Marketing Report: Artisan Finnebrogue
This report has been rafted for presentation to the CEO of Artisan Finnebrogue, to help him assess expansionary options for growth, and facilitate decision making regarding the same. The report presents an overview of the business, as well as highlights inclination for geographic expansion. Additionally, the report also identifies possible resource provisions present to support the expansionary plans. However, the company cannot expand without adequate planning, and forecasting, and needs to conduct an internal and external audit to facilitate decision making process regarding growth through expansion. The report identifies the use of tools of SWOT analysis, analysis of placement on PLC and Ansoff matrix to help the firm understand internal capabilities and capacities that will be leveraged during the expansionary process. The report identifies the use of tools of PESTLE, Porter's five forces and perceptual mapping to facilitate the company's external audit, and decision making for country selection based on forces of market reception and resistance. The report also suggests the use of cost-benefit analysis to help it select the country for expansion, as well as proposes possible SMAR goals and objectives for the company. Possible segmentation techniques, as well as marketing mic options, have also been proposed to facilitate decision making, and different modes of entry have also been suggested to facilitate expansion. The report concludes with brief recommendations about how Finnebrogue can make use of findings to facilitate its expansionary plans and strategy.
Executive Summary. 1
Artisan Finnebrogue: An Introduction. 3
The Opportunity for Expansion. 4
Internal Audit 5
SWOT Analysis. 5
Placement of the Business Along the PLC. 6
Ansoff Matrix. 7
External Audit 8
PESTLE Analysis. 8
Market Analysis: Porters Five Forces. 9
Competition Analysis: Perceptual Mapping. 10
CBA and International Country Selection. 11
SMART Marketing Plan Objectives in the Target Market 12
Segmentation, Targeting, and Positioning Within the Chosen Country. 13
Entry Mode Strategy. 15
Marketing Mix (7/8Ps) 16
Playing in the food and service industry, Finnebrogue Artisan is a leading pioneer in high quality meat foods and products that are not only sustainable but also environmental friendly and healthy. Located in Downpatrick, Co Down, Northern Ireland, the family owned business is privately held, employs around 300 employees, and leads the market share in crafting artisan produce that focuses on the wellbeing of animals. The company specializes in the production of burger, sausage and stuffing products. Additionally, the company ensures through its values and work culture that the farming land is adequately and effectively used, and that employee satisfaction levels remain high across all organizational structures and processes (LSEG, 2018).
Denis Lynn, chairman and founder of the company state that, "We always look at what is wrong in the world of food and figure out how we can make it the best it can be without being bound by the way it has always been done” (LSEG, 2018, p. 1).
Finnebrogue Artisan specializes in sourcing eat and maintaining its juiciness and flavour – creating a successful and a popular product. Finnebrogue Artisan’s business has been well received by customers, so much that it has grown from £12 million to £50 million, in a span of just four years (LSEG, 2018).
Finnebrogue Artisan’s business model supports own label products for retail customers. The business manages its own brand, Good Little Company, which was launched in 2009 and which focuses on the wellbeing of animals, Healthy food, as well as deals with green packaging (Finnebrogue, 2018a). Additionally, Finnebrogue Artisan also supplies meat products for other brands. For example, the business supplies Marks and Spencer’s with ‘top tier’ sausages in Ireland as well as in UK (Hospitality Ireland, 2014). Moreover, Finnebrogue also produces and supplies sausages for a brand such as Jimmy Doherty and Paul Rankin (Finnebrogue, 2018b). Finnebrogue Artisan ensures that all its produce is free of allergens and preservatives, is natural, healthy and delicious (The Guardian, 2017). To do so, the company continually innovates in processes, maintains consistent high quality and maintains a focus on the consumer needs and demands. The company’s present strategy is to continue its growth as well as explore other food categories as means of diversification.
The company’s aim to grow further is supported by its strong brand reputation and image. Finnebrogue capitalizes on its “artisan values” in its branding activities, and ensures to communicate the same to customers. This has allowed the company to build a trusting relationship with customers and clients who see it as a company that is responsible, environment friendly, sustainable, and focused on animal welfare.
