Marketing Strategy For Westland Co-operative Dairy Company Limited

Product Policy Decisions

Write a report to deduce the marketing strategy of a dairy organization in New Zealand. 

An effective communication strategy is extremely important for business companies in order to create to position their products appropriately in the market. As far as Westland Co-operative Dairy Company Limited is concerned, the company has presence in New Zealand, its home country while China forms its only offshore market. It can be pointed that both New Zealand and China are extremely competitive dairy market with both resident and international competitors (Bai & Chang, 2015). For example, Nestle, the largest dairy company already has strong presence in both New Zealand and China, thus competing with Westland Cooperative in both its home and only existing host country respectively (nestle.co.nz, 2018). Again, on the home front, Westland faces competition from the largest resident dairy company, Fonterra. This discussion clearly shows the Westland needs to combine a formidable communication strategy with its product policy decision:

Kundu and Majumdar (2017), business organizations require to extend their present communication strategy to the international markets as a part of their product strategies. This enables them to create awareness about their products in the new markets. This communication creates awareness about the company and its products among the different stakeholders like government, suppliers and consumers in the new host market. The early entrants in the international market always opt for this particular strategy. The management of Westland, though one of the largest firms in New Zealand is actually a medium sized enterprise with limited manpower and other resources. Thus in order to extend its operations into the United Kingdom, Westland need to extend its communication channels into the country and promote its products. It being a premium dairy products manufacturer and marketer should promote its products in visual and digital media(Koeman & Bialkowski, 2015).The company should promote its products, its profitability and its capability of causing profit to the suppliers. The communication strategy of Westland Cooperative in the United Kingdom should adverstise its products in the business magazines and websites. It should promote its entry into the British market in its official websites. This would help the company to attract suppliers in the UK which would provide it with high quality raw materials and enable it to manufacture products adapted to the local tastes. The communication strategy should consists also communicate to the customers in the United Kingdom that Westland would be adjusting its products to match to the British tastes. Thus, the communication strategy of Westland should be an extension of its central communication strategy and aim to create all-round business opportunities for the firm in the market of the United Kingdom(westland.com, 2018). A proper and uniform product policy along with that of a uniform communications strategy is utmost essential for the business to produce the economies of scale.

Part i-Product (Communication Extension)

Notta and Vlachvei (2015) mention that the product extension strategy of Westland should be a part of core product strategy adapted to adapt to market conditions of the United Kingdom. The extended product line should have influences of the characteristic high quality dairy products which form the unique selling proposition of the Westland. The company should retain its core high quality and add new characteristics like fresh cream and English style dairy products. In most of the cases the organizations seem to offer the same kind of products to the customers that are already present in the market and offers similar kind characteristics. This kind of marketing strategy is taken up by the firms generally in cases of different cultures and a different kind of competitive environment (Bai & Chang, 2015). The management of the mentioned company have decided to use the following strategy in order to capture the market of UK and ensure the success of the dairy products in the targeted country. The main strategy that will be adapted by the4 organization in such a case will be the creation of customized advertisements for the global market and most importantly customized local advertisements for the market of United Kingdom.

The different firms of the UK market can adapt the products and market them using standardized communication policies. However the company has chosen the expansion strategy for completing the process of the adaption of different kind of products for the business(Lyons et al. 2016). Many companies add brands to their product portfolio through the acquisitions of different small local companies. However, given the absence of huge resources and less manpower. The target of the Westland is to start their business in UK and the firm should use localization as the appropriate product strategy. The new products should be adapted to the English tastes and preferences. The company at a later stage can extend its product line to adapt to the tastes of the European countries like France and Belgium. This would drive the establishment of Westland in the United Kingdom in two ways. The introduction of  flavours reflecting the tastes of England, France and Belgium would enable Westland to establish itself as dairy product manufacturer capable of catering to the needs of a multicultural consumer base. This outcome this strategy would be generation of immense revenue which would enable the dairy firm to make its British operations sustainable financially. The firm after attaining success and earning considerable market share in the United Kingdomshould target to acquire smaller companies and increase their geographical presence in United Kingdom. 

