Developing International Business Plan
Table of Content
Sr. No Topics Page no.
1 Business purpose and aim 4
1.1 Vision and values of business 4
2 Business description : an overview 4
3 Products and services 5
3.1 List of products imported by the company 5
3.2 Services of the company 6
3.3 Key differences between our product and existing ones in the market. 6
3.4 After sales services 6
3.5 Will complementary products or services to the ones described above be eventually developed? 7
4 4.1 Geographical scope of market 7
4.2 Satisfaction of customers need 7
4.3 Main different types of customers for company’s products and services. 8
4.4 Market segment concentration 8
4.5 Factors which will attract the customers to buy our product and services. 9
4.6 Target market 9
4.7 Goal of market share 10
5 Competitors 10
5.1 Our competitors in Ontario 10
5.2 Size and level of operations along with profitability 11
5.3 Strength and Weaknesses of Competitors as compared to our business 11
5.4 Critical factors for success in business sector 12
5.5 Uniqueness about our proposition 13
6 A plan for market research 13
6.1 Information we still need to find 13
6.2 Research type 14
6.3 Money and time required to do the research 14
6.4 Responsibility for each element of research 14
6.5 Critical Factors for a successful business 15
7 7.1 Analysis of Porter’s five forces with respect to food importation industry and our business. 16
7.2 Advantages for our proposition if we are first to the market 17
7.3 Strategic decision 18
7.4 Strategic option to be adopted and implemented by us 18
8 Pricing 19
8.1 Start-up expenses 19
8.2 Fixed cost & Variable cost 19
8.3 Optimal price to be charged 19
8.4 Prices charged by the competitors 20
8.5 Factors taken into consideration while charging price 20
8.6 Price sensitivity to the market segment 21
8.7 Opportunity to sell at different prices in each market segment – so enhancing profits? 22
9 Advertisement & Promotion 23
9.1 Leaflet 23
9.2 Press release announcing business, list of media and approximate cost associated 24
9.3 Advertising & promotional plan 25
10 Place and distribution 28
10.1 Size and type of premises is required for our venture. 28
10.2 Describing the Location 29
10.3 Advantages of Premises 29
10.4 Freehold 29
10.5 Leasehold 30
10.6 Insurance & premium 30
10.7 Adequacy of plans for future needs 31
10.8 If you have not found your premises yet, what plans do u have to find them? 32
10.9 Channels of distribution used in your business 32
1. Business Purpose and Aim
The group members discussed their ideas through brain storming within the group and by considering the pros and cons of all the ideas the group came to this proposition.
Other options were rejected because they had less scope, inadequate knowledge. Future growth and profitability along with demand of other products seem to be inadequate to select other options.
The group thinks this will be a success because a large number of population from Asian countries has migrated to Canada and demand for groceries and other products from these countries is on rise.
1.1Vision and Value of Business
To provide good quality Asian products to the immigrants as well as Canadian population.
Vision
The organisation intends to serve best quality Asian food products to people from all across the globe.
It aims at conducting business in ethical manner. It also aims at providing good quality and environment friendly products at reasonable cost.
Initially the investment required to commence the business would be around $200,000 and a certain
Amount of loan from the bank.
- Business Description: An Overview
The name of the business:
Quality Food Incorporation. This name has been chosen because the aim of the firm is to provide good quality products from Asian countries.
Experience and skill of group members.
Group members have diverse skillset in field of finance, sales, marketing along with good knowledge in the same fields which will help in building a good sustainable business plan.
Professional Advisors.
Company Secretary, accountant, marketing experts, and financial advisor would be few professionals we would like to consult while developing our business plan.
Incorporation-
Legal form of venture.
- Product and Services
3.1 Following are the products we wish to import from Asia:
A) Ready to Eat
B) Herbal and Ayurveda medicines
A) Ready to Eat: There is a wide range of ready to eat products which is helpful as it is easy recipes which taste like fresh food. Some of the varieties are Curries, Vegetables, Gravies, rice items and Deserts.(MTR)
• Curries:
o Mixed Vegetable Curry
o Navratan Kurma
o Dal Makhni
• Vegetables:
o Rajma Masala
o Chana Masala
o Palak Paneer
o Mutter Paneer
o Aloo Methi
• Gravies:
o Paneer Butter Masala
o Shahi Paneer
o Kofta
o Paneer Tikka Masala
• Rice:
o Sambar Rice
o Vegetable Pulao
o Pongal
o Masala Upma
• Deserts:
o Kesar Suji Halwa
o Kheer
B) Herbal Medicines: Herbal medicines are made from plants or herbs and they are also called as Botanical medicines. Herbal products provide natural, high quality, daily consumable, rejuvenating health products at reasonable price. Some of the herbal products are:(14Ja)
• Health Care
• Beauty care and Personal Care
• Home Care
• Anti-Radiation
• Agriculture Products
OUR SERVICES:
- Delivery of goods at the prescribed location.
