The success of an organization greatly relies on the effectiveness of introducing new products in the market. When an organization identifies a productive gap in the market, it acquires and effectively allocates the required resources to ensure the appropriate inception of a new product in the market. Introducing new products helps in increasing the organization’s profit margin. An organization’s development process of a new product is one of the most significant procedures since the quality of the product greatly depends on the different steps in developing new products. The inception of new products in the market enables the organization to capture a bigger market share.
The dairy farming and milk production industry is one of the most critical sectors to operate in since it involves the development of products that are orally consumed by individuals and may have different impacts on an individual’s health. The Malaysia Dairy Industries Pte Ltd majorly ensures that most of their products are of high quality and natural to reduce the negative effect on the health of their target market. The organization has a variety of products that are currently performing positively within the market since they can meet the demand of their products. Their current market share of the organization will ensure that their new products reach a larger market.
The Malaysian Dairy Industry Pte Ltd should develop and introduce new products that their target customers can consume to increase their profit margin. One of the most appropriate markets that the organization should explore is the cheese market in the country. Malaysia is one of the big importers of cheese since the local production from the various industries does not meet the demand of the production in the market. Venturing into the cheese market will help the organization to acquire more customers since the target market will mostly consider locally produced products over imported cheese. The cheese market is also considered to be very lucrative since most individuals consider consuming it in different forms.
The Malaysian Dairy Industry Pte Ltd will also be advantageous to venture into the cheese market since they major in milk products. Cheese is a major product acquired through different extraction processes from milk. This will save the organization from various importation processes that require too many financial resources to channel to other productive ventures in the industry. The cheese market is not only huge within the local Malaysian markets; the international markets will also serve as an appropriate market destination for the organization. The industry’s development of cheese products will bring major positive impacts to the organization since it will also help the organization diversify its wings to newer and better markets.
Utilizing the Ansoff Matrix is the most appropriate strategy to develop and ensure effective marketing for the successful inception of the new product into the market. The Ansoff strategy majorly takes into consideration the quality of the product and the characteristics of the target market to ensure that the product is effectively accepted into the market. Its major goal is to ensure the growth of the product and the growth of the market share. The Ansoff strategy will be the most appropriate for introducing cheese into the market since the cheese market is still a developing market in the Malaysian economy.
Some of the major strengths of venturing into the cheese production by the Malaysian Dairy Industry Pte Ltd include an increase in the organization’s profit margin due to the diversification of their portfolio within the economy. Another major positive impact is that the new product will introduce the organization into the international markets, which the organization had not ventured into initially. The organization will also benefit from the new research and technological advancements within the organization, which will help ensure the production of quality products by the industry. Important information about cheese production within a sector is also readily available, making it easier and efficient to produce the product.
The weaknesses that come along with venturing into cheese production within the sector include a low share of export in sales. The international markets are some of the most lucrative markets since the selling prices in the international markets are higher than the local market prices. However, the share of export sales is relatively low, resulting in a low return on investments for the organization. Another major weakness is that the cost of producing cheese is very high due to the high amount of energy utilized during production. Seasonal fluctuations in the supply of milk to the organization may also negatively affect the cheese production.
Setting up an appropriate cheese production by the Malaysia Dairy Industry Pte Ltd will take approximately five months to install the premises’ ready-fix equipment. The total budget required for the installment of a cheese production plant within the organization’s premise will be approximately $12 million. The cost of labor will consume a higher amount of the total cost, which is 54%. The utilities will consume up to 15.2%, while other expenses such as tax and insurance add up to 30.8 % of the total cost of production. The breakeven point of the investment is approximated to be one year after commencing cheese production using the plant. Audit mechanisms within the cheese processing plant will help ensure that all the health hazards should be effectively documented to ensure adherence to the government’s health policies and regulations. Some of the audit mechanisms include food safety, red flags, and critical control points.
The main department within the organization that has the mandate to develop new products is the engineering and research department. The engineering department will be designing and installing the machines required for large-scale production of cheese. The research department is responsible for conducting various scientific researches related to cheese production to enhance the production of quality products that meet the healthcare requirements and are safe for human consumption.
