Int MKT Assignment

International Marketing Plan for HELADIV Brand Tea
Group Members
Tuan Kitchilan (Team Leader)
FGS / PGDMkt / 2016 / 20
Dhanusha Karunagamage
FGS / PGDMkt / 2016 / 00
Dushantha Pradeep
FGS / PGDMkt / 2016 / 00
Fathima Faslina
FGS / PGDMkt / 2016 / 00
Mohamed Shafraz
FGS / PGDMkt / 2016 / 00
M Hafeez Afzal Nazim
FGS / PGDMkt / 2016 / 16
Subject: International Trade and Marketing

Course Instructor: Ms. Prbodhanie Wanigasundara
Mr. Nilantha Perera
Term: Semester 2- 2017
Post Graduate Diplomas in Marketing

Department of Marketing Management
Faculty of Commerce and Management Studies
University of Kelaniya.
Table of Contents
1.Executive Summary .....................................................................................................................4
2. Introduction .........................................................................................................................5
2.1 Evolution of Heladiv......................................................................................................5
2.2 Vision Statement.............................................................................................................5
2.3 Mission Statement ........................................................................................................5
3. Profile of the Board of Directors .........................................................................................6
4. Productivity Award for World Class Tea Production............................................................8
5. Unparalled Investment in Reserch and Development..........................................................9
6. Company Achievement......................................................................................................10
7. HVA Product Range...........................................................................................................12
8. SWOT Analysis..................................................................................................................13
9. Michael Porters 5 Force Theory Analysis Model...............................................................14
10. PESTEL Analysis.............................................................................................................16
11. The Heladiv Brand Equity ............................................................................................18
12. International Markets........................................................................................................19
13. Companies International Aims........................................................................................21
14. Competition ...................................................................................................................22
15. World Tea Production and Trade in Global Tea Industry ...............................................23
16. Body of the Assignment...................................................................................................24
16.1 Country Selection....................................................................................................24
16.2 Market Screening Process.......................................................................................24
16.3 Initial Screening.......................................................................................................27
16.4 Select the Country and Justification .......................................................................28
16.5 Second Screening.....................................................................................................28
2
16.6 Geographic Indicators............................................................................................31

16.7 Third Screening .....................................................................................................47
16.8 Fourth Screening....................................................................................................51
16.9 Fifth Screening.......................................................................................................54
16.10 Final Selection ....................................................................................................59
17. Findings and Conclusion ..................................................................................................62
18. Recommendation................................................................................................................62
19. Annexures...........................................................................................................................63
20. References...........................................................................................................................66
1. Executive Summary
Identified a local FMCG manufacturing organization that is already in international market
and identified few potential countries and markets where they are not entered as yet and Out of
potential country markets we have identified and choose the most desirable country to enter, with
the companys products. In choosing the most desirable market to enter. We have explain how we
have used the screening process to the same.
In this we have present secondary data obtained through reliable websites in going through the
selection process.
Basically we have selected HVA Foods Limited (HVA) which has The HELADIV brand
where amongst in the top five most recognized Sri Lankan owned tea brands in FMCG sector.
In conclusion we have come out with HVA to export organic Gift Teas to Netherland market
by going through country selection Market screening process.
Information for this report was gathered through a direct interview with the company
Marketing Manager Mr.Vidura Gunarathne, credible web sources and text books on International
Marketing.
2. Introduction
One of Sri Lankas fastest growing exports companies and ranking among the largest tea
exporters HVA Foods Pvt. Ltd. was established in 1996 as a BOI approved company. Prior to that
the company began business in 1990 as HVA Lanka Exports Pvt. Ltd. as an affiliate of HVA
International a Dutch based agricultural development company that had a global presence. In
1993 the Company came under the ownership of a completely Sri Lankan board of directors.
2.1 Evolution of Heladiv
During 20 years of operation HELADIV has increased its competitiveness by offering a
variety of innovative products matching the needs of the discerning customer. A hallmark of this
product development has been the development of ready-to-drink iced tea introduced to the Sri
Lankan market, a venture that was pioneered by the company and is now available on Sri Lankan
and Mihin Air. It also introduced a special range of tea 'infinit' which is offered at exclusive tea
kiosks in China and set to expand to other countries. In keeping with meeting the challenges of
the 21st century HELADIV has its own ultra-modern ecofriendly production facilities ISO 22000
certified since 2009, staffed by a highly skilled team and led by a dynamic management.
Now HVA Foods Limited (HVA) is a market leader in manufacturing, marketing and
distribution of a wide array of value-added tea products. The HELADIV brand is amongst the
top five most recognized Sri Lankan owned tea brands.
2.2 Vision Statement
To initiate and set the pace for positive changes in the Tea Industry by building a brand of
Ceylon Tea that is the preferred health drink around the world.
2.3 Mission Statement
HELADIV Tea is engaged in delighting its customers with an outstanding quality product,
with constant innovation, developing environmentally-friendly products to offer a superior
benefit for our customers with quality standards maintained to its highest levels.
Management Team
Mr. A. Rohan H Fernando (Chairman), Mr. Luxman Samarasinghe, Mr. Jayanath Kannangara,
Mr. Vidura Gunarathne, Mr. Rohan Fernando, Mr. Jeewaka Raddalgoda, Mr. Damith
Hewathudella, Mr. Harsha Fernando
3. Profiles of the Board of Directors

Mr. A.R.H. Fernando Chairman
The CEO is also in the capacity of an Executive Director. Mr. Fernando has over 35 years of
experience in the tea industry and has been successful in developing, promoting and marketing
the traditional beverage of tea in many innovative variants over the last several years. Prior to
finding his own Company, he began his career as a trainee Tea Taster at Carson, Cumber batch &
Co., Ltd. He was promoted to a Tea Executive in 1979. He joined Brooke Bond Ceylon Limited
as a tea buyer where he was promoted to Tea Manager in 1985. In 1982 he spent one year with
Brooke Bond Commodities Ltd. United Kingdom learning international tea blending and trading.
He served on the Colombo Tea Traders Association as a member and also as a Director on the Sri
Lanka Tea Board. He functioned as the President of the National Chamber of Exporters in 2008
and 2009. He is currently the Vice Chairman of the Tea Exporters Association of Sri Lanka.
Mr. J. Raddalgoda - Executive Director

6
Mr. Raddalgoda accounts for nearly eight years of experience in the plantation management in
the private sector and final four years of same holding managerial level posts. His knowledge on
the plantation sector includes of tea, rubber, coconut and cardamom. He has been with the
Company since February 1998 and handled tasks under managerial positions in the areas of,
Production and Commercial operations, Human Resource and Administration. Before joining the
Company Mr. Raddalgoda has served as a Plantation Executive at Kelani Valley Plantations
Limited.
Mr. H.J. Fernando Executive Director
Mr. Fernando has over 10 years of experience in the tea industry. He joined HVA Lanka
Exports (Private) Limited as a Management Trainee and currently acts as the Director Operations
being responsible for manufacturing and procurement and is also involved in international brand
marketing of the Company.
Mrs. V.S. Amunugama Fernando Non-Executive Director
Mrs. Fernando is a graduate of the Faculty of Law, University of Colombo and an Attorney-atLaw by profession. She counts for over 17 years of experience in the field of advertising and is
the founder and joint Managing Director of TRIAD Advertising (Pvt.) Ltd.
Mr. N.C. Vitarana Non- Executive (Independent) Director
Mr. Vitarana is a graduate of the University of Ceylon and a Chartered Accountant. He brings
with him a wealth of knowledge and experience acquired over a career spanning over 57 years in
areas such as taxation, auditing, banking and financial services, mergers and acquisitions and
corporate restructuring both in Sri Lanka and abroad. Mr. Vitarana is a qualified Chartered
Accountant has also served as a director of John Keels Holdings PLC.
Mr. J.H.P. Ratnayeke Non-Executive (Independent) Director
Mr. Ratnayeke is a leading commercial lawyer and the senior partner and founder of Paul
Ratnayeke Associates. He graduated with honors from the University of Ceylon (Colombo) and
has been awarded a LLM Degree by the University of London. He is an Attorney-at-Law of the
supreme court of Sri Lanka and a Solicitor of the Supreme Court of England & Wales.
4. Productivity Award for World Class Tea Production

