Situational Analysis for Blackmores Fish Oil 1000 - Case Study Example

Situational analysis report-marketing plan for Blackmores’ Fish Oil 1000 Abstract Blackmore Company is an Australian organization, which is concerned with production of health products and vitamins. One of the best products of Blackmore Company is Fish Oil 1000. This report provides a situational analysis of Fish Oil 1000. This is aimed at enlightening the public about the product and its values. Table of Contents Introduction 3 Internal environmental analysis 3 Blackmore Company 3 Marketing plan for Fish Oil 1000 6 Fish Oil 1000 6 Internal resources of Blackmore Company 8 Evidence of marketing mix strategies 9 Strengths and weaknesses 11 External environment analysis 12 Economic 12 Legal 12 Technological 13 Social/cultural issues 13 Opportunities and threats 13 Success factors 13 Customer analysis/ target market 14 Competitor analysis 14 Conclusion 15 Reference 15 Introduction Blackmore Company is an Australian organization, which is concerned with production of health products and vitamins (Blackmores, 2010). The company is involved in the development of natural health industry. It also inspires people to lead healthy life and life styles. Many Australians are concerned about their healthy and the role played by Blackmore Company is in line with the expectation of people. One of the best products of Blackmore Company is Fish Oil 1000. This report provides a situational analysis of Fish Oil 1000. This is aimed at enlightening the public about the product and its values. Internal environmental analysis Blackmore Company Blackmore Company was founded in 1930s by Maurice Blackmore (Blackmores, 2010). He was an English immigrant to Australia. He came up with health ideas, which were the basis of the company. Blackmore Company began its operations in Queensland. Blackmore lived between 1906 and 1977 during which he started and engineered Blackmore Company to leadership in natural health products. Blackmore believed in healthy living using properties of minerals and herbs. This believes guided him to develop a comprehensive system of healthcare based on naturopathic principles (Robertson & Fadil, 1999). Blackmore was the first person to set up a health food store in Brisbane in 1938. He also in conjunction with his colleagues established the first naturopathic colleges and associations in Australia. The journey begun by Maurice Blackmore is being continued by his son Marcus Blackmore. Marcus has embarked on expansion of the company both locally and internationally. His still adheres to his father’s goals and keeps high standards of work. He is trying to make natural healthcare to be part of people’s lives both local and international scene. Blackmores Company was listed on Australian stock exchange in 1985. Since then, the company has been operating in Australia Asia and New Zealand. The company has a current employee base of about 400. Its main campus is found in Warriewood on Northern beaches of Sydney. The products of Blackmores are developed using both scientific and traditional knowledge. The ingredients used to produce these products are sourced from all over the world. The products adhere to the requirements of the international Pharmaceutical Inspection convention and Pharmaceutical Inspection Cooperation Scheme standards of good manufacturing practice. The company educates and trains its retail partners and offer free advisory service on naturopathy to its individual customers through its website (Achrol & Stern, 1988). These services are unique to Blackmores since no other company has such services (Wedel & Kamakura, 2000). The commitment of Blackmores is performance of superior business. To maintain its leading position, Blackmores focuses on delivery of growth and continuous improvement. This is also aimed at achieving success for both the company and its shareholders (Robertson & Fadil, 1999). The passion of Blackmores is natural health and therefore the company is involved in inspiring individuals to be at the control of their health and well-being (Fidler & Johnson, 1984). It thus encourages people to invest a lot in their health to better their well-being. Blackmores leads in the development and marketing of products and services, which are innovative in the delivery of natural based healthcare in Australia. Blackmores Company still upholds passion for natural healthcare as being the heart of their daily activities as believed by its founder. All employees share this passion (Fidler & Johnson, 1984). The success of Blackmore is derived from excellent customer service, innovative thoughts, responsible actions toward one another, the environment and the local community (Blackmores, 2010). The company also strives to live in accordance to their reputation and values. Blackmores’ values are both aspiration and behavioural (Robertson & Fadil, 1999). These values are the basis of employee practices and are supported by the company’s legal policy and procedures. The company upholds several values, which it refers to as PIRLS. The first value is passion for natural health. This passion inspires the company people to excel in all activities they are involved in. The second value is integrity. The company is committed to high standards of professional, personal and business behaviour in addition to being trustworthy and honest. The third value respect. The company administration treats all persons at the company with fairness, compassion and dignity. In addition, the company embraces diversity, which is one of its strengths. Thus, persons are employed based on their qualification and talent and not their racial or cultural backgrounds. The