Exporting Cereal Products To The Indian Market: Market Analysis And Business Considerations

SWOT Analysis Tool

Question:

Discuss about the Importation of Hubbard cereal product specifically muesli to India.

Product importation or exportation depends on value proposition of the products or service. According to Sohel, Rahman and Uddin (2014), exporting the cereal products make million dollars in the global market if the procedures meets the appropriate shipping methods and business norms. Hubbard, New Zealand produces the healthy and nutritious cereal products (Hubbards.co.nz 2017). The company is looking forward to export the cereal products in Indian market to make more monetarys benefits. India captures the second largest position in producing the major cereal products, such as wheat, rice, and so on. Therefore, it can be assumed that Hubbard has the significant opportunities to make more profits in the Indian market. It is reported that India had imposed ban on the cereal products in the year of 2008 for meeting the domestic needs (Lee et al. 2012). Therefore, while exporting these products from New Zealand market, it is essential to recognize the market demands and accordingly need to conduct the extensive market research to accomplish the repeatedly changing demands in the Indian market. It is noticed that the current innovations and advancements in the business scenario have created the significant impacts on the global and domestic customers. Therefore, it is assumed that the repeated changes in the market demands are quite considerable threats for Hubbard Muesli in exporting cereal products in the Indian market.

The macro and micro environmental analysis tool would be used in this study to identify the market potentially, both internally and externally. The development of the SWOT analysis tool would be used to identify the potentiality of the company for conducting business in Indian market. The strategic priorities would also be discussed in this study by analyzing the ‘marketing mix’ tool.

The importation of the cereal products in the Indian market requires following the business norms and regulations (Hollensen 2015). Especially, when the export marketing is performed between two countries, it is essential to keep the focus on the market demands. The PESTLE analysis would explore the external market scenario of India in recognizing the market opportunities and risks of importing cereal products by Hubbard.

PESTLE Analysis

Political Impact

India ensures the stable condition in the democratic field with the political equilibrium that attracts the international countries to invest in the domestic market. Hubbard is looking forward to invest in the Indian market by identifying the prospects for the cereal products. The stabilized political scenario in India would thus be much favorable for the cereal business. However, the sudden change in the import policies and cereal market can be one of the potential threats for the company (Bohari, Hin and Fuad 2017).

Economic Impact

Indian cereal market has been experiencing growth in the economic field. The noticeable rise in the consumer health-awareness is quite opportune for the foreign cereal company. It is anticipated that the rise in the demands of breakfast cereals would be more profitable in upcoming years. The net production and availability of the cereal products in India is presented further:

Marketing Mix

Graph 1: Net Production and Availability of Cereals in India

(Source: Thehindubusinessline.com 2017)

It is notable that the food price inflation is one reason for the continuous declining per capital domestic availability. If Hubbard pays attention on meeting the expectations of the domestic market, it would be profitable to increase the revenues with the imported cereal products. Therefore, it is essential for the company to utilize market opportunity and the economic favors for gaining profitability in a high competitive Indian cereal market.

Socio-cultural Impact

The acceptance of the products or services and the willingness of the people to purchase the product are considered as the socio-cultural aspect of a country. It is necessary for the company to analyze the market demands in India in consuming the cereal products. It can be interpreted the increasing concerns regarding health is quite impactful factor for making profits in this business (Stam, Arzlanian and Elfring 2014). The company requires focusing on the market demands at the initial stage to offer the desired cereal products. Accordingly, Hubbard would make more revenues by exporting the cereal products in the Indian market.

Technological Impact

India is a developing country in which technological adoption is a considerable factor for business growth. The cereal market of India is quite adaptive towards the technological advancements that can be brought to the business industry (Ekmen-Özçelik and Erlat 2013). The innovative process of producing grains would be much profitable for the company. It is necessary to invest the adequate capital resources for using these technologies.

Legal Impact

The legal scenario of India is quite flexible towards importing the grains or cereal products from different country. It welcomes the opportunity to establish the internationalized companies that would make more profits in the domestic market (Riff, Lacy and Fico 2014). Hence, Hubbard can utilize such legal facilities to expand the business and make more profits from the Indian customers with the imported cereal products from New Zealand.