HELADIV's Production process is ISO 22000 certified since 2009. Production is highly
facilitated with high end packing machines and tea bag machines which enhance the productivity
with a superior quality.
The company invests in improving the capacities of its skilled production team and dynamic
management team, who ensure the products are of international standards and truly world class.
Given below is a figure depicting the production process of black Tea.
Figure 1: production process of black tea
The green leaf supplied by the plantation companies and the tea small holders are brought to
the factories for processing and manufacturing of black tea. The finished product is then sold
through the Colombo tea auction to local and foreign buyers. Part of the tea is consumed locally
while bulk of the production is shipped to foreign countries by local and foreign owned export
companies
HELADIV's production process is;
ISO 22000 certified since 2009
Has a solid platform in terms of storage, flavoring, packaging, tea bagging
Has an effective traceability system in place
5. Unparalleled investment in Research & Development

The company recognizes the need for and the importance of R & D in competing in the global
market. HELADIV established the countries first standardized laboratory and development
center titled The HELADIV Concept Centre setting the stage for more innovative and out of the
box inventions based on Tea and its byproducts. These new age products combined with novel
packaging and new age thinking proved to be a winning combination for HELADIV.
Inputs and finished products are tested to ensure that the specifications are maintained.
Organoleptic, Chemical. Physical and Microbiological analysis are carried out in the in-house
Research and Development Laboratory. The Company is also finalizing arrangements to obtain
the internationally reputed ISO 17025:2005 General requirements for the competence of testing
and calibration laboratories.
With its concerted efforts in Research and Development, the company has attracted much
interest from local and international enterprises for synergized operations. The international
interest revives around the development o f p pharmaceutical products based on the lab trials
done by R & D.
Initial discussions with Asian Development Bank has given a clear indication to private sector
funding for future development of tea related projects which will have benefits to the industry.
The Government of Sri Lanka has recognized Research and Development as an integral part in
developing the national economy. It is expected that special grants or incentives for Research and
Development will be announced during the forthcoming budget, which the Company plans to
make full use of.
As a brand developer, HVA Foods Limited will be fully qualified to draw on the special
Development Fund for promoting and marketing of tea that will be initiated by the Sri Lanka Tea
Promotion Bureau. This initiative will generate a minimum of LKR 1 billion per year over a
period of 5 years and will be managed primarily by the private sector tea exports.
6. Company Achievements
A leader in the manufacturing, marketing and distribution of a wide array of products which
include a range of flavors and presentations including black tea, green tea, specialty teas and
various other value added tea products.
They own an exclusive franchise chain of tea boutiques in China.
10
Winner of six Gold Awards as the Exporter of the Year in both traditional and nontraditional
exports from Sri Lanka.
The HELADIV brand name is registered in 40 countries around the world and has been
valued in the range of USD 1.08 million to USD 1.24 million.
Pioneers in developing Ready-To-Drink Ice Tea in the Sri Lankan market.
HELADIV Ice Tea is served on board Sri Lankan Airlines and Mihin Air flights.
The company has a special plant built for the manufacturing of Ice Tea and post IPO it is
expected to increase its capacity to approx. 5,000 7,000 litres of tea concentrate a month.
Already been introduced to the international markets such as the Maldives, Australia and New
Zealand under the HELADIV brand. The forecasted movements are as follows.
Heladiv Range
HVA Foods Limited is a leader in the manufacturing, marketing and distribution of four major
product categories; value added tea based products, tea extract based products, tea concentrate
based products and its franchise operations. There are about 80 products presently being
marketed under the HELADIV brand which includes a range of flavors and presentations
including black tea, green tea, herbal tea, specialty teas, tea concentrate with pure tea extract,
fruit base, and various other value added tea products.
11
7. HVA Product Range
8. SWOT Analysis
12
Strengths
Strong Brand all over the world Tea
Interactive relationship market / Good brand Image
Experienced Staffs
R & D facilities
ISO (International Standard Organization) certified
Financial strength and stability
Weaknesses
Rely on third party suppliers
Opportunities
Social and cultural changes favoring for hygienically certified Tea
Export to more Countries
Appoint Franchises around the world
Innovation an technology development
Threats
Diseases are the big threat for Tea Plant
Strong competition
Competitors can offer similar products for low price
9. Michael Porters 5 Force Theory Analysis Model
13
Further there is a model that we needs to study to identify methods to handle

competitive challenges as an exporter. That is Michael Porter Five Forces Analysis model, we
needs to study the five forces framework for the structural analysis of any industry.
Five Forces Analysis assumes that there are five important forces that determine competitive
power in a business situation. These are:
Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven
by the number of suppliers of each key input, the uniqueness of their product or service, their
strength and control over you, the cost of switching from one to another, and so on. The fewer
the supplier choices you have, and the more you need suppliers' help, the more powerful your
suppliers are.
Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again,
this is driven by the number of buyers, the importance of each individual buyer to your business,
the cost to them of switching from your products and services to those of someone else, and so
on. If you deal with few, powerful buyers, then they are often able to dictate terms to you.
Competitive Rivalry: What is important here is the number and capability of your
competitors. If you have many competitors, and they offer equally attractive products and
services, then you'll most likely have little power in the situation, because suppliers and buyers
14
will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do
what you do, then you can often have tremendous strength.
Threat of Substitution: This is affected by the ability of your customers to find a different
way of doing what you do for example, if you supply a unique software product that automates
an important process, people may substitute by doing the process manually or by outsourcing it.
If substitution is easy and substitution is viable, then this weakens your power.
Threat of New Entry: Power is also affected by the ability of people to enter your market. If
it costs little in time or money to enter your market and compete effectively, if there are few
economies of scale in place, or if you have little protection for your key technologies, then new
competitors can quickly enter your market and weaken your position. If you have strong and
durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.
15
By going through above process, we have decided to export our products to the Netherland,
based on the following findings;
On both volume and value basis, Netherland has a big potential with both imports and
consumption on an upward trend for the past ten years. According to the Netherland Food Trade
Association (NFTA) the current per capita consumption of Tea is 1.6 kg and is expected to grow
further.
10. PESTEL Analysis

Political
Political Factors in a country that could affect the organization
Primary factor in developing countries where they are politically unstable
Globalization and opening up of markets
Political affiliation and support to governments
Economical
Economic situation in the country, the GDP, Exchange rates etc.
Tax structures and export limitations and regulations
Import and export duties / Banking and Credit / Balance of trade surplus / deficit
Socio Culture
Cultural aspects in a country mainly race, language and ethnicity. (And other underlying
factors)
Peoples relationships and behavior will have a major influence of the societies beliefs,
values and norms
There could be different cultural groups within a society
16
Some of the socio cultural factors can be listed as follows
Demographic factors- population structure- age, family size, ethnicity, income,
Social Cultural behaviors- languages, religious beliefs, mythology, gender roles, gift
giving habits, Social responsibility and ethics
The impact of war / Role of women in society / Attitudes towards credit / Concern about
health
The socio- cultural affect will influence peoples attitudes towards buying patterns, living
patterns, dress codes, fashion, sports, savings, social behaviors, music, credit, marriage,
and many areas of life styles
Technological
Technological level of the country or infrastructure in the country.
Some innovations make products and processors improve dynamically and sometimes
they even replaces the old products and make them obsolete Economy of Scale
Containerization and shipping / Genetic engineering / Nano technology is knocking doors
Environmental
Concerns of environmental issues like energy saving
Adoption of ECO Friendly Recommended Packing
Main ecological issues are: Resource Depletion- Pollution Concerns- Health Related
Concerns
Legal
Legal aspects in the country like bureaucracy and taxation
ISO 22000 Food Safety Management System
17
HACCP Certification Hazard analysis for critical control point
Commercial laws, Company laws employment laws, health and safety laws, Intellectual
Property laws, Environment laws, directly affect the marketers, Consumer Protection
Laws
Other Religious and Civil Society conventions, rights groups and practices also affect the
operation of businesses
11. The Heladiv Brand Equity