- Giving sufficient Credit for the smooth running of business.
- Availability of stock.
3.2 Patents Available and work done in establishment
Patents for the products/services are available as we are planning to import the goods directly from the company and sells to the retailer. The patents are the sole proprietorship of the company which ensure the originality and authenticity of the products which ensure quality, uniqueness, hygiene and nutrition in recipes used to make the product. These products are already in the market and they are performing well in the domestic era. We are not importing goods which donot obey the regulatory legal framework of a country. We are bound to deliver the best and good quality product at an affordable price. There is no work required on our part to establish any rights but, in future if the circumstances demands for any right, it will be our top most priority present the rights to the authority in a given time.
3.3 Key difference between our products and the existing ones in the market.
With our business we are thinking to launch a new line and brand of products which are not there in the market. Our objective is to bring in the market something which is best for the consumer, and we are hopeful the market will relish our efforts. As we have mentioned earlier, our plan is to deal in quality Asian food and herbal products. We will differentiate our products from those existing in the market mainly with respect to quality. Besides, our efforts will revolve around customer satisfaction. Apart from it, unlike the existing products we want to offer the goods at reasonable prices. Thus, our profit margin as compared to our competitors will be lower.(Start Your Own Business: 50 Things You'll Need to Do, n.d)
We have also thought to develop a website for our business so that we can do business online and access customers which are not reachable physically.
3.4 After-sales services
Yes, we will offer after-sales services. In our business plan we have emphasized on customer feedback as one of the important practices of our business. There will be arrangements for customer grievances, suggestions, and they will be taken care of with due diligence. Our prime concern will be to seek and maintain positive customer response in the market.
In the case of our herbal goods, our practice will be to contact our customers from time to time to get their feedback regarding the differences and benefits they find. We will gather the data through telephonic conversations, questionnaires and surveys. With the quality herbal products we want to bring improvement in the lives of our customers. We aim to provide them health friendly goods. With the information that will be received through feedback, we will bring in the market what the consumer desires.
3.5 Will complementary products or services to the ones described above be eventually developed?
Yes, the complementary or similar range of products can be developed in the near future. We are now focussing on some of the recipes of Ready to Eat food which are already produced by the companies.
There is a possibility of more recipes added into the range or a new company coming up with a wider range of Ready to Eat food products.
We also plan to distribute herbal medicines which are made from herbs like Basil(tulsi) and the product range is limited to what the IMC company manufactures. There is a possibility of new or complementary products developed in the near future.
4.1 Geographical scope of market
Our main aim is to serve all of the people but particularly Asian community. That's one of the reason we are procuring products from Asia. Asian community is mainly settled in Toronto and Greater Toronto Area [GTA], so initially we will focus on these two areas. Another reason to choose Toronto as our area of operation is that we are a new company with limited resources and capital, and in the near future we intend to serve people from all over Canada.
4.2Satisfaction of customer’s needs.
Due to the changing lifestyle customers want to spend less time in planning, preparing and cooking food. This demand led opportunity guarantees a profitable market for ready to eat food products convenient for the customers which are tasty and healthy at the same time. “In 2008, a Data monitor survey found that 44% of citizens across 15 countries feel that it is difficult to manage their daily obligations and find time to relax”.(Consumer Trend Report, 2010)
Time Scarcity-Students away from home and working class population do not have ample time to cook food as they are engaged into their jobs. Ready to eat meal are fast to cook.
- Simplified Meal Preparation
- Expedient Dining
Meal Fragmentation-Healthy complete meal of entire day require many ingredients, cooking skills, a balance of nutrients. Our product are healthy and include all types of dishes from salad to rice to gravies and deserts.