Hubbard is mainly looking forward to sell the cereal products in India by meeting the needs of the domestic market. The environmental impact is thus quite a significant factor to be taken into account. The increasing demands of the healthy foods and multi-grains or the cereals are thus opportune enough for making more profits in India (Gupta 2013).

Micro environmental analysis

Competitive analysis

Competitive analysis in marketing and strategic management is a systematic policy of evaluating the strengths and weakness of competitors. Based on the evaluating the brand managers like to form business strategy and policy. Before entering into the new market, every single brand has to identify their competitors and their market strategies (Sohel, Rahman and Uddin 2014). In the market of New Zealand, Hubbards Muesli has already received immense recognition as one of the most prestigious cereal brands. While expanding the entire process of business in the market of India the business experts of Hubbards Muesli has made effective competitive analysis.

Baggrys and Kellog’s are the two recognizable cereal brands occupying a predominant place in the market of India. Over 20 years Bagrry is running their wings successfully in Indian market. After evaluating the psychological and cultural background of target customers, Bagrry has decided to maintain low cost pricing strategy so that customers having average income level can afford their services (Lee, Feiock and Lee 2012). As per the market scenario of 2015, Bagrry has received as one of the most leading cereal brands in India. Kellog’s on the other hand is one of the most successful food manufacturing companies especially famous for various cereal products. In order to expand the business in the market of India the business experts have rendered varieties of products and services based on which customers can get ample options to choose the different flavors.  As per the current market scenario, the positions that the two brands like Baggrys and Kellog’s hold are as follows:

PESTLE Analysis

Figure 1: Current market position of Baggrys and Kellog’s

( Source: Hollensen 2015)

However, after evaluating the price, strategy and product range of Baggrys and Kellog’s it can be analyzed that the two brands have rendered variety of flavors in order to draw the attention of different level of customers. The price range of the products such as Baggrys and Kellog’s is average. As a result, the target customers of India do not have to face difficulties in affording the products as well as services (Bohari, Hin and Fuad 2017). However, Hubbards Muesli while entering their wings in the market of India would have to face major market threats from its competitors.   Baggrys and Kellog’s has already established their brands in the market of India where they have occupied around 50% market share together in the cereal industry.

However, after evaluating the competitors, market strategy and policy Hubbards Muesli brand managers have decided to implement low cost strategy by maintaining quality of products. Low cost strategy would be very much effective in the market of India for drawing the customers’ attention due to their average income status. However, this Hubbards Muesli has rendered product variety as well in their business process to draw attention of the people of various cultural backgrounds (Gupta 2013). As per the current market scenario, the influence of digital market in India is high. Therefore, in order to make the people of India aware about brands and services Hubbards Muesli should use social media as well for business expansion in the soil of India. Followings are the specific areas where Hubbards Muesli has analyzed the strength and weakness of its competitors.     

Table 1: Strengths and weaknesses of Competitors

(Source: Stam, Arzlanian and Elfring 2014)

SWOT analysis

Before entering in the market of India Hubbards Muesli should make an effective microanalysis as well in order to know the strength, weakness, opportunities and threats of the company.

Table 2: Overview of SWOT of Hubbards Muesli

(Source: Riff, Lacy and Fico 2014)

Product variety is one of the most effective strengths of Hubbards Muesli due to which the brand can draw the attention of large number of customers in the market of India. People belonging to this specific country are endowed with average income status. Therefore, Hubbards Muesli has decided to follow low pricing strategy so that customers do not have to struggle in affording the products.

In addition, in compared to the brand volume Hubbards Muesli has not recruited sufficient number of employees within the operation. As a result, the service providers have to face difficulties in maintaining a balance between customers’ demands and supply. The employers are from New Zealand. Therefore, they face challenges while understanding the psychology of Indian customers (Hollensen 2015). The two major competitors such as Baggrys and Kellog’s have already established their business in the Indian market. In order to overcome the competitors’ market threat Hubbards Muesli should innovative business models for expanding entire business process.

Marketing Objectives

• To identify the market potentiality of making profits in the Indian market with the imported cereal products
• To make 10% of the profit amount with the sales of cereals products in next 1 year
• To understand the market risks for Hubbard in selling the imported cereal products to the domestic customers

Positioning

The major focus of Hubbard to establish the position of the cereal products is presented further:

• The company is developing awareness of the domestic market needs for the revenue growth in the Indian market.
• Hubbard is concerned about the high quality grains or the cereal products that would be healthier for the current generation. The current increasing concerns regarding the healthy diets should be taken into consideration before importing the cereal products to Indian market.
• The appropriate pricing strategy should be developed as per the income level of the domestic market.