The HELADIV trademark is owned and registered under HVA Foods (Private) Limited and
for commercial purposes is employed by the HVA Group. This trademark has enabled consumers
with a means of identifying and distinguishing the HELADIV brand of products produced by
HVA Group against the goods supplied by any other entity. Based on the assessment carried out
by PwC Sri Lanka, the value of the HELADIV brand as at 31st December 2009 has been
estimated at USD 1.08 million to USD 1.24 million (with a mid-point value of USD 1.16
million). At a US dollar to Sri Lankan rupee exchange rate of USD 1 : LKR 114 this implies a
value range in the order of LKR 124.0 million to LKR 141.6 million (with a mid-point of SLR
132.8 million). This brand value has been assessed employing the relief from royalty approach, a
generally accepted valuation approach where value attributed to an intangible asset is estimated
based on the notional royalty expense savings from ownership of the brand vis--vis royalties or
franchise fees payable on an arms length basis to a third party in return for the right of use of
such brand.
HELADIV brand value has been estimated based on the five-year forecast sales amounts
provided by management, estimated royalty rate applicable to the associated brand sales
generated and computation of notional post-tax royalty streams, net of any associated marketing
expenses generated thereafter. These post-tax royalty streams have been discounted at the
companys post-tax weighted average cost of capital in order to arrive at the assessed brand
value.
18
Further, different market segments catered to by the HELADIV brand have been reviewed in
order to assess the brand proposition within the respective market segments. Both publicly
available and PwC Sri Lanka proprietary information on royalty rates and franchise agreements
have been reviewed to carry out an overall assessment of the economic benefits generated by
HVA Foods (Private) Limited.
12. International Markets (Tea Export Market)
For
more
than
15
years,
HELADIV's reputation and distinctive image have consistently developed across an expanding
number of products, brands and international markets HELADIV brand is registered in 42
countries around the world.
Asia
China
Japan
Malaysia
Singapore
Taiwan
Australia
Maldives
Hong Kong
New Zealand
Korea
Philippines
USA/ Canada
Canada
USA
Barbados
Jamaica
St. Lucia
St. Vincent
Trinidad
Belize
CIS /Europe
Russia
Ukraine
Lithuania
Latvia
Belarus
Germany
United Kingdom
Kazakhstan
HVA products are mainly valve adder gift teas to many countries all over the world such as
Australia, Singapore, Malaysia, New Zealand, Maldives, U.A.E., Lebanon, Oman, U.K., USA &
Canada. Etc. they cater to Sri Lankan food lovers in these countries, especially niche markets. As
a result, HVA earns over of USD 500,000 annually.
19
Sri Lanka is considered to be the worlds second largest exporter with almost 90% of its total
production being exported. Its export market is currently valued at approximately USD 1.5 Bn
and has been able to maintain a global export share of 20% - 21%.
You can find their products in the following establishments;
Supermarket
Country
Yamaya
Meidi- Ya
Alliance
Carrefour/Foodland/
Top's Cheangwattana/ Ladprao/ Piyarom
Liniya
O'Key
E-mart
Gourmet Supermarkets
Japan
Singapore
Thailand
Thailand
Russia
Russia
Korea
20
13. Companies International Aims

The Company aims to become one of the most recognized and respected tea brands in the
world. The strategy used for this will be to consolidate the brand in countries where there is
already a presence whilst increasing the market share elsewhere. In this regard an aggressive
marketing campaign will be launched from the beginning of 2014 to attract new buyers/ agents
particularly in new countries.
HELADIV brand, having been established in Russia and Ukraine will expand its reach in
other CIS countries including Kazakhstan, Belarus, Azerbaijan, Uzbekistan, Georgia etc. Russia
at present consumes approximately 240 million kilos of tea per annum out of which Ceylon Tea
share is approximately 50-60 million kilos. It is the aim of the company to increase its market
share by as much as 25% year on year in this region.
Neighboring India is also a major tea consuming country. The FTA between India and Sri
Lanka will be useful for establishing a joint venture particularly for a chain of tea cafes and
boutiques.
In the west the American market has potential for tea variations, other than normal tea bag
business. Ready-to-drink Ice Tea has the best potential in the USA. Tea variations with the
inclusion of herbs and tea applications in the life style product category similar to the Body Shop
will be pursued through showcasing the Company's products at strategic exhibitions in the US.
21
It is also the vision of the Company to have offices in strategic markets. With this in mind
HELADIV has initiated a programme for joint ventures in India, Indonesia and Vietnam.
Table 1: Company Forecasted export mix for 2014

(Far Eastern Region)
Source: HVA Foods Limited
14. Competition
Given below is a table which shows the top ten value added tea exporters by volume. Table 2:
Top Ten Sri Lankan Exporters of Value Added Tea
22
Source: Tea Data Book

Compared to its competitors HVA Foods Limited has exported only 604,472 kg of value added
tea. Given Below is the breakup of sales based on the product line.
Chart 3: Breakup of sales based on the product line
15. World tea Production & Trade in Global Tea Industry

Tea is the most popular and cheapest beverage, next to water, in the world. It is consumed by a
range of age groups in all levels of society. Some three billion cups of tea are consumed daily
worldwide. The price of tea has not seen a decrease in the world market during 2010 even with
the weather conditions returning to normality, high prices remained during the year 2010. The
biggest consumers of tea India and China are the biggest producers of tea. Tea is imported and
blended with the local tea and then distributed to the local markets. This consumption by the
produces could account for the demand increase. The other factor that accounts for the stable
increase in demand could be due to the health implications in drinking tea. The health benefits
of tea could be highlighted in order to encourage increased consumption. The tea industry is
likely to publicise research that shows, for example that substances found in green tea could help
fight eye disease; that green tea is a natural remedy for losing weight; that men who drink tea
have smaller waistlines than those who don't.. The popularity of value added teas such as
flavoured and ice tea will also account for the demand for tea. Tea has become a fashionable
drink as Hip bars in France, the UK and the USA are serving champagne teas and Earl Grey
martinis.
23
HELADIV brand, having been established in Russia and Ukraine will expand its reach in
other CIS countries such as Kazakhstan, Belarus, Azerbaijan, Uzbekistan, Georgia etc. Russia at
present consumes approximately 240 million kg of tea per annum out of which Ceylon tea share
is approximately 50-60 million kg. It is the aim of the company to increase its market share by as
much as 25% year on year in this region. Furthermore, with effect from November 2010 a
special Development Fund for promoting and marketing of tea will be initiated by the Sri Lankan
Tea Promotion Bureau. This initiative will generate a minimum of LKR 1 billion per year over a
period of 5 years and will be managed primarily by the private sector tea exporters.
Presently, Sri Lankan tea exports reach approximately 137 countries, the most important
markets for Ceylon tea, absorbing 36% of all tea exports amounting to 106 Mn Kg is Russia and
the Middle East
So the new trend is towards to healthy beverages that give health benefits to consumers so
they now used to buy premium type of teas concerning organic and fair trade teas which serves
to the social culture and to the living earth as well
16. Body of the assignment

16.1 Country selection
What is Market screening?
A version of environmental scanning in which the firm identifies desirable markets by using
the environmental forces to eliminate the less desirable markets. This is accomplished by
subjecting the countries to a series of screening based on the environmental forces.
16.2 Market screening Process
1. Initial screening
Basic need potential/foreign trade and investment
2. Second Screening
Economic and financial forces
24
3. Third Screening
Political and Legal forces
4. Forth Screening
Socio cultural forces
5. Fifth screening
Competitive forces
6. Final selection
Personal visits
Elaboration on above process
1. Initial Screening ( Basic Need Potential )
An initial screening based on the basic need potential is the first step. We have to see whether
the need is lacking? Example - Large farm Tractors- Switzerland / Araliya International Bike
seats
2. Second screening
After the first screening the list will become smaller. We have to use Market indicators.
Economic data used to measure relative market strengths of countries or geographic areas.
Buying power index

GDP
Market size and intensity
Market growth
Inflation
Consumption per capita
What is Consumption per capita?

