In the current business scenario, entering in the foreign market is one of the most common business decisions taken by the business organizations. This is due to the reason that in the current time of globalization, entering in the foreign countries is not difficult and complex. In addition, it also helps the business organizations in enhancing their business revenue and presence in the global market. Ausy fruit is one of the leading fruit producers and marketers in the Australian region. They are specialized in growing Kiwi fruit. In the recent time, the authentic kiwi fruit of the regions of Australia and New Zealand gained immense popularity in the global market due to their nutritional value, taste and alternate usages (Ferguson 2014). Kiwi fruit is having number of benefits including medical benefits also. The first commercial cultivation of kiwi fruit started in New Zealand. Currently, there is huge competition in the market of kiwi fruit and it is encouraging Ausy fruit to consider the concept of international business in order to increase the market share and revenue.
This report will discuss about the potential country that will be beneficial for Ausy fruit in enhancing their market and business operation. In addition, the target customer profile along with the environmental analysis of the chosen country will also be discussed in this report.
India is selected as the potential country for Ausy fruit in enhancing their business operation. This is due to the reason that in the international business, one of the major factors that should be considered is the level and stability of the national economy of the host market (Kaushal and Pathak 2015). India is the fastest growing country in the world in terms of GDP. Thus, the economical viability will be more for Ausy fruit in entering in the Indian market.
Figure: 1
Economy growth rate of India
Source: (Tradingeconomics.com 2018)
According to the above figure, it is seen that the current GDP growth rate of India is standing at 7.2 percent that is highest in the world. This will ensure that Ausy fruit will have favorable business economy and opportunities in entering in India. Moreover, India is also chosen due to the reason that India is having the second highest population in the world. Thus, the market opportunities for Ausy fruit will also be more compared to some other countries in entering in Indian market.
Direct exporting entry mode is selected for Ausy fruit in entering in the Indian market. Direct exporting is selected due to the reason that kiwi fruit can be grown in the Indian condition or it will have that authentic taste of the kiwi fruit if it is grown in India. Therefore, Ausy fruit is having no other chance of producing in India. On the other hand, direct export entry mode will also help them to minimize the risk associated with the international business (Laufs and Schwens 2014). This is due to the reason that Ausy fruit will not have to incur huge cost of investment in case of the direct exporting entry mode.
Political environment
India is having favorable political scenario in the country with having governmental system. In addition, India is also not having any disturbances in its political history. Thus, investing in India will have less political risk for Ausy fruit. However, India and Australia are not having free trade agreement as of now but according to the recent reports, both the countries are in discussion for the free trade agreement (Anderson and Yotov 2016). Thus, this will also have favorable impact on the business operation of Ausy fruit in Indian market. It is also to be noted that restrictions related to the exporting of food items from Australia is less in India and Ausy fruit can export their products in India with having less issues and challenges.
Economical environment
Figure: 2
FDI inflow in India in food processing industry
Source: (Bandyopadhyay 2018)
According to the above figure, it can be concluded that the flow of the foreign direct investment is rapidly increasing and mainly in the food industry. It is reported that the investment in the food industry is increasing due to the reason that the demand for the food is increasing in India. Thus, this figure is providing a favorable scenario of investing and doing business India. This coupled with the positive economy growth of the country is having huge business opportunities for Ausy fruit in operating in India.
Social environment
Figure: 3
Unemployment rate of India
Source: (Tradingeconomics.com 2018)
The above figure shows that rate of unemployment in India is reducing and it is contributing in the economical growth of the country. This will also have positive implication on the business performance of Ausy fruit due to the reason that the less will be the rate of unemployment, the more will be the purchasing power of the average customers. Thus, it will ensure that the demand for the products for Asuy fruit will also be favorable.
Figure: 4
Growth trend of food and beverage sector in India
Source: (Dartconsulting.co.in 2018)
According to the above figure, the food and beverage market of India is rapidly increasing along with the increase in the investment in this sector. It is reported that the growth of the food and beverage sector of India is mainly due to the huge market size and favorable economy of the country. Thus, it can be concluded that Ausy fruit will have favorable market opportunities in distributing in the Indian market.
The target market segments for Ausy fruit will be determined by evaluating the different aspects of the market segmentation. In this report, the target market segment for Ausy fruit will be identified in terms of demographic, geographic and psychographics.
In terms of the demographic segmentation, the age group between 12 and 60 will be mainly targeted with having the major concentration on the teenage age groups. The target age group will be vast due to the reason that fruit is having acceptability across all age groups. They are preferred by the younger age groups for the taste and by the older age groups for nutrition (Mohd Suki 2013). However, the major concentration will be on the teenage age group due to the reason that these groups will more open towards the new fruit items as kiwifruit is not so popular and mainstream in the Indian market. In terms of the gender, both male and female genders will be targeted. In terms of the socio-economic condition, the target market will be higher section of the society comprising of affluent background. This is due to the reason that Ausy fruit will have to price their products in premium due to the involvement of tariffs in export and import process.