Lack of cooking skills- - Basic cooking is considered as difficult
- Customers have limited cooking skills
- Cooking is a low priority
Cooking is an art that everybody doesn’t have. Kids needs foods that look tasty and smells goods. Ready to eat meals are safe, tried and tested in laboratories. There are a variety of products that customer can choose and something new every time. (Sharma, 2012)
It is a speed shopping/Efficient Shopping- While doing grocery they don’t have to think about the ingredients that should buy as per the recipe and can do speed shopping.
Innovative Solutions-It is an innovative solution to the working class and middle age section of the society. Also, old age people can use them to reduce the cooking pressure.
Herbal and Ayurveda Products: Basil is the main ingredient of all the herbal products that company is using. It is a good source of dietary fibre, proteins and a lot of vitamins.
Low price and affordability
Basil is used is fresh cooked recipes and is a great herb to get rid of cold, cough and sore throat. All the products are highly cheap and have high medicinal value therefore, customers can afford to purchase them conveniently.
4.3Main different types of customers for company’s product and services.
• Students-There is huge population of immigrant students in Greater Toronto region who go to school as well as work. It is difficult for this section of society to cook food at home. Easily available food products like ready to eat are a quick solution because they are preservable, tasty and have high nutritious value.
• Working Class-People working for longer hours in offices have no time to cook and they have to maintain their health at the same time.
• Old Age People and children- Herbal Ayurveda basil products are especially useful to them. There are certain herbal products of Basil that they can use on regular basis to improve immunity and for overcome the deficiency of vitamins.
Overall the company focus on entire Greater Toronto Region i.e. the local Canadian population as well as the immigrants from all around the world but specifically we seek Business from average middle-class population as the products cheaper that what is available in the market.
4.4Market Segment concentration:
Our main target is basically on the students, low income working people and old age people as we are offering ready to eat products which are best suitable for students as Canada is the land of immigrants and many of the students don’t have time to cook their food due to their busy schedule then this products are best suitable for them and some of the working people even don’t have time to cook so they would prefer to buy our products as they are cheap and consumes very less time in preparation.
We are offering medicines and different products made with herbs which are best for old age people as the don’t have side-effects in the near future
4.5Factors which will attract the customers to buy our product and serviceare:
• Reliable
• Cheap
• Quality
• Customer satisfaction
• Less side-effects
• Suitable for all age groups
Reliable: As we are the distributer of herbal and ready to eat products in the greater Toronto area. We encourage more and more people to buy our product as we provide guaranty and warranty for the products. Any product which is sold comes with a limited time period guaranty and they are easy to use and reliable.
Cheap:we are offering the products at very minimal cost as compared to the other competitors in the market so, we think that more and more people want to save their money through purchasing such products from us and this type of products are suitable for the students and the working class people as they want to spend little amount of money for food.
Quality:we are offering the products of different brand like MTR which is offering ready to eat products. These products are of a good quality as we are aware that our products will have a great demand because of the students and the low income working class people.
Customer Satisfaction:we promise to provide proper services to our customers and we will be there to help them in every possible step.
Less Side-effects:the products which we are offering to our customers are made using different herbs so they have very less side-effects which is a benefit for the customers as other products are made using chemicals.
Suitable for all age groups: The products can be used by different age groups like the ready to eat food is basically for the students and low class working people whereas the herbal products can be used by the old people as medicines.
4.6Target Market
The market we are aiming for is an international market with lot of opportunities. This market is a rising market as a lot of Asian population is migrating to Toronto so the demand for Asian products will increase in future. Also the Indian herbal products have lot of benefits and do not have any side effects which will fulfil the demand of local as well as immigrant population. As a large number of migrating population consists of students and working people a demand for ready to eat products would be high. Our main markets for distributing products would include small to large stores all around Toronto. Different variety of product will make it possible to target a homogeneous audience from kids to adult. This market has a scope of growing demand for the products on a continuous basis so the market we are aiming will provide a positive growth in future. Along with meeting the demand of the population we also aim at satisfying the customer.
4.7Goal of Market Share
Initially we aim at capturing as much market as possible. This effort will help us in forming a strong distribution base in Toronto as well as nearby areas. We plan to provide a proper after sales service as mentioned earlier which will help in understanding the grievances, needs and demand of the consumer. This will add an advantage to our firm in increasing our market share.At the beginning we aim to target only the Asian population with further plan to expand and market our products to the local Canadian population. Our initial figure to capturing market share would be around 30% of the Asian population.
