MAR035-2 International Marketing Assignment Sample
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Horlicks is a UK based product owned by Unilever. The product partially is available in the US but not at a large scale. It is available as a product that can be imported from the UK. This article explores how to launch Horlicks in the US. The three target populations will be th evagns, children from age 8-14 and women especially expectant mothers. This article tries to understand how Ovaltine will be a competition to Horlicks in terms of price and the product itself. It explores the angle of delicious yet nutritious images that can be carved for Horlicks.
Horlicks is now produced by the company Unilever. Horlicks has become a staple hot drink powder in countries such as India, UK,Malaysia, Australia etc. It is a sweet malted milk powder that is sold for the demographic of children, women and adults. Horlicks and its products are aimed at helping children become taller, stronger and sharper.Horlicks are made from natural ingredients. They have been diversifying their products from the inception of the company. The products have ranged from Vegan Horlicks to Horlicks customised for women health. The company has made sure the recipe has 14 vitamins and minerals. It is the best combination of deliciousness and nourishment. The vitamins listed for Horlicks are C, B1,B2,B5,B6,B12, folic acid,niacin,calcium and zinc. It helps to improve the person’s Vitamin E and Iron.
Vitamin B6 is an integral part of Horlicks. It helps to make sure the person’s immune system, RBCs and nerves are healthy. It reduced feelings of being tired or fatigued. Iron also affects RBCs and the feelings of being tired. Folic Acid helps to make new cells and it affects the health of blood positively. Dietary fibre, Vitamin C and B Vitamins are also components that make the malt powder nutritious.
Most of the powders in the USA are targeted towards taste more than nutrition. Most average Americans drink chocolate milk which isn’t as nutritious as Horlicks. They do not like the healthy powder and do not have many tasty healthy powders that can be given to kids. This market has extreme potential. Unilever has the resources to be able to open up in different countries and it’s brand value encourages consumer loyalty. This encourages consumers to want to try the product, trust the company and thus making the rollout smoother and easier.
Selecting the chosen country and analysis of the country (environment, opportunities and threats, market, buyer characteristics), objectives, and limitations
The market and country Horlicks will be launched in will be the USA. The primary reason that makes the USA an appealing place to launch Horlicks is due to its strong economy. The USA is known as the top importer of British products. Most of the states have a high GDP especially California and are currently the 6th largest economy in the world. This aspect ensures a stable market. The US also has an incredibly low tax rate for foreign businesses as compared to other countries. This is enticing especially since Horlicks will be launched for the first time. The USA is also a precedent on how the product will thrive in other countries. If the product does well in America, Horlicks and easily expand to other countries such as Canada.
The US is the perfect environment for any new product. Consumers are generally very open to new concepts. The diverse population and various backgrounds also means that there will always be a group of consumers who like the product. If the business decides to set up in the US, there are so many benefits that they have in the form of an employee work force. The employees tend to be from different backgrounds and have a good amount of white collar and blue collar employees. The US also tends to have the best technology and is always the first place where new technology is launched. So if factories are built, by using newer technology they can save up on additional expenses for labour or machinery.
The objective is to introduce Horlicks to the consumers of America. So far, most american households only have Ovaltine as a major malt based powder. While Ovaltine is focused primarily on the taste more than benefits. Horlicks have been determined from the get go to create a malt based powder that balances nutrition as well as taste. It has higher content of calcium and proteins as compared to Ovaltine Horlicks is more expensive than Ovaltine but this due to use of no artificial flavouring, colors or sweeteners. Horlicks also has introduced vegan products. Vegan products have seen a huge increase in the USA due to increase in healthy eating trends.
Most Horlicks currently available in the USA are exports available in Asian and Indian stores.. This is a good opportunity to bring it to mainstream grocery stores such as Walmart and Target. There is a challenge in Ovaltine being a household staple and being a local USA product. Americans tend to be loyal to their local products so the transition might take some. It is also seen that many non white families are open to buy non-traditional types of milk related items including speciality milk (Gulseven Wohlgenant,2017). This shows that non whites would be interested in Horlicks. Many non white households may already be using Horlicks as a staple. As many Indians who immigrated to the USA have brought up their children with Horlicks and some of these habits have passed through the generations.
