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SP54966563

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SP54966563

  1. 1. SP54966563
  2. 2. 2 Executive Summary Around the world, in recent time, the interest in organic food items seems to have extended rapidly. It is empowered by buyer observations that organic items are preserved, perfect and correct. The development rate was evaluated to be around 20% for every revoke in the following couple of years, with deals achieving $US 50 billion in 2020. The greatest development in utilization has happened in developed nations, for example, the UK, the US, and several Asian countries (like Japan, Singapore, etc.). Those are likewise real merchants of organic food. It is clear that Australia, customarily a noteworthy exporter of farming items, endures profiting by the development in the search for organic food items. The target of this paper is to give a description of the Australian organic food company (“Organic Origins”), including it formulation, promotion, and accreditation of organic food. The paper is surveying the possibilities of this organization in the world's business sector and will give some recommendation for its future growth. Real issues confronting the “Organic Origins” are considered, and future analysis is recognized. Marketing segment issues incorporate the inadequate production base and transformation to organic sustaining while marketing mix issues concentrate on costs and item probity.
  3. 3. 3 Table of Contents Executive Summary........................................................................................................................ 2 Table of Contents............................................................................................................................ 3 Table of Figures .............................................................................................................................. 4 Introduction..................................................................................................................................... 5 The Organic Food Market............................................................................................................... 6 Marketing Environment .................................................................................................................. 7 Micro Environment ..................................................................................................................... 7 Producers ................................................................................................................................. 7 Retailers ................................................................................................................................... 8 Customers ................................................................................................................................ 8 Buyers ...................................................................................................................................... 8 Sectors...................................................................................................................................... 8 Macro Environment..................................................................................................................... 8 Political.................................................................................................................................... 9 Economic ............................................................................................................................... 10 Social ..................................................................................................................................... 10 Technological ........................................................................................................................ 10 Environmental........................................................................................................................ 10 Legal ...................................................................................................................................... 10 Market Segment ............................................................................................................................ 11 Customer’s Behaviour According to Market Segment................................................................. 13 Marketing Mix .............................................................................................................................. 16 Conclusion .................................................................................................................................... 19 Recommendation .......................................................................................................................... 20
  4. 4. 4 References..................................................................................................................................... 21 Table of Figures Figure 1: Micro Environment of Organic Food Market, followed by Organic Origins ................. 7 Figure 2: Macro Environment in Organic Food Market, followed by Organic Origins ................. 9 Figure 3: Major Market Segment of Australian Organic Food Industry ...................................... 12 Figure 4: Market Segment Followed by Organic Origins ............................................................ 13 Figure 5: Market Segmentation Strategy of Organic Origins....................................................... 14 Figure 6: Product Mix Strategy followed by Organic Origins ..................................................... 16
  5. 5. 5 Introduction Organic food in Australia has accepted expanding consideration from administrators, government, and industry associated with the numerous parts of the globe. It is working since last two decades due to the numerous apparent development that it gives. As per production aspect, it is perceived to contribute a few solutions to the ecological concerns that have been correlated with routine farming issues in the developed nations. A few governments have assumed a dynamic part in supporting organic food items. Accordingly, the quantity of makers changing over to organic farming generation has expanded essentially in a few nations, especially in Australia “Organic Origins” is likewise seen to be conceivably advantageous to the developing nations by extending several possibilities to the world business sector (Essoussi & Zahaf, 2014). For the promotion aspect, the interest for organic food has extended immediately worldwide. It is supported by various improvements over the previous decades. The first of these is the uplifted consciousness of the connection between eating habit and health consciousness. The second component is the modern adaptation of extremely distributed food cautions, which incredibly expanded buyer knowledge and attention for food quality. Another substantial contribution point for organic food is the apparent ecological advantages. At last, the verbal confrontation over "genetically modified (GM)" food has given further stimulus to organic food items. The organic testimony blocks the utilization of GM substances. Other critical elements are the inexorably and focused on advertising and advancement by the standard retailers and significant food makers. So, they move into organic product libations. Nonetheless, regardless of the general uplifting viewpoint, there are potential dangers that might thwart the future development of the organic area (IBISWorld, 2016). So, the “Organic Origins” administration is addressing whether the present reinforcement for organic food is a prevailing fashion or a strong pattern that will proceed. The inquiry is being raised due to the potential clashes between interest patterns for comfort and liberality. There are worries over food wellness and nature. In light of these irreconcilable situations, customers are not inexorably steady in their buying manner with regards to individual utilization. In reality, they might say one thing however accomplish something different.
