Mexican culture of drinking tea Mexican report of soft drink consumers International soft drink manufacturer Main body Market factors analysis for USA manufacturer to consider Political factors SWOT analysis Economic factors Conclusion References
THE UNIVERSITY OF DODOMA COLLEGE OF HUMANITIES AND SOCIAL SCIENCES SCHOOL OF BUSINESS AND ECONOMIC STUDIES DEPARTMENT OF BUSINESS ADMINISTRATION AND STATISTICS
COURSE INSTRUCTOR: MR. ONESMO CHAWALA DEGREE PROGRAMME: BCOM. IN INTERNATIONAL BUSINESS SUBMISSION DATE: NATURE OF WORK: GROUP MEMBERS: NO. 1 2 3 4 5 6 7 8 9 10 NAME KADENDULAH, JOSEPH MAGEGE, EVA .M RUHEMBE, NIOSHIMA .S NANYARO, PRAYGOD .E PAUL, FRANSIS SADICK, SHAMIM MRISHO, HASSAN .J MUNISI, HENRY KISAMO, JULIETH LYIMO, JOHN REGISTRATION NUMBER T/UDOM/2010/03845 T/UDOM/2010/03851 T/UDOM/2010/03869 T/UDOM/2010/03864 T/UDOM/2010/03867 T/UDOM/2010/03870 T/UDOM/2010/03856 T/UDOM/2010/03859 T/UDOM/2010/03847 T/UDOM/2010/03850 SIGNATURE 31ST DECEMBER, 2012 GROUP ASSIGNMENT
QUESTION: A major USA manufacturer of Iced Tea wants to enter Mexican soft drinks market.
1.0
Introduction
Financial data from major players Customer surveys Hence the manufacturer of iced tea has to look the market sizes in terms of competitors sales volume and their product demand and compare the demand of the new product (Iced tea). The major competitors are coca-cola export corp, pepsi cola. Market trends; Market trends are the upward or downward movement of a market, during a period of time. The market size is more difficult to estimate if one is starting with something completely new. In this case, iced tea manufacturer will have to derive the figures from the number of potential customers, or customer segments. Besides information about the target market, one also needs information about one's competitors, customers and product. Lastly US Iced tea Manufacturer need to measure marketing effectiveness. A few techniques that the company can use are, Customer analysis, Choice modeling, Competitor analysis, Risk analysis, Product research, Marketing mix modeling. Market trends changes in the market are important because they often are the source of new opportunities and threats. Moreover, they have the potential to dramatically affect the market size. Market growth rate; a simple means to be used by the US analysts of the Iced Tea company on forecasting the market growth rate at Mexico is to extrapolate historical data into the future. While this method may provide a first-order estimate, it does not predict important turning points. A better method is to study market trends and sales growth in complementary products. Such drivers serve as leading indicators that are more accurate than simply extrapolating historical data. Market opportunity; a market opportunity product or a service, based on either one technology or several, fulfills the need(s) of a (preferably increasing) market better than the competition and better than substitution-technologies within the given environmental frame (e.g. society, politics, legislation). Market profitability; while different organizations in a market will have different levels of profitability, they are all similar to different market conditions. Michael Porter devised a useful framework for evaluating the attractiveness of an industry or market. This framework, known as Porter five forces analysis, identifies five factors that influence the market profitability:
Porters five forces Is a frame work for industry analysis and business strategy development formed by Michael Porter of Harvard business School 1979, it draws upon industrial organization economics. Three of porters five forces refer to completion from external sources the remainder are internal threats, which are close to the company that affect its ability to serve its customer and make profit. Them being a) Threat of substitute products. Fierce competitions exist among very few players. Having duopoly industry or even intense rivalry between soft drinks say coke and Pepsi. b) Threats of established rivals. The threat of substitute is reduced by expansion of products portfolio. Many of alternative beverages e.g. juice and tea. c) Threats of new entrants. Suppliers have less bargaining power. Many substitute for sugar and packaging e.g. can syrup, sweetener, package, glass, and plastic metal can. d) Bargaining power of supplier. Different levels of bargaining power exist among the groups of buyers. Say vending machine (no buyer bargain power), fast food chain (more bargaining power) e) Bargaining power of customer. Strong barrier to review entrants. Amount of capital investment require large amount for entrants, exclusive territories in distribution channel and access to retail channels.
as they are being perceived by the Mexican consumers as being a healthier option. By so doing the Iced tea manufacturer may use such an opportunity to get into the market with its Product and acquire potential customers. Legal restrictions, in order for the iced tea manufacturer to get into the market of Mexican, the understand of basic laws governing the products and their use. Since Mexican Customs Law is very strict regarding proper submission and preparation of customs documentation. Imported health foods to be sold in the retail sector must be labeled according to the Mexican government specifications. General labeling specifications for pre-packaged foods and non-alcoholic beverages. Under this, nutritional information is voluntary, unless a nutritional claim is made and in this case the label must be evaluated by the Mexican Department of Healths Federal Commission for the Protection against Sanitary Risk. This applies to most food items. Some U.S. suppliers choose to develop special packaging for the Mexican market. This is fine as long as a label is affixed to each package of the exported product prior to entering Mexico.
- Non alcoholic
b) -
Weakness Negative claim; The U.S. continues to be among the top five suppliers of soft drinks to
Mexico despite Mexico's recent imposition of a 20% import duty. Health and wellness
campaigns promoted by the Mexican government are expected to continue to the hinder growth of high-sugar carbonates in 2009 and beyond. As a result, market analysts predict that demand for diet soft drinks will continue grow as they are perceived by Mexican consumers as being a healthier option. The Mexican government is considering issuing a new Official Mexican Standard (NOM) for soft drinks requiring the following health warning on soft drink labels, "El abuso en el consumo de este producto puede causar obesidad" (The consumption of this product may cause obesity). - Traditional preservation - Narrow range of materials
c)
Opportunities-establish facts and use potential IPR - New package material - Replace alcoholic drinks
d) -
- Distribution costs.
3.0 Conclusion
For the iced tea manufacturer to succeed in the Mexican soft drink industry, then demographic factor on population of the country and the means of distribution has to be achieved. As long as the Mexican people consider their language as the potential and influential factor of inducing people perception on their consumption, hence all the information on the label must be in Spanish and must include the following features Commercial/brand name, producer's name and address, exporter's name and address, country of origin, importer's name, address and taxation number, product description in Spanish, product description in English, preparation and handling instructions, Net weight in metric units, date of expiration, Ingredients, Special warnings.
4.O References
Kumar. V. (2000), International Marketing Research Upper Saddle River, NJ: Prentice Hall http://www.fas.usda.gov/scriptsw/attacherep/default.asp http:/www.euromonitor.com http://www.researchandmarkets.com/reports/1436380