The growth and expansion strategy is also evidenced in the company’s launch of its state of art 160,000 sq. ft. sausage processing plant, which also houses product development facilities (Irish News, 2016). This highlights that company's focus on innovation in products, as well as processes, is fuelling its drive forward. The processing plant will work to provide Finnebrogue with the capacity needed to introduce sales outside Northern Ireland, as well as manufacture products for different markets. The expansion is expected to increase turnover for Finnebrogue from £55m to over £100m (McDonald, 2016). To support its expansion and growth strategies, Finnebrogue has also received capital funding of £1.7m from Invest Northern Ireland (Perkins, 2016).
The expansion strategy and plans being pursued by Finnebrogue is justified in facilitating the company’s growth as well as for enhancing brand awareness and brand image across different countries. Finnebrogue growth strategy through international expansion will also be supported by the increased globalization witnessed in the food industry in recent years (Wilk, 2006). The global food community is driven by the increased awareness regarding different brands of food products, as well as by smooth supply chains and distribution networks that have now been made possible, along with strong financial backing as well as trusted and dependent franchise partners in different countries. These factors facilitate growth through internationalization and expansion (Dutton, 2016).
Based on the overview of Finnebrogue’s inclination towards expansion to other countries, as well as positive receptivity of the global market for new players offering quality food products, researcher of this report recommends Finnebrogue to pursue expansion through globalization of its business. However, in order to avoid failure and obstacle in the way of globalization, it is recommended that Finnebrogue, like other companies who seek to globalize their business, assesses its internal capabilities and capacities, as well as conducts an external audit of the host country where it is planning to expand. This assessment of internal and external factors will take into account different models for reviewing and assessing the same, as well as a brief discussion on how they help in the decision making process. The researcher will conclude with brief recommendations for Finnebrogue, which will guide the business in the expansion process and decisions.
Finnebrogue is seen to pursue an organic growth strategy. This means that the family owned business focuses on annual growth at an attainable and achievable pace, which ensures its leading as well as increasing market share. The organic growth strategy is pivoted on the company's focus on maintaining a high quality of its products, ensuring high satisfaction levels for customers, as well as ensuring a satisfactory and comfortable workplace for its employees. Moreover, the market leadership enjoyed by Finnebrogue is fuelled by its continuous innovation in business processes as well as products to ensure sustainability and flavour. Tools of SWOT analysis, PLC analysis as well as Ansoff matrix will help the company identify its internal capacities and capabilities which will support and facilitate its expansionary plans.
The SWOT analysis will be useful for the company in assessing not only its internal strengths and weaknesses but also in identifying external opportunities and threats. Assessment of internal strengths will help the company identify capacities which may be leveraged during the expansion process through adequate resource allocation as well as in designing and implementing competitive positioning. Assessment of weaknesses will help the company mitigate probable risks during the expansion process. Similarly, identification of possible threats and opportunities will help the company prepare adequate measures to face them (Coman & Ronen, 2009). The SWOT analysis, as an overall internal audit tool, will help the company understand the feasibility of expansion.
Based on secondary data, the SWOT analysis for Finnebrogue can, for example, present the findings shown in table 1:
Leading developers of agri-food
- Dominant market position and reputation
- Continuous focus on innovation
- High quality products
- Strong relationships with retailers
- Customer centric
- Offers environment friendly/ green proposition to consumers as key USP
- Focused on UK and Ireland only
- Lacks international exposure
- Growing consumer preference for healthy foods across the globe
- The outbreak of cattle diseases can directly influence demand.
Table 1 SWOT Analysis for Finnebrogue
Finnebrogue is in the growth stage of the PLC (see figure1). During the growth stage. A business is experiencing increased sales because of favourable word of mouth and focuses on maintaining its market share. Increased market acceptance has led to high profit margins for the company.
