Marketing Analysis Of Tassal Company: Products, Strategies, And Sustainability Practices

Background of the company

Tassal Company was formed in the year 1986 and began farming of salmon in Australia. The company’s head office is located in Melbourne.  It is the major manufacturer of Salmon in Australian region. Throughout the years, the company has become one of the prominent companies in this sector. The company also believes in upholding transparency among consumers by providing information about the product. In 2003, Talson became a public company and is also registered stock exchange in Australia. Its product list consists of fresh, smoked, canned and frozen salmon products within Australia as well as globally. Huon Aquaculture and Petuna Seafoods are the key competitors of the company. Tassal has managed to accomplish operational excellence in their activities and also maintains primary values of the company ranging from quality standards and health benefits. (Tassal Team, 2017).

• Community Commitment and mergers: Tassal takes periodic feedback from the stakeholders and performs their activities accordingly. For the usage of marine resources, the company takes several initiatives in uniting with the stakeholders.  Tassal also provides decent amenities to the people affected by its day to day activities.  It is important for the companies to have community partnerships. For this purpose, the Tassal has joined hands with various stakeholders.
• Maintainability: The Company is loyal towards its product quality, staff and society.  It has a planned strategy for the future, which ensures that the company is able to providing long term returns to its stockholders. (Government, 2016).
• Corporate Social Responsibility: The Company has a separate budget for funding local clubs, societies and communities. The company takes pleasure in undertaking activities that benefit society (Ryan, 2016).

• Protecting Wildlife: Tassal also gives utmost importance to the protection of wildlife and manages its operations accordingly. At the farms the wildlife management takes care to avoid interactions between Seal and birds. The idea is to minimize the number of interactions and make sure that they do not enter the farms. For this purpose, the company makes use of seal proof bird nets (Commonwealth of Australia , 2015).
• Change in weather: There is always a tendency of long term risks and opportunities as well occurred due to climate change specifically in agriculture. The company employs scientists to identify the future weather forecasts and focuses on broad scale ecological monitoring. It has employed practices to manage risks. During summers at a time when survival of fishes becomes difficult, Tassal opts for selective breeding and modifies its farming techniques.
• Ecological Balance: Tassal is spending huge amount in research and development.   It is already participating in various related ecological research projects. From time to time the company undertakes several studies make to gain knowledge about the changes in the field.
• Maintaining Water Quality: For ensuring better quality of water, the company has taken necessary licenses related to water quality management. Ensuring water quality is important to the company as ultimately it will help in providing better fish quality.

Tassal enjoy’s great goodwill. The National survey published in BRW has listed Tassal as the extremely reputed industry leader in agriculture, forestry as well as fishing. The company has a system in place for being socially and environmentally responsible in carrying out its business activities (World Ocean Review, 2017).

The Company is compliance with Aquaculture Stewardship Council (ASC) certification. For a company dealing with Salmon production, it is a first award of such kind. This also developed faith in the consumers that the company is environmentally responsible (FRDC, 2014).

Marketing Mix is a tool used by the companies and Marketing departments to be able to determine a product offering.  The 4Ps of the marketing mix are:-

The product offered should be relevant to the prospective buyers, and it should be as per their need and requirements. The aim of the company should be to meet the consumer expectations.

Under the salmon category, Tassal offers a variety of products. Salmon is provided by them in different forms, i.e. fresh, smoky, canned and frozen. Their fresh salmon is very demanding on the BBQ and users love to cook sashimi (Fitzgerald, 2013). Their other version, i.e. smoked Tasmania has good health benefits and is easy to cook with great taste. Tasmania is also available in the canned form which is also delicious and unique. Even the Frozen Salmon doesn’t take much time to cook as it takes just 20-25 minutes in the oven. Because of several other factors, the company has designed a wide range of products. For example: Due to avoid the use of microwave by consumers, recipes that can be easily made using microwaves are designed and made available by the company. It also keeps on modifying its product offerings as per the needs of the consumers. The Tassal’s products are designed in such a way that they are healthy and hygienic. They are so skillfully designed that it prevents any kind of allergy caused because of seafood. Atlantic salmon that grows in Tasmania is very nutritious. It offers a rich source of required fatty acids, minerals, protein and vitamins. Salmon is very nutritious and is also a good source of Vitamin D and Omega 3. At 150 grams intake of salmons per week has enormous health benefits (Singh, 2012).

Several activities performed by Tassal

If a product is conveniently available in the market it reflects that the company has employed a good place mix. The customers can effortlessly shop the product across the, shopping malls or even go for online shopping. Nowadays, people are finding online shopping very convenient and comfortable. It’s not only beneficial for the buyers but also sellers (Horvat, 2014).

