A Report

On

International Marketing Strategy for Frylite of Ireland to expand in Georgia

Submitted to:

Submitted by:

Session: 2021-2022
 Table of Contents

S.no. Particulars Page no.

1 Introduction 3

1.1 Vision 3

1.2 Mission 3
2 Environmental Scanning 5

2.1 Political factors 5

2.2 Economic factors 7

2.3 Social factors 9

2.4 Technological factors 10

2.5 Legal factors 10

2.6 Natural Environmental factors 11

3 Potential Market Opportunities 12
4 Marketing Mix 14
5 Developing the Global Marketing Startegy 16
6 Conclusion 17
References 18

International Marketing Strategy for Frylite of Ireland to expand in Georgia

1. Introduction

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Frylite is an Ireland based leading supplier of cooking oil and also a collector of

waste oil and even food. The company claims to provide complete oil management

system with all in one oil supply and waste collection system. It provides cooking oil

to businesses like bakeries, restaurants, hotels and fast food outlets and collects the

used oil as well and that too for free (frylite.com).

The company has defined its values very clearly. The values include respect for

each other and customers, working on relationships with employees and customers,

striving for excellence, keeping intact the work ethic by delivering the customer

promise and continuously working towards success.

1.1 Vision

The vision of the company is to be The Natural Choice supplier and collector of

vegetable oils for restaurants, catering and food industry. Along with this the

company will enhance its reputation as the industry leader by delivering exceptional

service, quality and value for money by continuously investing in its people systems

and communities (https://frylite.com/about-us/vision-values/)

1.2 Mission

The mission of the company is to source products which are healthier and high in

quality; maintain and improve the certified standards and work in partnership with the

customers in order to deliver the one stop value for money service which meets the

needs of the customers.

The company currently provides seven varieties of the cooking oil namely, Rapeseed

oil, Soyabean oil; these oils are available in the packages of 10 litre, 20 litre and bulk

ordering. Frylite gold available in 20 litre packaging, Beef Dripping in 10kg

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packaging, FryMax in 12.5 litre packaging and Olitalia Extra Virgin Olive oil. All of

these varieties have their own benefits and suitability. It has five depots in place for

the distribution in Strabane, Lisburn, Dublin, Galway and Cork. It has a staff of

approximately 230 people across the existing sites. The major concern for the

company is to cut down on the carbon emissions and it aims t be completely carbon

neutral by 2030. As per the latest article on Belfast Telegraph, the company is

planning to use its oil products to produce fuel through the anaerobic digestion to

power its vehicles (Canning, 2021).

The pandemic of Covid-19 affected the business of Frylite along with the economy of

Ireland. As per the annual report of the company published in April, 2021, the

business had to face a fall from £1.5m to £361,288 in profit before taxes and the

revenue also fell from £39.9m to £33.8m over the year.

The company now wants to expand across the country. The selected country is

Georgia. The purpose of this report is provide the comprehensive analysis of the

business environment for Frylite in the country of Georgia. Along with this, the report

aims to identify the potential market opportunities for the company in this new

market. On the basis of that a marketing mix is suggested and the other aspects of

its international marketing strategy are discussed and recommendations are made

on the basis of environmental scanning done.

2. Environmental Scanning

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The process of acquiring information on events and their relationships within an

organization's internal and external environments is known as environmental

scanning. The primary goal of environmental scanning is to assist management in

determining the organization's future direction (Menet, 2016). There are two types of

environments that a business has to scan; micro and macro. The micro environment

deals with factors such as suppliers, customers, competitors etc. The macro

environment presents a broader picture as it includes the factors such as political,

economic, social, legal and technological environment within a physical territory the

business operates in. In this report we primarily aim to analyze the macro

environment of Frylite in the country of Georgia where it wishes to expand its

business.

There are various tools available to scan the macro environment. One such tool is

PESTLE. It represents Political factors, Economic factors, Socio-cultural factors,

technological factors, legal factors and the natural environmental factors. The

analysis is done as under:

2.1 Political factors:

Election results as well as decisions made by other commissions and

agencies, are all examples of political factors. The environment's political

sector imposes actual and potential constraints on how an organisation works.

Regulation, taxes, spending, takeover (forming a royal company), and

privatisation are among the most essential government actions. The contrasts

in the political climate between local, national, and international subsectors

are frequently fairly striking. In some locations, political instability makes the

entire form of government vulnerable to revolution (Allard, Martinez &

Williams, 2012).