  6. 6. 6 The Organic Food Market These days, sustainability is getting to be one of the primary social issues in the business field. Authority from financial specialists, it is cuttings the product costs. It is having advancement of a positive picture, and the capacity to charge the people mind towards organic food. “Organic Origins” is the real world example. The issue of sustainability is additionally presuming that corporate social obligation in the food retailing industry is deciphered to support the nearby food makers. It also includes reasonable exchange, adhering to a good diet, and duty to organic items. For some purchasers, neighborhood farmers support is viewed as a socially dependable conduct. In this case, “Organic Origins” is privately developed in the market of organic food (Chang, Griffith, & Zepeda, 2012). An expanding number of organic customers like to have local food which comes from a sustainable company. Those are in direct connection with their inspiration to purchase organic food from “Organic Origins”.” Organic product frameworks are those who are cultivating the food without any utilization of counterfeit manures and chemicals. Those are having a high level of eco-friendly substances. In “Organic Origins”, organic cultivation is designated as management methods that form soils enriched to produce quality organic food. It is always measured by the level of organic fertilizer, morsel formation and feeder root advancement. The natural resources reinforce organic plants and not fundamentally through solvent manures added to the soil. Organic plants take up supplements that are released continuously from "humus colloids". In this framework, the digestion system of the plant and its capacity to absorb supplements is not overemphasized by unnecessary uptake of dissolvable salts in the water of soil (Chang, Griffith, & Zepeda, 2012).
  7. 7. 7 Marketing Environment Micro Environment It refers to the factors that influence organizations in a particular trade or industry. The factors of microenvironment are those in which the firm can control and directly affect an organization's prosperity (IBISWorld, 2016). Figure 1: Micro Environment of Organic Food Market, followed by Organic Origins (Source: http://www.organicvalley.coop/why-organic/organic-defined/evolving-organic- lifestyle/) Producers The world's organic food generation has expanded considerably in the previous century, as has calorie consumption per capita. Four billion metric tons amounts of organic food are delivered
  8. 8. 8 all around per year. Australia (including “Organic Origins”) right now creates enough organic food for its residents. Retailers They incorporate an extensive variety of outlets, for example, general stores and expert supermarkets. They are described by their managing the end client of the food item. Likewise, they consider eateries and other food administration foundations like bistros, fast food outlets, and cooking organizations. Customers They incorporate several food junctions, like bistros, cafes, restaurants and fast food corners. This group of people is getting interested in buying organic food items that can change their bad food habits. Buyers As everyone drinks and eats, they all are considered as buyers. Shockingly not all buyers have sufficient access to organic food. Food security is worried about the progressing accessibility of organic food. Sectors “The Australian Government Department of Agriculture (DAFF)” arranges divisions, or organic food supply sectors and classifications in the residential business sector as dairy, protein, agriculture, beverages and other basic food commodities. Macro Environment These factors are radical and “Organic Origins” should be arranged and situated to acknowledge and adjust. Moreover, a significant number of these strengths are interrelated and affect the smaller scale environment. Factors and forces shape opportunities and present difficulties.
  9. 9. 9 Factors are a heading or arrangement of incidents that have forced. Those uncover the state without bounds, and, also, give several opportunities. The new increment in online shopping for organic food is a pattern in which clients can helpfully do their general store shopping online every minute of every day. And there, they have their basic needs conveyed to their gate. This buyer pattern is changing the shopping for food scene. It has been affected by the majority of the full-scale ecological strengths (Lyons, 2016). Figure 2: Macro Environment in Organic Food Market, followed by Organic Origins (Source: http://www.mdpi.com/2071-1050/7/6/6457/htm) Political It is a crucial force for advertisers to comprehend and screen, especially in the food business. The characteristics are key components in molding tastes, decisions, assessments and information of food.
