The 21st century is the age of changes and technological advancements. As a result of this, all the companies are trying their level best to utilize all the available technological means in order to satisfy their customers to the maximum level. However, it must also be noted in this context that the customers are also becoming highly cautious. They are in search of the best and the purest form of products. It has to be noted in this context that health conscious has become the new trend and people all over the world are asking for a pure and natural product. Same is the case in India. People in India are in search of some pure and fresh fruit juice. The two well-known brands of soft drinks namely Pepsi and Coca-cola saw the setbacks in the year 2016. People are becoming much influenced by the lifestyles of people living in the west. In this modern day scenario, the customers are mainly in search of products that are devoid of any artificial added preservatives (Reddi et al., 2015).
There is a huge demand for fresh and natural products in India. It is for this reason that Grove juice, one of the well known fresh fruit juice brands Of Australia is about to enter India with their fresh products. Among, many of their brands, they will be starting off their business in India with the signature brand. Signature will bring a wide variety of fresh fruit juice for Indian consumers (Rais & Sheoran, 2015). The best part of this company is that they provide purely fresh and pure fresh products made from the finest fruits of Australia. Grove juice has been working as one of the leading fresh fruit juice producers of Australia. They make sure that the purity and the freshness of the fruits are not lost while they are being brought in the process of production (grovejuice.com.au, 2018). The fruits are hand-picked while they are in their optimum mature state and then thoroughly tested in the own laboratories. As there are huge numbers of health-conscious consumers in India, it can be said that Grove Juice will have good scope for doing their business on India.
The political system refers to the Governmental scenario in the modern scenario. The political scenario also includes the taxes, the political power and the kinds of tax policies that are imposed by the government on the import and export of the goods. Being one of the largest democracies it is enjoying a federal form of Government. The taxation policy is one of the most important aspects that must be seen by any company that is about to start its business in India (Garg, Goyal & Pal, 2017). As the taxation policy is well developed, Grove Juice can be assured about the fact that they will not have to pay any unnecessary taxes in order to enter and sell their products in India (Rajauria & Tiwari, 2017).
The political condition of India is more or less stable. It is for this reason that Grove juice might use this as one of their strength. Privatization will also be used as a strength of Grove juices while starting their business India. Privatization has led to less interference from the political within the private enterprises (Wellard et al., 2015). As a result, if this, being a beginner they will be able to carry on with their business without much interference.
The taxation system of India comes under the economic set up as well. The taxation system of India includes different taxes or mandatory contributions that have to be made by a business firm in India. These taxes include taxes like a central tax, corporate tax, central tax, employee’s state insurance, and many other such taxes. This will ensure that Grove juice is above to carry on the business with proper safety and insurance. The tax system in India is considered to be favorable enough for any business firm to expand. The low the rate of interest, the more advantageous it will be for business expansion.
It must be noted that there has been a sharp improvement in the economic condition of India. The country registered a GDP of $5.07 trillion in 2013 following a further improved GDP growth rate of 5% in 2014 as compared to 4.35% in 2013. There has also been a reduction in the liberalization, Industrial licensing, foreign capital and other such parameters. This will surely be an advantage for Grove juice to expand their business in India.
The social scenario of India is quite favorable for the business expansion of Grove Juice in India. Indian customers have become very health conscious and are looking for fresh products with zero added preservatives. There is in a sharp rise in the older population of India. Therefore, it is a common fact that this age group will have a good demand for fresh health products (Jayaram, Dixit & Motwani, 2014). Fruit juice is one of the healthiest products that they can get. It has also been suggested by the ministers of India that the producers must add at least 2petcent of fresh and natural fruit content in the aerated products like Coca-cola and Pepsi. However as these brands have seen setbacks, the Indian customers are in search of some real, natural fresh fruit juice. Therefore, this will be a good and positive point for Grove Juice’s business expansion.
India is one the most technologically advanced countries in India. They are upgrading their technological base every time so that they can deliver the best services to their customers. India has upgraded them not only with the IT but also with 3G and 4G technology. This will help Fruit juice to develop a grip over the technological market (Kandachar & Halme, 2017). They can convey about their offers, details of their products through the social media pages, apps and other such aspects.
Porter five forces analysis is important to determine the level and intensity of the market competitiveness in doing business in India. In addition, this will help Grove juice to position their products in the Indian market based on the intensity of the competitive forces (Dobbs, 2014). The following sections will discuss about the elements of the Porter five forces analysis based from the perspective of Grove juice.