Part ii-Product Extension (Communication Adaption)

The management of Westland Dairy Products limited have quite a clear idea of the cultural and physical profile of both the countries and thus they have targeted to adapt a dual mode strategy that is considered to be a more viable option for the company (Kundu & Majumdar, 2017). The target of the company is to bring a prominent celebrity of United Kingdom on board and launch the marketing campaign accordingly. The communication strategy should be adapted to match the market conditions of the United Kingdom which is one of the richest markets in the world. The communication strategy of Westland in the market should keep the preferences of the customers in the United Kingdom. The company should identify ways to gain, expand and manage its customer base in its new market like capturing maximum possible data while interacting customers. The firm should then use this customer information to bring about necessary adaptation in its products and introduce new variants, thus aligning it more to the British conditions.

The most appropriate strategy which Westland should use its product extension strategy comprising of adapting its present products to the tastes of the British customers. The company should then extend its product line to incorporate flavours of other European cultures like France and Belgium. There are several reasons which would necessitate Westland to adopt this product expansion strategy. The first reason is adapting the preferences of the customers residing in the United Kingdom is that it would enable the firm to attract more customers and earn high immense revenue. The second reason is that Westland can give its investors more returns on its investments and attract more revenue. The third reason of the product expansion strategy would be thus boosting the revenue and capital generation, thus boosting the overall competitive strength of Westland compared to its biggest domestic rival, Fonterra. Fourthly, this strategy would enable Westland make its British division financially sustainable. The fifth reason to adopt this product expansion strategy is that establishing itself strongly in the UK would also pave ways for future expansion of Westland into other European markets, thus boosting its competitive position in the international market.

The Company must organize a proper research and development strategy to invent new products that suits the different demands of the customers accordingly. Product Invention strategy is one of the many strategies that can be adapted by the mentioned dairy firm to ensure success for the business organization.

Product iii-Product Adaption (Communication Extension)

Considering all the given options, the most viable and adaptable marketing strategy is the communication adaption and invention strategy.  

Channel Management is mainly used in different types of Sales marketing parlance. It is generally defined as the process where the management of the company develops different types of marketing strategies as well as sales strategies to reach out to a large base of customers(Bauman, McFadden & Jablonski, 2018).

The specialized trade importers are those firms that deliver specialized goods and services to an overseas company in exchange of a considerable amount.

Manufacturing importers are those types of importers who depends upon the imports of different types of goods and services from the foreign companies.

Retail Importers can be divided into a number of different types which are as follows;

Wholesalers are a firm that typically buys goods from the manufacturers and resells them to the retailers. The typical task of the resellers is to stack goods from different manufacturers.

Distributors are those type of retail importers that serves a number of different roles. They perform in a proper manner which is quite similar to that of the independent representative in that they try to solicit the orders for their products.

Importers on the other hand are referred to as the firm that serves as an exclusive distributor for a company in the overseas territory. The firms of these types help the receiver to clear the customs and transport and deliver the products to the warehouse and also complete effective marketing for the organization.

The management of the organization will choose the retail importers as the source for their marketing campaign.

The appropriate channel decision which Westland Cooperative must undertake would be retail importers. As discussed above the retail importer channel consist of wholesalers, retailers and distributors. The company should use distributors to target specific markets with Britain where it can acquire a large market share. The wholesalers would enable it to promote its products in areas where the customer bases are large and consume dairy products from multiple marketers. The retailers consisting of small shops would enable the firm to sell its products in towns and villages where big wholesalers and distributors do not have access. Westland should also enter into contracts with retail chains like Aldi to sell its products at their outlets. This would enable the firm to shorten a portion of its distribution chain and earn higher revenue by excluding wholesalers and distributors.

Product iv-Product (Communication Adaption)

Currency Fluctuations

Currency Fluctuations is one of the main considerations of the management of Westland to establish the business in United Kingdom. The large value of Pound in comparison of New Zealand Dollar is one of the main challenges that need to be solved (Shadbolt et al. 2017). The company can mitigate the challenge by introducing the products of high value which can be beneficial for bringing stability in the business and also start the business by acquiring a small firm that has a substantial presence in the market of United Kingdom.

Inflationary Environment

According to, Foote, Joy & Death (2015) inflation is one of the main causes which have led to a stagnant market and a loss for most of the companies. Global inflation has been one of the most potent forces that has changed the way of the companies thinking. The most important criterion of the business is to ensure the market of United Kingdom and adapt strategies that will suit the most.