  10. 10. 10 Economic It is worried about the accessible acquiring power in an economy. Organic food is a crucial part of ordinary life. This factor is influencing the buying force which can strongly affect unnecessary food items that might be seen as misuse things. The key properties that merchants incorporate salary budget and funds, obligation and credit accessibility. Social It impacts buyer tastes and inclinations towards food. Dietary patterns are reliant on the convictions, qualities, and standards of the way of life. It can effect on essential elements, for example, eating times, food portions and how a person eats his/her meals. The key perspective properties that promoters incorporate are perspectives of themselves, society and nature, social qualities and the presence of sub-societies. Technological It is a key factor in food production and the whole supply network of organic food. It likewise is a sensitive power to form a person's life. It reinforces developments in the organic food business. The key qualities that advertisers must consider are the quickening pace of progress, boundless possibilities for development, fluctuating R&D plans and the expanded regulation of innovative change. Environmental It is vital for food generation. It is also affecting the organic food. It persuades environmental change, wastage of food, crude material deficiencies, landfill and contamination levels, water, and expanded expense of vitality, food generation lifecycle, and ideas. Legal It can make both difficulties and possibilities for the organic food business. This environment comprises of laws, government offices and food security groups. All of which can impact associations (including “Organic Origins”), people, and organic food items. The key properties
  11. 11. 11 that merchants must consider incorporating the expansion in the business enactment and development of specifically vested parties. Market Segment In any market, the market segmentation is one of the important parts of marketing strategy. The success of any business or company in any industry is highly dependent on the choice of market segment or target market to sell the product (Gil, Gracia, & Sa´nchez, 2014). Wedel & Kamakura define the market segment as an appropriate strategy which must be followed and applied by an entrepreneur understanding the customer need and their behavioral choice (Wedel & Kamakura, 2010). The principal intention of this segment is to analyze the market segment faced by “Organic Origins” to sell their organic products starting from body care products to pantry products (Organic Why Organic, 2016). The production and consumption trend of the organic products is continuously increasing in Australia like other developed countries of the world. In Australia, the consumption of organic products has touched the saturation point of the consumers both regarding quantity and quality (Gil, Gracia, & Sa´nchez, 2014). Therefore, the marketing strategy of “Organic Origins” has to be powerful to capture more customer base not only in the present but also for future. As per Richter, in this situation, the organisation has to use several strategies like quality food diversification, market environment study, changes in the distribution of channels, modified marketing strategy to specify the market segment for the organisation to operate in the industry (Richter, 2012).
  12. 12. 12 Figure 3: Major Market Segment of Australian Organic Food Industry (Source: Mascitelli, Lobo, Phan, Bez, & Low, 2014) The whole market of organic products of Australia is segregated into three types of consumption of a product. As per the report of Mascitelli, Lobo, Phan, Bez, & Low, these three segments are fruits and vegetables, home-cooking ingredients, and dairy (Organic Why Organic, 2016). Therefore, the growth of this company is also dependent on the existing market condition of organic products, and the company should work a lot to capture the maximum market segment. The studies of (Mascitelli, Lobo, Phan, Bez, & Low, 2014) has explored that “Organic Origins” has to apply different pricing for their different market segment of Australia, and this differentiation is dependent upon the compliance of the buyers to spend for their products rather than others. This willingness is more affected by the product quality and brand preferences of the consumers rather than the income scale of the consumers (Mascitelli, Lobo, Phan, Bez, & Low, 2014).
  13. 13. 13 Figure 4: Market Segment Followed by Organic Origins (Source: Mascitelli, Lobo, Phan, Bez, & Low, 2014) Figure 4 shows the market segment of the major organic products sold by “Organic Origins” in Australia. The comparative study of the two diagrams. Figure 3 and Figure 4 shows that the organisation is following the market trend to derive their market segmentation of the product. The organisation is following such kind of market segmentation strategy to retain the customer base of the whole market as much as possible. Customer’s Behaviour According to Market Segment The market segment of any organisation in any industry is totally dependent on the existing consumers in the market. Moreover, the marketing and advertising strategy of the company, the product quality, branding, etc. are also some major factors to determine the market segment of any company. The demand for organically produced products is rising at a rapid speed in Australia. The reason behind this is the concern about food safety and health issues of the consumers and the concern related to the conventional agricultural commodities (Jolly, 2012). Another way of market segmentation should be analysed in case of organic food market fo Australia. According to this analysis, the whole market for organic foods should be categorised into two parts – Organised
  14. 14. 14 sector and Unorganised sector. In 2009, the demand for organic food was 450 tonnes which have increased by more than 60% in 2014 as per the studies of Australian Organic Market Report of 2014 (Mascitelli, Lobo, Phan, Bez, & Low, 2014). Therefore, the market segmentation of this product for “Organic Origins” should be measured not only based on demand but also depending on other factors of consumers’ behaviour like demographic, geographic, psychographic, etc. (Tanner & Raymond, 2012). The customers behaviour according to the market segment depends on several factors related to the customers. These are – age, occupation, gender, expectation, reason of purchase, etc. these parameters should be the primary focus of a single market segment to analyse a customer’s behaviour in this section. Therefore, the market segmentation for the organic products should be like following types. These are – geographic, demographic, psychographic, and behavioural (Jolly, 2012). The geographic segmentation questions about where to sell the products; the demographic segmentation talks about whom to sell the product, the psychographic segmentation examine the reason behind the sale; and behavioural segmentation talks about the process and strategy of selling (Tanner & Raymond, 2012). A rigorous study on any industry explores that these questions have to be answered properly and clearly to recognise and differentiate the consumer’s behaviour of different market segments. Figure 5: Market Segmentation Strategy of Organic Origins (Source: Wedel & Kamakura, 2010)
  15. 15. 15 As per Jolly, the consumer behaviour towards the organic products is reflected in the willingness to pay for them. Therefore, the producers pricing strategy for these products is going to affect the market segments. The differentiated pricing strategy can increase the customer base of “Organic Origins” (Jolly, 2012). Expect the pricing strategy, the factors like product quality, diversified production, etc. will be helpful to capture more of the market segment. In demographic segmentation, the customer base can be segmented according to the age of the customers. It is clear from the studies of (Aertsens, Mondelaers, & Huylenbroeck, 2014), the age group of 30 – 45 is containing the majority of organic product buyers in Australia. As per the gender consideration, 55% of the Women of Australia like to consume Organic products. It is very much interested to find out that the income profile of any family or person of Australia is not affecting the market segmentation robustly. As per Aertsens, Mondelaers, & Huylenbroeck, the reason behind this their education level. A maximum number of educated and health conscious people of Australia is attracted to the organic food products in Australia (Aertsens, Mondelaers, & Huylenbroeck, 2014).
