Strategic Expansion: Crafting an International Marketing Plan for Capilano in the Thai Honey Market

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INTERNATIONAL MARKETING PLAN- CAPILANO

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Contents Introduction .................................................................................................................................................. 3

Environmental and internal analysis of CAPILANO.................................................................................... 3

Product Mix .................................................................................................................................................. 4

Capilano Marketing Strategy in Thailand ..................................................................................................... 4

Segmentation & Positioning opportunities in Thailand ................................................................................ 6

Size of international market for the product ................................................................................................. 6

Future Prospects of Capilano honey ............................................................................................................. 7

Internal and external environment of the company....................................................................................... 8

Conclusion .................................................................................................................................................... 8

References ...................................................................................................... Error! Bookmark not defined.

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Introduction Aim:

To prepare an International Marketing Plan for the Australian firm CAPILANO

Objectives:

• Enabling to understand the international marketing strategy and the elements of international

marketing analysis, including customer analysis, company analysis and competitor analysis.

• To assist in evaluation of the integral international elements such as marketing mix (product,

pricing, promotion, and distribution strategies)

• To assist in enhancing the problem solving techniques and decision making skills by learning

how to leverage strategic international marketing analysis to inform tactical marketing mix

decisions while allowing you to consider a comprehensive framework for evaluating international

marketing decisions and to create successful international marketing planning initiatives.

• To expand knowledge in the area of international marketing strategy while increasing awareness

of the different strategic and tactical initiatives that are available.

• Enabling to identify and act on sustainable, social and ethical concepts required in international

marketing planning.

Environmental and internal analysis of CAPILANO

Capilano’s Mission Statement

• To enhance shareholder prosperity through leadership in the marketing of honey and other foods

in Australia and selected overseas markets by achieving excellence in customer service; product

quality; and product innovation.

• To continue a commitment to employee career development and well-being and

• To be an ethical and responsible member of the community and act in a manner conducive to the

welfare and protection of the environment.

Capilano’s presence in the Australian Honeybee Industry

Capilano Honey was founded in 1953 by the apiarist brothers J.C. (Tim) Smith and HA (Bert) Smith.

They commenced the business by packaging and selling the honey directly to the grocery stores in and

around Brisbane and in today’s date the company is the dominant market leader of the Australian

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honeybee industry and markets the honey produced by Australian beekeepers around the world.Capilano

is a world renowned honey brand with capacity to produce and pack around 40,000 tonnes of honey

yearly (BEECULTURE, 2014). It has global presence in around 40 countries with their biggest markets

inAsia, Europe, Middle East, and North America. Company collects honey from around 500 beekeepers

of Australia with their operations spread in the vicinity of New South Wales, Tasmania, South Australia,

Victoria, and Queensland with the capability of producing more than 18,000 tonnes of honey and 250

tonnes of beeswax every year (BEECULTURE, 2014). The growth and progression of Capilano has

highly benefitted the Australian economy and it is the financial contributor to AHBIC (Australian Honey

Bee Industry Council) and RIRDC (Rural Industries Research and Development Corporation)

Product Mix

Since inception, the company has evolved in terms of meeting the customer taste and demand hence

making it the number one choice of the customers (Webster Jr, 2005). The product mix of Capilano honey

is presented as below:

A. Organic honey

B. Premium floral honey

C. 100% pure Australian honey

D. Pure Manuka Honey

E. Latest Products

• Macadamia honey

• Tasmanian rainforest honey (Limited edition)

• Capilano’s Dark &Bold (Limited Edition)

• Capilano’s Light and Smooth (Limited Edition)

Capilano Marketing Strategy in Thailand

The choice between private label and branded product

As per Mr. Ben McKee, managing director Capilano the reports tell that Capilano is facing stiff

competition from private label brands not only in Australia but in International market, Thailand as their

biggest customers are now turning to be their biggest competitors (Australia, 2005). He believes that if the

private label continues to growth the honeybee industry will shift towards major restructuring as the

Neilsen survey says that 82% of the Australians believe that private label products are equal in quality of

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branded products. He raises his concern over the fact while these private label brands are investing

aggressively in the industry they fall on short on investing in education and marketing of the company.