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As per the report published in NewEurope (Feburary 26, 2021) by

Zurabashvili, on the current political situation of Georgia, the country has been

facing a political crisis for more than three months that is from the end of

2020. Many incidents happened back to back when Nika Melia, the chairman

of the country's major opposition party, the United National Movement (UNM),

was condemned to prison by a Tbilisi city court. It was followed by a day later

that the Prime Minister Giorgi Gakharia announced the resignation which was

effective immediately. Gakharia was replaced by former Prime Minister Irakli

Garibashvili, who was selected by the ruling Georgian Dream party only hours

after Gakharia's declaration.

The court's decision to imprison Melia exacerbates Georgia's protracted

political crisis, which began on October 31, 2020, when there were

disagreements over the results of parliamentary elections. There has been a

constant tiff between the two major political parties of Geogian Dream and

UNM since the last decade. The UNM was frequently accused of and linked to

human and property rights violations, mass incarceration, crackdowns on

protestors and opposition groups, and pervasive unlawful monitoring during its

second term as the dominant party. Hopefully now, Georgian Dream will be

able to stabilize the political scenario of the country.

However, as per the report, In the current political crisis, the Georgian Dream

continues to display a strong aversion to lowering the heat. This hinders the

country's chances of improving its sagging democracy. A rising polarisation

will hinder any prospect of continuing to develop a democratic Georgia as

long as strong disputes and a lack of commitment exist between the ruling

party and the opposition (Zurabashvili, 2021).

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 Figure 1: Physical Situation of Goergia

Source: https://country.eiu.com/georgia

2.2 Economic factors:

As per the GEOSTAT Report (2017), Georgia is a middle income country with

US$4046.8 GDP per capita. In recent years, economic reforms and rapid

growth have not entirely addressed the country's primary economic concerns

which are, poverty and unemployment. While the national unemployment rate

is 13.9 percent (GEOSTAT, 2017), young unemployment in some areas

surpasses 40 percent. Poverty fell from 35 percent in 2006 to 17.1 percent in

2016, according to the World Bank. During the same time period, inequality

fell, showing that prosperity was being shared more widely. However, the

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economy has not been able to increase job availability or reduce

unemployment.

According to world bank data, for the year 2020, the GDP of Georgia fell to

-6.16%. Figure 2 and figure 3 provide the view of expenditure on GDP and

origin of GDP respectively in Georgia.

The inflation rate in Georgia was about 4.85% in 2019 and rose to 5.2% in

2020 and still on the rise. Thus the trend of elevated inflation is likely to

prompt further interest rate rises in later part of 2021.(

https://country.eiu.com/georgia)

Figure 2: Expenditure on GDP

Source: The Economist Intelligence Unit (https://country.eiu.com/georgia)

Figure 3: Origin of GDP

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 Source: The Economist Intelligence Unit (https://country.eiu.com/georgia)

2.3 Social factors:

Family ties and friendships are essential elements in Georgian culture.

Georgians are known for spending a large portion of their leisure time with

their friends. Collectivist societies are characterised by this trait, as well as a

general lack of social trust. The simplicity of launching a business, the

availability of family links and friends in Georgia, and the country's geographic

location are all factors that encourage foreign investors to come to Georgia

(Muehlfried, 2008).

Surprisingly, the majority of international corporations see family ties and

personal relationships as essentially insignificant for company profitability,

despite the fact that one-third of firms say they use their social links to buy

real estate in Georgia. Furthermore, social relationships play a larger

influence in deciding the location as well as the first stage of performing a

commercial transaction, whereas social contacts are less important in the

later stages of the business. Because of the Soviet system's scepticism of

formal institutions, Georgian society trusts informal networks and depends on

them in business transactions (Shengelia, 2012).

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2.4 Technological factors:

Local enterprises in many smaller nations and developing economies rarely

have access to high–end information, hence innovation is frequently reliant on

the presence of a multinational corporation (MNC) in the country.

Unfortunately, Georgia's export and economic structure, which is dominated

by agricultural products, raw materials (gold, copper), and other commodities,

leads to two negative consequences (Meskhia & Shaburishvili, 2014).

Georgian businesses are not very innovative. This makes it difficult to achieve

and maintain international competitiveness; the Georgian economic growth

model does not relate to or even resemble that of developed countries. In the

global market for innovative items, Georgia does not even have a single

specialty. Despite this, a move to a more innovative development paradigm is

critical. Georgian enterprises have no chance of competing with firms from

industrialized and developing countries (Maglakelidze, 2020).

2.5 Legal factors:

Apart from the content of laws, which must be tailored to the needs of a

market economy, the rule of law is an important determinant of the business

environment (Paurova & Gregova,2020).Foreign investors and local actors

alike face a variety of hurdles while doing business in particular jurisdictions.