It is How much will you spend from your income
Regression analysis - Statistical technique utilizing a linier model to establish relationship
between independent variables and dependent variables.
25
Ex. Market potential for refrigerators

Marriages, Divorces, housing start
When there is no other method this model may be used
Trend analysis - Statistical technique by which successive observations of a variable at regular
time intervals are analyzed to establish regular patterns that are used for establishing future
values
Cluster analysis - Statistical technique that divide objects into groups so that the objects within
each group are similar.
Ex. Eating habits, lifestyle
3. Third Screening
The elements of the political and legal forces that can eliminate a nation from further
consideration are numerous.
Entry barriers
Profit remittance Etc..
Political instability, safety regulations, political and legal forces

4. Fourth screening
Analysis of socio cultural components
Unless and otherwise you are a specialist in that country you must rely on the opinion of the
others.
Example: Culture, Socio cultural forces
5. Fifth screening
Examining of the competitive forces and futuristic business strategies.( 4Ps)
Refer Prof. Michael Porters model
26
6. Final Selection
Appreciate the value of businesspeople, trade missions and trade fairs
Field trip
Government sponsored trade missions
Research the local market ( Local research groups)
Cultural problems/ technical difficulties
Selection of foreign markets

Introduction: - HVA planned to export organic Gift Teas to Netherland market
16.3 Initial Screening (Need potential)

In this initial screening based on the basic need potential in the first step we see there is
healthy tea beverage need is lacking
As per the World tea Production & Trade In Global Tea Industry we discussed above we have
identified that there is Basic Need Potential on healthy beverages that give health benefits to
consumers so they now used to buy premium type of teas concerning organic and fair trade teas
which serves to the social culture and to the living earth as well
Chart 4 : Harmonized index of consumer prices : coffee ,Tea and Cocoa for Netherlands
Source: http://www.research.stlouisfed.org/netherlands
27
As per the chat we can see that consumers in Netherlands pays high prices for premium
products such as healthy beverages that are not harvested by adding fertilizers. The drop in 2005
because of the world crisis what we all have faced
16.4 Selected country and justification

16.5 Second screening
After the first screening the list became smaller. I have used Market indicators and Economic
data to measure relative market strengths of countries or geographic areas.
Buying power index
Chart 5: Netherland Personal Savings
Source: http://www.tradingeconomics.com/netherlands
Conclusion: - people in Netherland seems not saving money
Chart 6: Netherland household disposable income
28
Conclusion: - people in Netherland seems that they have much disposable income to spend so
they have a strong buying power
Chart 7: Netherland Consumer Spending
Conclusion: - people in Netherland seems selecting on what to purchase and not purchasing
unwanted stuff even though they have the buying power
Chart 8: Netherland minimum Wages
29
Conclusion: - In Netherland minimum Wages are increasing hence the bottom of the pyramid has
more buying power
Chart 9: Netherland average hourly Wages index
Conclusion: - In Netherland Average Hourly Wages are increasing
Market size and intensity
Market size and growth can be made on both a macro and micro basis.
30
On a macro basis, It may be determined that Netherland country needs a minimum set of
potential resources to be worth further consideration. The macro indicators of market potential
and growth are generally used in the first stage of the screening process, because the data readily
available and can be used to eliminate quickly those countries with little or no potential demand.
Here some macro indicators identified by the Netherland country as follow.
16.6 Geographic Indicators
Size of Country, In Terms of Geographic Area:-
Location: Western Europe, bordering the North Sea, between Belgium and Germany
Area: total: 41,543 sq km
Land: 33,893 sq km
Water: 7,650 sq km
Area - comparative: slightly less than twice the size of New Jersey
Land boundaries: total: 1,027 km
Border countries: Belgium 450 km, Germany 577 km
Coastline: 451 km
Chart 10: Netherland Population
31
Conclusion: - Netherland Population is increasing hence lot of potential for FMCG market
Climatic conditions :-:
Temperate; marine; cool summers and mild winters

Terrain: mostly coastal lowland and reclaimed land (polders); some hills in southeast
Note: the highest point on continental Netherlands is Vaalserberg at 322 m
Natural resources:-
Natural gas, petroleum, peat, limestone, salt, sand and gravel, arable land
Total renewable water resources:91 cu km (2011)
Freshwater withdrawal (domestic/industrial/agricultural):total: 10.61 cu km/yr
(12%/88%/1%)
Per capita: 636.7 cu m/yr (2012)
Natural hazards: flooding
Environment - current issues: water pollution in the form of heavy metals, organic compounds,
and nutrients such as nitrates and phosphates; air pollution from vehicles and refining activities;
acid rain
Environment - international agreements: party to: Air Pollution, Air Pollution-
Nitrogen
Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulfur
32
94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, AntarcticMarine Living Resources, Antarctic Treaty, Biodiversity, Climate Change, Climate ChangeKyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous
Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection,
Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling
Signed, but not ratified: none of the selected agreements
Geography :-
Located at mouths of three major European rivers (Rhine, Maas or Meuse, and Schelde)
Nationality:
Noun: Dutchman (men), Dutchwoman (women)

Adjective: Dutch
Ethnic groups:
Dutch 80.7%, EU 5%, Indonesian 2.4%, Turkish 2.2%, Surinamese 2%, Moroccan 2%,
Caribbean 0.8%, other 4.8% (2008 est.)
Languages: Dutch (official), Frisian (official)
Religions: Roman Catholic 30%, Protestant 20% (Dutch Reformed 11%, Calvinist 6%, other
Protestant 3%), Muslim 5.8%, other 2.2%, none 42% (2006)
1. Demographic characteristics ( Regression analysis)
Population: 16,805,037 (July 2013 est.)
Country comparison to the world: 65
Age structure:
0-14 years: 17.1% (male 1,468,364/female 1,401,651)

33

65 years and over: 17.1% (male 1,284,788/female 1,589,817) (2013 est.)
Population pyramid:
Source: https://www.cia.gov/library/publications/the-world-factbook/geos/nl.html
A population pyramid illustrates the age and sex structure of a country's population and may
provide insights about political and social stability, as well as economic development. The
population is distributed along the horizontal axis, with males shown on the left and females on
the right. The male and female populations are broken down into 5-year age groups represented
as horizontal bars along the vertical axis, with the youngest age groups at the bottom and the
oldest at the top. The shape of the population pyramid gradually evolves over time based on
fertility, mortality, and international migration trends.
Dependency ratios:
Total dependency ratio: 51.7 %
Elderly dependency ratio: 25.8 %
Youth dependency ratio: 25.9 %
Potential support ratio: 3.9 (2013)
34
Median age:
Total: 41.8 years
Male: 41 years
Female: 42.6 years (2013

est.)
Population growth rate: 0.44% (2013 EST.) Country comparison to the world: 156
Birth rate:
10.85 births/1,000 population (2013 EST.) Country comparison to the world: 177
Death rate:
8.48 deaths/1,000 population (2013 EST.) Country comparison to the world: 84
Net migration rate:
1.99 migrant(s)/1,000 population (2013 est.) Country comparison to the world: 41
Urbanization:
Urban population: 83% of total population (2010)

Rate of urbanization: 0.8% annual rate of change (2010-15 est.)
Major urban areas - population:
Amsterdam (capital) 1.044 million; Rotterdam 1.008 million; The Hague (seat of government)
629,000 (2009)
Sex ratio:
at birth: 1.05 male(s)/female

0-14 years: 1.05 male(s)/female
35
55-64 years: 1 male(s)/female

65 years and over: 0.8 male(s)/female
Total population: 0.98 male(s)/female (2013 EST.)
Mother's mean age at first birth: 28.9 (2005 EST.)

Maternal mortality rate:6 deaths/100,000 live births (2010)
Infant mortality rate:
Total: 3.69 deaths/1,000 live births

Male: 3.99 deaths/1,000 live births
Female: 3.38 deaths/1,000 live births (2013 est.)
Life expectancy at birth:
Total population: 81.01 years

Male: 78.93 years
Female: 83.21 years (2013 EST.)
Total fertility rate:
1.78 children born/woman (2013 EST.)

Contraceptive prevalence rate: 69%
Note: percent of women aged 18-45 (2008)
Health expenditures:
12% of GDP (2011)

36
Physicians density:
3.921 physicians/1,000 population (2007)
Hospital bed density:
4.7 beds/1,000 population (2009)
Drinking water source:
Urban: 100% of population

Rural: 100% of population
Total: 100% of population (2010 EST.)
Sanitation facility access:
Urban: 100% of population

Rural: 100% of population
Total: 100% of population (2010 EST.)
HIV/AIDS - adult prevalence rate:
0.2% (2009 EST.)

HIV/AIDS - people living with HIV/AIDS:
22,000 (2009 EST.)

HIV/AIDS - deaths:
Fewer than 100 (2009 EST.)