Tassal obtains its raw produces from the sea of Tasmanian. As already discussed, Tassal’s local and import supply approach includes risk management and safeguards the environment. Since Salmon has three years of growing cycles, the product’s supply may at times be less than the required time as it is dependent on a number of factors such as environmental and demand fluctuations that are outside the control. The industry has this imbalance of supply and demand, but focus is being laid to cover this gap. Tassal plans to continue to sell its salmon products in the Australia’s fishing sector. Its products are already popular among the people of Australia.

While determining the prices of the products offered, certain things need to be kept in mind. Pricing should be determined in such a way that it maximizes profits, there is a decent return on investments, sales target is achieved and competitor pricing is considered. For meeting the production expenses, companies determine the value of the product above the cost (Dundas-Smith & Huggan, 2006). The price finalized should also cover the cost of Research & development and other indirect costs. Consumer expectations also take into consideration at the time of pricing as they may require ethical, sustainable and exclusive product. The company Tassal practices different kinds of pricing strategies. Since their products are healthy and hygienic, they tend to offer value based pricing where consumers are ready to pay more for better quality and taste. Another pricing strategy the company uses is cost based pricing strategy. Even at a time when the cost of harvesting salmon was more, the company could cover up the costs because of supply chain efficiencies. The company’s focus is on attaining a sustainable price for the customer. The price is determined in such a way that it fulfills both companies as well as customers’ expectations. Even at the time when there was slow fish growth due to high temperature in summers as well as autumn season, Tassal managed to provide their products at reasonable prices and adjusted their retail price to cover up the higher cost. Also selling less volume at increased prices fish in the sea will be helpful in recovering the costs and building Salmon biomass for long period sustainability growth. This is important for better optimization of agriculture, processing, returns and for better international business practice (Pilgrim, 2015).

Promotion mix is an amalgamation of several tasks which includes advertising, sales, promotion and personal selling. In the present times, Internet including Social Media is the most trending communication tool for all companies. Every company must use Social Media as all the prospective buyers are keen on interacting and hearing feedback about the product they are looking forward to buy. Tassal has witnessed an upward trend in the demand of salmon. This is also because it has been using unique marketing strategies along with product development. As per the company, it is essential for the long term growth and sustainability of the Salmon industry in Australia. To escalate sales, Tassal has been working very hard targeting its retail as well as wholesale consumers. The company runs promotional campaigns, provides recipes to ensure that marketing communication reaches to the potential buyers. Tassal offers its products in several forms, but is lacking in branding of fresh fish segment and specifically if the salmon is layered with grass on fish counters in fishmongers. The company is working on this concern and is creating an entire set point of sales material to discuss about Tassal brand (Papageorgiou, 2012).

Social activities

The company is active when it comes to social networking sites. The clients seem like fond of all the posts posted by Tassal about its products which includes recipes, new product development and general health benefit tips. They also acknowledge and address consumer complaints and offers them improved quality and service which happens to be a significant part of branding and marketing (Clare, 2017).

Tassal: Under the salmon category, Tassal provides a variety of products. They provide salmon in fresh, smoky, canned and frozen form.

Huon: On the other hand, Huon provides Caviar, cold, smoked, fresh and hot smoked products. Both Tassal and Huon produces salmon in Tasmania thereby providing net protein food to the consumers.

Tassal: It obtains its raw products from the sea of Tasmanian. Tassal’s local and import supply strategy includes risk management and makes sure that no harm is caused. As the growing cycle of Salmon is 3 years, the supply of the product can at times be slower than what is required, due to many environmental and demand factors which are outside the control (Team, 2015).

Huon: Looking at the challenges faced in this sector, Huon Company turns out to be better than Tussle in facing challenges of the fishing industry that may arise due to climatic conditions or infections. In 2014 the production of Tassal lowered by 12% as it was seriously affected by summer season, whereas Huon was able to increase its production by 12%. The Huon Company has a well-planned program to minimize dying of fishes and improving their health. Due to this effort it seems that Huon’s investment program is superior as compared to Tussle.

Tassal:  As per the table shown below, it can be noted that Tassal’s return on assets has been stable in the previous five years.

Huon: Huon’s figures were downwards in the starting but subsequently it has shown an upward trend which resulted in more earnings in comparison with Tussle. Huon could perform better because of the low rate of death of its fishes and higher sale in the local market.

