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Hazeem Azam

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ANALYSZING AND PLANNING MARKETING PLAN FOR ENTERING

INTO TWO INDUSTRIES

Introduction

Why Malaysia was Chosen

Why Bangladesh

Analysis

Fact Bangladesh

Facts Malaysia

PEST ( Politics)

PEST ( Economics)

Pest(social)

PEST(Technology)

Pest(Summary)

Segmentation

Target Market

Brand Positioning

Product Strategy

Price Strategy

Promotion strategy

Advertising

Promotional Mix & Place

Entry mode

conclusion

TABLE OF CONTENTS

• Agora company produces halal milk and wants to enter Malaysian and Bangladesh market.

• Mominul says his focus on this project was to analyse the dairy industries of selected countriy and identify the opportunities there in order to market our company’s product.

• Factors that influence their choice to enter a market are given below:

1. Per-capital income

2. Population rate

3. Growth rate in income

4. Tax- level

5. Laws for foreign companies

INTRODUCTION

• Malaysia is a growing economy with the chances of becoming a first world country soon.

• There are 30 million people in Malaysia.• Per capital income is $10,400 and is growing at 4%.• They have a strong market-oriented economy with business friendly

policies.• They have high points in all categories in World Bank's Doing Business

website.• It has been ranked the sixth friendliest country to do business in, beating

developed nations such as South Korea, the United Kingdom and Australia. • Malaysia has also entered into investment guarantee agreements with over

70 countries. These agreements guarantee that, except for public purposes, Malaysia will not expropriate or nationalise property without prompt and adequate compensation.

• Infrastructure is very developed and is improving continuosly.• A pro-active government trying to make country attractive to investors.

WHY MALAYSIA WAS CHOSEN

• Highly Populates with over 150 million people.• Low GNP of only $700.• Developing at about 6% every year.• From 1990 to 2010, the poverty rate declined from 57%

to 31.5% which is an indication of gradual development.

WHY BANGLADESH

Product Strength Analysis

Rating scale 1-9 (1=Extremely unattractive, 5=Industry average, 9= Extremely attractive

Milk Powder

Characteristics Weight Rating (1-5) Value

Quality 20% 9 1.8

Price 20% 9 1.8

Cost Base 20% 8 1.6

Brand Strength 20% 8 1.6

Profitability 20% 8 1.6

Total= (weight value) 8.4

* The sum of the weightings assigned to the different factors are added up to 100%

ANALYSIS

Opportunity in Bangladesh


Dairy Industry


Overall market size 20% 9 1.8

Projected market growth rate 20% 9 1.8

projected profit margin 15% 8 1.2

Global Opportunity 10% 8 0.8

Opportunity to Differentiate 5% 8 0.4

Regulatory Regime 5% 7 0.35

Demand Patterns 5% 9 0.45

Entry Barriers 5% 9 0.45

Distribution Structure 5% 7 0.35



ANALYSIS

Opportunity in Malaysia


Dairy Industry


Overall market size 20% 6 1.2

Projected market growth rate 20% 6 1.2

projected profit margin 15% 5 0.75

Global Opportunity 10% 5 0.5

Opportunity to Differentiate 5% 5 0.25

Regulatory Regime 5% 9 0.45

Demand Patterns 5% 8 0.4

Entry Barriers 5% 3 0.15

Distribution Structure 5% 9 0.45



ANALYSIS

Bangladesh industry:

The potential market for Agora powder milk is very big for a few reasons:

The country needs 7.227 million ton milk calculating 120ml per head (Iedap, 2012).

With the 4.9 million of milking cows and 0.3 million of milking buffalo, the country is producing only 2.686 million ton.

Further 52 thousand ton milk is imported from aboard and there is still shortage of 3.91 million ton.

According to the growth rate of population in Bangladesh, the potential market growth for milk consumers can be considered large and it will also continue increasing in the future as the population rises (fao, 2012).

Bangladesh has high demand for the powder milk due the shortage of liquid milk production and the country has revealed a green signal to the foreign companies by reducing the entry barriers such as foreign investment in Bangladesh can be either 100% foreign owned or joint ventures. Furthermore, the import tariff for milk powder is set at 20% which is also a good indication for foreign products entry (fao, 2012).

FACT (BANGLADESH)

With total 30 million populations Malaysia is average attractive market for Agora powder milk for a number of reasons.

The country was heavily reliant on imported milk powder due to a vast shortage of production in liquid milk but now in the livestock sub-sector (milk production), they are achieving high growth (Fao, 2012).