The main focus is to target initially the immigrant population and later the local population
- Competitors
5.1 Our Competitors in Ontario
In Ontario, there are a number of distributors and importers of Asian and Indian goods, particularly food items. These importers specialize in grocery food items such as spices, rice, pulses, lentils, frozen vegetables, oils etc.
Following is the list of existing Asian foods importers in Ontario who will be our main competitors in the business of food imports:
Anchor Foods International Ltd.
Shah Trading Co.
Bombay Trading Co.
Amba Food
Datta Food Manufacturing Inc.
Handi Foods Ltd.
Super Asia Food and Spices Ltd.
Zaika Foods (Indian Business Directory Canada)
These businesses are the dealers of all kind of Asian groceries, for example Pakistan, Afghani, Sri Lankan and Bangladeshi food items. Out of these, Anchor foods is the biggest player which has been in this line of business for a long time. The company distributes gourmet food products in the whole North America, and it has a good market capture.
Apart from it, we cannot overlook other players who have been in this business for a while.
5.2 Size and level of Operations along with profitability
As mentioned earlier, out of the existing companies anchor foods is a big organization. It is headquartered in British Columbia and its main high scale operations are there. Contrarily, its operations in Ontario are comparatively lower.
On the other hand, all other Asian distributing companies work on a relatively same scale. They deal in a limited range of products and their customer base is narrow focusing on one or two major retailer. Besides, their distribution network is also within restricted parameters not expanding too far.
Profitability: As a key objective of every business, all these existing businesses have been profitable to some extent with the percentage varying from one to another. The difference in profitability between the existing business houses is due to their scale and efficiency of operations. As said earlier, Anchor foods being a large corporation among all has a high profit percentage.
We found that all the existing Asian food importers are working on the principle of high profit margin, thus they are making high profits on limited set of operations. Opposing this, we will aim at keeping our profit margin low and attracting new customers. Our strategy will be to earn profits by selling in bulk at lower rates.
5.3 Strength and Weaknesses of Competitors as compared to our business.
Strengths
The competitors have an existing market share which acts as a powerful tool for them against us.
They have a certain percentage of customer loyalty from existing client base.
The competitors have existing recognition in the market.
They have experience in this field since few years which makes them more knowledgeable about the business environment. They have know-how luring and attracting customers.
Existing contracts with few client will create difficulties for us in creating new contracts.
Weakness
The prices of the products of the competitors are high as compared to our products.
They have a limited range of products.
The area of operation is limited in Toronto.
They lack on time and smooth flow of products and services.
Lack of use of technology in improving services.
No follow up for the services provided.
5.4 Critical Factors for Success in Business Sector
As an importer and distributor it is very important to focus on various factors to be successful among the competitors. This will help in beating the competition and gaining advantage over them. Following are some of the critical factors to be focused while conducting business:-
Gain Market share: -
The main aim of the company should be to acquire as much market as possible initially and then set higher targets in future. A higher market share will provide the company a good recognition. This will not only attract the local customers but will help to expand business in other regions nearby.
Customer satisfaction:-
Customer satisfaction would play an important role in acquiring and increasing the consumer base. It will help in creating customer loyalty and in turn generate more customers in future.
Maintain proper supply:-
Maintaining a proper supply of products and in time delivery of products and services will be an added advantage in beating the competition. This is an important factor as various importers fall short of supply to the demand of products. For facilitating a proper supply of goods a strong and effective distribution network formation is essential. This will support supply and on time delivery of goods.
Competitive prices:-
To provide product and services of finest quality at a reasonable cost. This will help in eliminating competition from products with inferior quality. Also the brand will gain recognition as a symbol of quality.
Availability of credit facility:-
Providing credit facility to the customers will be an added advantage over others. It will develop trust among the clients regarding the fulfilment of services as the company will show faith in the client to pay the cost of goods.
Creating awareness about the company its products and services:-
Marketing the company and its products and services to create awareness among the client about the company with the help of various sources such as social media, print media, and website. Other methods to promote the company would be to sponsor various public events and to display print advertisements about the company.