forth value upheld at Blackmores is leadership. Wisdom, knowledge and experience are used to inspire all persons at the company at both individual and team level (Fidler & Johnson, 1984). The fifth value of Blackmores is social responsibility. Most of the company’s actions demonstrate its respect, compassion and care for its people, the broad community, and the environment. Marketing plan for Fish Oil 1000 It has been noted that Blackmores exports some of its products to Indonesia. However, the highest share of imports of health food products comes from United States of America, which holds 50% of total imports in this sector. In New Zealand, Blackmores' products are highly valued and some competition is emerging (Achrol & Stern, 1988). To strategically position its products in these regions, Blackmores needs a marketing plan to ensure it takes a larger market share. In case of Fish Oil 1000, Blackmores pricing strategy has worked on its favour in New Zealand. In comparison to other related products, Fish Oil 1000 has the lowest pricing. Given its high quality, this makes it much competitive (Blackmores, 2010). However, exchange rates in countries like Indonesia make the Fish Oil 1000 to be expensive in relation to related products from United States of America. To this end, Blackmores need to find a way to reduce the costs of production so that it can increase its market share in Indonesia since its products are highly valued there. Thus to stay a float Blackmores need to intensify its promotional strategies in both New Zealand and other Asian countries where its markets seems to thrive (Domzal & Unger, 1987). Furthermore, the Blackmores Company needs to maintain the high quality of Fish Oil 1000, which is in consistent with value for money products in comparison to competing products from the United States of America. In addition, the company needs to introduce this product in other regions since many people are now turning to natural products, which are known to be the best way to healthy living. Fish Oil 1000 Fish Oil 1000 is a product of Blackmores Company, which is a source of omega 3 fatty acids. Over the time, fish oil has been known to alleviate inflammation and joint swellings, which are associated with arthritis. Fish oil is also known to have the capability of maintaining and supporting cardiovascular system and healthy heart. Fish oil is also able to maintain normal eye and the proper functioning of the brain. Fish oil also decreases the amount of triglycerides fats in the blood of healthy persons. Thus taking Fish Oil 1000 comes with all these advantages to the individual who uses them. Fish Oil 1000 is usually developed without the use of artificial polysorbates (surfactants). It also acts as a source of natural omega 3s. Thus it provides eicosapentanoic acid (EPA) and decosahexanoic acid (DHA). Just like fish oil, it reduces inflammation and joint swellings, which are associated with arthritis. It also supports cardiovascular system and heart health. In addition, Fish Oil 1000 maintains normal eye and brain function. The Fish Oil 1000 from Blackmore also helps in decreasing the triglycerides fats in the blood of healthy persons. Fish Oil 1000 is also mercury tested and has the lowest amount as compared to competing products (Blackmores, 2010). Omega 3 fats are essential fatty acids, which are usually incorporated into the cell membrane in form of phospholipids (Achrol & Stern, 1988). The cell membrane regulates what enters and leaves the cell. The fluidity and integrity of the cell membrane is determined by the phospholipids, which are derived from essential polyunsaturated fatty acids. Omega 3 fatty acids also form part of prostaglandins and leukotrienes which are vital for proper immune functioning, smooth muscle functioning, aggregation of platelets and inflammation (Blackmores, 2010). Fish Oil 1000 is an anti-inflammatory formulation because prostaglandins and leukotrienes originating from Fish Oil 1000 have less inflammatory activity. Fish Oil 1000 is able to alleviate rheumatoid arthritis because of the ability of omega 3 to suppress production of inflammatory compounds. Furthermore, fish oil found in Fish Oil 1000 inhibits the synthesis of triglycerides in the liver and therefore Fish Oil 1000 helps to lower the levels of triglycerides in the blood, which then supports a healthy cardiovascular system. The dosage of Fish Oil 1000 differs dependent on the intended use and the age of the person. For alleviation of arthritis, the dosage for adults is four capsules three times a day with meals or as prescribed by physician. Children aged below twelve years should only take the capsules as directed by physicians. For omega 3 supplement adults take takes three capsules per day or as directed by physician. Children aged between 6 and 12 years take 1 to 2 capsules per day or as directed by physician. Children below the age of six should take a single capsule per day or as directed by physician. Active ingredients in Fish Oil 1000 include 180 mg of eicosapentanoic acid (EPA) and 120 mg of decosahexanoic acid (DHA). Internal resources of Blackmore Company The believes by both the management and personnel of Blackmores company in naturopathic principles which views natural health, preventive medicine, the environment and recycling as a new way of treating illnesses and maximizing health has been at the heart of Blackmores success story (Dwyer & Welsh, 1985). The naturopathic principles has helped Blackmores company to devise ways of approaching health conditions and maintaining wellbeing of people by drawing from traditional use of herbs as medicine and incorporation of this with knowledge in nutrition. The