Recent research conducted on the Australian Beef Industry forecasted an unsustainable future. The report identified that more effective marketing approaches must be adopted so Australia can maintain a competitive position in the world market for beef.
The conclusions drawn from the MRC (1992) report is that all sectors of the Australian beef industry should adopt ‘best practice marketing strategies’ which comprises a synthesis of practical research, analysis of the situation and commercial judgement.
The best practice scenario provides a background which supports the need for research into effective marketing techniques that will provide beef exporters with a framework to identify and develop new market opportunities.
The research problem addressed in this research is, Does strategic market management provide a suitable framework for the identification and development of new markets by an individual firm in the Australian beef industry.
A ten stage framework for international strategic marketing of beef was developed in chapter 2 and implemented in chapters 4 to 7. The overall approach adopted in this thesis uses a post positivism paradigm of multiple methodologies. The thesis is structured into four studies of goal setting and internal analysis, external analysis, strategy development and evaluation.
The internal analysis is based on objectives, strengths and capabilities of the business and is designed to answer research questions regarding the firm’s ability and commitment to export. Primary data collection was undertaken through the use of a case study methodology using in-depth interview sessions with management and staff of Firm A. The questions were in a structured format to ensure all information needed was collected. The internal analysis indicated that Firm A was in a position to investigate new market opportunities with the idea of developing these opportunities further.
The external analysis of the strategic marketing management framework investigated two research questions using survey techniques . The exploratory research consisted of desk-top research and preliminary in-market research to answer the question - How can an export market opportunity be identified? The outcome of this exploratory research revealed a target market for Firm A in the 4/5 star hotels of Jakarta and Bali.
Further market research was conducted on this market segment in order to answer the research question - How can the market opportunity be specifically described? Structured personal interviews with Executive Chefs and importers provided the primary data for this investigation. The results of the descriptive study on 4/5 star hotels in Jakarta and Bali included:
• a market potential for chilled beef of 900 tonnes per annum,
• the market demand is chilled primal cuts with the majority of orders being tenderloin and striploin,
• Australian beef is considered of good quality, however this is tempered by perception of variability in the quality and ineffective marketing by the Australian beef industry in general,
• USA and New Zealand are the main competitors in the hotel and restaurants of Indonesia. However, in the markets of Jakarta and Bali, New Zealand does not hold significant market share, therefore the dominant player is USA. USA beef is consistently more expensive than Australian beef, and there is a definite linkage between price paid and perceived quality,
• the current marketing mix for beef to this segment shows that the primal cuts are primarily used for carveries and as steak dishes,
• the distribution channel must pass through an importer (licensed) who has daily deliveries to the hotels. Very little fluctuation occurs with pricing in the Indonesian market (less than 5 per cent p.a.). Importers believe a 6-10 per cent mark-up on wholesale to retail is normal business practice,
• price is reflected in product positioning with USA at the high quality, high price sector which leaves Australia to command the lucrative good value for money area,
• the level of promotion offered by Australian beef industry (which includes financial support, face-to-face contact and training) in the opinion of importers and Executive Chefs is inadequate,
• Executive Chefs are relatively young - between the ages of 20-35. They are also transient with 68 per cent of Executive Chefs having been in their current position for less than two year. The nationality of the Executive Chef working in Indonesia is predominantly European, and
• importers in Indonesia are well established with 43 per cent having been in business for more than 10 years. The largest market for importers are hotels which make up some 47 per cent of the total chilled beef imports.
The data collected from the external and internal analysis stages of the strategic market management framework is used to generate a specific marketing plan for Firm A. The plan links the specific target market requirement to the capabilities of the exporting firm.
The concept developed for this marketing strategy is based on chilled primal cuts packaged and delivered according to the needs of the individual Executive chef. Weaknesses identified in distribution and training were turned to positive aspects by the development of the DFC - Designed for Chefs system which simplified the ordering process as well as minimising the need for education and training. An appropriate marketing mix was developed to reach the Executive Chefs which included a closer association with the Chefs Culinary Association in Jakarta. Financial analysis indicated that this niche market was a lucrative market for Firm A. The most important consideration is that a successful strategy depends on good and efficient service and delivery of high quality products consistently.
The research reveals that it is possible to develop a marketing strategy based on the theory of strategic market management. The strategy was evaluated by an expert panel, to verify the feasibility and applicability of the marketing strategy.
The evaluation has shown that, in the professional opinion of the evaluators, the marketing strategy developed in this thesis is applicable to Firm A and is feasible to be implemented in a practical context.
This thesis illustrates the use of market segmentation to concentrate market resources in an identified segment where the company is not the dominant player and supports the use of formal planning as a means of identifying and developing new market opportunities. It makes a contribution of a more comprehensive model of international strategic market management, in the ten stage framework to assist Australian beef exporters in identifying and developing new markets.