Proper utilization of resources:-
Proper utilization of resources is a critical factor as wastage of resources can lead to hampered growth of the business. It is very important to utilize the resources optimally as it will lead to generation of higher returns.
Offering Discount:-
The company will provide sufficient discounts to the regular clients apart from reasonable prices. This can be an advantage against other distributors to attract more clients. It will not only increase the client base but also create loyalty from client towards the company.
Follow up on sales:-
It will be essential to get a review from the clients about the services they received and feedback in form of suggestion which will help in improving our services. This will help in developing our business as per the requirements and needs of customers.
5.5 Uniqueness about our proposition
The products which we are importing from India to Canada are ready to eat food and herbal products which has a great demand in Canadian environment and some ready to eat food can easily be found in any grocery stores. Our idea is different as compared to the competitors as we want to bring the quality food into the Canadian market as this country is the land of immigrant and most of the people who are immigrants are students so we are bringing some ready to eat food for those students who either don’t know how to cook and the students who don’t have time for cooking food. For the maximization of sales we have cut down the prices of our products and we are going to supply these products to big store in Greater Toronto Area. Our products covers a big range of North Indian and South Indian recipes and they just feel you like you are eating a home cooked food. There are different variety of cuisines and they are convenient to buy. Our range consist of items such as Soups, Vegetables, curd cheese. We have some other products which are made from Herbs these products are very much different from
Other products available in market as they have no side-effects and they can be used by any age group. We can also compete in the fast pace market of Canada as we are providing customer satisfaction to our customers.
- A plan for market research
6.1Information that we still need to find:
Since our business plan is for ready to eat meals and herbal healthcare products we would have to meet the necessary compliances with the products according to the government of Canada. For food products we have to assist in preparing submissions when seeking approval from Health Canada for food products, processes and packaging materials.(Food and Nutrition guidance , n.d)
- Food Additives 6. Microbiological safety of foods
- Food Labelling7. Novel Fibre Sources
- Food Packaging 8. Novel Foods
- Health Claims 9. Sodium
- Incidental Additives 10. Temporary Marketing Authorization for Foods
Also we have a segment of herbal healthcare products of which we have to get approval from the Health Canada. Health Canada assess all natural health products before letting them to be sold in Canada. They also check that NHPs are properly manufactured (without contamination or incorrect ingredients). And they do post market monitoring to make sure that NHP regulations are being followed. Therefore we should be assure of our products quality as if we don’t get approval from the authorities, then our whole investment can prove to be a waste.(Health Canada, n.d)
Secondly, we need to have a knowledge about our competitors in the market. Since they have occupied the market share for longer period in the market we should grab some positives from them which would eventually help us out in conducting our business. We should also conduct a research on the ingredients which their products have which eventually lead to approval from the Health Canada. Pricing strategies and packaging are also an important part for the products in Food items and Healthcare products. We should be able to match them in every aspect and provide the products at a much cheaper price to gain a competitive edge over the competitors.
Last but not the least, we should also be aware of the demand of the products of our competitors till now as we need to establish a new brand, therefore we should make sure that a proper demand exist for our product which will help us to determine the volume of products we need to import in the beginning. We should also be aware of our product’s expiry as Food and Healthcare products can’t be kept in stock for longer periods and as the expiry comes near for these products we have to sell them at a discount as if the expiry date arises we will have to dump the product as per government rules and regulations.
6.2 Research Type
We will mainly rely on secondary based research as we will not sell our products directly to the consumer. We will get all the possible information from the internet, business journals and market analysis. But we will do some primary research as well like survey on demand of products with retailers and other business associates. Along with these researches we will also conduct a research on our competitors in the market. Our focus on the research will be specifically based on 4 P's i.e. product, Price, Place, and Promotion.
(Guide to Market Research and Analysis, n.d.)
6.3 Money & Time Required For Research
As a start-up and also a good team we will carry out every possible research work on our own but there is always something missing and also we cannot always rely totally on secondary data as it is highly unreliable. Therefore we will also hire a market research consultant to help us with our research work. A good consultant will cost us around 18-20 CAD$ an hour and we will need him/her 6-8 hours a day for around 15 days. We can also hire a consultant on fees basis. We will allocate approximately 2000 CAD$ and 15 days of our time for intensive marketing research.
(Pyle, n.d.)(Staff, n.d.)