company through the leadership of Marcus has grown and made natural healthcare an important part of many lives of people (Achrol & Stern, 1988). The commitment of Blackmores Company having passion for natural health care, quality products and sustainability has been one of the core driving forces of Blackmores company expansion in both local and international markets. Thus, Blackmores’ products continue to touch the lives of many and empowering them to take control their health and wellbeing (Wedel & Kamakura, 2000). The values held at the company are of great value to the realization of the company’s vision of becoming a market leader in naturopathic healthcare (Dwyer & Welsh, 1985). These values include the passion for natural health, integrity that ensures that the company is committed to high standards of professional, personal and business behaviour in addition to being trustworthy and honest, respect, which ensure fairness, compassion, and dignity is embraced at the company, leadership and social responsibility (Wedel & Kamakura, 2000). All these values are geared toward customer and employee satisfaction. The satisfaction of the employees ensures that the delivery of services to the customers is effective and efficient. Evidence of marketing mix strategies Many tactics are used by marketing professionals to attract and retain their customers. Different concepts are used in these activities. Marketing mix is one of the concepts used by these professionals to retain and attract more customers. Two concepts of marketing mix exist: 4Ps or the 7Ps marketing mix (Blackmores, 2010). For many years, 4Ps marketing mix has been used for the product industry while 7Ps marketing mix has been used extensively in services industry. At Blackmores Company, an integrated marketing mix is adopted. This takes care of both types of marketing mix. The 4Ps marketing mix involves product, price, place and promotion. Here product involves its variation, differentiation, innovation and elimination. Price includes cost recovery pricing, penetration pricing and price skimming. Place involves distribution channel, direct sales, indirect sales and e-commerce. Promotion involves individual communication, mass communication, brand management and corporate identity. On the other hand, 7Ps marketing mix includes product, price, place, promotion, people, process and physical evidence. Product here involves provision of value to customer (Dwyer & Welsh, 1985). Price entails competitive and profitable pricing. Place involves where the products can be bought by the customers and through what channels for example internet, wholesale and retailers. Promotion entails communicating to consumers of what the company offers and its benefits. People include customers, employees, management and anyone involved. Process refers to methods and process of service provision. Physical evidence refers to the experience of using a service or a product. Blackmores usually values their brands very much. This is informed by the fact that consumers buy brands as opposed to just products. The success of Fish Oil 1000 is based on the company’s emphasis of the brand (Sandhusen, 2000). The production of this brand involves sourcing for high quality ingredients and it therefore contains an effective dose of active ingredients (eicosapentanoic acid (EPA) and decosahexanoic acid (DHA)). Blackmores also funds and supports health research and therefore its brand is the most trusted natural healthcare brand in Australia and other Asian countries such as New Zealand and Taiwan Fish Oil 1000 included (Manning, 1981). Promotion of products at Blackmores involves communication to consumers through advertising, news stories and media events, point of sale material, via website and through their advisory and training centre. The advisory and training centre communicates with customers by educating their retailers who include pharmacists, health food store employees and pharmacy assistants. This training ensures that Blackmores’ consumers receive superior information concerning the products available. To address the place as one of the P in marketing mix, Blackmores’ products are available in retail outlets including online while practitioner only products are available to health professionals and are dispensed to consumers after consultation (Bourgeois & Brodwin, 1984). Blackmores’ success is dependent on superior performance of its employees, which is committed to cooperation, encouragement and recognition. Employees are recognized, rewarded and developed based on their performance at Blackmores (Dwyer & Welsh, 1985). The company also values its shareholders’ needs and therefore the company seeks highest possible returns for its shareholders by investing in sustainable growth. Blackmores has a trade marketing team, which takes the marketing brand plans and helps the sales team to execute those (Tan & Lo, 2008). Thus, they assist in pricing and promotion, providing merchandising solutions, analysing information, category development, proactively providing regular analysis, reviews and recommendation on company performance and sales communication. Strengths and weaknesses The strengths of Fish Oil 1000 are several. First, Fish Oil 1000 is one of the best products in the market that provides omega 3 fats (Blackmores, 2010). It is also build from highly pure active ingredients, which are sourced from all over the world (Weinreich, 2001). Furthermore, the development of this product involved many years of research and hence is trusted by many consumers. The pricing of this product is relatively cheap in comparison to other competing products (Manning, 1981). Fish Oil 1000 is