Objectives
Discuss About The Niche Marketing Naturally Cheeky Management.
The intense competition in the beverage market has made it crucial for the national level beverage companies to seek new markets and expand even within Australia (Boerschinger, Svitavsky and Yoder A., 2017). These companies require to make international standard marketing strategy to counteract the competition which they face owing to entry of international competitors from other countries. The paper would concentrate on formation of an international level marketing strategy for Naturally Cheeky which an apple cider vinegar manufacturing and marketing firm (naturallycheeky.com.au 2018). The study would first delve into the business environment of the firm and then go on to explore its marketing strategies.
The objective of international market strategy is to market the apple cider vinegar products by Naturally Cheeky in both business to business market (B2B) and business to customer market (B2C). The Australian vinegar based drink marketing firm has its offices in multiple places in Australia like Queensland, Palmerston, Coolalinga, Darwin and New South Wales. The firm seeks to markets its vinegar products using niche marketing strategy both in the B2B and B2C segments. The B2B segment would consist of premium five star hotels located in Sydney and Melbourne. The end customer segment chosen for the B2C niche marketing strategy consists of athletes. The marketing strategy would hold great significance for Naturally Cheeky because the firm promotes its drinks as healthy alternatives to soft drinks. This means that the company comes direct competition from beverage giants like Coca Cola and Pepsi Co.
The following section would deal with the environment which prevails in the market of Australia is concerned:
The political environment in Australia is very stable which encourage spread of companies. The government makes laws and policies which forms the base of the operations of all the business firms operating in the country. The country has strong bilateral relationship with countries like the United States, the United Kingdom, India, China and other emerging countries. These political factors have significant impacts on the business operations of the companies operating within Australia. For example, Australia and the United States of America share strong bilateral relationship in the different fields like foreign policy, energy and trade (usa.embassy.gov.au 2018). This strong relationship has led to the entry of American companies into the Australian market. These American companies are competing with the Australian companies. Coca Cola is competing with the beverage companies based in Australia for market share and revenue. Moreover, these leading American beverage giants have listed themselves on the Australian Stock Exchange which allow them to raise capital from the Australian securities market (asx.com.au 2018). The Australian beverage firms like Naturally Cheeky are not public limited companies and fail to withstand this competition. Thus, the political stability and bilateral ties of Australia have led to entry of foreign companies making the market of Australian more competitive.
Marketing Environment Summary
An analysis of the impact of the political factors of the Australian market would point that the bilateral ties present several business opportunities for the Australian firms. Australia has strong ties with Asian countries like China (aph.gov.au 2018). China is emerging into a global giant and Australian companies are eyeing China as a profitable. Similarly, India also presents a profitable market for the Australian companies (mea.gov.in 2018). Both these Asian countries have hige customer base which would provide the Australian companies the opportunity to diversify the loss of revenue they incur due to competition from American companies. However, the complex relationship which China shares with India and the US, its dwindling political stability and arms race in East Asia have negative impact on the business of the Australian companies seeking to enter the markets (aph.gov.au 2018). The political factors like political problems in Australia like national energy policy have deep impacts on the operations of all the firms including Naturally Cheeky (smh.com.au 2018). Terrorism and extortion of firms for money by terror groups remains to be a perpetual political threat looming over the business market environment in Australia (news.com.au 2018).
The economic environmental factors of Australia impacting beverage companies like Naturally Cheeky would be increasing per capita income of the country, its high quality supply chains and the market opportunities are the outcomes of its bilateral political connections. As far as beverage industry is concerned, its productivity is dependent on the availability of fresh agricultural products like fruits. Another important economic factor which determines the production of beverage is availability of water resources (Valta et al. 2016). The availability of labour plays an important role in the productivity of the beverage industry. The main raw materials of the beverage industry consist of fruits and nature identical ingredients which are perishable in nature. The finished products, the apple cider vinegar in different flavours are also perishable in nature. This makes it clear that the productivity and the revenue generation of the beverage industry is dependent on the availability of logistics and warehouse facilities. The market of Australia provides an excellent network of modern warehouse and logistics which enable the beverage companies store and transport their products to distant places (prnewswire.com 2018). The next economic factor which promotes the business of firms like Naturally Cheeky is availability of easy finance in Australia. The country has a wide network of banks and non-banking financial institutions which provides the firms with ready financial help like loan facilities. This factor help firms in Australia run their immense business operations spread all over Australia and abroad.
Political Environment
Figure 1. Graph showing 10 per GDP in Australia
(Source: tradingeconomics.com 2018)
The graph above shows that GDP of Australia over is showing a downward trend. This means that the income of the Australian consumers are falling. The outcome of this fall of GDP would be lower amount of disposable income in the hands of the Australian consumers to afford services at the premium hotels which form a main B2B customers of the beverage companies. This analysis clearly shows that along with dwindling GDP and entry of foreign beverage companies, the Australian beverage companies are under intense economic threats.