37
Obesity - adult prevalence rate:18.8% (2008)

country comparison to the world: 103
Education expenditures:5.9% of GDP (2009)
Literacy:
Definition: age 15 and over can read and write

Total population: 99%
Male: 99%
Female: 99% (2003 est.)
School life expectancy (primary to tertiary education):
Total: 17 years
Male: 17 years
Female: 17 years (2010)
Unemployment, youth ages 15-24:
Total: 7.7%
Male: 7.5%
Female: 7.8% (2011)
2. Economic characteristics
The Dutch economy is the sixth-largest economy in the euro-zone and is noted for its stable
industrial relations, moderate unemployment and inflation, a sizable trade surplus, and an
important role as a European transportation hub. Industrial activity is predominantly in food
38
processing, chemicals, petroleum refining, and electrical machinery. A highly mechanized

agricultural sector employs only 2% of the labor force but provides large surpluses for the foodprocessing industry and for exports. After 26 years of uninterrupted economic growth, the Dutch
economy - highly dependent on an international financial sector and international trade contracted by 3.5% in 2009 as a result of the global financial crisis. The Dutch financial sector
suffered, due in part to the high exposure of some Dutch banks to U.S. mortgage-backed
securities. In 2008, the government nationalized two banks and injected billions of dollars of
capital into other financial institutions, to prevent further deterioration of a crucial sector. The
government also sought to boost the domestic economy by accelerating infrastructure programs,
offering corporate tax breaks for employers to retain workers, and expanding export credit
facilities. The stimulus programs and bank bailouts, however, resulted in a government budget
deficit of 5.3% of GDP in 2010 that contrasted sharply with a surplus of 0.7% in 2008. The
government of Prime Minister Mark RUTTE began implementing fiscal consolidation measures
in early 2011, mainly reductions in expenditures, which resulted in an improved budget deficit in
2011. In 2012 tax revenues dropped nearly 9%, GDP contracted, and the budget deficit
deteriorated. Although jobless claims continued to grow, the unemployment rate remained
relatively low at 6.8 percent.
Gross domestic product:- GDP (purchasing power parity):$718.6 billion (2012 est.)
$725 billion (2011 est.)
$717.9 billion (2010 est.)
(Data are in 2012 US dollars)

GDP (official exchange rate):$773.1 billion (2012 est.)
GDP
Chart 11: Netherland GDP
39
Chart 12: Netherland GDP Per Capita
Chart 13: Netherland GDP Constant Prices
40
Household consumption: 45.5%

Government consumption: 28.4%
Investment in fixed capital: 16.8%
Investment in inventories: 0.4%
Exports of goods and services: 87.3%
Imports of goods and services: -78.5%(2012 est.)
GDP - composition, by sector of origin:
Agriculture: 2.8%
Industry: 24%
Services: 73.2% (2012 est.)
Agriculture - products:
Grains, potatoes, sugar beets, fruits, vegetables; livestock
41
Industries:
Agro industries, metal and engineering products, electrical machinery and equipment,
chemicals, petroleum, construction, microelectronics, fishing

Industrial production growth rate: -0.4% (2012 est.)
Labour force:7.895 million (2012 est.)
Labor force - by occupation:
Agriculture: 2%
Industry: 18%
Services: 80% (2005 est.)
Unemployment rate:5.3% (2012 est.)
Household income or consumption by percentage share:
Lowest 10%: 2.5%

Highest 10%: 22.9% (1999)
Distribution of family income - Gini index:30.9 (2007)
Budget:
Revenues: $357.9 billion

Expenditures: $388.8 billion (2012 est.)
42
Taxes and other revenues:46.3% of GDP (2012 est.)

Budget surplus (+) or deficit (-): -4% of GDP (2012 est.)
Public debt: 71.1% of GDP (2012 est.)

Data cover general government debt, and includes debt instruments issued (or owned) by
government entities other than the treasury; the data include treasury debt held by foreign
entities; the data include debt issued by subnational entities, as well as intra-governmental debt;
intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such
as for retirement, medical care, and unemployment, debt instruments for the social funds are not
sold at public auctions
Stock of narrow money:
$389.6 billion (31 December 2012 est.)

$369 billion (31 December 2011 est.)
See entry for the European Union for money supply in the euro area; the European Central
Bank (ECB) controls monetary policy for the 17 members of the Economic and Monetary Union
(EMU); individual members of the EMU do not control the quantity of money circulating within
their own borders
Exports - commodities:
Machinery and equipment, chemicals, fuels; foodstuffs
43
Exports - partners:
Germany 26.3%, Belgium 14.1%, France 8.8%, UK 8%, Italy 4.5% (2012)
Chart 14: Netherland Exports
Imports:
$474.8 billion (2012 est.)

$484.6 billion (2011 est.)
Imports - commodities:
Machinery and transport equipment, chemicals, fuels, foodstuffs, clothing
Imports - partners:
Germany 13.9%, China 12%, Belgium 8.4%, UK 6.7%, Russia 6.4%, US 6.1% (2012)
Reserves of foreign exchange and gold:$54.82 billion (31 December 2012 est.)
44

Chart 15: Netherland Imports
Airports: 29 (2013)
Airports - with paved runways: total: 23
Airports - with unpaved runways: total: 6
Heliports: 1 (2013)
Pipelines: condensate 81 km; gas 8,531 km; oil 578 km; refined products 716 km (2013)
Railways: total: 3,013 km
Standard gauge: 3,013 km 1.435-m gauge (2,195 km electrified) (2012)
Roadways: total: 139,295 km (includes 2,758 km of expressways) (2012)
Waterways: 6,237 km (navigable for ships of 50 tons) (2012)
45

Merchant marine: total: 744
by type: bulk carrier 4, cargo 514, carrier 15, chemical tanker 56, container 67, liquefied gas 21,
passenger 17, passenger/cargo 14, petroleum tanker 4, refrigerated cargo 10, roll on/roll off 19,
specialized tanker 3
foreign-owned: 196 (Australia 1, Bermuda 1, Denmark 27, Finland 13, France 2, Germany 86,
Ireland 8, Italy 6, Japan 1, Norway 19, Sweden 12, UAE 4, US 16)
registered in other countries: 233 (Antigua and Barbuda 17, Bahamas 23, Belize 1, Canada 1,
Curacao 43, Cyprus 23, Germany 1, Gibraltar 34, Italy 2, Liberia 31, Luxembourg 3, Malta 3,
Marshall Islands 21, Panama 6, Paraguay 1, Philippines 17, Russia 2, Saint Vincent and the
Grenadines 1, Singapore 1, UK 1, unknown 1) (2010)
Ports and terminals:
Major ports: Amsterdam, IJmuiden, Moerdijk, Rotterdam, Terneuzen, Vlissingen
Container ports: Rotterdam (11,876,920)
Market growth
Chart 16: Netherland Gross national Product
46
Inflation
Chart 17: Netherland Inflation Rate
Trend analysis
We have discussed this in initial screening based on the basic need potential and we already
identified that there is healthy tea beverage need is lacking and consumers are more towards to
purchase premium type of teas concerning organic and fair trade teas which serves to the social
Micro indicators of Netherland country analyses as follow.

Macro indicators of market size are general and crude, they do not necessarily indicate a
perceived need for the product.
Television: - In Netherlands began in Berlin on March 22, 1935, broadcasting for 90 minutes
three times a week. The Netherland television market had approximately 36.5 million television
households in 2000, making it the largest television market in Europe. Nowadays, 95% of
Netherlands households have at least one television receiver. All the main German TV channels
are free-to-air.
Electricity consumption: - 108 billion kWh (2012 EST)
Telephones: - mainlines in use: - 7.086 million (country comparison to the world is 4). Mobile
cellular: - 19.643 million (country comparison to the world is 10).
47
Hospital: - The average length of hospital stay in Netherland has decreased in recent years from
14 days to 9 days, still considerably longer than average
Coffee consumption: - Dutch drinking less coffee, coffee consumption in Netherland
For this scenario HVA also need to analysis micro indicators of the Netherland country
because it indicate annual consumption of a companys product or a similar product. Its
signaling a perceived need
16.7 Third Screening

The elements of the political and legal forces that can eliminate a nation from further
consideration.
Political conditions
Some of the political risk HVA Company faces in Netherland market.
The politics of the Netherlands take place within the framework of a parliamentary
representative democracy, a constitutional monarchy and a decentralized unitary state. The