6.4 Responsibility for each element of the research
The main aim of marketing research is to provide relevant, accurate, valid, reliable, clear and current information. Due to the ever increasing competition and poor decision making, marketing research proved to provide sound information.
Market research is done by the market researcher whose job is to provide the relevant information about the product or a market as asked by the company. Market researchers inform the company or firm about the largest market for their product, the fastest growing markets, market trends and outlook, market conditions and practices, and competitive firms and products( (N.A, 2008). Our firm can sell their products directly without conducting a research but, it will consume more time for analysing the right market to target as research will provide sufficient data to increase our chances of success.
Marketing manager’s role is to identify and satisfy customer needs by taking strategic decisions. Manager make decisions about potential opportunities, target market selection, planning and implementing marketing programs, marketing performance and control. Marketing manager’s decision is majorly based on the report given by the marketing researcher.
But, the roles are changing as marketing researcher are more involved in decision making and marketing manager are becoming more involved with market research. Their roles are interrelated with each other and they work as a team by putting their efforts and knowledge all together to get positive results for the company/firm.
It is not justified to hold one person responsible for each element of the research. It is not possible to carry the research process single-handedly. The marketing manager and marketing researcher is accountable for the research and thereafter implementing the strategies and tactics by keeping the research process in mind.
6.5 Critical Factors for a successful business after this research are:
• Good Communicator: After doing the research on the market and after studding the consumers demand the owner of the business should have a good command over his communication skills so as he/she can understand the consumer and their demands.
• Recruit the best people: Once the business has been started we should look for employees who are reliable and available to work in any shifts.
• Don’t let your service be viewed as a commodity: Lower price will help to get more business and profits into the market and will help to manage the competition.
• Quality Assurance: Once the business is started and you have a great demand for your products into the market as you have studied the consumer demands never compromise with the quality as it effects the goodwill of the company or Business.
• Up to date products: There is change in the demands of consumers so we should not stop studding the market as new and new products are needed in the market as people want change.
• Maximize Business into the market: Provide quality products as every business wants to be successful and provide the products at a cheaper price to the consumers as keeping in mind the pocket of the consumers.
- Analysis of Porter’s five forces with respect to food importation industry and our business.
The Porter’s five forces tool is a strong tool for knowing about where power lies in a business situation. It helps to understand the current competitive position and the position the business is aspiring to move into. A clear view enables to take advantage of the strengths and improve our weaknesses. The tool is helpful in assessing the profitability potential of new products, services and processes.
According to Porter’s five forces analysis, there are five main factors that help in determining the competitive power of business. The analysis of factors that will play in our industry is as under:
- Rivalry among competitors: In any industry, every firm strives to obtain a competitive advantage over its rivals. In the food import and export industry, the rivalry is always intense since there are many players in the industry. There is intense competition with every firm aiming to gain an advantage over the rivals with competitive practices and strategies. Following are the characteristics that will determine the rivalry in an industry:
i. Number of firms: In our industry, there are a number of firms who will fight for the same customers and resources. As a result, we will possess little power as buyers as well as our suppliers will tend to shift if we do not offer a good deal to them. But our competitive advantage will be herbal line of products. Since no other firms deal in good range of herbal products, our firm will be on the driver seat. It will be our strength.
ii. Market growth: As the Asian food market is growing in Canada, every firm in the industry will enjoy more revenues. Hence, businesses don’t have to fight intensely for the market share.
iii. Fixed costs: Taking into consideration that most of the costs are fixed in this line of business, firms will aim at bulk operations to attain the benefits of economies of scale. Consequently, the rivalry will become bitter.
iv. Storage costs: The storage costs for food items are high because of the need to store them in a favourable environment. As the result, the rivalry will be fierce because every firm would try to sell the products as soon as possible.
v. Switching costs: Due to low switching costs in this industry, our customers might shift freely from one product to another. Hence, our efforts will be to retain our customers in the competitive market
vi. Product differentiation: The bottom line of our business reveals that we are dealing in high quality products. Thus, our products will differ from our rivals, and we can do well in the competitive market.
vii. Industry shakeout: Being a profitable segment, new firms will be attracted. Eventually, it will result in increase in number of firms. It will result in increase in supply over demand at some point of time. Thus, the competition will turn intense resulting in price wars, failures or successes.