Government Controls

BREXIT is one of the most important considerations for the management of the organization and the organization has to ensure the new rules and government policies to determine the strategies of the business. As of now the organization must make sure to study the different types of policies and put forward the next step accordingly (Koeman & Bialkowski, 2015).

Competitive Behaviour

The presence of large scale competitors is the main challenge for the expansion of the business in United Kingdom. However the organization has to ensure a competitive strategy to ensure the success of the business in the mentioned market.

Promotional Challenges and Issues

Westland Milk Products is a renowned co-operative dairy company in New Zealand. UK is their target company where they are trying to expand their business with suitable advertising strategies. The advertising industry work within strict centralized regulations and there are specific higher authorities to monitor the issues. Although there are strict and stern advertising laws in place, but the advertisers always find their way to violate the laws.  As Westland Milk Products is expanding their business in UK, therefore the advertisers need to be careful and depend on ethical terms to advertise the products and services of Westland in the target country (Brouthers & Baker, 2015). If the laws are not followed then the company might have to face legal constraints. There will be negative impact on the reputation of the company if they face legal issues in the initial days of expansion. For instance, the advertisers need to be careful while advertising for the children, or using psychological tactics to create demand among the customers. Tactics in advertising might come with additional ethical challenges. There are not- so- legal tools such as emotional appeals, spreading propaganda for political campaigns which are not followed by the ethical advertisers. They believe that the customers are likely to get attracted to those who do not use manipulative tactics (Hollenback, Moorthy & Proserpio, 2017).

Most appropriate strategy:

Language or linguistics plays an important role in the advertising of products and services. The advertisers need to consider the location where the products will be sold in order to find out the language spoken by the target market. For instance, as Westland is trying to expand in UK therefore their advertising strategies need to be intended towards the English- speaking people. They cannot use the Australian language in UK, as it will create linguistic barrier while spreading the message to the target market (Ma et al., 2017). There will be negative impact on the growth and development of the company in the target county due to lack of coordination of messages such as advertising campaigns, press releases and modification in the specifications of products and pricing in different markets. The limitation might arise due to lack of understanding the marketing communication process and various factors such as sender, message and receiver. If the advertisers ignore the legal, linguistic, media, cultural, cost and production aspects, then they might pose to be barriers in the linguistic arena of advertising strategy of the company. However, it depends on the company the ways in which they want to mitigate the barriers because no communication can become effective without failures (Pareek & Singh, 2017).  

Advertising is an important aspect of communication, which is influenced by culture of the particular area. There is a major relationship between the cultural dimensions and different characteristics of advertising. The advertisers need to keep it in mind that the products and service advertising must be culture- oriented towards the local region. For instance, the advertisers need to be careful while advertising the products of Westland in UK by targeting the positive aspects of the culture of that country. For Westland Milk Products, B2B marketing will be best suitable international promotional strategy. It is effective in retaining the loyal customers and attracting the potential onesby continually creating useful and valuable content for serving the purpose of changing consumer behavior. The Westland Milk Products will be benefitted as they have targeted UK and B2B marketing will help them to grow in the new market, as it is a continuous process. The buyers will be positively influenced and the gap between the consumer and buyer is bridged. Moreover, the ROI of the business is enhanced and the company will get the scope to analyze their outputs. This tactic is usually followed by the already established companies in the market to spread word about their products and services. It helps them in selling their products to other commercial businesses, agencies and institutions for consuming the products or reselling (Pashupati, Morse & Ellis, 2016). This promotional strategy will help the company to be connected with other business companies in the target country and they will be able to grow and develop.

The economic conditions of the United Kingdom are subject of inflation and economic fluctuations which Westland needs to consider.

 

Figure 1. Graph showing rate of GDP against USD (black) and NZD (blue)

(Source: bloomberg.com, 2018)

The graph above shows the 5 year historical value of GBP against two international currencies namely, USD and NZD. It clearly shows that the value of GBP is decreasing against both the currencies which clearly show increasing inflationary trends. Moreover, Britain leaving the EU which means the expenditure to gain resources from Europe would increase the inflation further. This means the company can enter the United Kingdom and not limit its presence in the market alone. It should amalgamate this strategy with its market and product expansion strategy to operate profitably in Europe.

