Case Analysis: Boomerang Juice Company

Located in Perth, Australia, Boomerang Drink is a little enterprise that has specialized in exotic organic and natural fruit juices. It was founded with four employees who could actually capitalize on the neighborhood market and increase to 26 employees. Their beverages are marketed efficiently within Australia as a high end product, geared to middle-class, health mindful men and women, and are allocated to organic food markets, juice bars and a retail supermarket string. Most the merchandise is dispensed in recyclable, solitary serve bottles, and the company has recently packed drink in 1L tetrapack containers for supermarkets. Although Boomerang Juice is a tiny organization, their in-house research allowed the company to focus on foreign market segments that led to business expansion. Today, Boomerang Drink employs 95 personnel and is seeking to further extend their product circulation.

The company CEO and marketing director began participating in food and drink trade shows to exhibit the range of company products. Throughout 2003 and 2004, company representatives participated in five such occurrences throughout South East Asia and learned that there were hardly any foreign companies who specialized in organic juice. Company representatives provided samples to operate show participants, and conducted flavor exams. Reactions were positive and the hunger because of this product made an appearance, on the top, to be there.

Squeezing out the details

Back in Perth, the CEO initiated a small international market research project to determine the maximum location for export. The company was not in a financial position to dramatically adjust their labeling or presentation, and they needed to identify the right local distributor. The CEO had made a number of associates with potential local distributors at the trade show within Japan, Hong Kong and Singapore. Boomerang Juice driven that its research budget would allow a team of in-house experts a month to put together and organize the info on a suitable first market. Management made a decision that it didn't have budget to acquire data reports, retain the services of an outside research organization or conduct considerable taste examining in each of these markets.

The research results yielded appealing conclusions for the Boomerang Drink Company. All targeted countries offered some potential. In Singapore and Hong Kong, Australia placed among the very best three exporters of juice while in Japan, the United States offered 38% of Japans fruit drinks, followed closely by Mexico and Brazil.

The distribution and sales channels for fruit juices in Japan are kept by the large manufacturers, and research shown significant hurdles in acquiring a route for the short to medium term. FITTskills: International Trade Research Case Study #1: Boomerang Drink Company: A Tastes for International Market Research FITT 2

Research also uncovered that a big area of the sales of drinks comes from vending machines, but because there is already a surplus of these machines, it would be extremely difficult to market their organic juice through them. Some ethnic behavior studies showed that Japanese households tended never to drink juice at breakfast time time, but indicated an urge for food for low priced organic products. The research team decided that its more costly product could not be sold competitively for the reason that market. Furthermore, their limited marketing budget prohibited Boomerang from contending with the American, Brazilian and Mexican companies already set up in japan marketplace.

The market potential in Hong Kong was considered more promising. Rules for the labeling of pre-packaged foods allowed for English, China or both. Market fads revealed that high end products that count upon a notion of prestige or quality used English packaging over Chinese language. However, Boomerang believed it required consumer understanding of the product quality and differentiation and did not have budget to execute further general market trends to look for the most suitable Chinese language names for his or her products, or even to provide effective product labeling. Research exhibited that the make-or-break decision wouldn't normally pertain to labeling, but to the nature of the supermarket trade. There are more than 800 supermarkets in Hong Kong, dominated by two chains, which seldom transfer food and beverages from international, but prefer to purchase from local vendors to save operational costs. The Boomerang Drink Company had vulnerable connections with Hong Kong vendors and could not identify any immediate potential for partnership within that market.

Could Boomerang soar to new heights?

Early research results signaled that Singapore was the ideal starting place. Its population is targeted in a single city and it has an affluent and health mindful demographic which has a large variety of English speaking ex-patriates. The product was well suited to the market and no significant changes were necessary to their existing labels. Growth in fruit juice consumption in every categories continues to rise, and todays consumer is more aware of the characteristics of pure fruit juice (instead of fruit-based beverages which contain a great deal of sugar), and are prepared to pay the purchase price. Vendors in Singapore not only import drink products for national use, but also re-export to neighboring countries such as Malaysia, Brunei and Hong Kong. Boomerang identified that the most cost-effective option to help ease into the Singaporean market was to form a partnership with an area distributor. This may have been a significant hurdle for the company, but continued involvement in food and drink showcases in Singapore generated interest with marketers and buyers. After having a thorough selection process, Boomerang decided a tiny but active distributor they had fulfilled at a display. They had been proven for seven years and were backed by a sizable logistics company.

The research generated about the Singaporean market, coupled with efforts to establish direct contacts in the market allowed management to abandon their endeavors to enter into the Hong Kong and Japanese market segments for the short-term and focus only on Singapore. Using its first export sales complete, and a distributor relationship set up, the Boomerang Drink Company could triple its sales inside a calendar year and has long term plans for even more enlargement into other Asian market segments. FITTskills: International Trade Research RESEARCH STUDY #1: Boomerang Drink Company: A Style for International GENERAL MARKET TRENDS FITT 3

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