1 PLC Placement in Growth Stage for Finnebrogue
Source: Hill & Jones (2007)
Identification of placemen ton the PLC lifecycle is important as it will help the company strategize for the future – especially for expansionary purposes; a provide the business with various options it has available (Golder & Tellis, 2004). The company will seek to establish itself in the market through product quality and advertising - as well as exploring options for further growth. During the growth stage, the business may also continue to educate the market to create awareness about its product (Hill & Jones, 2007). The business may also focus on customer feedback and demands, and incorporates them in manufacturing processes as a possible strategy. Additionally, the company may also explore diversification options as well as new geographic locations to ensure higher growth rates for the business in the growth stage (Hill & Jones, 2007).
The Ansoff's product/market growth matrix is another tool for an internal audit that may be used by Finnebrogue to assess its growth options, and make decisions regarding possible expansionary and growth plans. The results of the Ansoff matrix suggests four primary growth strategies: market penetration, product development, market development and/or diversification (Witcher & Chau, 2010). Figure2 briefly highlights how the business may use the Ansoff matrix to decide possible strategic growth options.
2 Ansoff Matrix Strategies
Source: Witcher & Chau (2010)
In deciding to expand to new geographic locations, Finnebrogue must first shortlist its various options for expansion. This shortlisting will depend on the environmental audit of various countries. The external environmental audit and analysis should be conducted as it will help the business assess and identify the various macro-economic forces as well as conduct an industrial and market analysis and competitor analysis (Thompson & Martin, 2010). For expansion into new geographic locations, an external environmental audit helps the business identify the various forces which will influence its operations, and develop contingency plans for future probable events. Tools of PESTLE analysis, market analysis as well as competitor analysis have been suggested to Finnebrogue to facilitate its analysis of the external environment.
The PESTLE analysis of possible expansionary options will help the company assess the business environment of different countries. The PESTLE analysis reviews six important macroeconomic factors, as presented in figure3.
3 PESTLE Dimensions for external environment audit
Source: Berry (2015)
Conducting this analysis for expansionary purposes is important as it will identify probabilities of success and failure for the company based on factors that are out of the company’s control. Moreover, the analysis will also help the business decide how to best leverage its resources, and where to best use them for successful growth. The analysis will also be useful as it will help Finnebrogue develop an objective view of the various external environments, instead of basing it excisions on assumptions; and therefore will help the business mitigate possible threats, risks and challenges through adequate, focused, and careful planning (Berry, 2015).
The use of Porter's five forces to conduct market analysis will help Finnebrogue determine the competitive industry landscape and structure. Porter's five forces look into five unique elements, as described in figure4. The model is useful in helping businesses determine profitability in different markets and industrial setups. For Finnebrogue, the use of Porter's five forces for different countries will help it assess and identify where the company will get the highest return on investment, and where setting up expansionary plans will be the easiest and smoothest. In doing so, the Porter's five forces will help Finnebrogue in determining the attractiveness and profitability of different markets, as well as in determining and identifying the competitiveness in the different markets. Therefore, conducting the porters five forces analysis for different markets will facilitate Finnebrogue in determining the market that is best suitable for it in terms of attractiveness and profitability – based on its own resources and growth strategy (Porter, 2008).
4 Porter Five Forces for external environment audit
Source: Porter (2008)
Drafting perceptual maps for different geographical locations will facilitate Finnebrogue in assessing and analysing the competition for different markets. The use of perceptual maps will allow Finnebrogue to assess the competitive advantages that its competitors have in the different market across different dimensions – such as price, quality, brand awareness, brand image etc., and how it will compare with them upon market entrance. The different dimensions used for assessment should be consistent across all countries and markets to ensure objectivity in decision making. The use of perceptual maps will also help the company decide where it will be placed in different countries. This will help it select a country and a market for expansion where it will be most favourably placed against competition players, and thereby, facilitate its positioning (Witcher & Chau, 2010).