Entry Strategies
The first strategy that can be effective for the company is a joint venture. It consists in approving a business agreement between two or more organizations to combine forces and resources in order to perform a specific task. It will initially be used to distribute products for the first three or five years. It can become profitable, since the production of products such as juices, milk, soy milk requires a separate well-established process, for which many involved workers are responsible. Moreover, such a merger will contribute to an increase in the number of buyers, which will have a positive impact on profits.
Moreover, it is worth noting that the joint venture is used in the interaction of small businesses with larger ones to enter the foreign market. Other advantages are the opportunity to gain new opportunities and knowledge and gain access to related enterprises or new markets. In addition, the number of resources, personnel and technologies will increase, and there will be greater flexibility and adaptability to changes. Thus, the process of market segmentation will also improve, as enhance the indicators of audience analytics and the scope of the company’s activities. Perhaps in the future there will be a merger or acquisition of one company by another to create a strong competitor.
Further, it is important to emphasize that the opening of production in another country can contribute to the company’s entry into a new market. Among the positive features of this process, there is an increased demand for goods and the absence of fierce competition with other firms. This helps the company to increase product awareness in several countries. Moreover, there is a more detailed and deliberate attitude and specialization in relation to manufactured goods. Other advantages include savings due to large scale, attracting more qualified specialists and increasing the degree of loyalty and commitment of the The Malaysian Dairy Industry Pte Ltd’s customers.
Despite how effective a company’s strategy can be, the environment can be multi-shadowing. This is especially true for such aspects as marketing priorities and marketing management functions. The motivators of changes in the market can be both economic changes in the world, as well as new competitors, technologies or changing consumer needs. Thus, from a critical point of view, the influence of today’s factors is quite high. Thus, in order to survive, the company must adapt its strategic plans and be ready to change. Moreover, the environment largely determines the growth, profitability and longevity of a business. In order to avoid the harmful consequences of changes, the company must analyze social, economic, political and technological influences. Such actions will help in the development of an effective and correct marketing strategy. The business environment, characterized by the dynamics of changes, has had a significant impact on the development of scientific thinking in the field of management. It includes such indicators that affect the company’s activities in the selected market. The factors of the marketing field affect the business through sales and profits, and the business also affects the environment through output.
The other option might be setting up a production plant in Indonesia, somewhere in the island of Java, to start serving the consumer market in Jakarta. The products would be Marigold’s range of juices and milk and the new soy milk. Moreover, the consumer market in Indonesia is noted as one of the most promising, thus it has some advantages. Thus, the significant growth of the population and its well-being makes Jakarta an attractive consumer sphere. This is also due to the confluence of a growing middle class and the increased value and prevalence of e-commerce. However, it also motivates some of the changes that the economic sphere is undergoing. Companies merge and acquire each other, but at the same time the projected market share increases. Such shufts focus on online sales, which is also worth noting the companies under the study. Internet sales are currently of great interest to the audience, so you should pay attention to digital marketing. In addition, the rapidly developing consumer market is also stimulated by the rapidly growing incomes of the population.
A brand’s reputation within a given market is one of the most critical aspects of ensuring that an organization performs appropriately within a given market. Consumers only go for products from brands that are considered to be of great reputation within the market and one that has a greater following in the market. Keller’s brand equity model is one of the most effective brand management strategies for an organization to strengthen its brands within the market (Purani and Jeesha, 2021). The approach enables the target customers to have positive thoughts about their products. It also motivates the producers to ensure high-quality products that enable the consumers to have a positive experience with the brand in the market.
The Malaysian Dairy Industry Pte Ltd can utilize Keller’s brand equity model to ensure that they achieve a significant market share. This can be done by ensuring brand salience by making their products stand out within the market and that their cheese products are able to meet the needs of their target customers (Purani and Jeesha, 2021). Highlighting brand response and identity within the market also enables the organization to acquire effective brand equity. The major psychological and sociological factors that may influence consumer decision-making include motivation to consume a particular product and an individual’s attitude and belief towards a particular product. The most appropriate branding strategy would be the use of peer influence to enhance the reputation of the brand. Associating the final product with influential individuals within society will help the organization acquire better brand equity.
Reference List
Purani, K. and Jeesha, K. (2021) ‘Community based brand equity as brand culture: advancing brand equity conceptualization for a connected world.’AMS Review.