Marketing assignment on: Arctic Food service Ltd

1. Introduction:Arctic Food Service Ltd refers to a privately owned frozen food company which was established in the year 1988. This organization provides its customers with wide range of chilled as well as frozen products. These products came into existence after a fair response from its customers. Such type of products is amongst the high selling products based upon the requirements of its target audience.

Arctic Food Service Ltd its customers with temperature controlled products. This organization also provides its customers the liberty to buy from Arctic collect cash & carry facility where all the products are readily available & at a desired temperature.

Our Mission:

The main mission of Arctic Food Service Ltd is to provide its customers with superior quality of products without compromising upon its taste & the quality of the same. It also aimed at providing its partners with true as well as honest communications which would help to provide convenience as well as excellence at service.

1. Country Identification:While identifying an appropriate market in order to expand the Arctic Food Ltd., a structured format shall be kept in mind. This would help in order to understand the various company factors which might be achieved while spreading its wings in the other parts of the globe.

There are three countries which have been shortlisted in order to expand its operations. The countries are China, Canada & Middle East Asia. It has been surveyed that the total market for food & beverages in China has been increased by approximately 8% (Marketing-in-China, 2011). This country shows high levels of advancements in this sector. It is deemed that, in the future years the cost of goods sold (cogs) is expected to rise by 5% (Marketing-in-China, 2011) approximately. The total paid up capital in the Chinese food & beverages market has been expected to rise by 12% (Marketing-in-China, 2011). Thus, Arctic Food Ltd. chose to expand its operation in the Chinese market as compared to Canada & Middle East Asia (Marketing-in-China, 2011).

The next step would be to analyze each & every country based upon the various criteria. The screening of the country has been described as under:

1. Country Screening:3.1  Country 1 market: The first country chosen to expand the Arctic Food Ltd. is “Canada”. The first country i.e. Canada can be screened based upon its manufacturing capacity of the same.

The PEST analysis for Canada has been discussed as under.

PEST Analysis:

Political: It has been noticed that, the various political aspects such as employment laws, environmental regulations, tariffs, political stability & restrictions are affecting the Canadian Market. Therefore, Arctic Food Ltd has not chosen Canada as its potential market to upgrade its operations within it.

Economic: The economic aspects attached with the Canadian market refers to its growth, interest rates, rate of inflation& stability within the value of money shows low levels of growth in all the respects. Hence, Canada is not the suitable country to operate Arctic Food Ltd (Marketing-in-China, 2011).

Social: The people living in Canada are quite conscious regarding their health. With the rise in the levels of health problems in Canada would lead to problems in order to launch frozen food. Hence, Canadian food market would not be an apt market to open Arctic Food Ltd & serve the population with ready to cook frozen food.

Technological: The use of various traditional means of technology in the Canadian market will not lead to an up gradation in the food & beverage sector. Therefore, Canadian market would not be regarded as the potential market to open Arctic Food Ltd.

 Porters Model:Þ    Threat to entry: The threat to entry in Canadian market has been rendered to quite low. If any of the competitors to Arctic Food Ltd wants to enter this market, it would not be a tough job for them. This is because the entry barrier to enter this market is low.

Þ    Rivalry between competitors: The rivalry between the competitors in the Canadian market is quite high. In case of the Canadian market, the rivals can enter the market by focusing upon high levels of innovations, differentiation amongst the products, exit barriers, cost incurred, and use of better technology & by means of competitive pricing methods.

Þ    Bargaining power of buyers & sellers: In case of the Canadian Market, the bargaining power of buyers has been rendered to be quite low. Customers in the Canadian market have enough options to switch.

Þ    Threat of Substitutes: The threat of substitute in case of the Canadian market is high as compared to the other two countries. There many competitors within the frozen food section. Therefore, it would not be regarded as an easy task for Arctic Food Ltd to start up with his frozen food joint in the Canadian market.

Country 2 market: The second country chosen to expand the Arctic Food Ltd. is “China”. The second country i.e. China can be screened based upon its advancements amongst the technology used as well as the consistency of the quality provided to its customers.