Selection of and rationale for chosen mode of entry into the target country
For the set up of Horlicks in the USA, there is a two set plan that can be used. There can be two modes of entry. This is a smart way to make sure that Horlicks and by extension Unilever lose minimal resources over their setup. At first, Unilever should start exporting Horlicks to the USA. The company already exports products to the Indian and Asian stores in the US. They can increase the number of products being exported. Then they can try and make deals with big groceries chains such as Walmart and Target. This can help to introduce the consumer to the product. This lets them try the product and enjoy the product at a low risk and low cost for the company. Unilever already has headquarters in the US. This is a huge advantage in terms of trying to find a local distributor. The distributors have to package, label and price the product. Unilever already has firms in place which makes the transition easier. This is a foolproof plan to understand the market and how the consumer operates at first. This allows the minimal risk for the company.
Once the consumer base has been established, depending on the success Horlicks can choose to export or set up a Wholly Subsidiary. Whole Subsidiary is the process through which firms can set up a direct operating presence in the foreign country. This isn’t as much of a problem for Horlicks as it would for other companies as their parent company already is established in the US. This is where they can start a new company from scratch or they buy an existing company that exits. This requires a large amount of commitment and this is why exporting initially makes sure that the decision is based on the sales of the product. Once this mode of entry occurs, the financial and economic risks fall squarely on the company.
This allows the firm to have control and operate on their own term. This allows them to come up with customised products specifically for the USA market. This uniqueness and personalised products is a major tactic that works in the US due to the individualistic approach that the Americans have. Horlicks have some added benefits that other firms don’t have when using this approach. The advantages include less cultural differences, establishment of the parent company and eagerness of consumers to try new products. The UK and USA have similar cultures and lifestyles. They have very minute differences as compared to countries such as Italy, France, India etc. This allows for the transition to be easier for the company. The already established Parent company also helps to make the transition easier. This makes the company have better access to resources, facilities and funds. The US consumers are looking for healthier and newer products. Their openness to try new products can work as a huge advantage in establishing Horlicks during the export phase. These are why it makes sense for the approach to be wholly subsidiary after the market is established.
Segmentation within the chosen country, target market selection
The Horlicks target population mainly tends to be children ranging from the age from eight to fourteen. In many markets, Horlicks has also catered to women from 20-45 with women health horlicks and horlicks for mothers. This is to help improve the health of women and have necessary nutrients required for mothers. This will be the target in the USA as well. We can also include the vegan horlicks to cater to the health conscious population. There has been a major rise in the vegan community in the USA. It is a fairly new product and will launch in the UK only by 2021.
According to the numbers there has been an increase in vegan dietary choices has been 600 percent in the last two years.This an exponential market and it hasn’t been tapped as much. There is no ovaltine alternative as of now for vegans. Since most vegans must have grown up with some variation of the ovaltine drink when they were growing up. The childhood classic can be enjoyed again through Horlicks Vegan. This is definitely a target population that would be open to tasting new alternatives to their classic drinks.
The children aged 8-14 are the main target population. The vegan drink can aslo to cater to them for vegan families and childrens who are lactose tolerant. Children with lactose intolerance tend to not have dairy which is important for calcium and other vitamins. Horlicks vegan can help to provide these substitute nutrients with the substitutes of milk to allow children to gain similar nutrients. Children this age also tend to want to try new things. This allows them to have a different choice of drink and flavor as compared to Ovaltine,Bournvita.Children may be the primary consumers but we must understand that children do not make the final decision. Parents are the secondary consumers of the product by extension. This is why we must push the nutrition and delicious perspective. Since ovaltine is more towards the taste than the nutrients. This will help to entice the parents, and since american consumers live in such a diverse country. They tend to always make new choices and try new things. Americans are more open as consumers to understanding whether products are a match for them or not.
The mother’s horlicks is also a good market to establish. Especially after the company does well with the population of children. This is good especially when consumers are second time mothers. Parents in general are always in contact with other parents and can help to recommend this to other first time parents as well. Mothers are consumers who will trust established brands already for products as they want to be precautious. So the brand loyalty for Unilever comes into play for this target. Also women are the main target population for the health trend in the USA. They are always looking for new ways to be healthy and tastier ways to increase their nutrient, vitamin, iron and protein intake.