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Threat of substitutes |
· Threat of substitutes will be high for Grove juice due to the reason that there are number of other brands already operating in the market (Van Alstyne, Parker & Choudary, 2016). · India is having global brands such as Tropicana operating in the market. Thus, Grove juice will also face competition from them also. · Each of the competing products is similar in terms of taste and looks. Thus, the differentiating factors for the customers are less (Skokan, Pawliczek & Piszczur, 2013). · It is important for Grove juice to have some sort of differentiating factors to fend off the threat of substitutes. · Each of the brands operating in the Indian market is being majorly perceived as fruit drinks by the majority of the customers. Thus, the impact of substation will be more for Grove juice. |
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Threat of new entrants |
· Threat of new entrants is also high due to the fact that smaller brands can also operate in this market. · In the Indian beverage market scenario, there is already good number of small brands catering to specific market. In addition, more global brands are also intending to enter the market (Meissner & Wulf, 2013). · The more will be the threat of new entrants in the market; the lower will be the profitability of Grove juice. · Thus, it is important for Grove juice to have diverse product portfolio in doing business in India. This will ensure that market presence and sales volume will be more for them (Safa et al., 2015). |
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Bargaining power of the buyers |
· Bargaining power of the customers will be high due to the presence of high level of competition. · Fruit drinks are included in the fast moving consumer goods category and thus the switching cost is less for the customers (Huang et al., 2015). · Customers are having different options to choose from with the presence of different fruit drink brands across different price levels. · Thus, in the Indian beverage market scenario the price of the fruit drinks is highly influenced by the market forces. · Change in the price structure of the products will determine the demand in the market for Grove juice. |
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Bar gaining power of the suppliers |
· Bargaining power of the suppliers is moderate for Grove juice in doing business in India. This is due to the reason that Grove juice is heavily depended on the sourced materials (Palacios-Marques, Soto-Acosta & Merigo, 2015). · It is reported that in their existing operation in Australia, Grove juice is having own farmland, which helps them to have lower dependability on the external sources (Allram, Tate & Feitzinger, 2013). · In doing business in India, it is important for Grove juice to have the same approach, otherwise the bargaining power of the suppliers will be high. · On the other hand, the brand value of Grove juice will help to fend off the bargaining power of the suppliers due to the reason that suppliers are depended on these brands for their produces. |
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Competitive rivalry |
· Competitive rivalry is high in the Indian market. · Global and premium brands are also offering discounts to attract more customers. · In addition, aggressive marketing and promotional activities being initiated by the existing fruit drink brands to stay ahead in the market (Chen et al., 2015). · It is important for Grove juice to position and market their products in order to stay relevant in the Indian competitive market scenario. |
In the above sections, the external business factors and competitive factors of doing business in India are being identified and evaluated. Thus, it is now important for Grove juice to set their market objectives accordingly.
Identification of the target market is also important due to the reason that Indian market is highly diverse in nature with having the presence of potential customers across different levels. Thus, various segmentation variables will be used to identify the potential customers for Grove juice.
In terms of the demographic segmentation, customers between the age group of 12 to 60 will be targeted due to the reason that fruit juice is having social acceptance across larger age groups. Teenagers will be targeted as a healthier option over the carbonated drinks and older age groups will be targeted based on the nutritional benefits of the fruit drinks (Cross, Belich & Rudelius, 2015). Thus, the target age groups for Grove juice are wide and vast. In terms of the gender, both the male and female customers will be targeted as fruit juice is having acceptance among both the genders.
In terms of the geographic segmentation, tier I cities will be targeted in the initial stage. This is due to the reason that products of Grove juice will be positioned as a premium in the market and thus the affordability of the customers will be more in the tier I cities only (Jacques, Manaugh & El-Geneidy, 2013). However, in the later stage, tier II cities will be also be targeted based on demand for their products.
Customers with having the intention for regular purchase will be targeted due to the reason that it will ensure the steady inflow of revenue from the market for Grove juice. In addition, customers with more frequent purchase trends will have higher level of loyalty and this will help Grove juice to deal with the competitive scenario (Muller & Hamm, 2014). In addition, customers seeking for quality and access will be targeted due to the reason that Grove juice will provide premium and quality drinks in the market with no added sugar and preservatives. Thus, the targeting this customer segment will help in meeting their expectations effectively (Venter, Wright & Dibb, 2015).