Political Scenario

Marketing Mix

Marketing mix of Hubbard analyses the brad or the company that covers the 4 elements of marketing, such as product, price, place, and promotion. The discussion of this marketing mix would ensure whether Hubbard has the potentiality to enter the Indian market with the imported cereal products.

Product

The availability of the multi-grain and high quality cereal products, such as wheat and rice is quite demanding for the Indian customers (Huang and Sarigöllü 2014). The increasing concerns regarding the healthier diet are thus quite favorable for Hubbard to enter the Indian market with these cereals products.

Price

Hubbard requires concentrating on the price of the products at the initial stage. The economically developing country India is highly concerned about the income level. Hence, the moderate and reasonable price of the products would be beneficial for Hubbard to participate in a highly competitive cereal market of India.

Place

The people from rural areas are more likely consuming cereal products more than the urban people. Hence, Hubbard can target both the rural and urban market simultaneously for selling the cereal products. The availability of the products in the grocery shops would be convenient enough to reach the people in domestic market of India.

Promotion

It is notable that the direct competition with Kellog’s India is quite threatening for Hubbard to make the considerable profits. The impressive promotional activities performed by the competitors would also be a potential threat for the company (Stam, Arzlanian and Elfring 2014). Hence, it is essential to develop the effective promotional strategy to make the people aware of the value added product ingredients associated with the brands. Meeting the needs of the domestic market about consuming the healthier diets would be fulfilled with an attractive promotional process.

These specifications are important for Hubbar to enter the domestic Indian market in cereal industry.  Developing the proper market analysis would ensure the future profitability and accomplishment of the marketing objectives.

Conclusion

This specific study has focused to make an in-depth overview about the importance of effective market analysis before expanding the entire business process in the market of India. Hubbards Muesli has already achieved an image and reputation in the market of New Zealand due to the quality of brands as well as services. Before expanding the entire business process in different market Hubbards has made effective environmental analysis in order to know the various factors and barriers in India. With the help of in-depth competitive analysis Hubbards used their business innovation model so that the business experts can draw the attention of target customers. The marketing managers of Hubbards Muesli have implemented marketing mix strategy as well for maintaining effective promotional activities of products as well as services

References

Bohari, A.M., Hin, C.W. and Fuad, N., 2017. The competitiveness of halal food industry in Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space, 9(1).

Ekmen-Özçelik, S. and Erlat, G., 2013. What can we say about Turkey and its competitors in the EU market? An analysis by extensive and intensive margins. Topics in Middle Eastern and North African Economies, 15.

Gupta, A., 2013. Environmental and pest analysis: An approach to external business environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), pp.13-17.

Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.

Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.

Hubbards.co.nz. 2017. Hubbards. [online] Available at: https://www.hubbards.co.nz/about-us/ [Accessed 20 Dec. 2017].

Lee, I.W., Feiock, R.C. and Lee, Y., 2012. Competitors and Cooperators: A Micro?level Analysis of Regional Economic Development Collaboration Networks. Public Administration Review, 72(2), pp.253-262.

Riff, D., Lacy, S. and Fico, F., 2014. Analyzing media messages: Using quantitative content analysis in research. Routledge.

Sohel, S.M., Rahman, A.M.A. and Uddin, M.A., 2014. Competitive profile matrix (CPM) as a competitors’ analysis tool: A theoretical perspective. International Journal of Human Potential Development, 3(1), pp.40-47.

Stam, W., Arzlanian, S. and Elfring, T., 2014. Social capital of entrepreneurs and small firm performance: A meta-analysis of contextual and methodological moderators. Journal of Business Venturing, 29(1), pp.152-173.

Thehindubusinessline.com. 2017. The political economy of food exports. [online] The Hindu Business Line. Available at: https://www.thehindubusinessline.com/opinion/columns/c-p-chandrasekhar/the-political-economy-of-food-exports/article4570293.ece [Accessed 20 Dec. 2017]

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