As has been highlighted, Finnebrogue’s brand image as well as business model and processes make it an ideal candidate for international expansion. A company decides to expand to new geographic locations for purposes of seeking new resources or seeking new markets and consumers, or strategic asset seeking (Johnson & Turner, 2003). For Finnebrogue, the desire to expand is pivoted on its desire to explore new markets. Talking about growth and expansion, the founder and chairman of the company, Denis Lynn, states that, “Being in business is not about standing still, but moving forward and being innovative. That is what we do here” (Down Recorder, 2016, p. 1). This shows that Finnebrogue has plans for further expansion – locally as well as internationally to achieve a faster growth rate.
Finnebrogue’s success rests in its ability to anticipate and respond to market trends and opportunities, and consumer needs and demands. The same performance level will be required when Finnebrogue expands to other geographic locations. Based on the information from, and analysis of internal and external audits for different possible markets, the company should make use of CBA – cost-benefit analysis to help it decide which country to expand into. The cost-benefit analysis will require the management and the strategic team of Finnebrogue to draft a list of pros and cons of expansion into different markets, and compare them to decide which market will be most suitable for expansion, and which will help Finnebrogue advance while remaining true to its brand values. The use of CBA is important in decision making as it will provide the business with a systematic approach to assess different alternatives based on internal strengths and weaknesses, as well as external threats and opportunities; and help it assess the feasibility of expansion into different markets, and associated costs and benefits for each (Boardman & Boardman, 2008). The CBA will also be used as a comparison tool which will facilitate the business shortlist the option that provides an avenue for higher growth, higher profitability, and higher brand enhancement.
The SMART objective setting is a guideline and standard for setting goals so that they are clear and understandable not only for the business but also so that they provide direction for future strategic ways (Greene, 2011). SMART goals and objectives have characteristics of being: Specific, Measurable, Attainable, Relevant, and Timely (see figure5).
5 SMART goal and objectives
Source: Greene (2011)
For expansionary purposes, Finnebrogue will need to set SMART marketing plan objectives for the target market in order to assess its performance and measure growth.
These SMART objectives may include:
- To achieve 25% return on capital investment during the first year of expansion
- To gain a market share of 35% over a period of 18 months in the host location
- Educate 85% of target audience in host market about Finnebrogue Artisan predicts, and importance of animal welfare
- To increase brand awareness to 45% during the first year among the target group in the host location
- To achieve trial of the product to 25% amongst the target group during the initial six months in the host location
- Acquire at least 5 key B2B clients for company products in the first year of expansion
- Make Finnebrogue products available for retail customers across at least eight national supermarket chains across the host country in the first six months
The Segmentation, targeting and positioning process (STP) is an important means of business and brand establishment (see figure6). This is especially true for businesses expanding into new geographies. Since the Finnebrogue business will be expanding to a new geographic location, it should not only keep true to its values and product and service offering, but it should also maintain consistency in the positioning of the business, as well as the segmentation and targeting techniques. This will help the business achieve a unified image across different countries, as well as avoid brand image and offering confusions to customers (Parry, 2005).
6 STP Analysis
Source: Parry (2005)
Finnebrogue can use segmentation to identify the different groups of customers present in the host country. These customer groups can be decided through a number of variables, such as demographics, psychographics, behavioural inclinations, and benefit-seeking responses, lifestyles, life stage, and beliefs and values- to name a few (Kotler & Keller, 2007). The variables used for segmentation in the host country and host market, however, should remain consistent with those used in existing markets of Ireland and UK. The business should identify the characteristics of each segment group. This can be done with the aid of interviews, surveys, and available customer data in public as well as private records.
After segmentation, the business should decide on the groups that it would like to cater to i.e. its target groups. This will help it form a targeting strategy. The choice of target groups will depend on the size and attractiveness of group, as well as on the number of competitors who would presently be serving them. The business will also need to look into its resource capabilities to identify which groups it would be able to optimally serve. Moreover, it will also be important that the business selects segments it would be able to reach and access easily, and those which would be able to access and understand its marketing messages with ease (Kotler, Marketing Management, 2003). The business will further need to ensure consistency of target groups with those currently being pursued in the UK and Irish markets in deciding its target group(s).