Although Capilano is facing stiff competition from the private labels in Thailand, the government it still

has huge potential, Australia being the hub of honey production, government has asked them to double

their production for meeting the growing demand of honey due to the changing dietary habits of people

(Australia, 2005). This provides a huge opportunity to Capilano to strengthen their market presence by

pitching the right product at right time meeting the consumer demand, taste and quality needs.

Market demand analysis

Capilano is famous worldwide for its quality, efficiency to meet the regular customer demand, and

excellent customer service. When, it comes to International markets like Thailand, Capilano has huge

potential due to the following reasons;

1. Changing demographics and customer lifestyle- The once rural population of Thailand is

gaining urbanization at fast pace with change in their lifestyle. Their eating habits are getting

more westernized with honey becoming a prime ingredient of their diet. Since Thailand is still

isn’t equipped with the experience and technology to meet the soaring customer demands, it

provides a huge market potential to the company (Australia. 2004).

2. Bad reputation and low quality- To support the farmers for fostering the honey business and

survive from the tough competition by global players such as Calpino, Thailand government has

introduced The Free Trade Agreement. But on the contrary, introducing low duty has earned bad

reputation for Thai Honey and traders have been found importing low quality honey from

countries and supplying them in Thailand. They also, re-export the low quality honey under

different labels to international markets of Europe and North America. Also, Thailand has been

blamed for money-laundering at several instances.

3. Low production- The domestic honey demand is of 20,000 tonnes and Thailand. Currently

Thailand has 1588 registered farms with 206,412 beehives to produce around 10,000 tonnes of

honey every year. However, this is extremely low to meet the domestic and export demand

together (Australia. 2004). Since, no country would like to compromise on exports earning,hence

to meet the demand around 70% of the honey is still imported from overseas providing it a huge

opportunity for Capilano to easily fulfill the demand.

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Segmentation & Positioning opportunities in Thailand

The best segment and positioning opportunity for the Black and Bold honey as a clean and green product,

produced under natural condition to the urban population of Thailand blending with the western lifestyle

trends (Ashworth & Voogd, 2010). Capilano can position its product based on the following factors:

• Experience- Capilano has enriching and impressive business legacy of more than 50 years and

strong presence in the international market with effective supply chain and strong distribution

channel.

• High and positive growth rate- Capilano has achieved high and positive growth rate due to the

supply of high quality products since inception. Their honey is directly extracted from the

beemakers who nurture and maintain beehives under great conditions.

• Diverse product mix- Capilano has diverse product mix to suit the needs and tastes of every

customer.

• Competitive pricing- With high quality production facilities and strong distribution network in

place, Capilano has managed to reduce the labour cost hence passing on the benefits of

competitive pricing to its customers.

• Product quality- Capilano receives the honey directly from the beehives and further manufactures

and packages under superior quality conditions making it the numerouno brand globally.

• High nutrient value- Capilano can have an extensive marketing campaign educating the potential

customers about the health and nutrition value of honey.

Size of international market for the product

The international honey market is dominated by China however China was low on consumption but

seeing the westernization of Chinese population and their shift towards healthy diet, in the coming 5-10

years they will consume their total honey production. The Honeybee industry in Australia has the GVP

(gross value production) of $65 million, and the production of honeybee alone comprises the GVP of $50

million. Rest of the GVP is divided into other related products such as exports of bee in domestic and

exports market, production of beeswax, pollen, and propolis. Although, the GVP value may sound low

however the value of honey based on its usefulness in various fields such as medical, sports, health,

agriculture, beauty etc. is more than just numbers. The Australian Honeybee industry comprises around

9600 registered beekeepers with around 500,000 hives (Australian Government ‘Population’ Strategy.

