Edna is a famous chocolate and confectionery brand in Sri Lanka. Edna brand is owned by Edna Group which was found in 1952. The group is known as one of the largest diverse conglomerates in the country which provide various sweet foods to the consumers in the country (Ednagroup.com, 2017).
Edna has more than 4000 employees and the organisation has state of the art production plants for the chocolate and confectionery production (Ednagroup.com, 2017). The organisation has a high level of capacity in production and the capacity is over hundred metric tonnes per month. The head office of the organisation is situated in Grandpass, Colombo, Sri Lanka. The chairman of the organisation is Mr Lal Edirisinghe and under his leadership, the organisation is functioning better in the market by providing innovative products to the both local and international markets (Ednagroup.com, 2017).
The proposed new product to the market is Edna Chocolate Chess Set. Chocolate Chess Set is not an existing product in the market and also to the Edna, it is a new product. Chocolate Chess Set are chocolate pieces that are made into shapes of the Chess Pieces of the famous chess game. The target consumer of the product would be consumers who favour consuming chocolate and candy. Because of that, the product would not be limited to one age group. Mainly the little children would be interested in the product since they are eager to eat chocolate and confectionaries. Below table depicts the description of the product and its consumer.
|The product profile||The consumer profile|
|Product name||Edna Chocolate Chess Set||The target consumer||The target consumer of the product is anyone who like to consume sweet confectionary and chocolates.|
|Product category||Chocolate and confectionary||Age limit||Age limits are not apply to the situation and anyone from age 2 years upwards can consume the product.|
|Special features||Chocolate pieces with similar shapes to the chess game pieces||Demography||No specific demographic factors are applicable to the product. Anyone would like to consume chocolates and confectionaries.|
|Taste||Sweet sugar and chocolate taste||Health concern||Chocolate has high level of nutritional values and it would give tasty experience while refreshing the person. Some people would not consume chocolate by concerning their sugar level in blood.|
|Packaging||The products are inserted into a tray and covered with foiled package. The outer layer of the package would be made using cardboard. The cardboard package would contain all the branding details with relevant descriptions.||Value expectation||There would not be high level of value expectation by consuming the product. The taste and the positive feeling would be expected by the consumer and it would define the consumer perception over the brand.|
|Nutrition||Chocolate is known as high calorie product and all the proteins, carbohydrate and other vitamins of both chocolate and wafer would be counted as the nutrition profile|
|Unique Selling Proposition (USP)||By consuming the product the consumer would feel the taste and the funkiness of the product. It feels like he is eating Chess Set.|
The target international market is Indian market. Indian market is known as the second largest market in the world (Bednarek, 2009). Also, the country has similar culture to the Sri Lankan culture. When conducting the business in international markets cultural concerns should be taken into the account and Geert Hofstede Six dimension cultural analysis would be a good tool for the international cultural analysis (Geert-hofstede.com, 2017). Below figure 1.1 depicts the cultural comparison of India and Sri Lanka according to the Hofstede’s six dimensions.
Figure 1. 1 Cultural comparison of India and Sri Lanka
According to the diagram, it is clear that the almost all the dimensions are similar in both countries but the masculinity dimension. Indian culture gives a high level of consideration to the male role and due to that, the masculinity was high in that culture (Geert-hofstede.com, 2017).
Edna chocolate and confectionaries are not currently exporting to the Indian market. But the Edna group has trade relationships with the Indian pharmaceutical companies such as Torrent pharmaceuticals. Because of that, the organisation has some level of knowledge of the Indian market and the trade policies of the market. This would help the organisation to function better in the international market with their new product (Waldron and Markman, 2007). SWOT analysis would give higher level of conclusion about the organisation in regard to the international market.
Non market forces are beyond the control of the organisation. It is easy to understand the non market forces when the person has an idea about what are the market forces (Waldron and Markman, 2007). Market forces are consumers, buyers, suppliers and competitors. These forces can be managed by the organisation. But the non market forces are beyond the control of the organisation and the organisation would get impact from the non market forces (Kumar Pallapothu and Evans, 2013).
The economic factors of the market are very important. Because the economy would define the abilities of the consumer in the market. If a better economic conditions are available the consumers would have the high level of purchasing power. The demand and supply would define the economic conditions of the market (Cavusgil, Sinkovics and Ghauri, 2009). When deciding the selling prices, cost margins, profit margins and operational cost of the product introduction the economic condition would have the impact on the new product in the international market (Cavusgil, Sinkovics and Ghauri, 2009).