For Finnebrogue, the positioning of the products should remain consistent with the original and existing positioning of the business providing healthy and nutrient filled food that is not only delicious but also nitrite free and manufactured through processes that take consideration for animal welfare and wellbeing, as well as the wellbeing of the employees.
The entry mode strategy for the company will depend on its assessment and analysis of internal and external capabilities and capacities. The business will then assess the best mode of entry into the desired location to ensure risk mitigation. For example, it is assumed that Finnebrogue chooses to expand to France. This decision is based on a review of:
- Internal audit: company’s ability to leverage resources, and build strong networking and supply chain ties based on close geographical proximity, presence of superstore grocery chains that share good relationships
- External environment analysis: increased awareness of healthy food, adoption of a green life style, high influx of tourists, low competition, low barriers to entry, politically friendly and mature market
The entry mode strategy suggested for Finnebrogue to introduce its product in the French market is through partnership. The business would look for a trusting partner who is well aware of the French customers, their needs and demands, as well as behavioural habits. The partner would also require to hold good knowledge and relation with distributors. This would enable Finnebrogue to gain access to the French market without investing and risking high capital (Brady, 2010), and assess the market and its receptivity of the product without attracting high risk levels (Gilligan & Hird, 2012).
It is important for Finnebrogue to conduct a thorough and an in-depth STP analysis and decide on an entry strategy for the host market as it will help the company develop as well as implement an adequate marketing mix (see figure7), as will be discussed in this section of the report.
7 Marketing Mix elements
Source: Kotler & Keller (2007)
Since Finnebrogue would be introducing existing products in a new market – with minor to no tailoring, in the beginning, the marketing mix for Finnebrogue will be based on thorough market research and data. Its entry into the new market, taking the example of France, would typically include the marketing mix:
Product: the business would offer meat products that are healthy, and that are obtained and manufactured wit taking into consideration the wellbeing of animals as well as the environment. These products will be offered directly to business clients, as well as to retail consumers.
Place: the product will be available through retail via grocery stores to consumers, as well as be directly sold to business clients.
Price: in the new market, the business can opt for either:
- Premium pricing: offer product at artificially high price to create enhanced brand image and attract value-brand conscious customers (Kotler, Marketing Management, 2003); or
- Value pricing: the price will be based according to the value reception that customers hold of the product and the brand offering. For Finnebrogue, the perceived value will be high because of its ability to satisfy consumers intrinsic needs and motivations (Kotler & Keller, 2007).
Promotion: the promotion for Finnebrogue will vary based on its decision of the entry mode. It can range from own advertising to consumer trials to promoting through joint ventures and partnerships. In case of partnership, the company will let the partner from host country do marketing and promotion of the brand based on his knowledge of the local culture, traditions, and customers
People: the business will ensure adherence to host markets regulations, as well as internal culture and norms in its expansion plans and business in other geographic locations.
Process: the processes will be similar to the parent company – where consideration for the environment, employees and animals are prioritized.
Physical environment: for the host market, the physical environment will be designed to be face-lifting and comfortable for all stakeholders involved.
It is important to note that decisions regarding the choice of the marketing mix will depend on an in-depth analysis of the host market’s external environment, as well as the psychological and behavioural dimensions of the target groups. More importantly, these decisions will also take into consideration the resources available for the firm to leverage to achieve its objectives.
Finnebrogue is a growing firm with a high inclination towards expansion as means of further growth and development. The business has strong brand values and appealing product offering in light of growing international awareness about healthy food and healthier lifestyles. However, it is important for Finnebrogue to conduct thorough research before entering a foreign market. This research includes not only an internal audit; but also a thorough external environmental analysis. The use of strategic tools will facilitate the business in its decision making the process for selection of market for expansionary purposes, as well as its entry strategy. The selection of the host market should be followed by a close analysis and understanding of the customers through the STP analysis, which will help the company design an effective marketing mix to appeal to the customers, and penetrate the target groups effectively.
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