The next important economic factor which impacts with business operations of the beverage companies like Naturally Cheeky is international currency exchange rate. This is because online payment system which the companies use to make and receive payments, especially from business organisations are owned by American companies like Amazon. The graph below show the weakening position of AUD against USD. This means that Australian beverage companies require to obtain services like hiring of ecommerce portals from American companies at higher rates which would increase their expenditure.
Figure 2, Graph showing AUD:USD conversion rate on 5 years
(Source: bloomberg.com 2018)
The Australian beverage companies can take advantage of the political ties of the government and expand into the neighbouring markets. This would enable them to diversify the losses they incur due to increase in expenditure and loss of revenue due to stronger competitors (Asongu 2016).
The economic and political stability of Australia has earned it a strong technological environment which in the end benefits the business organisations. The firms like Naturally Cheeky manufacture apple cider vinegar and mix them with fruits. This requires high order food technology to maintain appropriate colour, flavour and quality of the products.
The next area where technological factors play significant role is in the supply chain management. The advanced information and communication technology which Australia offers enables the business organisations communicate with a suppliers of raw materials spread all over the world. This enables them to obtain high quality raw materials at economic rates, which in turn enable them to keep their cost of production low. The technologically advanced market of Australia provides opportunities to business organisations to bring about innovation in their products.
The business organisations of Australia use technology to operate and maintain a strong communication within the companies and with external parties. The business organisations use their strong communication channel to coordinate business operations among their various geographically dispersed locations. The use technology to promote their goods and services as well. They communicate with their customers using the social media platforms which enable them to inform the latter about their future strategies. Thus, technology enables business organisations to operate more efficiently in the market.
Economic Environment
The business organisations operating in Australia come under several environmental factors. For example, the Environment Protection and Biodiversity Conservation Act 1999 or EPBC Act necessitates all business organisations operate in environment friendly ways so as to minimise pollution in the country. The law clearly mentions that failure to comply with it would attract legal actions and penalties against the organisations concerned (environment.gov.au 2018). The customers today also prefer to obtain products from companies which operate in environment friendly ways. This societal influence has resulted in business organisations acquire green supply chains to acquire more environment friendly raw materials. This business organisations today operate as responsible corporate citizens which operate in environment friendly ways to reduce the pollution level to the extent possible.
The business organisations today have to comply with several laws while operating in the market of Australia. They have to comply with various laws and regulations which is power within Australia. The business organisations have to follows laws like income tax laws which apply to all the industries. Similarly the business organisations have to comply with laws pertaining to the industries they belong to. For example, Naturally Cheeky manufactures apple cider vinegar in fusion with different flavours. This necessitates the firm to comply with the food safety standards which are in operation in Australia (foodstandards.gov 2018). The business organisations operating in Australia have to comply with Safe Work Act 1999 (safework.nsw.gov.au 2018).
A competitor analysis of Naturally Cheeky shows that the firm receives strong competition from other manufacturers of apple cider vinegar like Lirah which is based in Stanthorpe, Queensaland, Australia (lirah.com.au 2018). The availability of technology and a strong wine industry has led to the growth of vinegar industry in the country. The premium vinegar making companies manufacture and market thousands of vinegar within Australia. The vinegar manufacturers like Lirah employ high level food technology and specialists to manufacture premium quality vinegar which they export to foreign markets as well. These manufacturers compete with Naturally Cheeky for market position (abc.net.au 2018).
The next group of competitors of Naturally Cheeky consist of the carbonated beverage manufacturing companies. This is because the apple cider manufacturers promote their products as ‘healthy’ alternatives to carbonated soft drinks. This brings them under direct competition from the leading carbonated beverage manufacturers like Coca Cola and Pepsi Co (pepsico.com 2018). The manufacturers of tea and coffee based products like Nestle also compete with apple cider vinegar manufacturers like Naturally Cheeky (nestle.com.au 2018).
Technological Environment
An analysis of the competitors of Naturally Cheeky would show that the firm faces stiff competition in Australia. One can also point out that the competitors like Pepsi Co and Nestle are stronger compared to it. The company needs to promote its goods aggressively in order to succeed in sustaining in the Australian beverage market.
Naturally Cheeky finds ready acceptance in the Australian market both in the business to business segment and business to customer segments. The firm uses niche marketing strategy to sustain and expand in the highly competitive Australian beverage market. The business to business market of the firm consist of premium hotels in Sydney and Melbourne. The business to customer segment consists of health conscious athletes (Ashraf et al. 2017). These firm uses appropriate marketing mix to gain acceptance among these two customer segments. This is evident by the presence of the firm in multiple locations in Australia like Ballina, Byron Bay, Darwin and Humpty Queensland. The products by the firm are available in top retail chains like Coles which once again substantiates its strong market presence (Li and Lin 2015).
Naturally Cheeky uses niche marketing as the mode of entry to enter and sustain in the competitive beverage market of Australia. The firm in order to gain strategic in the markets of Australia and access to its target customers, makes its products available in cafes, organic stores, pharmaceutical stores and health clubs. The firm uses the franchisee and retailer mode to distribute its products among these retailers.