Overall, we will face a good level of competition from other firms in the industry. But our practice of differentiation of products from others in the market will enable us to find a fixed strong spot in the market.
- Threat of substitutes: Considering the fact that there are large number of substitutes in the food industry, demand will be elastic. In such a situation, customers have more alternatives. This will weaken our power to increase the price of the products. For example, in case of a packing of long raw carrots the substitute can be the bag of shredded carrots. The customer will prefer the one that is priced lower.
- Supplier power: As we are dealing in high quality food products and herbal products, we will have a limited number of suppliers from whom we can seek supplies. It will make our supplier powerful as they will have some degree of control. Also, we will need suppliers help in such a situation. Overall, due to unique line of products we will be dependent on our suppliers, and it will be difficult to shift from one supplier to the other due to high switching costs. Thus, suppliers might overcharge.
- Buyer power: Our main buyers will be grocery outlets and other retailers. They are concentrated with only a few having a significant market share. Hence, buyer will be powerful, and they can dictate terms with relation to price. Buyers will show a tendency to shift if we do not maintain good business relations with them.
- Threat of new entry: Because of the fact that it costs little money to enter this segment, few entry barriers, high profitability, fewer economies of scale, absence of patents and proprietary knowledge, new competitors can easily venture in. It will decline the overall profit levels of the industry.(Porter's five forces, n.d.)
In relation to some of the factors we have analysed, we can state that we are in a strong position since we are going to deal in an area of expertise; that is, high quality products, herbal products. Thus, we will have influence on prices to some extent.
7.2 Advantages for our proposition if we are first to the market
Our Ready to Eat products are already into the market selling under different brand names but the Herbal products of IMC Pvt Ltd which are basically made from herbs like basil leaves are new into the Canadian market.
According to the Health Canada, a government organisation 71% of Canadians have used a natural product or medicine for health and medicinal purpose in some part of their life.
(About Natural Health Products, n.d.)
This gives us a competitive advantage of introducing Indian Herbal products into Canada as ancient Indian remedies are popular worldwide with no side effects.
(India looks to cash in on global demand for ancient remedies, 2014)
Hence introducing the Indian Herbal Product of IMC Pvt Ltd which is one of the reputed company of India will definitely make us the industry leader of herbal products.
As our main goal is to target Asian customers and Asia already has a very rich culture of herbal remedies. This will be very helpful for us to for a customer base. In future we intend to serve each and every person from every community across Canada.
As the herbal product is already marketed successfully in India so there will be a minimal risk involved in marketing the same product into Canada.
7.3 Strategic Direction
Our Ready to Eat product marketing strategy is based on Focus. We intend to focus basically Asian consumer, specifically new immigrants, students and working class who face difficulty in adjusting into a new society. From my personal experience many of the international students and new immigrants are not used to live alone away from home and face a lot of difficulty as most of us are not used to cooking.
As we all work hard to survive in this country and living alone, away from our home can be too stressful, especially if we don't know how to cook. SO our Ready to Eat product caters to the working class immigrants from the Asian community to have our Ready to Eat food in traditional flavours.
Our strategic direction for herbal products from the IMC Pvt Ltd is based on product differentiation. This product is something new in Canada. Our aim is to target every person living in Canada and particularly the Asian community as they have a very strong history and culture of herbal remedies. Most of our herbal products are made from basil leaves along with some other herbs.
(Porter's Generic Strategies, n.d.)
7.4 Strategic option to be adopted and implemented by us.
The strategic option which we will adopt will be a combination of cost leadership and differentiation strategy. We aim at selling the products at a relatively low prices as compared to the existing competitors. On the basis of it, we will focus on quantitative expansion; that is, attract as many clients as we can. We can acquire cost advantages if we have unique process efficiencies, access to low cost supplies, and expertise in our area ofoperations, efficient distribution channels and avoidance of unnecessary costs. Also, we will concentrate on many segments instead of any individual group of clients.
Along with it, we are looking forward to differentiating our products from others on the basis of quality so that the customers perceive it to be better than our competitors. The unique attributes of the products may create extra value for the customers. We will also deal in large range of herbals which do not exist yet in the Canadian market. As our products are different from others, we can command high but reasonable prices keeping the profit margin low.(Porter's Generic Strategies, n.d.)
Following are the cost which are likely to incur while marketing the products-
8 Pricing