In line with many developing South Asian countries they are becoming more rigorous and strict on foreign investment whereas the entry barriers for foreign products are relatively high if Malaysia already has reputable position in that sector (WTO, 2011).

Currently, it is seen that Malaysia is having stable financial and legal systems although not overly transparent, that support and encourage open trade.

However, opportunities still exist; there are still prospects for UK brand milk powders which can be sold directly to the consumers. The Malaysian dairy industry is willing to import any source as long as the price is competitive and the quality is good.

FACTS MALAYSIA

• Malaysia has a stable political environment compared to Bangladesh.• tariff rates for imported goods such as dairy product (powdered milk)

is comparatively lower than the other items.• there is no limit for equity share thus a foreign company and

investment is welcome at all sectors of Bangladesh.• there is comparatively stringent trade policy in Malaysia than

Bangladesh as seen on the report of World Trade Organisation (WTO):

• any foreign investment or distribution service must be locally incorporated with 30% of equity reserved for bumiputera

• Although Malaysian government is welcoming foreign products with good quality but in reality the government is encouraging the foreign company only in the sector where products are produced in low amount by Malaysia

• Import taxes are relatively high for those products

PEST ( POLITICS)

• The analysis includes the inspection of economic growth, exchange rate, GDP growth, purchasing power parity, GNP growth of a country.

• Malaysia has one of the strongest and fastest-growing economies in Southeast Asia.

• Malaysia is an upper middle income level country with a great improvement of standard of living while it is the 30th largest economy in the world by purchasing power parity.

• The current growth rate of Malaysian national income is 4% which is 2% less than Bangladesh.

• Bangladesh is a less developing country than Malaysia, comparatively it has satisfactory history of economical progression since 1996

• A great advantage of Bangladesh is its low-cost labour force which is a green signal for any foreign company

PEST ( ECONOMICS)

• it includes demographics, education, culture, health and environmental consciousness of the population of the country.

• Bangladesh is the 8th largest country of the world on the basis of population ranking and between 1-14 years are the second largest group (34.3%).

• a growing health consciousness is also driving the people towards quality products

• it is seen that foreign products like US and UK brands have a positive image among the consumers.

• In Malaysia, the country has a growing concern for health and environmental issues and there is also a great need of high quality products.

• The major trends seen in powder milk buying behaviour is that halal products have a high preference

• However, it is seen that both countries have a good rate of social development while the distinction can be seen above.

PEST(SOCIAL)

As compared to Malaysia, Bangladesh has not been much developed in the technological sectors

Malaysia is on the way to a successful transformation from labour based industry to technology based industry.

A good point is that almost 70% of the people in Bangladesh have access to media and television (Thedailystar, 2012), while the percentage of internet, mobile phone users in Bangladesh is rapidly increasing.

PEST(TECHNOLOGY)

• From the PEST analysis it is seen that both countries have opportunity and threats for agora milk powder.

• Compared to Bangladesh, Malaysia is more industrialised and fast developing country which creates several entry barriers to foreign companies.

• On the other hand, Bangladesh is less industrialised and less stable country which creates opportunities for foreign companies whereas the entry barriers are relatively low.

• In this stage, the product marketing strategies for Agora powder milk need to be very sensitive and carefully considered so that the company can survive in those market

PEST(SUMMARY)

Segmentation variables and breakdown for Bangladeshi and Malaysian market of Powder milk

Main Dimension Variables Breakdowns (Bangladesh) Breakdowns (Malaysia)

Geographic Segmentation Region Emphasis on Major Cities and Metropolitan area Nationwide

Density Urban Everywhere

Climate All (east, west) All (east, west)

Demographic Segmentation Age 6-60 years old 6-60 years old

Gender male and female male and female

Income all above 1500$ all above 1500$

Occupation Housewives, Bachelors, student, officials Housewives, Bachelors, student, officials

Education Elementary 4th grade, High school and above Elementary 4th grade, High school and above

Race Bangladeshi Malay, Chinese, Indians and others

Psychographic Segmentation Personality Brand conscious, inclined for differentiation, health conscious and quick maturation with foreign product Brand conscious, inclined for differentiation and looking value for money product

Lifestyle Most of them are dependent on the head of the family (father/husband). Not very open society like western freedom of choice, cultural

Behavioural Segmentation Benefit Sought communication benefit- communication benefit-

SEGMENTATION

Nutritional information on Bengali and English language Nutritional information on Malay, English, Chinese and Indian language

information text of the origin of product information text of the origin of the product

functional benefit- Functional Benefit-

healthier than liquid milk easy to use

easy to process healthy, quick disposable

Perceptual benefit- Perceptual Benefit-

good quality, competitive price good quality, competitive price

UK brand, good looking UK brand, good looking, standard size

Usage Rate Occasional (religious, cultural, officials), daily basis, weekly basis Occasional (religious, cultural, officials), daily basis, weekly basis

User Status Non-user, regular user Non-user, regular user

Loyalty Status none, medium, strong none, medium, strong

SEGMENTATION

• Agora milk powder will adopt concentrated marketing strategy for Bangladesh on the basis of geographic segmentation this is because the purchasing power of the urban people is considered higher and for a UK brand product it will be hard to gain the attractiveness in the rural area.