The PEST analysis & the Porter’s Five Force’s Model would help in order to define the main reasons to choose as compared to Middle East Asia & Canada.

PEST Analysis:

Political: It has been noticed that, the various political aspects such as employment laws, environmental regulations, tariffs, political stability & restrictions are not affecting the Chinese Market. Therefore, Arctic Food Ltd has chosen China as its potential market to upgrade its operations within it.

Economic: The economic aspects attached with the Chinese market refers to its growth, interest rates, rate of inflation& stability within the value of money shows high levels of growth in all the respects. It has been surveyed that the total market for food & beverages in China has been increased by approximately 8% (Marketing-in-China, 2011). This country shows high levels of advancements in this sector. It is deemed that, in the future years the cost of goods sold (cogs) is expected to rise by 5% (Marketing-in-China, 2011) approximately. Hence, China is a suitable country to operate Arctic Food Ltd.

Social: There is a high level of population which is working in the Chinese Market. Therefore, frozen food, ready to cook meals would be referred to as one of the best meals for the working population. Launch of Arctic Food Ltd. would be termed to one of the best options within the food & beverage sector.

Technological: The use of various research & development methods along with automation & innovation technologies would lead to high levels of advancements in the food & beverage sector.

Porters Model:Þ    Threat to entry: The threat to entry in China has been rendered to quite low. If any of the competitors to Arctic Food Ltd wants to enter this market, it would be a tough job for them. This is because the entry barrier to enter this market is high. The competitors would not be able to enter the Chinese market by reducing the levels of profits earned. The capital requirement in China has been referred to be quite low due to the subsidies provided by the government of China.

Þ    Rivalry between competitors: The rivalry between the competitors in the Chinese market is low. In case of the Chinese market, the rivals can enter the market by focusing upon high levels of innovations, differentiation amongst the products, exit barriers, cost incurred, and use of better technology & by means of competitive pricing methods.

Þ    Bargaining power of buyers & sellers: In case of the Chinese Market, the bargaining power of buyers has been rendered to be quite high. Customers in the Chinese market do not have enough options to switch. Therefore, Arctic Food Ltd has chosen to establish its operations in the Chinese market.

Þ    Threat of Substitutes: The threat of substitute in case of the Chinese market is not high as compared to the other two countries. There are mainly three competitors for frozen food in the food & beverage sector. Therefore, it would be an easy task for Arctic Food Ltd to start up with his frozen food joint in the Chinese market. Hence, it can be stated that Chinese Market is the apt country to launch Arctic Food Ltd as compared to the other markets (Canada & Middle East Asia).

3.2  Country 3 market: The third country chosen to expand the Arctic Food Ltd. is “Middle East Asia”. The last country i.e. Middle East Asia can be screened based upon the likeness of the frozen food market. Based upon a survey, it has been estimated that the frozen food market in Middle East Asia is worth USD80 billion in a year (Marketing-in-China, 2011). With arise in the overall growth of the Muslim population the Middle East Asian region has led to a constant rise within the frozen food market. Therefore, Middle East Asian region would be referred to as an apt country to launch the Arctic Food Ltd. The demand of the frozen food ltd. within the Middle East Region has been estimated to be approximately 1.5 billion across the frozen food lovers. The various countries included within Middle East Asia contributing towards the frozen food market are Saudi Arabia, Thailand, Turkey, Iraq, UAE, Iran, etc (Foley & James, 2010).

PEST Analysis:

Þ    Political: It has been noticed that, the various political aspects such as employment laws, environmental regulations, tariffs, political stability & restrictions are affecting the Middle East Asia Market. Therefore, Arctic Food Ltd has not chosen the Middle East Asia as its potential market to upgrade its operations within it.

Þ    Economic: The economic aspects attached with the Middle East Asia market refers to its growth, interest rates, rate of inflation& stability within the value of money shows low levels of growth in all the respects. Hence, Middle East Asia is not the suitable country to operate Arctic Food Ltd (Marketing-in-China, 2011).

Þ    Social: The people living in Middle East Asia are quite health conscious. With the rise in the levels of health problems in Middle East Asia would lead to problems in order to launch frozen food. Hence, Middle East Asia food market would not be an apt market to open Arctic Food Ltd & serve the population with ready to cook frozen food.