Georgia is a developing country that is currently undergoing legal reforms in

order to attract industry, and it is doing so in accordance with European legal

values in order to become a full member of the Common Market. International

business agents are becoming more interested in Georgia as a result of policy

and institutional reforms aimed at liberalization during the transition phase. As

a result, several international corporations have entered the Georgian market

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 in the previous decade. Manganese mines and the Batumi Port have been

purchased by British companies (Abuselidze & Katamadze, 2018). The laws

that would impact Frylite will be laws related to international investment and

its protection, dispute resolution, general labour laws, obligations in the

context of AA/DCFTA, laws on consumer protection etc.

2.6 Natural environmental factors:

The inadequate disposal of the used frying oil presents various ecological,

environmental and management problems for a state. The major

environmental issues that the country is facing are, pollution, land and forest

degradation and waste management (Singh- Ackbarali et al, 2017

). All of these leading to climate change and loss of biodiversity. Though there

are policies in place to solve these issues but not much has been done in this

area. Frylite can be a source of change and motivation for the business and

also the society as a whole to accept Frylite as part of the system. Since the

major feature of the company is that it does waste management for free for its

customers. It not only includes used oil but the food as well. Georgia's waste

management issue causes several types of pollution and has a detrimental

impact on public health. The National Center for Disease Control reports that

respiratory disease morbidity per 100,000 people is on the rise

(www.georgiaconservancy.org).

3. Potential Market Opportunities

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Georgia's economic growth has been modest (2.7 percent real growth in 2016), but

the country is making significant headway in terms of strengthening its business

environment (Benidze, 2019).

As per the report by GEOSTAT in 2016, the economy of Georgia is majorly run by

the trade and repair services. The hotels and restaurants industry accounted for 2%

of the total business turnover in the country in 2016 (Figure 4).

Figure 4: Percentage share of hotels and Restaurants out of total business

activity in Georgia

Source: https://www.pmo-

bc.com/storage/app/uploads/public/5ce/795/dba/5ce795dba596c190438918.pdf

There are certain factors prevailing in Georgian market which must act as an

opportunity for Frylite in Georgia:

- Oilve oil has got a boost from healthy profiling in the year 2020, while local

production emerged as imports were affected due to the pandemic. Edible oils

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 benefited from state subsidies during the COVID-19 pandemic, which will

likely help keep retail unit costs consistent.

- Although, Georgia is also starting to see some local edible oil production,

albeit in small quantities. Here, Frylite has a competitive advantage as it

enjoys economies of scale from its vintage in the industry.

- Bunge Limited is one of the leading players in the country and operates

through its subsidiary Edison SpA. But the opportunity for Frylite is that this

company is present only with the sunflower seed oil brand Oleina. Though this

competitor has the advantage of being in the country for a decade but here

Frylite has the opportunity to introduce its wide variety of edible oils.

- The company has a huge opportunity of taking over the market with its

biggest weapon which is the waste food and oil collection for free. It shall

serve two purposes; it will attract the customers because now they shall have

the opportunity to deliver their social responsibility by contributing in reduced

carbon footprint. Secondly, they it shall reduce their overall costs of oil

management.

- As per a report by Euromonitor, there are various opportunities in the

Georgian market for the suppliers of olive oil as future growth in olive oil is

projected due to changing food preferences and increased health awareness.

Apart from this, as per the same report, In the short to medium term,

economic instability will most certainly stifle edible oil innovation.This is where

Frylite will stand a chance and thus can introduce its wide range of edible oils

in the hospitality and food industry of Georgia (Euromonitor, 2020).

4. Marketing Mix

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The marketing mix model, sometimes known as the 4Ps, is a framework for

analysing a company's marketing efforts. It assists in evaluating essential aspects of

the organisation based on the 4Ps: Product, Price, Place, and Promotion. It is

especially true when the company has decided to expand its business in a new

market. The following marketing mix has been devised for Frylite in the light of

PESTLE analysis done in the previous section of the report.

Product strategy: The product line of Frylite is not very wide but is deep. It currently

provides the number of cooking oil options to the carters, restaurants and food

businesses. It shall remain the same in the new market as well. The variety of oils

provided by the company serve different purposes. For instance, oil for different

temperature conditions of a physical location, oil for different foods such as salads,

beef etc., oil with different levels of fats etc.

However, as per the local produce and the cuisine, olive oil is the most popular oil

used by people of Georgia (http://agr.georgia.gov/state-national-olive-industries-

continue-to-impress.aspx). Thus the company can make olive oil its face to enter the

market. Apart for this, the oils used in the country are coconut and vegetable oils

including soybean and palm oil (Refined oil).