It is recommended that Grove juice should initiate both product differentiation and market focus strategy in doing business in India. This is due to the reason that cost leadership strategy will not be applicable for them due to their premium offerings. On the other hand, initiation of the product differentiation strategy will further help in creating distinctive image among the competitors and attracts the potential customers (Anderson & Xie, 2014). In addition, initiation of the market focus strategy will help Grove juice to determine the taste and preference pattern of the target customers and offer them products accordingly. This will ensure that the products of Grove juice are in accordance to the requirements of the target market and brand loyalty for the customers will also be more.
It is recommended that Grove juice should position their Signature juice brand as a premium offering in the market. This is due to the reason that Indian is market is more price sensitive market and majority of the fruit juice brands are being listed as premium offerings. However, the contents and quality are not at par to their pricing. Thus, premium positioning of Grove juice along with offering the authentic quality will ensure that they will be able to have more sales volume along with more profitability (Urde & Koch, 2014). In addition, it is also being recommended that Grove juice should leverage on their rich and original taste of their fruit juice as marketing positioning element. This is due to the fact that majority of the fruit juice brands operating in the Indian market are having sugar and preservatives.
It is recommended that Grove juice should follow the joint venture entry strategy in doing business in India due to have reduced risk of investments. In the case of joint venture, they can have the partnership with a local brand, which will further help in gaining the local market competiveness. Initiation of the direct exporting strategy would have least risk for Grove juice but it will increase the cost of the end products in the Indian market (Sun & Lee, 2013). Thus, with the help of the joint venture strategy, Grove juice should have own farmland in India, which will help them to provide the authentic local taste to the customers along with having the opportunity for competitive pricing in the market.
It is recommended that Grove juice should have diverse product offerings in the Indian market. This is due to the reason that the more diverse will be the product portfolio of Grove juice, the more will be the opportunities of targeting different customer segments. It is recommended that in the initial stage, the premium Signature brand should be launched in the market in different flavors. This will help to cater to different taste pattern of the customers. In the following stages, Grove juice should also launch their mass market drinks to leverage on their gained brand value in the Indian market. Introduction of the mass market brands will help Grove juice to target the customers across different price levels and increase the sales volume in the long term.
It is recommended that Grove juice should follow market based premium pricing strategy in doing business in India. This refers to the strategy of offering the products at a premium compared to the market determined price. This is due to the reason that fruit drinks are perceived as premium products in the Indian market and initiation of the premium pricing strategy will ensure that customers will have favorable brand image towards Grove juice in accordance to the concept of price portrays the quality of the items. Initiation of the premium pricing strategy will further help Grove juice to have more profitability in selling their products. This will also enable them to push their mass market products in the following stage after the gaining the favorable market image by operating in the premium category.
It is recommended that Grove juice should initiate Omni Channel distribution strategy in doing business in India involving both the offline and online mediums. This will help in reaching out to more number of target customers effectively. In addition, the extensive distribution strategy should also be initiated by Grove juice in order to make their products available in different stores ranging from hypermarkets to convenience stores. Thus, the product visibility will get increased with the help of this strategy. Initiation of the online distribution strategy will help Grove juice to add more convenience to the customers and this will also provide a competitive edge over their competitors in doing business in the Indian market.
In the case of promotion also, Grove juice should initiate Omni Channel promotional strategy involving both offline and online mediums. It is recommended that Grove juice should have effective mechanism of social media marketing to the two ways communication process with the target customers. Initiation of the social media marketing as a promotional tool will further help Grove juice to determine the feedback of the customers for their products and change the product strategy accordingly. Print and television media should be used from traditional promotional mediums to reach out to larger customer segments.
Conclusion
Therefore, it can be concluded that the entry of Grove Juice in India will be very beneficial for the Indian consumers. This is because Grove Juice comes with the apt products that are in huge demand for the people of India in the current scenario. The PEST analysis that has been done in this report shows that the current political, economic, social and technological factors of India seem favorable for the business expansion of Grove Juice. Apart from this, it has also been seen from the marketing mix that if all the plans and policies are implemented properly, Grove Juice will certainly get a proper advantageous scenario for expanding their business in India.
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