Both the companies have a traditional gearing ratio (~20%) because of which it can ratchet returns by escalating debt. Huon is working on its controlled growth investment plan. They have also rolled out its proprietary fortress Pens in order to improve production. These pens supports in providing extra shelter to the fishes which also decreases their death rate. Whereas, Tassal is stressing on strengthening its brand and improving its marketing strategies. With the help of such cost effective initiatives the company is eyeing on to achieve a 15% return on investment. As of now, Huon trades on P/E of 13x. The ratio is more than that of Tassal’s i.e. 12.5x which makes Huon economical in comparison with Tassal. (Appendex-2)

Tassal: Tassal gets its major earnings from retail unlike Huon. The rise of white label products in the superstores has caused a greater challenge to tussle as there can be a huge burden on product pricing and profit margin (McArthur, 2015).   

Huon:  Huon earns its major share from wholesale by doing business with restaurants as well as fishmongers.

Both the companies function from Tasmania. Both of them are targeting the domestic market due to fluctuating export rates.

As the basic product for the business is less available in summer and autumn season therefore it results in enhanced prices at this peak season because of the rise in the cost. Therefore, initiatives to augment the survival of fishes in these seasons are imperative. Hence, higher quality pens should be used by the company and fishes should be stored in a healthy environment.

As of now, the source of supply of fishes is from Tasmania only. More initiatives should be taken to locate the source of supple from other sources like the Indian Ocean or the Pacific Ocean. More and more steps should be taken to decrease the mortality rate of the fishes.

The company should focus more on its advertising and marketing. As of now, it is using the social media platform to reach its desired audience; the company can also further enhance their brand image by joining some food events etc. to market its product (Araya & Krishnan, 2014).

References:

Araya, T. & Krishnan, M., 2014. SWOT analysis and recommended policies and strategies of Eritrean fisheries, Available at: https://www.researchgate.net/publication/274717323_SWOT_ANALYSIS_AND_RECOMMENDED_POLICIES_AND_STRATEGIES_OF_ERITREAN_FISHERIES

Clare, 2017. Global Aquaculture – Communications Technology. American City Business Journals, Available at: https://www.bizjournals.com/prnewswire/press_releases/2017/03/23/BR44584

Commonwealth of Australia , 2015. Australia’s seafood trade, Available at: https://www.agriculture.gov.au/SiteCollectionDocuments/fisheries/aus-seafood-trade.pdf

Dundas-Smith, P. & Huggan, C., 2006. An overview of the Australian seafood industry, Available at: https://aaa.ccpit.org/Category7/mAttachment/2006/Dec/13/asset000070002007202file1.pdf

Fitzgerald, M., 2013. Successful strategies for sustainable salmon, Available at: https://www.foodanddrinkbusiness.com.au/news/successful-strategies-for-sustainable-salmon

FRDC, 2014. How does the size of the Australian seafood industry compare to others around the world?, Available at: https://www.frdc.com.au/knowledge/q_and_as/Pages/size-of-Australian-seafood-industry-compare.aspx

Government, A., 2016. Aquaculture industry in Australia, Available at: https://www.agriculture.gov.au/fisheries/aquaculture/aquaculture-industry-in-australia

Horvat, P., 2014. Building a seafood marketing plan, Available at: https://www.frdc.com.au/stories/Pages/16-Building-a-seafood.aspx

McArthur, T., 2015. Tassal Group Limited vs. Huon Aquaculture Group Ltd: Buy, hold or sell, Available at: https://www.fool.com.au/2015/10/30/tassal-group-limited-vs-huon-aquaculture-group-ltd-buy-hold-or-sell/

Nic, A., 2012. SWOT Analysis: Fisherie, Available at: https://andssw1.and.nic.in/rti/Fisheries/17%20_b_%20SWOT%20Analysis.pdf

Papageorgiou, P., 2012. Seafood marketing research design, Available at: https://www.slideshare.net/philippospapageorgiou/seafood-marketing-research-design-15682284

Pilgrim, I., 2015. Tassal Group Ltd. – Sustainable Salmon Farming, Available at: https://investmentpilgrim.wordpress.com/2015/02/23/tassal-sustainable-salmon-farming/

Ryan, M., 2016. Tassal MD & CEO on FY2016 results and growth outlook, Available at: https://www.tassal.com.au/wp-content/uploads/2016/08/Market-Briefing-Tassal-MD-on-FY16-and-outlook.pdf

Singh, M., 2012. Marketing Mix of 4P’S for Competitive Advantage. IOSR Journal of Business and Management (IOSRJBM), Sep,-Oct., 3(6), pp. 40-45

Tassal Team, 2017. Tassal official website. [Online]
Available at: https://www.tassal.com.au/about-us/

Team, U., 2015. Market Analysis For Seafood Restaurant, Available at: https://www.ukessays.com/essays/marketing/market-analysis-for-seafood-restaurant-marketing-essay.php

World Ocean Review, 2017. Toward more sustainable fisheries. [Online]
Available at: https://worldoceanreview.com/en/wor-1/fisheries/sustainable-fishing-industry/

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