• On the other hand, country with high purchasing power parity like Malaysia needs an undifferentiated marketing strategy whereas the market will be considered as combination of all segments .

• With an undifferentiated marketing strategy the business choose to ignore the difference in the market

• concentrated marketing focuses all the marketing efforts on a single or relatively few, carefully defined segment

•

TARGET MARKET

positioning is how the firm wants its products to be perceived by the target customers on important attributes or benefits”.

1. To achieve good brand position they have to do the following:

2. creating strong consumer awareness towards a new UK brand powder milk,

3. to establish wide brand recognition through the capture of market shares in the powder milk industry

4. become the market penetrator in the particular segment through continuous advertisement and promotion.

BRAND POSITIONING

Product Strategy in Malaysia and Bangladesh

Packaging and labelling easy to open and close, agora milk powder label, plastic box easy to open and close, agora milk powder label, plastic box

Branding colourful but moderately, aspects of quality, square shaped, agora milk powder logo with modern font colourful but moderately, aspects of quality, square shaped, agora milk powder logo with modern font

Trade name Agora milk Powder™ , an UK product Agora milk Powder™ , an UK product

Brand personality high physical growth, energy, quick disposal, quality high physical growth, energy, quick disposal, high quality, substitute of liquid milk

Language Arabic, Chinese, Indian, English and Malay English, Arabic and Bengali

Nutritional information calcium, mineral, GDA and so on calcium, mineral, GDA and so on

Product class Foods→ Dairy products→ Milk→ Powder milk Foods→ Dairy products→ Milk→ Powder milk

PRODUCT STRATEGY

• Paley (2006), professes “when launching new products, pricing strategies can range from skimming a market with high prices, penetrating with low prices or following the market leader”.

• In this term, Agora milk powder will initially follow the current market leader like Dumex Malaysia, Nestle Malaysia to give a choice to the potential consumers who perceive foreign products have high quality than local.

• In contrast, pricing strategy for Bangladesh will be penetrating the market through slightly lowering the price than local market. This strategy is suitable for entering into Bangladeshi market whereas it will drive customers from two points such as low price versus foreign product.

PRICE STRATEGY

PROMOTION STRATEGY

• In this regard, advertising in Bangladesh can focus on the difference between good quality products and poor quality products, health awareness related advertisement, different use of milk powder and so on.

• In contrast, for a mass market like Malaysia the product advertisement can combine continuous advertisement through big celebrities, renowned face. The advertising activities can also include arranging quiz show, talk show, cooking program on the television.

ADVERTISING

• It is argued that promotion of consumer products has great impact on the developing countries and it drives sales (Havaldar, 2006), so that promotional activities in Bangladesh can combine giving spoon free with each packet, collecting six stickers from the package and getting one free and so on.

• Agora milk powder will be distributed through shopping complex, super shop, and large size confectionaries in the major cities (Dhaka, Chittagong, Barisal, and Shylet) of Bangladesh. In Malaysia the product will be available in the super shops, medium sized confectionaries located nationwide.

PROMOTIONAL MIX & PLACE

“international market entry modes refer to the methods of business organisation employed by companies to enter international markets for the purpose of undertaking value-creating activities”.

Agora has 4 options available:

1. Indirect exporting

2. Direct exporting

3. sales agents

4. licensing and joint ventures.

ENTRY MODE

An attempt has been made in this study to analyse the potential market of Agora milk powder in two selected countries (Malysia and Bangladesh) and to offer the product in terms of opportunities and threats found in the selected countries. The major notable trends found in the analysis that both countries have certain level of risk and opportunities for foreign company such as in Bangladesh the opportunities for foreign product is high whereas the infrastructure of the country is relatively poor. In contrast, the opportunities for foreign product are comparatively low in Malaysia whereas the infrastructure of the country is ideal for doing business. However, considering the threats and opportunities two different marketing strategies have been adopted so that each strategy suits the market in terms of the consumer behaviour of the countries. In this way, Agora powder milk can position itself in the selected country to achieve a long term growth.

CONCLUSION