Netherlands is described as a convocational state. Dutch politics and governance are
characterized by a common striving for broad consensus on important issues, within both the
political community and society as a whole.
Political system of the Netherlands
Constitutional Monarchy
Since 1815 The Netherlands has been a constitutional monarchy. Historically for centuries
before, it had been the proud republic, a union of provinces. Since 1848, the Netherlands is also a
parliamentary democracy. Dutch monarch has no real political power, but serves as
representative head of state and a symbolic person uniting the divided parliamentary politics.
The parliament
48
The parliament consists of two chambers. The Lower House (Dutch: Tweede Kamer, or
Second Chamber) is elected every four years in a direct national elections together with the
provincial parliaments. It consists of 150 members. Only the political parties can take part in the
elections. The lower chamber approves the budget and has the right of the legal initiative, the
right of submitting amendments, the right to start its own inquires and the right of interpellation.
The members of the provincial parliaments vote for the less important Senate (Dutch: Eerste
Kamer, or First Chamber) consisting of 75 members who approve or reject all laws of the
Netherlands without the right of amendment. Together, the First and Second Chamber constitute
The Estates-General (Dutch: Staten Generaal, established 1593). In fact, Dutch political system
gives a lot of freedom to the government, as long as it has support of the parliament.
Head of state The King
Willem Alexander coronation flagKing Willem-Alexander van Oranje-Nassau is the nominal
head of state of the Netherlands. The King has several mostly representative functions. He
nominates all the mayors in the Netherlands as well as the politician who forms the government
after the general elections. The monarch also signs all the laws approved by the parliament.
Government
The Netherlands is usually governed by a coalition of different political parties. Prime minister
is usually coming from the party, which won the most seats in the elections. Usually the King
gives the leader of the party, which won the elections, or an important politician coming from
this party, the task of forming the new government. The constitution does not permit to a member
of the parliament to serve in the government.
The council of ministers leads the countrys policy, the minister together with junior ministers
govern. The council of ministers with the King form together the Crown, an organ which
nominates the members of the State Council (Dutch: Raad van State), an institution with
influence on certain decisions and more important nominations.
Prime Minister
49
Prime Minister is the head of the government. Mark Rutte from the People's Party for
Freedom and Democracy VVD (liberals) is at present the Prime Minister of the Netherlands.
Chart 18: Netherland Three Month interbank rate
Conclusion: - its safe in Netherland to do business as economy is seems stable and to barrow
many from banks as no interest losers that can occur
Chart 19: Netherland Personal Income Tax Rate
Conclusion: - its safe in Netherland to do business as economy is seems stable and there are no
income tax losers that can occur
50
Politically Netherland is in a position of stability and the regulations are safety with fair
political and legal forces
3. Governmental support
Exporters supply 60% of the annual demand for tea in the export and domestic use of tea has
been on the rise according to the Netherland department of agriculture. As per the Netherland
government, there is no limit on the amount of tea that could be imported into the country.
Also the Sri Lankan ministry of minor export crop promotion and the department of export
agriculture extend support by way of fiscal concessions and subsidies to local tea exporters.
Speaking at the annual general meeting of the Sri Lankan tea traders association 2013,
association chairman mentioned that government has allocated a budget of 45 million rupees
from the national budget for the development of the tea export industry
4. Economic and demographic factors

When concerning the current population in Netherland making it the somewhat populous
country in the world. The current per capita income is valued at USD 48,211. Also the
composition of the population is highly diverse with a significant composition of Asians and
Hispanics which is growing at a high rate.
The increase in tea usage has been fueled by the ongoing economic recession that has
shifted more focus to preparing better tasting meals at home with fewer restaurant visits in the
Netherland.
With a per capita tea consumption rate of 1.6kg and the growth in consumption of ethnic and
spicier foods being on the rise there is a huge potential for the tea market in the country.
A significant increase in tea exports from Sri Lanka was observed over the past years which
reflect the growing demand globally for Sri Lankan tea, which encourages new entrants to the
export market.
Export performance by major product sectors 20010, 2011 & 2012
51
Agricultural products
Value in USD - US Dollars Millions

%
Growt
%
2010
2011
h
2012
Growth
1766.3 2213.4
1
6
25.32
2449
10.64
1.1
Tea
1185.4
1
1439.2
21.41
1476.18
2.57
1.2
National Rubber
98.85
173.75
75.77
207
19.14
1.3
Coconut
Coconut kernel products
Coconut fiber products and shell
products
258.85
104.29
274.27
99.39
5.96
-4.7
418.91
191.4
52.74
92.57
154.56
174.88
13.15
227.51
30.09
Other export crops

Spices
Pepper
Cinnamon
Cloves
Nutmeg & Mace
Cardamoms
223.19
115.11
20.58
74.18
12.02
8.09
0.24
326.24
191.18
44.95
91.44
37.93
16.52
0.34
46.17
66.08
118.42
23.27
215.56
104.2
41.67
346.91
213.61
30.76
121.18
35.47
25.61
0.59
6.34
11.73
-31.57
32.52
-6.49
55.02
73.53
Se.N
o
1.4
Description
Source - Sri Lanka Customs

Analysis & Preparation - P & P division EDB
16.8 (Fourth Screening) Cultural and Social forces [Cluster analysis]

Analysis of socio cultural components
Dutch culture, or the culture of the Netherlands, is diverse, reflecting regional differences as
well as the foreign influences thanks to the merchant and exploring spirit of the Dutch and the
influx of immigrants. The Netherlands and Dutch people have played an important role for
centuries as a culturally liberal and tolerant centre, with the Dutch Golden Age regarded as the
zenith. Eating habits of the country has been changes with the time as per blood sugar and blood
pressure trend is increasing so they have changed their lifestyle and Eating habits more towards
to healthy and organic stuff
52
3.2.3. a) Traditions
One traditional festivity in the Netherlands is the feast of Sint Nicolaas or Sinterklaas. It is
celebrated on the evening before Sinterklaas' birthday on December 5, especially in families with
little children. In the United States the original figure of Dutch Sinterklaas has merged with
Father Christmas into Santa Claus. In the Netherlands, gift-bringing at Christmas has in recent
decades gained some popularity too, but Sinterklaas is much more popular.
Conclusion: - we can have a organic gift tea collection for the same
A wide spread tradition is that of serving beschuit met muisjes when people come to visit a
new-born baby and his mother. Beschuit is a typical Dutch type of biscuit, muisjes are sugared
anise seeds.
Other traditions are often regional, such as the huge Easter Fires or celebrating the feast of
Sint Maarten on the evening of November 11 when children go door to door with paper lanterns
and candles, and sing songs in return for a treat. The same thing happens on January 6 with
Epiphany in the South of the Netherlands. In the past self-made lanterns were used, made from a
hollowed out sugar beet.
Another traditional feast of the Netherlands is Kings day or "Koningsdag". This is celebrated
in honour of the King's birthday. Jumble sales are traditionally held in the streets of some city
centres; the salespeople, including children, often wear orange clothes. The King and his family
visit two places somewhere in the country. Those places organise a special program, displaying
local folklore.
In North-Brabant, Limburg and some other parts of the Netherlands people celebrate carnival
similar to the carnival of the German Rhineland.
Conclusion: - we can have an organic gift tea collection for the above functions
There has been a growth in healthy foods and beverage like organic and premium type foods
53
The volume of organic tea used in the retail sector in the Netherlands appears to have
expanded due to population growth and changes in the Netherland diet .Although convenience
foods and pre prepared dinners are very popular , there is an apparent trend for the average
Netherland family to eat more highly seasoned foods at home .This trend is probable the result
of the increasing influence and exposure of Asian and Hispanic foods to the greater population,
which in turn has led to the consumption of greater quantities and a wide variety of spices with
tea .
Many restaurants in the Netherland are popularizing the terms healthy and taste of asia
cooking today , signifying a menu apt to offer dishes from all parts of Asia .Typically organic tea
is increasingly being imported to service the growing demand
5. Opportunities in Netherland market
Organic tea used in ethnic cuisine or that fill the healthy gap left by reducing salt or fat for
health reasons are becoming increasingly popular in the Netherland. The fastest growing spices
products in the US are onion powder, pepper and salt mixtures, jalapenos , Anaheim and ancho
peppers ,fennel, marjoram, savory tarragon, paprika cumin seeds ,dried garlic, candied ginger
root and cardamom.
Out of these, none of this items are gives health benefits when it get mixed with oil and
artificial ingredients .But growth in this market as a whole is less important than growth in
market segments seeking the highest quality products. So there is a high potential for organic tea
after having consuming the above said food
Sri Lankas exports represent only a small portion in the market in all organic tea, except
conventional tea; therefore a strategy targeting upper niches is appropriate.
For Sri Lankan organic tea exports to move forward, the concept of branding and value
addition must be adapted into the system. There is a threat of foreign companies coming into
dominate the value addition sector and Ceylon organic tea losing both value and identity.
The selection process continues to examining the average length of the hospital staying people
in hospital nearly 14 days to 9 days Netherland people staying in hospital and government
spending for health care services rose by 10.7% in year.
54
In micro factors they are specially looking for the demand for the product in future market.
There are high demand for Netherland market because tea consumption of the Netherland people
rise by 9.2% by 2019.it gives good opportunity for HVA Company.
Finally, management must consider political risk competition. Newly opened markets with
greatest growth potential may be the best targets for a new exporter of Organic Tea, because is
not so entrenched as it would be in a growth market. Alternatively, management may decide to
development of the market. Such as improving product, price, place and promotion.
The Dutch United Provinces declared their independence from Spain in 1579; during the 17th
century, they became a leading seafaring and commercial power, with settlements and colonies
around the world. After a 20-year French occupation, a Kingdom of the Netherlands was formed
in 1815. In 1830, Belgium seceded and formed a separate kingdom. The Netherlands remained
neutral in World War I, but suffered German invasion and occupation in World War II. A modern,
industrialized nation, the Netherlands is also a large exporter of agricultural products. The
country was a founding member of NATO and the EEC (now the EU) and participated in the
introduction of the euro in 1999. In October 2010, the former Netherlands Antilles was dissolved
and the three smallest islands - Bonaire, Sint Eustatius, and Saba - became special municipalities
in the Netherlands administrative structure. The larger islands of Sint Maarten and Curacao
joined the Netherlands and Aruba as constituent countries forming the Kingdom of the
Netherlands.
16.9 (Fifth Screening) Product strategy in a global environment