  16. 16. 16 Marketing Mix The marketing mix is defined as the combination of four factors related to the sale of a product in the market. These are – description of the product, the price of the product in the market, the promotional strategy of the product and place of the product to sale (Tanner & Raymond, 2012). The products of “Organic Origins” like bakery products, stationery and cosmetics products, fruits, vegetables, few chilled products and several pantry products also need the analysis of perfect product mix depending on the market demand and market segmentation of the products. Figure 6: Product Mix Strategy followed by Organic Origins (Source: Dominici, 2014) Product The market for organic products of Australia is very much competitive. Therefore, both of the new entrants and the existing customers has to be very much careful about the quality, materials used, packaging, price setting, labelling, etc. of the product. All of these factors are the determinants of the image of the product to the customers (Essoussi & Zahaf, 2014). Moreover,
  17. 17. 17 the organic product related issues are very health sensitive, and it is often found that any bad image of the product can ruin the brand loyalty and survival possibility of any company in the organic industry. Price The difference between price and other marketing-mix elements is price reflects the income structure of the product while others reflect the cost structure. It is the basic of all the characteristics of a product in the market. The pricing decision of the organic products of Australia is a little bit less effective by the demand for organic commodities in the market. The market research, conducted by Organic, has explored that 58% of the market demand for organic products is dependent on the quality of the product whereas, 15% (approx.) of the market demand is controlled by the pricing policy taken by the producers (Organic Why Organic, 2016). Therefore, “Organic Origins” has to be more dependent on the quality of their product than a proper pricing policy. Promotion The potential firms of the organic product industry require a huge promotion of their products to face competitiveness of this industry of Australia in present days. Promotion of any product help the customer to choose their products and in order to promote the products the producers use to take strong advertising strategies using their presence in online and offline media (Essoussi & Zahaf, 2014). Dominici has stated that the promotional policies of modern organic product producers have brought a huge change in the style to reach the customers with their best quality products and services (Dominici, 2014). Therefore, “Organic Origins” should be very active and aware of applying their promotional strategy in the market. Distribution The distribution of the organic products is equally important to build a proper marketing strategy of the product. There are two factors to concentrate. These are – distribution activities and the distribution channels. To make the marketing of the organic products, “Organic Origins” should use two distribution channels – direct and indirect (Luan, 2010). The organisation can sell their
  18. 18. 18 products directly to the customers using direct distribution channels and in the case of indirect distribution, the organisation involves the mediators or the trade shops for selling purpose. The success of a distribution strategy is related to the establishment of multi-layered connection with the other activities related to distribution (Essoussi & Zahaf, 2014). Therefore, there are two wings to concentrate in distribution. These are the distribution in the market (Direct) and distribution to the whole sellers (Indirect). Therefore, it is very much important for “Organic Origins” to apply an appropriate marketing mix to be successful in the business of organic products.
  19. 19. 19 Conclusion This report has concentrated the whole analysis on the marketing strategy applied in the organic product industry of Australia. To give this analysis a clear view of reality about this industry, “Organic Origins” is taken as the representative organisation of this industry. In the above sections of this report, the clear description of the macro and micro environmental forces faced by the organisation is described. This description has revealed that in one hand, the company can grow in the industry and another hand, it has to face some hindrance too. The organization has to face different market segments too depending on the competitive and growing opportunity in the industry. Therefore, “Organic Origins” has to take a proper marketing mix strategy so that it can target all the market segments of the industry and build the bigger loyal customer base. Most of all, the company has to create a brand name within the industry, and it should take all the necessary step to do it.