Communication mode

Westland Milk Products is a New Zealand based company, which is owned by more than 429 farmer shareholders. The company is planning to expand in the markets of United Kingdom and therefore, it needs to assess the potential of communication means for reaching the most number of target audiences. The direct marketing strategy begins with a strong database of customer. One of the major factors includes providing great customer values through a personalized and customized approach for the products and services. Furthermore, Westland Company should ensure that their distribution processes are tailored in order to meet the customers’ needs, demands and build an opportunity to build consumer loyalty (Solomon et al., 2014).

In addition to this, the company can also utilize mobile marketing strategies for promoting its products to a large extent. Mobile marketing strategies is the multi-channel marketing technique, which is focused on reaching the most number of audiences through online channels. Westland Milk Products can utilize several online channels like the social media (Facebook, Twitter and Instagram), electronic mail, SMS, MMS and others to communicate with their target audience. Interactive mode of communication helps the owner to resolve the issues of customers in an efficient manner. Mobile marketing also helps in providing the customers with personalized information time to time, which also promotes services, ideas and goods (Ryan, 2016). 

In modern days, a large chunk of the population has accessibility to the internet through smartphones rather than desktop or laptop. The portability feature of the mobile phones has enabled the users to get information from the furthest corners of the world. Therefore, the company can utilize this option to a large extent, in order to make people aware of their strategies. However, Westland Milk Products Company needs to utilize this strategy in an efficient manner as the advertisements over the mobile sites are more effective than others (Pappas, 2016).

For the tradeshow marketing strategy, Westland Milk Products Company should plan in advance and determine the tradeshow goals beforehand. The speakers should not miss the sessions and plan the features and goals of the show, beforehand. In addition to this, it is immensely important to take this opportunity and personally invite the customers as well as the prospects to meet up at the tradeshow. Questions from the customers should be attended and problems should be addressed in an effective manner (Ottman, 2017). These sorts of marketing strategies enhance interaction level and help the company to progress on the long run.

Both the location as well as the space of the location plays a critical role for the overall success of the tradeshow efforts. During the planning procedure, the location must be decided in the first place, to ensure that no customers face any problem. Designing the booth, giveaways and messages in an efficient way help in leaving an indelible mark upon the customers’ minds. Moreover, the location must be staffed with enthusiastic as well as energetic employees, who will be able to connect with the customers on a personal level. The more the session is interactive, the more it will have the power to engage the target audiences (Solomon et al., 2014). 

Last but not the least; Westland Milk Products Company should also take the Global Sponsorship marketing strategy into consideration. The company should consider the organizational values as carefully as their impressions. Good companies and organizations are built on their principles and values first. In addition to this, the company should also build transparency and value alignment into their agreement for avoiding issues later (Kotabe & Helsen, 2014). The global sponsorship strategy will benefit the company to a huge extent, if and only if the strategies are being utilized in an effective manner.

		Unit cost(NZD)	Estimated maklret or mar ups	Your costing
1	Retail price	100	25	125
	Retail mark-up	100	25	125
2a	Wholesale price	100	25	125
	Wholesale mark-up and/or	100	25	125
2b	Distributor price	100	25	125
	Distributor’s mark-up and/or	100	25	125
2c	Agent’s price	100	25	125
	Agent’s commission	100	25	125
3	Landed price	400	100	500
	Landing charges	100	25	125
	Tariffs/duties	100	25	125
	Customs clearing charges	100	25	125
	Handling and delivery charges (actual or estimated)	100	25	125
4	Market currency	100	25	125
	Foreign currency at exchange rate	100	25	125
5	Cost, insurance and freight (CIF)	200	50	250
	NZ$	100	25	125
	Insurance costs – based on value	100	25	125
6	Cost and freight (C&F)	200	50	250
	Freight costs	100	25	125
	Contingencies	100	25	125
7	Free on board (FOB) NZ$	10049.6	2512.4	12562
	Export expense allocation (as per budget)	500	125	625
	Export packaging	500	125	625
	Documentation	500	125	625
	Bank charges including collection charges	500	125	625
	Other finance costs (foreign exchange charges)	500	125	625
	Freight handling (factory to ship or aircraft)	500	125	625
	Trade indemnity insurance, export credit insurance	500	125	625
8	Ex factory cost	100	25	125
	Profit margin or mark-up	100	25	125
9	Total factory cost	400	100	500
	Materials	100	25	125
	Direct labour	100	25	125
	Fixed	100	25	125
	Variable overhead costs	100	25	125

References

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