also regarded in other countries as being a high quality product and therefore this makes it more competitive in the market. Thus, it provides value for the consumer’s money as compared to products, which are cheap, but of low quality. Some of the weakness of Fish Oil 1000 is that compared to US related products it is expensive in external markets such as Indonesia due to exchange rates. In addition, Fish Oil 1000 is packaged in bottles and lacks boxes while competing products from US are have boxes. External environment analysis Economic The main competitors of Fish Oil 1000 in the market are products from USA, which tend to have lower prices as compared to Fish Oil 1000’s price. However, Fish Oil 1000 is known in many Asian to be of high quality as compared to US counterparts. Thus, promotion of value-based products in these regions can help in increasing the market base of Fish Oil 1000 (Blackmores, 2010). Quality is highly valued at Blackmore and to ensure that its products meet this quality standards Blackmore is involved in several processes. First, it audits contract manufacturers in addition to setting up and approving all product specification (Weinreich, 2001). It also inspects all products prior to their packaging. The company also performs in process testing during packing. Finally, the company has processes and systems, which help in maintenance, monitoring and improving the quality of its product. Legal Blackmore is legally obligated to ensure that labelling, packaging, shelf life and microbiological requirements of the products are met. These standards are usually set by TGA and therefore the company usually seeks regulatory approval prior to releasing its products to the market. This implies that all Fish Oil 1000 products in the market pass these standards before being released to the market. Technological Blackmores supports and is involved in research in natural health care. Thus, its products are based on scientific evidence in addition to traditional beliefs. This has helped the company to be competitive in the naturopathic healthcare and provision of food supplements (Bourgeois & Brodwin, 1984). Social/cultural issues Employment at Blackmores encourages diversity and therefore people are hired based on their capabilities and not on racial or cultural affiliations. The company has common values, which dictate its culture that must be adhered to by all employees. Opportunities and threats Fish Oil 1000 is considered a high quality product both within Australia and in international markets. Other related products are known to be contaminated and therefore consumers prefer Fish Oil 1000 as a source of omega 3 fats. This is an opportunity for Fish Oil 1000. Fish Oil 1000 is threatened by US products due to high currency exchange in its external markets. Success factors The success of Fish Oil 1000 in the market is mainly due to Blackmores’ reputation in the market, the quality of this product and other marketing mix strategies employed by the company. Customer analysis/ target market Many customers buy brands and are least concerned with prices (Bourgeois & Brodwin, 1984). Thus Blackmores should continue investing in its brands and ensuring high quality to enjoy a wider market base. Australians of Arab origin and Middle Eastern parts of the country holds a potential for future markets for Fish Oil 1000. Given the great values of this product on alleviating heart diseases, arthritis and other ailments, these customers are bound to receive the product with enthusiasm. Promotions and marketing strategies need to be employed in these regions to sensitize people in these areas on the benefits of these products so that the company can reap the returns of this growing market. The promotions should also herald the low costs and high quality of this product to residents of Middle Eastern parts of Australia and the Arab population to ensure that the product is well received. Given the emphasis of Arab culture on natural products, Fish Oil 1000 stands to be received positively by the population. Given that the largest percentage of Australia is made up of persons aged between 15 and 64 years, the brand is likely to be well received by this category since it is at this stage that most ailments alleviated by Fish Oil 1000 emerge. Competitor analysis USA products are less priced in the market and therefore they still hold a large market base than Blackmores’ products. The company should devise ways of overcoming exchange rates to remain competitive in the international markets. Conclusion Fish Oil 1000 is a successful brand in Australia and international markets due to its high quality and brand. Both the internal and external resources for Fish Oil 1000 are favourable for the marketing of this product among all ages and middle eastern (Arab population) in Brisbane. The advantages of this product on people’s health are outstanding and anyone who values healthy lifestyle and wellbeing can go for it. Reference Achrol, R., & Stern, L. 1988. Environmental Determinants of Decision-Making Uncertainty in Marketing Channels. Journal of Marketing Research, 25(1), 36-50. Blackmores. Home. Available at: http://www.blackmores.com.au/products/fish-oil-1000 [Accessed 12 August 2010] Bourgeois, L.J., & Brodwin, D.R. 1984. Strategic Implementation: Five Approaches to a Elusive Phenomenon. Strategic Management Journal, 5(3), 241-264. Dwyer, R., & Welsh, M. 1985. Environmental Relationships of the Internal Political Economy of Marketing Channels. Journal of Marketing Research, 22(4), 397-414. Domzal, T. & Unger, L. 1987. Emerging Positioning Strategies in Global Marketing. 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