Examining of the competitive forces and futuristic business strategies.( 4Ps)
3.2.4. a) Overview
One of the main challenges faced by companies entering global markets is whether the firms
products can be sold in their present form or whether they need to be adapted to foreign market
requirements, i.e. Product standardization; Same product to be sold at every market or Product
adaption; where product adaptation is necessary to cater different national markets.
55
Many adaptations are discretionary; that is a firm may chose to make certain adaptations or
not to do so. In some cases however adaptations are mandatory. They may be necessary for a
product to be sold on the local market.
3.2.4. b) Benefits of Product standardization vs. Product adaptation

Benefits of Standardization
Lower costs of manufacturing could
be achieved through economies of
scale
Lower input costs can be achieved
through volume purchasing
Cost savings maybe achieved

through elimination of effortsmarket research, design, and
engineering to adapt products.
Standardized products may enhance
consumer perceptions of a global
brand
3.2.4. c) Recommended product strategy
Benefits of adaptation
Mandatory adaptations allow
products to be sold in otherwise
closed markets
Products can be sold for use in
different climates and with different
infrastructures.
Modified products may perform
better with under different use
conditions.
Greater sales may be attained by

better meeting industry norms or
cultural preferences.
To export our products to the Netherland we have selected the adaptation strategy due to the
following reasons;
For our company to enter an attractive market like Netherland where consumers and
manufacturers who appreciate distinctive taste, aroma or color of the tea. We need to replace the
industrys current trading orientation with a marketing orientation and match the unique
attributes of Sri Lankan organic tea explicitly with customer preferences in the Netherland
market.
Firstly we need to understand the following when adapting our product to suit the Netherland
market.
Preference for stronger aromatics and taste among Netherland consumers

How food manufacturers and food service providers translate that preference into spicier
products
The criteria by which they select organic tea
56
And most importantly,
Their requirements relating to food and safety standards.(FDA)
The most promising opportunities for our company lie with tea produce in the Netherland
market.
The most promising target customers include;
Traders
Dealers
Buying offices,
Worldwide Distributers,
Merchandisers
Wholesalers/distributors
Modern trade and bulk ,
Food
service
providers
(international 5 star hotels and
restaurants) ,
Small and medium food and
beverage manufacturers
Food service distributors ,

Department stores,
Premium placers like duty free
shops ,
Super Markets & hypermarkets
High end supermarkets,
Specialty Stores
Gift shops
Retailers / retail distributers / retail
outlets/ corner stores
Grocery Shops & glossary out lets,
Online sales
Consumers
Over the last decade sales of blended teas seem to have grown in Netherland market as they
accompany various cuisines such as Asian, Cajun, Mexican, Italian, Thai and southwestern
cuisine.
Small or dispersed food providers and manufacturers uses organic tea to dry seasoning mixes
to say that there is organic tea in it hence people will think that that food is healthy, which saves
them the expense of complex procurement and provides them with proven blends and statistics
show no evidence that Sri Lanka has been able to explore these trends which gives us a great
opportunity to enter the market with products by means of specialty healthy tea seasoning
blends.
3.2.4. d) Adaptation
As organic tea being a pure commodity, differentiation of the product is a difficult task. But
the quality of the organic tea could be measured through different grades & various blends of tea
57
could be produced. As there are different qualities of teas are available in Sri Lanka, some of
them being very rare, it would help to cater to the niche segment.
As the product directly deals with the food and beverage industry there would not be any
differentiation as far as segmentation is concerned. But keeping in mind the different quality of
teas; different classes of food service providers, beverage manufacturers and tea blenders could
be considered.
Positioning of the tea brand will be based on several factors such as;
The type of tea

Availability
Usage
For example for rare and expensive organic tea such as organic ceylon green tea our strategy
would be to offer premium class green tea and easily available teas such as Ceylon black tea the
authenticity of Sri Lankan tea will be more considered.
Product
A mix of various types of Sri Lankan organic tea will be the basic product. The expected Sri
Lankan product will contain the Sri Lankan flavor and the augmented product will be rarely
available organic tea.
Price
Pricing will be based on demand mainly. If demand seems to be high, a constant and stable
pricing strategy may be applied. If the demand varies with the season then a high low pricing
strategy will be taken.
Place
If direct marketing to food manufacturers, restaurants and tea blenders are considered then
business portals and websites will be the ideal place to promote the product.
58
Secondarily the following places could also be used to display the products,
Big Supermarkets
Medium size retail stores
Promotion
As this is a business to business transaction the promoting of the business would be done by
listing it on the various export-import web portals where the worldwide businesses are listed.
Our message would clearly focus on authenticity, originality and quality of the product.
Packaging of the product
The packaging would be done according to different grades and packaged in specially
designed packaging to maintain quality standards.
The packaging operation is covered by the Sri Lankan local health codes; however the sales
of organic tea across the Netherland would fall under the US FDA guidelines. In the Netherland
both the FDA and ASTA have set guidelines and specifications for importation and trade of
organic tea and dry herbs
including FDA defect action levels and ASTA cleanliness
specifications. Under the food, drug and cosmetics act, FDA has prohibited the importation and
distribution of adulterated or misbranded teas.
We need to meet the requirements of,
Health department certification for food handling

A business license for the operation of the business; which is already in place in our case.
To be able to stand up to random health department health checks and be compliant with
the FDA guidelines.
16.10 (Final Selection) Global Market entry strategy

Any enterprise, whether it is a profit company or a non-for profit company, that pursues a
global strategy must determine the type of presence it expects to maintain in every market where
it competes.
59
A company may decide to export to the new market or it may decide to produce locally. It may
prefer full ownership of a local operation or it may seek partners .Once a commitment has been
made, changes will be difficult and costly. Thus it is important to treat these decisions with
utmost care as not only the financial return to the company is at stake, but the extent to which the
company can implements its global marketing strategy also depends on these decisions.
Entry Strategies could be broadly divided into;
Indirect Exporting
Direct Exporting
Foreign manufacturing strategies without direct investments
Foreign manufacturing strategies with direct investments.
3.2.5.a) Exporting as an entry strategy

Exporting to a foreign market is a strategy that most companies follow for at least some of
their markets.
We are looking at exporting our products as it allows us to manufacture the products for the
target market centrally and thus achieve economies of scale. When this occurs we can achieve;
Realization of more profits

Lower our prices
Or sometimes do both of the above.