  20. 20. 20 Recommendation The demand for organic products is expanding at a rapid rate in the world. Therefore, Australia is also not lagging behind. The organic product industry of Australia is also growing leaps and bounds. Along with this industry, “Organic Origins” is also expanding their product bundle and bring revolution in producing and selling organic products. Therefore, a proper marketing strategy is strongly recommended not only for “Organic Origins” but also other organisations in this industry depending on the macro and micro environment of each firm. Australia is a major exporter of agricultural products. Therefore, the government should take expansionary policy and make trade more liberal for this economy to grow further. Except this, the government should fix other macro environmental issues like legal, political, etc. related to the organisations of organic product industry to clean the path of expansion of this industry. According to Kneebone & Spencer, this industry can hike the GDP growth of Australia if and only if the political and economic barriers can be washed out as much as possible. Each of the organisations like "Organic Origin" should try to minimise the micro issues as discussed in a previous section (Kneebone & Spencer, 2015). The market segment, faced by the organisation should be redefined so that more customers can be taken to the targeted market. Hence, it can be concluded that these recommendations on marketing strategy can bring revolution in the organic product industry of Australia.
  21. 21. 21 References Aertsens, J., Mondelaers, K., & Huylenbroeck, G. V. (2014). Differences in retail strategies on the emerging organic market. British Food Journal, 138-154. Chang, H.-S. C., Griffith, G., & Zepeda, L. (2012, December 10). An Overview of the Organic Food Products Market in Australia. Working Paper Series in Agricultural and Resource Economics, pp. 1-36. Dominici, G. (2014). From Marketing Mix to e-Marketing Mix: a literature overview and classification. International Journal of Business and Management, 17-25. Essoussi, L. H., & Zahaf, M. (2014). The Organic Food Market: Opportunities and Challenges. In L. H. Essoussi, & M. Zahaf, Organic Food and Agriculture – New Trends and Developments in the Social Sciences (pp. 63-91). Canada: Intech. Retrieved from http://www.intechopen.com/ Gil, J. M., Gracia, A., & Sa´nchez, M. (2014). Market Segmentation and willingness to pay for organic products in Spain. International Food and Agribusiness Management Review, 207-226. IBISWorld. (2016, February 18). Organic Farming in Australia: Market Research Report. Retrieved from IBISWorld.com.au: http://www.ibisworld.com.au/industry/default.aspx?indid=1912 Jolly, D. A. (2012). Consumer Profiles of Buyers and Non-Buyers of Organic Produce. Retrieved from University of California Cooperative Extension: http://sfp.ucdavis.edu/marketing/organic_734/profiles_449/ Kneebone, M., & Spencer, S. (2015). FOODmap: An analysis of the Australian food supply chain. Department of Agriculture, Fisheries and Forestry (DAFF) (pp. 1-21). Canberra: Commonwealth of Australia.
  22. 22. 22 Luan, J. (2010). Forecasting Marketing-Mix Responsiveness for New Products. American Marketing Association, 47(3), 444-457. doi:http://dx.doi.org/10.1509/jmkr.47.3.444 Lyons, K. (2016). Supermarkets as organic retailers and impacts for the Australian organic sector. Mascitelli, B., Lobo, A., Phan, D. H., Bez, N., & Low, D. (2014). Autralian Organic Market Report. Belconnen: USDA Organic. Organic Why Organic. (2016, February 18). Retrieved from www.organicorigins.com.au: http://www.organicorigins.com.au/ Pour, B. S., Nazari, K., & Emami, M. (2013). The effect of marketing mix in attracting customers: Case study of Saderat Bank in Kermanshah Province. African Journal of Business Management, 3272-3280. Richter, T. (2012). International Marketing Mix Management: Theoretical Framework, Contingency Factors and Empirical Findings from World-Markets. Los Vegas: Logos Verlag Berlin GmbH. Tanner, J., & Raymond, M. A. (2012). Marketing Principles. Creative Commons. Retrieved February 18, 2016, from http://2012books.lardbucket.org/books/marketing-principles- v2.0/s08-market-segmenting-targeting-an.html Wedel, M., & Kamakura, W. A. (2010). Market Segmentation: Corporate and Methodological Foundations. Massachusetts: Kluwer Academic Publishers.

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