The marketing mix of any company is exploring the four Ps which are the product, price, promotion and the place. These factors help to understand how to increase consumption of the product and consumer loyalty. It is beneficial for the company to understand the consumer patterns to market the company as well.
The first factor to analyse for the marketing mix is the Product. The product should be designed for the target population only then it will interest consumers. Horlicks recipe has specifically been modelled to fulfil the nutritional needs of the consumer. It has been made differently for children and mothers. It helps to increase immunity, has iron, calcium and various nutrients to help increase physical and mental energy. The nutrients are appropriate for all the target populations. It is marketed for consumers who are health conscious. Horlicks have various flavors additionally to the original malt flavor to have diversity for the various target populations. It is also tasty along with being nutritious.
The second factor to analyse for the marketing mix is price. Price is a very tricky aspect of the marketing mix. The price should be perfect, where it’s not too low or high.. Horlicks for other countries have always done research on competitors prices and estimated their own as such. Their primary goal has been to make sure the prices are affordable for the general public. The price of Horlicks so far in the USA has been 0.78 dollars for an oz. This is compared to Ovaltine’s price which is about 0.64. This is okay for markets where Horlicks has already established itself as a reliable brand. But in the US, they may have to lower their price to 0.64 dollars for an oz to compete with ovaltine. This will allow the consumer base to be more interested in trying a new drink for the same cost.
The third factor to analyse is place. This is where the product will be located and how the consumers will be able to buy it. As mentioned before, Horlicks has been already present in Asian and Indian stores. This is a limiting market. So the initial plan to spread to markets where it is accessible to the general public of the USA. The company can strike deals with Walmart and Target in order to make them available on the shelves. This is where consumers who tend to prefer online and traditional retail will be able to find Horlicks. Another way to find the product would be through the website. Horlicks has their own website and it is also available on amazon for purchase. This might appeal to parents and mothers who may not have time to go to stores.
The fourth and most crucial factor of the marketing mix is Promotion. Promotion is very important to help market the product. This is the strategy that helps consumers understand the product. This spreads awareness of the product and its variants. Especially when a product is new in the market and the country, this is an important tool to make sure that Horlicks can transition from export to establishing a subsidiary in the US. The product must be promoted heavily for three main target populations which are mothers, children and the vegan market. These are the three target populations that the US expansion will consist of. If these three populations can be made into loyal consumers of the product. The spread of the product in the general public will be easier and it will be soon considered a mainstream product. The key to promotion is to understand the population and their behaviors.
The first recommendation is to push the vegan narrative. The increase in the vegan committee has been exponential over the years. The vegan community has seen a six hundred percent increase in the US itself. The vegan horlicks which is set to launch in the UK in 2021. This is available online and offline. This should be marketed heavily. Most consumers have various choices for malt based drinks but very few are available to deliver on taste. Horlicks brand is about making delicious and nutritious drinks. This not only applies to the vegan community but also to people who are lactose intolerant. People who are lactose intolerant are always looking for substitutes to get milk proteins and nutrients in another form. Horlicks can capitalize on this community and build a strong community of vegan consumers who are loyal to the brand.
The second recommendation is to make drinking milk fun, delicious and nutritious. So for the initial rollout of the product, horlicks can offer some initiative that will entice children to want to buy the powder. Toys and/or prizes can be a good way to make children want to buy the product. This advertising can be done through tv advertisements or on the internet. This will help to increase the child’s enthusiasm of wanting to try a new product. Parents then will see the nutrition details and realise that it is more than ovaltine. This will help to secure both the parents and children first time consumers. Then the brand can use new initiatives as time goes to build customer loyalty
The third recommendation is how to secure the target population of women.The initiative to promote women’s health matching America’s recent surge in their need to promote healthy lifestyles. People are conscious of what they consume and what goes into their bodies. The consumers especially women are always looking for new ways to try and increase their nutrition intake. This is where Horlicks again can push their narrative of healthy delicious drinks that helps to secure the consumers. As consumers aren’t quite able to find many brands that are able to quite balance those two factors like horlicks. The smaller subsection that horlicks also want to target are mothers. Mothers will be good consumers as they will also buy horlicks for their children in the future. The loyalty passes through the families. Mothers are also consumers who are willing to try products only from reliable and established brands such as Horlicks
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