60
We have two basic options for carrying out our export operations.
Indirect exporting- out target market to be contacted through an intermediary located in
Sri Lanka
Direct Exporting- Where we can reach our target market directly or through an agent in
that foreign market.
3.2.5.b) Direct exporting as our entry strategy

As competition is quite intense among suppliers to this industry in the US market, having
studied our opportunities in detail, we need to take a long term view and establish a strong export
strategy built on long term relationships with the US importers and buyers.
Having decided on direct exports as our entry strategy we will have to take a very proactive
role to understand and influence our target market.
However, direct exports need a high level of resource commitment in terms of time, effort and
financial resources.
3.2.5.c) Phases of entrance

Phase 1
In the initial phase of entrance into the market we would target the identified Food service
providers such as restaurants, small and medium food and beverage manufacturers and tea
blenders of specialized tea distributers who import from other countries.
The flow of goods will be through direct channel via export and in this phase a push approach
may be applied as the product is new to the market and mass selling maybe effective for future
brand recall.
Phase 2
61
As the volume grows and the demand for Ceylon organic tea increases, a distribution agency
would be appointed to meet the demand and distribute the Ceylon organic tea in the Netherland
market.
The distribution agent would help in smooth flow of goods and wider distribution and wider
penetration into the market and thereby increase the market share for our products.
3.2.5.d) Business growth from direct exporting

The success factors for our direct exporting strategy would be,
The commitment of our companys management team

Our skill and knowledge levels on export marketing
A good marketing and communications system
Adequate production capacity
Good operational backbone
Effective market research
And also effective national export policy which would support local export companies
like us.
And as our exports grow in volume and the demand for our organic tea increases we can grow
our business further by appointing and working with a distributor as,
They have more capability to influence the market

With their assistance we can gradually develop the operation in a wider scale with
systematic access.
17. Findings and Conclusion

With the information analyzed in this report it can be seen that HVA Foods Limited (HVA) has
an opportunity to market its Ceylon organic tea products under HELADIV brand to the
Netherland market.
62
As discussed above careful examination of macro environmental factors, buyer behavior,

cultural aspects, opportunities and threats in the market, screening of suitable product and entry
strategies has to be conducted in order to achieve its expectations.
18. Recommendations
I recommend to the HVA Foods Limited (HVA) to understand the international Market
screening, country selection concept and the tactics which we have given in the assignment and
confidently enter in to the Netherland market under HELADIV brand with Ceylon organic tea
products.
19. Annexures
Economy of the Netherlands
Zuidas in Amsterdam
Rank
24th (PPP, 2012 est.)
Currency
Euro
Fiscal year
calendar year
Trade organisations EU, WTO and OECD
Statistics
GDP
$709.5 billion (PPP, 2012 est.[1]
GDP growth
-0.5% (Real, 2012 est.)
GDP per capita
$42,300 (PPP, 2012 est.)
63
GDP by sector
Inflation (CPI)
Population
below poverty line
Gini coefficient
Labour force
Labour force
by occupation
Unemployment
Average gross salary
Average net salary
Main industries
Ease of Doing
Business Rank
agriculture: 2.8%; industry: 24.1%; services: 73.2% (2012 est.)

3.2% (June 2013 YOY est.)[2]
10.5% (2010 est.)
30.9 (2007)
7.746 million (2012 est.)
agriculture: 2%; industry: 18%; services: 80% (2005 est.)
8.7% (July 2013)[3] 9.25% (2014 projection) [4]
3,728 / 5,035 $, monthly (2006)[5]
1,980 / 2,673 $, monthly (2006)[5]
agriculture-related industries, metal and engineering products, electronic
machinery and equipment, chemicals, petroleum, construction,
microelectronics, fishing
31st[6]
External
Exports
$556.5 billion (2012 est.)
Export goods
machinery and equipment, chemicals, fuels; foodstuffs
Germany 26.3%
Belgium 14.1%
Main export
France 8.8%
partners
United Kingdom 8.0%
Italy 4.5% (2012 est.)[7]
Imports
$490.1 billion (2012 est.)
Import goods
machinery and transport equipment, chemicals, fuels, foodstuffs, clothing
Germany 13.9%
China 12.0%
Main import
Belgium 8.4%
partners
United Kingdom 6.7%
Russia 6.4%
United States 6.1% (2012 est.)[8]
FDI stock
$608.9 billion (31 December 2012 est.)
Gross external debt $2.655 trillion (30 June 2011 est.)
Public finances
Public debt
68.7% of GDP (2012 est.)
Revenues
$347.4 billion
Expenses
$386.6 billion (2012 est.)
Economic aid
4 bn (As of 2005)
Credit rating
Standard & Poor's:[9]
AAA (Domestic)
AAA (Foreign)
AAA (T&C Assessment)
Moody's:[10]
64
Aaa
Outlook: Stable
Fitch:[10]
AAA
Outlook: Stable
US$51.27 billion (31 December 2011 est.)
Foreign reserves
65
20. References
http://en.wikipedia.org/wiki/Culture_of_the_Netherlands
http://research.stlouisfed.org/fred2/series/CP0121NLM086NEST
http://www.tradingeconomics.com/currencies
http://www.ciafact.com/
https://www.cia.gov/library/publications/the-world-factbook/
https://www.cia.gov/index.html
https://www.cia.gov/library/publications/the-world-factbook/geos/nl.html
http://search.worldbank.org/all?qterm=Netherlands
http://search.worldbank.org/all?qterm=tea+market+in+Netherlands&title=&filetype=#
http://www.zenithinternational.com/consulting/market_intelligence
http://www.researchandmarkets.com/reports/2098872/tea_market_in_netherlands_business_r
eport_2012
http://www.amsterdam.info/netherlands/political-system/
http://www.mindtools.com/pages/article/newTMC_08.htm#sthash.VIMAnBfS.dpuf
http://www.internationalbusinessstrategies.com/market-research-reports/netherland.html?
referrer=gad1&gclid=CMGw_d2x6boCFQ8r2wodx1EASg
66

Int MKT Assignment

Uploaded by

Copyright:

Available Formats

You might also like

Int MKT Assignment

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Int MKT Assignment

Uploaded by

Copyright:

Available Formats

International Marketing Plan for HELADIV Brand Tea

FGS / PGDMkt / 2016 / 20

FGS / PGDMkt / 2016 / 00

FGS / PGDMkt / 2016 / 00

FGS / PGDMkt / 2016 / 00

FGS / PGDMkt / 2016 / 00

M Hafeez Afzal Nazim

FGS / PGDMkt / 2016 / 16

Subject: International Trade and Marketing

Post Graduate Diplomas in Marketing

16.6 Geographic Indicators............................................................................................31

3. Profiles of the Board of Directors

Mr. J. Raddalgoda - Executive Director

4. Productivity Award for World Class Tea Production

HELADIV's production process is;

ISO 22000 certified since 2009

Has a solid platform in terms of storage, flavoring, packaging, tea bagging

Has an effective traceability system in place

5. Unparalleled investment in Research & Development

7. HVA Product Range

Strong Brand all over the world Tea

Interactive relationship market / Good brand Image

ISO (International Standard Organization) certified

Financial strength and stability

Rely on third party suppliers

Social and cultural changes favoring for hygienically certified Tea

Export to more Countries

Appoint Franchises around the world

Innovation an technology development

Diseases are the big threat for Tea Plant

Competitors can offer similar products for low price

9. Michael Porters 5 Force Theory Analysis Model

Further there is a model that we needs to study to identify methods to handle

10. PESTEL Analysis

Political Factors in a country that could affect the organization

Primary factor in developing countries where they are politically unstable

Globalization and opening up of markets

Political affiliation and support to governments

Economic situation in the country, the GDP, Exchange rates etc.

Tax structures and export limitations and regulations

There could be different cultural groups within a society

Some of the socio cultural factors can be listed as follows

Demographic factors- population structure- age, family size, ethnicity, income,

Technological level of the country or infrastructure in the country.

Containerization and shipping / Genetic engineering / Nano technology is knocking doors

Concerns of environmental issues like energy saving

Adoption of ECO Friendly Recommended Packing

Legal aspects in the country like bureaucracy and taxation

ISO 22000 Food Safety Management System

HACCP Certification Hazard analysis for critical control point

11. The Heladiv Brand Equity

12. International Markets (Tea Export Market)

13. Companies International Aims

Table 1: Company Forecasted export mix for 2014

Source: HVA Foods Limited

Source: Tea Data Book

15. World tea Production & Trade in Global Tea Industry