The STPD strategy of Naturally Cheeky consist if segmentation, targeting, positioning and differentiation to gain higher competitive position in the market. The following section would unearth the STPD strategy of Naturally Cheeky:
Naturally Cheeky segments its markets geographically into New South Wales, Queensland and Northern Territory. The firm makes its products available in cafes, gymnasiums and pharmaceutical stores. The firms segments its market psychographically and target health conscious people like athletes. The athletes taking part in different sports usually avoid soft drinks due to high sugar content. According the manufacturers of apple cider vinegar drinks like Naturally Cheeky, the athletes can opt for their products owing to the health benefits and refreshing flavours in which these products come (theconversation.com 2018). The next segmentation strategy which Naturally Cheeky uses consists of economic segmentation. The products of the company are of high quality and are expensive. The high price of the products by Naturally Cheeky act as quality assurance for the consumers (Eckel et al. 2015). The presence of products in the premium hotels of Sydney and Melbourne once again bears testimony of its aggressive segmentation strategy.
The targeting strategy of Naturally Cheeky as pointed out would concentrate on two niche customer segments in B2B and B2C segment. The B2B segment would consist of premium hotels located in Sydney and Melbourne. The firm offers its apple cider vinegar products in flavbours like strawberry and minty blonde which finds acceptance among the middle-class and upper class customers who visit these hotels. This leads to large demand for its products in these high profile hotels. An analysis of the targeting strategy of Naturally Cheeky shows that the firm’s B2B and B2C targeting strategy are actually interdependent.
Naturally Cheeky positions its products as high quality and healthy premium products in the market. The firm through its official website clearly mention the organic and environment friendly origin of its products. The website also mentions that apple cider vinegar is good for health. These facts allow the company to establish its products as a healthy products which can even be consumed by athletes.
The differentiation strategy of Naturally Cheeky consists of the availability of its products in diverse flavours like mint and strawberry. The firm in order to differentiate its products from its competitors make them available in various locations like gymnasiums and cafes.
The product strategy of Naturally Cheeky consist of two parts the intangible component and the tangible component. The products of the firm consists of apple cider vinegar in flavours like cheeky pair, ginger red, minty blonde, spice blonde, troppo blonde and seasonal range. The intangible products of the firm consist of suggestions on serving its products to make them more enjoyable to consumers. Naturally Cheeky offers its healthy products at various cafes and gymnasiums which are frequented by its niche customers, the athletes. As far as the business customers are concerned, the firm offers distributorship of its products. The business customers can contact it on its official website.
The pricing strategy which Naturally Cheeky adopts helps it to attract its two customer segments, the premium hotels as far as B2B is concerned and the athletes in case of B2C. The premium hotels of Sydney and Melbourne are visited by upper class people. Australia receives immense number of foreign tourists who put up in these premium hotels (tra.gov.au 2018). Thus, appropriate pricing strategy acts as a sign of premium quality of Naturally Cheeky products which make attractive to the upper class customers of the hotels. The athletes too consider the high price of Naturally Cheeky products as an assurance for quality and consume them.
Naturally Cheeky promotes its products on its official websites to both B2B and B2C customers. The customers can gain information about the products of the company on its official website and about their availability. The firm also promotes its products on social media platforms like Istagram and Facebook. The official website as pointed out also help the firm to promote its products among the distributors as well. This strong promotional strategy enables Naturally Cheeky attract a large business and individual customers, thus earning it immense revenue (Govindan, Paam and Abtahi 2016).
The distribution strategy of Naturally Cheeky enables it to earn immense revenue. The firm is present in several locations like NSW and Queensland. This enables the firm communicate with the local distribution chains of retailers and wholesalers to distribute its products. Moreover, its distribution chains also includes supermarkets, cafes and gymnasiums frequented by upper class people. This intricate distribution network enable the firm to distribute its products among immense consumer base to earn huge revenue. The firm is in fact spreading its distribution channel in new Australian markets to earn more revenue (Afshari, et al. 2014).
Conclusion:
The above discussion bring into the light several salient aspects of the marketing environment and strategies of Naturally Cheeky. First, the business environment of the firm is extremely competitive and demands strong marketing strategies to sustain in it. Secondly, the firm offers apple cider vinegar which it promotes as healthy alternative to aerated soft drinks. Thirdly, this brings the company into direct collision with giants like Pepsi Co and fourthly, the company cannot withstand the competition from these gaints. The following recommendations can be made in the light of the conclusion to the management of Naturally Cheeky:
- The firm must become a public limited company which would allow it to acquire capital from the stock market of Australia. This would provide it with the strong capital base that it require to compete with competitors like Coca Cola Company which are multinational public limited companies.
- The company must expand its present product line into new products like organic fruit drink ranges not based on vinegar. This would enable it to attract new customer base and maximise its revenue generation.
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