The political environment is a very complex environment to the businesses. Because the politicians and the policymakers are concerned about the betterment of the country while ensuring their political power in the country. Since the proposed organisation is planning to introduce a new product to the market, the political parties would see that there is a new competitor to their domestic brands in the market. Since the domestic businesses are supporting the politics to the country the political environment would challenge the brand in the international market (Cavusgil, Sinkovics and Ghauri, 2009). The political visions would enforce the international trade laws of the country. Also, the organisation would have to face the country’s legal framework when conducting the business. Usually, the legal framework would be strict for the organisation that are supplying foreign brands to the domestic market (Bomann-Larsen and Wiggen, 2004).
The quality of life and the culture would define the consumer behaviour in the market. If the society of the country has a good level they would buy more things to improve their quality of life. Good education, health and the quality of life would encourage the consumer to go for the high-quality products in the market (Bomann-Larsen and Wiggen, 2004). But sometimes culture would control the buying behaviours. Some cultures would not appreciate the foreign brands to their domestic market. That would affect to the market entry strategy of the foreign brand to the international brand (Bomann-Larsen and Wiggen, 2004).
Since Edna is providing the new product to the new market and specially an international market which they do not have much of awareness, Edna needs to act cautiously when adjusting to the non market forces.
India has a large market and they are maintaining open market conditions in the country. Imports of the international brands to the country would happen and the legal framework of the country has defined to control the imports and improves the exports of the country (Bijapurkar, 2008). Therefore the organisation would have to face various challenges in the international market. Also, the political parties of the country are encouraging their domestic businesses and they would not appreciate another market entrant in the market to the domestic brands (Bijapurkar, 2008). It is clear that both the political and legal pressure would stand bad to the organisation.
India’s economic conditions are good. The country has high levels of population and because of that, the market is huge (Dayal-Gulati and Jain, 2010). Also, the country’s economic status is improving and therefore the domestic economic condition would improve accordingly (Dayal-Gulati and Jain, 2010). The new product of Edna cannot be consumed as a main food. Edna chocolate Chess Set can be consumed as a dessert or a small meal to improve the mood. So the product would not be high priced and according to the Indian economic conditions, people would not find difficulties affording the product. Economic conditions are a favour to the organisation (Drabek and Mavroidis, 2013).
No religion of the country would have issues with chocolate and chocolate related confectionaries. The society would consider their health and the need of the children and therefore the chocolate and confectioneries have a demand in the market (Dayal-Gulati and Jain, 2010). But the Indian culture is strong. Most of the leaders in the country would not appreciate international brands they encourage people to use domestic brands to improve the domestic economy and businesses. This market would have resistance to the international brands due to that. This would improve the tendency to the new product to become a failure in the market. The social conditions are in favour to the product but the cultural conditions are not in the favour to the new product.
2.2.1 4 I’s analysis for the non market forces
|Social and cultural conditions|
|Political and legal conditions|
To overcome the identified non market forces Edna should work smart. Most of the non market forces are not in the favour of Edna. Also, Edna does not pose much experience in handling chocolate and confectionary products in the Indian market. The less experience and the potential negativity of the international would make the new product introduction riskier to the organisation (Drabek and Mavroidis, 2013).
The organisation can win this risk by adopting safe international market entry strategy. Since Edna does not have the experiences, it would be risky to enter the international market alone and Edna should get help from a party who poses experiences in the international market. Edna should use the joint venture approach to entering the international market. In the joint venture, the other party should be a business which was founded in India and has strong roots in the Indian market.
Indian people would familiar with the partnering company and they would not see that company as a threat to their national market. Also, that organisation might already build up some sort of rapport in the market and that also can be used by Edna for their benefit. Yes, in the partnership the hosting country partner would have the high level of control over the market and decision making power about the operations (Dayal-Gulati and Jain, 2010). But Edna can get a huge amount of knowledge from the partnering company during the time and that knowledge can be used when they are going to introduce another new product or handling the business alone in the Indian market.
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- Ednagroup.com. (2017). Chocolates|Confectionery|Cocoa Products|Distribution in Sri Lanka|Largest Exporter | Edna Group. [online] Available at: http://www.ednagroup.com/about-us/about-edna/ [Accessed 12 Jan. 2017].
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