Þ    Technological: The technological aspects within the Middle East Asia market will not have any effect over the food & beverage industry. Therefore, Middle East Asia market is least considerate with respect to the technological advancements.

    4. Country selection:

4.1 Objectives: While selecting an appropriate country to expand the wings of Frozen Food Ltd. some of the key features shall be taken into consideration. The main objective for any organization in order to grow as well as expand its operations all across the globe would be due to the acquisition of heavy finances, promote its products or offerings as well as have a separate entity within the different parts of the globe. The various features to be taken into consideration have been defined as follows:

4.2 Marketing: While taking into consideration the marketing aspect for Arctic Food Ltd. the cultural, political as well as economic analysis of the target country i.e. China shall be taken into consideration. This would help in order to determine the market availability as well as the requirements of the products offered by the Arctic Food Ltd. Different types of questions such as the size, levels of growth, stability, and potential along with the levels of uncertainty attached to market selection process shall be done (China Daily, 2010).

In order to study the marketing aspect for the Arctic Food Ltd., the marketing mix consisting of the 4P’s shall be studied. The 4P’s are as under:

4.3 Marketing Mix:

Þ    Product: The product offerings provided to the potential Chinese masses have been discussed in this section of the report. The products offered by Arctic Food Ltd. would be divided into three categories such as:

• Frozen food: The frozen food offered at Arctic Food Ltd. would consist of wide range of products such as chicken nuggets, fish fry, French fries, spring rolls, super potatoes wedges, beef burgers, sausages, etc.

Þ    Chilled food: Arctic Food Ltd. would focus upon chilled food in order to capture the attention of the Chinese market. The chilled food offered by Arctic Food Ltd. would consist of baked meat, sandwiches & speciality cheese.

Þ    Price: The prices charged by the Arctic Food Ltd shall be kept lesser as compared to the two market leaders in the frozen food segment in China. The three market leaders are Henan Shuanghui Group, Shineway Group Co. Ltd & Beijing Hued Meat Chicken Co. Ltd.

Pricing Strategy: The pricing strategy which shall be used by Arctic Food Ltd in order to launch frozen foods in the Chinese market has been discussed asunder. They are as follows:

Þ    Skimming or Penetration Pricing:

The other pricing method which would be recommended to Arctic Food Ltd would be the penetration pricing. This means that the list of frozen food offered by Arctic Food Ltd would be priced high so as to recover the amount of marketing & producing a novel product in the opted country. This would refer to one of the best strategies for early adopters. This type of a pricing strategy would be quite helpful for Arctic Food Ltd to form a base within the opted country.  This type of the pricing strategy should be applicable for a limited period of time or else the customers would tend to shift to the other shops available (Berry, et al 2007).

Þ    Promotion: The integrated marketing communication (IMC) shall be used by Arctic Food Ltd which would help to link all the marketing communications together & portray a picture in the minds of the consumers.

Þ     Some of the integrated marketing strategies which would be used in order to reach large masses have been discussed as under. They are as follows:

• Blurring lines between Advertising & PR: The first integrated marketing communication which shall be followed by Arctic Food Ltd. Refers to high levels of advertising & PR contacts with the PR agencies. Some of the traditional means which shall be utilized by Arctic Food Ltd. in order to promote the products offered by the same would be newspapers, flyers, television, radio, internet marketing, online communication efforts, and low cost options for communicating with the consumers. All these marketing communications would help in order to make the customers understand the various varieties of options available at Arctic Food Ltd.
• Marketers at Arctic Food Ltd. shall think out of the box in order to reach potential Chinese market. Various non media communication tools shall be used by Arctic Food Ltd in order to catch upon the target audience base (Berry, & Parasuraman, 1991). Some of the ways with which Arctic Food Ltd would be able to catch the interest of the teenage or youngsters are posters in big malls, floor clings, bus or vehicle wraps, posters in stores & malls, attractive write ups on the posters, etc.
• Social media: Arctic Food Ltd. shall also take into consideration the various social media tools which would help in the integration of the marketing strategy used by the enterprise. The various social media tools such as Twitter, Face book, MySpace, etc shall be used which would help to attract the potential audiences. Blog postings on different sites, banners over the social media sites mentioned above would help the customers to know regarding the newly launched store in the market. Online flyers would also be regarded as one of the most interactive methods which would help to attract the target audience.
• Free coupons shall be provided by the enterprise in order to capture high levels of sales & build fair communication with the masses.