2011). Facts represents that 70% of the beehives are managed by commercial beekeepers having around

200 hives. On an average a commercial apiarist operates between 400-800 beehives however some

apiarists possess around 3000 beehives. For beekeeping, around 16000 hectares of native vegetation is

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required for proliferating and managing 20 bee sites and the bee sites are divided equally between public

and private land (Australian Government ‘Population’ Strategy, 2011). The largest producer of honey is

New South Wales comprising around 41% of the total honey production in Australia. Australian honey is

known for its premium quality and is exported to UK, Indonesia, South East Asian countries such as

Thailand, Malaysia, and Burma, Saudi Arabia, and North America. Although it is a positive indicator, still

the dominant players of other countries are also aggressively gaining momentum to gain market

prominence.

Future Prospects of Capilano honey

1. Strengthening exports in countries like Thailand- Capilano has strong financial backbone and can

expand its exports by increasing the production capacity as Thailand has a huge market potential.

2. Organic Honey- SinceCalpino Black and Bold honey is natural product it can be promoted with

the ever growing market with huge demand for organic product on the basis of health benefits,

0% fat product, zero preservatives, and loaded with antimicrobial qualities. To foster the demand

in organic market, the company needs to design special labelling and gain certain government

certifications.

3. Product and packaging innovation- Company should keep on introducing innovative products,

improved and appealing packaging to meet the evolving customer needs and demands.

4. Honey with medical benefits Calpino is just not a honey producer, they also do extensive research

on the health benefits of honey which are clinically proved and approved by their subsidiary

company MedihoneyPvt. Ltd. Calpino should focus on spreading the education about the

extensive range of health benefits to its customers. Attaching health benefits with the product will

certainly provide them edge over the competitors (Wymer, 2011).

5. Training and support for Pollination: Seeing the stiff competition in domestic and overseas

market, Calpino can diversify the business by providing paid pollination services to the

entrepreneurs of horticulture industry. It will prove as a source of good income for the beekeepers

in the low or no honey production scenario.

6. Live Bee Exports: It is one of the most lucrative business vertical for the Calpino. Since its

beekeepers already produce ample honey in natural environments and the availability of floral

resources permits for building up honey bee colonies, hence excess bees can packaged and sold to

the overseas beekeepers.

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Internal and external environment of the company

According to 2014 estimate, Thailand is dominated by 67,200,000 rural population mostly belonging to

the northern, central, and northeastern regions of Thailand (Australian Government ‘Population’ Strategy,

2011). Due to continuous industrialization from past few years, the urban population has also increased as

millions of rural Thais migrated to urban areas and now as per NSEBD urban population constitute

around 45.7% of the total population mostly inhabitants of Bangkok. Even though now they are an

integral part of urban population however they have spent the majority of their life in rural areas. Hence,

to penetrate its limited edition product Capilano Dark & Bold in the Thailand market, Capilano kept an

open mind to penetrate the market with the help of local traders so that it is easy for the urban population

still rural in heart to accept the product and later expand their business by creating their own production

base in the country (Baker & Hart, 2008). The language of Southwestern Tai family dominates Thailand.

The langue speaking is divided as per the areas. Karen language is spoken around the Burma border,

Khemr near Cambodia, and Malay in south region, near Malaysia. Chinese descendants speak Chinese

and the tribes of Himalayas have their own Himalayan language for communication ((Baker & Hart,

2008). Hence, marketing the honey as a branded product in Australian English may have proved to be a

wrong strategy.

Conclusion

Capilano honey is backed strongly by its brand value, integrated supply chain, excellent customer service,

and reputation for high quality product. As per Im & Workman, (2014), Capilano practices the best export

methods by joining the hands of local retailers providing them lucrative business profits. The local

retailers help them overcome language and cultural barriers and they expand their overall business in the

country. The company follows a well-defined strategy of introducing basic products meeting the customer

demands as per their research. It assesses the business growth for one year and later introduces other

products in the company’s pipeline. The high officials of company state that they introduce innovative

marketing strategies as per the country to fulfill its short term goal of reaching to maximum customers.

After achieving the first milestone company may go for diversification of business and set up their own

base in the country to meet the future demands.