Market Entry Strategy - Essay Example

Established in 1989, FIL Industries Ltd. is a company that works closely with the Indian Farmer to Protect & Preserve their produce. The food and beverages division of FIL industries consist of many mixed fruit juices such as; Kashmir apple juice -100% apple juice, apple guava, orange juice, mango apple juice, ladakh berry and TUK 3 which is a unique and refreshing blend of apples, mangoes and seabuckthorn (FIL industries, 2010).

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Boost Juice will need to take into consideration the services of pesticides that FIL Industries offers to the farmers. FIL Industries will have an established image in the consumer’s eyes because of this system they have consolidated. Boost Juice has to keep hygiene as a priority in order to be able to succeed and grow a strong based relationship. FIL industries are a threat to Boost juice indirectly, and may affect consumers and stop them from buying a new and fresh on the go drink from Boost Juice. Boost Juice will be differentiating from FIL industries by providing quality fresh fruits and smoothies not concentrating on packaged goods like FIL industries.

Booster Juice first opened in India on 15th of August 2008. The first store for the brand opened in Edmonton Canada in 1999 (Booster Juice Facebook, 2010). Which is one year before Boost Juice started; the company offers a similar range of smoothies, shakes and juices to Boost Juice. The company has seen mild success in the Southern states of India where it has opened up 7 stores in Bengaluru city.

The company has only two stores in New Delhi where we are targeting our Boost Juice stores. From a positioning point of view, Booster Juice is capturing the middle to lower social class demographic with their products. There is not much brand awareness or promotional work that has resulted in the companies’ placid accomplishment in doing business in India. Booster Juice will be our most direct competition, as the two companies will be regularly compared. Boost juice will differentiate its self through there Promotional work (viral marketing) and targeting a more affluent customer.

Competitor 3: Local Street Vendor The local street vendor has been operating for over 70 years and has been the prime source for fresh juice for the Indian populace. Cheap and refreshing are its main selling points. They can be found in all market places and the corner of most busy roads and streets in India. There isn’t a franchise that these local vendors can unite under and the lack of branding and anonymity of each vendor hasn’t allowed this to develop. They target local residence of the area and middle to low social class customers.

A negative to local vendor is hygiene and consistency of taste in Juice. These vendors don’t have a high profit margin and operate by acquiring resources they can afford, if this means purchasing bad or cheap fruit they will not hesitate to do so. They are more interested in saving the day making enough to survive. They have a separate target market to Boost Juice and shouldn’t be heavily preaching our primary and secondary target audience.

Competitor 4: Maaza Mango Maaza mango is widely believed to be India’s favourite fruit juice occupying 90% of the market. The company provides a variety of fruit beverages including the popular Frooti and Mango slice. They are available in small and large cartons, as well as plastic and glass bottles. The company was launched in 1976 in India and was acquired by Coca Cola India in 1993 (Maaza 2010). Boost Juice will be competing directly with Maaza because it is sold in specific locations we are targeting including shopping centres and uni campuses. Points of difference between the two brands are that Maaza is not freshly made in front of the customer, it is prepared and pre packaged. It is also a lot cheaper then Boost Juice (see price index under International marketing mix)

Competitor 5: Win Agro Foods Win Agro foods from India are another indirect competitor to Boost Juice. They offer not only juices but also have products like flavoured soya milk, vegetable pastes and try to add to the quality of the product and offer healthy processed food products that are consistent in taste.

Boost Juice will be eventually targeting the same customers to obtain a healthy weight in the market, therefore they will have to consider the facts of these health related issues. Boost Juice will be differentiating from this indirect competitor by offering small on the go quick consumable products and will aim for repetitive sales because they do not provide a mass amount of 3 litres like WIN agro foods.

Boost Juice Competitive Positioning Graph: As illustrated on figure 3.1 we have displayed the desired gap between Boost Juice and its competitors in India. Boost Juice will have high promotional activities and a fairly high price. The reason we are incorporating high price for the products we are offering is because we are simply targeting consumers that will confidently be able to purchase at that price. The closer competitors as shown in the positioning graph Maaza Mango and Booster Juice are also well known in the market therefore are ranked higher than other competitors in promotional activities. Having a look on the opposite side of the graph with WIN Agro Foods and local street vendors are lower in the graph because they haven’t established themselves as good as the closer ranged competitors.

Boost Juice wants to keep the gap between their competitors and have the upper hand with promotional activities consolidating into a strong foundation to stay long term and dominate the market. The illustration on figure 3.2 (Above) demonstrates the ideal spot for Boost Juice away from their competitors polishing the perfect hygiene and consolidating the brand awareness across India. This graph we see FIL industries creeping up without doing any promotional activities because they have the service of helping the farmers with their pesticide problem.

Market Entry Strategy Franchise

Boost is a successful franchise in Australia and is continually booming its franchise network worldwide. Therefore it is suggested that Boost Juice entry strategy into India’s market is to operate as a franchise. To keep in align with Boost Juice mission statement; “To become the worlds famous and loved brands,” India is a market for their future growth potential. When setting up business in India, Boost Juice need to taken in account of the geographical dispersion of India, it is recommended that Australian firms like Boost Juice consider a regional plan, that focuses on multiple locations and markets within India and finding the appropriate partners and agents within each region. Austrade offices in New Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Kolkata provide indispensable local information and advice and are in tune with local businesses. (Austrade)

“Doing Business” is a website which aims to help businesses measure regulations and enforcements in different economies and selected cities around the world. In terms of Boost, establishing their business in India, the website gives an in depth step by step process to follow when it comes to starting a business in India. The website identifies the bureaucratic and legal hurdles Boost Juice must overcome to incorporate and register a new firm in India. (Doing Business, 2009) Refer to appendix Table 3.1 which provides a summary of the procedures and the associated completion time and cost for setting up Boost Juice in India.

The initial cost of a Boost Juice Master Franchise varies significantly between countries, depending on variables such as the size of each market and therefore the development schedule. (Boost Juice) Therefore the master franchisee that will operate the business in India will be briefed on the fees and will outline in detail once the market in India has been identified. The master franchisee need to have a minimum net worth of $2 million (US) and liquidity of at least $1 million (US) in order to be considered for opportunity to expand internationally. (Boost Juice) The average store in Australia is a 20sqm kiosk costing $180000 (AUD). The average cost for a similar size store in an international market (India) will depend on the variables such as the cost of materials and the availability of equipment. However the establishment costs will be less than that of Australia in India.