In terms of the geographic segmentation, the metro cities of India will be first targeted. This is due to the reason that metro cities will have more affluent societies, which will be target market. Moreover, population in the metro cities will be more open and educated towards global products that will help Ausy fruit to distribute their products (Diamantopoulos et al. 2014). This will be followed by the Tier II cities.
People with having more updated lifestyle and personality will be targeted. This is due to the reason that this target segment will be aware about the products of Ausy fruit. They will be more targeted towards the social value to be offered by Ausy fruit by selling it in premium.
It can be concluded that the target customers will buy the product of Ausy fruit due to the fact that kiwi fruit is distinctive in the Indian market and will offer unique value in forms of taste and experience (Toften and Hammervoll 2013). Moreover, the competition in the kiwi fruit industry is less and thus customers are having less option for switching.
Ausy fruit will position their product n more premium category. The product will be positioned as a premium and tastier alternatives to the conventional fruit items available in the Indian market. Moreover, the premium positioning will also help in creating a separate market segment without having much competition (Akpoyomare, Adeosun and Ganiyu 2013). Initiation of the premium pricing will also enable Ausy fruit to provide value more than just the physical value. It will create a social value also for the customers.
Conclusion
Thus, it can be concluded that Ausy fruit is having huge market and business potentiality in targeting the Indian market. This report discussed about number of factors and elements in determining the potentiality of the Indian market. External environmental analysis is also being done in this report in order to identify the external business factors to be faced by Ausy fruit in India. In addition, the target customer segments are also being identified in this report along with discussing different forms of customer segmentation. The positioning strategy to be applicable for Ausy fruit is also discussed in this report and it is concluded that Ausy fruit will be able to maximize their revenue and operation in entering the Indian market.
Reference
Akpoyomare, O.B., Adeosun, L.P.K. and Ganiyu, R.A., 2013. Approaches for generating and evaluating product positioning strategy. International Journal of Business Administration, 4(1), p.46.
Anderson, J.E. and Yotov, Y.V., 2016. Terms of trade and global efficiency effects of free trade agreements, 1990–2002. Journal of International Economics, 99, pp.279-298.
Bandyopadhyay, S. (2018). Analysis: Food Processing Industry (FPI) in India – MarketExpress. [online] MarketExpress. Available at: https://www.marketexpress.in/2014/05/analysis-fpi-in-india.html [Accessed 20 May 2018].
Dartconsulting.co.in (2018). Growth of Food and Beverages Industry in India – An Overview about the Opportunities for New Concepts and Innovative Services – DART Consulting. [online] Dartconsulting.co.in. Available at: https://www.dartconsulting.co.in/market-news/growth-of-food-and-beverages-industry-in-india-an-overview-about-the-opportunities-for-new-concepts-and-innovative-services/ [Accessed 20 May 2018].
Diamantopoulos, A., Ring, A., Schlegelmilch, B.B. and Doberer, E., 2014. Drivers of export segmentation effectiveness and their impact on export performance. Journal of International Marketing, 22(1), pp.39-61.
Ferguson, A.R., 2014, September. Kiwifruit in the world-2014. In VIII International Symposium on Kiwifruit 1096(pp. 33-46).
Kaushal, L.A. and Pathak, N., 2015. The causal relationship among economic growth, financial development and trade openess in Indian economy. International Journal of Economic Perspectives, 9(2), p.5.
Laufs, K. and Schwens, C., 2014. Foreign market entry mode choice of small and medium-sized enterprises: A systematic review and future research agenda. International Business Review, 23(6), pp.1109-1126.
Mohd Suki, N., 2013. Young consumer ecological behaviour: The effects of environmental knowledge, healthy food, and healthy way of life with the moderation of gender and age. Management of Environmental Quality: An International Journal, 24(6), pp.726-737.
Toften, K. and Hammervoll, T., 2013. Niche marketing research: status and challenges. Marketing Intelligence & Planning, 31(3), pp.272-285.
Tradingeconomics.com (2018). India GDP Annual Growth Rate | 1951-2018 | Data | Chart | Calendar. [online] Tradingeconomics.com. Available at: https://tradingeconomics.com/india/gdp-growth-annual [Accessed 20 May 2018].
Tradingeconomics.com (2018). India Unemployment Rate | 1983-2018 | Data | Chart | Calendar | Forecast. [online] Tradingeconomics.com. Available at: https://tradingeconomics.com/india/unemployment-rate [Accessed 20 May 2018].
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