Price strategy: The company will have to choose market penetration strategy in

Georgia as the current market players in Georgia have benefitted from the subsidies

provided by the government from the time of pandemic. The company can choose

subsidized pricing for olive oil for which the major competition is expected but for

other oils it can choose a good mark up as the oils are new to the market. This can

be done only after it can communicate the benefits of the oils to the target customer.

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Place and distribution strategy: There are two leading manufacturers of edible oils in

Georgia namely, Mziuri and Karva. They are fierce competitors. The major

competitive edge that they enjoy in the market is their distribution and shelf

positioning. Frylite may face challenges in this area as a new entrant in the market.

But the fact is that the company need not to focus on shelf positioning as the target

customers are not households but the hospitality and food service businesses. Thus,

the distribution may also not pose challenges because the company provides bulk

packaging and that too is environmentally safe as the buckets are claimed to be

reusable (www.frylite.com). However, the company needs to build up its online

presence in the country by registering on business websites so as to increase its

customer reach (Lee et al., 2018).

Promotion strategy: The top companies operating in the Georgian market have used

the fact of them being local as their promotion strategy. For instance, Karva's local

profile, economy, and premium brand positioning appeal to a broad range of

consumers. Apart from this, strong advertising and in-store positioning help the well-

known Oleina brand. For the promotion, Frylite can position its brand as the more

environmentally sustainable brand of edible oils as it has been seen in the PESTLE

analysis that people are concerned about their natural environment thus may give

preference to the brand which can help them reduce the damage to the environment

along with providing quality goods and services of waste management.

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 5. Developing the global marketing strategy

There has been no such concept of such a vast range of edible cooking oils by a

company though there is strong presence of few competitors in case of sunflower oil

and olive oil. But the benefits and features of the product range of Frylite is nowhere

to be seen in the Georgian market. The fine cuisine of Georgia presents a good

opportunity to provide the food service market with oils which are environmentally

sustainable and provide health benefits as well as compared to other refined oils.

The company will enter the market with olive oil as its prime offering as this is the oil

most preferred by people in the cooking (http://agr.georgia.gov/state-national-olive-

industries-continue-to-impress.aspx). However, the product will be offered at

subsidized prices in the initial stage due to two reasons. First the competition already

exists and on the top of that after pandemic businesses started preferring local

produce. Secondly, Frylite can afford it due to its economies of scale . Furthermore,

the packaging need not to change as the 20ltr packaging will be a good enough try

and small enough to afford by even the small businesses.

The company shall position itself as the most environmental friendly organization

which provides number benefits to its customers apart from providing the great

quality products. The service of waste oil collection and its disposal shall be highly

promoted which shall not only justify the claim of being environment friendly but

customer friendly as well because it will provide them ease to choose Frylite over

other brands.

The company will have to abide by the local consumer and environmental laws

which will be easier for Frylite in Georgia as it already has covered so many aspects

of legal requirements in its operations and services.

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There have been many changes which are realized in the food service industry in

and after the year 2020 as the pandemic hit the globe. The food service faced a

huge hit during this time due to the lockdown and people are somewhat still

apprehensive about eating out as the pandemic is not over yet. But as per the

research by (Beckman & Morse, 2020), traditional restaurants will benefit from low

prices and the continued popularity of Georgian cuisine among tourists and locals.

Apart from this there have been certain changes in the industry like modern eateries

that serve quick and easy meals are gaining appeal, and the brunch idea is

becoming more popular. Outlets that take a quick approach to online development

have a longer lifespan.

However, the company needs to devise a strategy for overcoming the challenge

which is projected to exist in the near future. The report by Euromonitor suggests

that as competition grows and customers seek to support their local economy, locally

produced olive oil will gain momentum.

6. Conclusion

Georgia's transformation processes have resulted in extraordinary developments,

which have produced both opportunities and challenges for business agents.

Managers today operate in a very different commercial environment, one shaped by

a changed political system and governed by fundamentally new institutions. Among

other things, there has been a gradual revision of regulating norms in the areas of

taxes, customs, banking, and insurance; the loss of old markets; high inflation rates;

the emergence of new money and securities markets; new interest rates; and large-

scale privatization. Frylite has a fair chance to enter this market. Though there are

few challenges which exist in the market like the pricing challenges and preference

to locally produced olive il but there is also a fair share of opportunities which exists.

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It has been seen in the PESTLE analysis that people are concerned about their

natural environment thus may give preference to the brand which can help them

reduce the damage to the environment along with providing quality goods and

services of waste management. With a different marketing mix strategy than the one

it is using in Ireland will land the company in a fairly good position in Georgia even in

the initial period as well. The company must work and invest heavily on its brand

positioning and promotion through online channels as well.

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