Þ    Place/Distribution: The distribution strategies which would be adopted by the Arctic Food China in order to increase its availability would be through the following:

Intensive distribution: Arctic Food China would be recommended to use this distribution strategy in order to distribute the low priced food, merchandise, beverages, etc. Some of the examples would be the French fries, hot chocolate, etc (Arnold, 2000).

Out of the three distribution strategies, Arctic Food Ltd. shall adopt the intensive distribution strategy. The reason to opt intensive distribution at Arctic Food Ltd would be to make the customers aware regarding the product offerings. With the help of intensive distribution, the frozen food would be made available at variety as well as number of stores within the Chinese Market.

With the help of intensive distribution strategy, the frozen food offered by Arctic Food Ltd. would be made available at the different stores in different locations. The frozen food shall be made available in the various retail outlets. This would help Arctic Food Ltd. to broaden its availability within the Chinese Market (Aliouche, 2001). The main purpose of the putting the products at so many locations & make it clearly visible within the masses would be accomplished. The best use of this type of a strategy would be to buy such type of products more frequently. By practicing the intensive distribution strategy, the customers would be able to have both choices as well as find what they want to procure from the list of frozen food variety offered by Arctic Food Ltd.

5. Market entry method:

When the firm i.e. Arctic Food Ltd. has recognized the target country where it wants to expand its operations & grow, then, the acquiring company should use certain entry as well as expansion strategies in order to establish the organizational structure & the management policy which would best suit the country in order to have a competitive edge as well as capitalize on its value creation (Sorec, 2002). The relationship amongst the host country, company as well as the industry would evaluate the various entry norms which would help the Arctic Food Ltd. in order to promote its products & services in the most efficient manner (Sorec, 2002). Some of the entry modes which are particularly used in order to enter into the foreign market & would have significant result in order to promote the Arctic Food Ltd. are as listed below (Sorec, 2002). Expansion in the Chinese market would occur by using any of the four ways:

Þ    Licensing

Þ    Exporting

Licensing:

One of the major ways through which Arctic Food Ltd. could establish itself in the Chinese Market would be through fair licensing. Under this entry mode, licensing gives a green signal to target the products which are being used by the licensor (Sorec, 2002).

Licensing helps the target company in order to provide a wide scope of expansion as well as increased Rate of Investment. The disadvantage with this entry mode is that, when the licensee manufactures certain goods & services, promotes the products then the marketing activities are lost (Sorec, 2002).

Exporting:

Exporting is one of the simplest & traditional ways through which any company would enter the foreign markets. It is one of the direct method through which the deal of goods produced could be done into another country (Berry & Parasuraman, 1991).

It refers to one of the oldest ways which is there in practice from decades of now. Exporting is a traditional as well as an established technique for exploring the foreign markets. It would be one of the easiest ways through which Arctic Food Ltd. could establish in the well known & growing economy i.e. China. It would also act a cheap mode in order to enter in the Chinese economy (Berry & Parasuraman, 1991).

     6. Conclusion

Hence, it could be concluded that China has recognized the target country where it wants to expand its operations & grow, then, the acquiring company should use certain entry as well as expansion strategies in order to establish the organizational structure & the management policy which would best suit the country in order to have a competitive edge as well as capitalize on its value creation.While taking into consideration the marketing aspect for Arctic Food Ltd. the cultural, political as well as economic analysis of the target country i.e. China shall be taken into consideration. This would help in order to determine the market availability as well as the requirements of the products offered by the Arctic Food Ltd. Different types of questions such as the size, levels of growth, stability, and potential along with the levels of uncertainty attached to market selection process shall be done.

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