Improving Distribution Channel of Nudie Juice in Australian Beverage Industry

BUS703 Managing Research
Task 2. Research Proposal
Assignment template
Student name & ID:
Project Title:
1. Introduction and Background
Nudie Juice is a Australia based Beverage manufacturing company. The company has
been founded in 2003 guaranteeing the 100% purity. Currently the company consumes
5,000,000 pieces of fruits to manufacture their various beverage products. Nudie Juice has
29% market share of the Australian Beverage industry. 75% of its fruit supply is managed
within the nation while only 25% of fruits are collected from abroad (Nudie.com.au 2017).
In the Australian market of Fruit Juice, the major competitors of Nudie Juice are Bickford’s,
Just Juice, Harvey Fresh and Daily Juice. Nudie is famous for its product diversity. The
company manufactures both mono flavoured and combinational flavoured juices. This
product diversity has made 60million USD of revenue for Nudie Juice. One of the closest
competitors of Nudie Juice is Bickford’s who has 20% market share (Nudie.com.au 2017).
The mission of Nudie Juice is to provide healthy fruit Juice of top quality while making
huge market share and profit.
The company is currently experiencing strong rivalry within the beverage market of
Australia. The main causes of this competitive environment is intervention of multinational
beverage manufacturing and supply chain companies, new entries with high potentialities,
Efficient distribution network and diversities of existing competitors. The major weakness
of Nudie Juice is its inefficient distribution channel. As per the recent market research and
annual forecast of this company, Nudie Juice has lack of reaching power to the terminal
consumers. The market availability of the products is comparatively lower than other
companies. In spite of effective promotional activities the potential buyers is not getting
adequate amount of products through the conventional distribution channels, corner shops
and super markets (Heath, 2014). The varieties of products cannot reach to the target
consumer in sufficient quantity while having enormous amount of manufacturing rate. This
weakness is hindering the brand value, consumer base power, competency and other
factors that could improve the profitability of the company.
2. Management problem

Nudie Juice has recently conducted a market research through which it has been identified
that their current weakness is insufficient distribution channel that is not capable to
distribute the divertive products to the target consumers. The management has to identify
what kind of product the customers are getting easily and which products are not available
adequately in the market. This will help to identify the weakest distribution channel that has
to be improved. Apart from that information about most available products in the market
that is reducing the number of potential buyers has to be collected. It will help to determine
the best strategy to regain the market recognition.
3. Literature review
Beverage industry of Australia:
The soft drinks manufacturing industry has been showing the moderate growth since the
last five years. At the same time, the intervention of internationalise beverage chain
regulates the larger section of the Australian market of non alcoholic beverage products
(Huang et al. 2015). The price of competition is also very high that makes the business
opportunity narrow for the novice level company. From 2017 the industry revenue has
increase 1.7% that acts as the advantage and disadvantage for any moderate level
companies (Sacks et al. 2018). The Australian government is not making any significant
changes in the traditional rules and regulation such as trading low, contractual ethics, food
and safety and others. This stable legal environment is favouring the potential growth of
this beverage industry to some extent. On the other hand the soda based beverage market
is unable to influence the traditional market demand of fruit juice (Alkaya and Demirer
2015). This specific feature is making the soda based beverage companies more attracted
towards fruit juice production. On the other hand, from the past few years the national level
fruit supply chain has failed to supply adequate raw material to this industry that increase
the competitive environment (Huang et al. 2015). In other part of the globe some major
supply management has made a near monopoly or competitive duopoly market, where in
Australia the beverage industry is still under distributive ownership.
Importance of distribution channel:
Like any other operation associated with the production and development of the product
distribution chain management is also a chief regulatory factor that influences the
operational efficiency, market share, customer strength and even the potential revenue of
any company (Spowart and Wickramasekera 2012). In organisational operation
distribution management is considered as a part of outbound logistics that is responsible to
make the produced product available to the target market segment. The potential buyers
will not get their desired product in adequate amount without the intervention of efficient

distribution network. Like any other industry, efficient distribution management can cause
beneficial business growth. However, some of the organisation maintains their integrated
supply chain with enough control on operation, while other organisations depend more on
the external independent distribution chains (Moretto et al. 2014). To regulate the
distribution chain the depended company needs to maintain additional partnership and
contractual relationship with other logistic companies. This policy reduces the operational
cost for market distribution while increasing the dependency on external environment. The
bargaining power of the distribution management also influences the competitive
environment of any industry.
Consumer behaviour and market trends:
The socio-psychological environment of consumer segment influence the huge amount of
business opportunity of any industry. In food and beverage industry of Australia the
potential consumers currently prefer more heath drinks over the carbonated drinks. The
organic fruit processing will going to be the additional crucial components of this non
alcoholic and non carbonated beverage market (Jensen et al. 2012). The bigger brands
are currently trying to incorporate this profitable strategy in the Australian beverage
industry where the moderate or lower level businesses will not have enough opportunity to
compete against those giants. Apart from that after the innovation of Web 2.0 the influence
of social network and online promotional activities has become huge in any corporate
environment. Consumers are free to get enough review about a particular brand to build
their own perspective about a company.
More that 73% Australian promotional activities are dependent on the online based
marketing, especially with social media promotions (Hutt and Speh 2012). More the 85%
of food and beverage companies of Australia have their own top rated social media pages
and forum (Ronit and Jensen 2014). The strategic implementation of this marketing tool
requires the accurate measurement of consumer behaviour. Through analysing the
consumer behaviour and market trends the operating company can build more effective
and attractive strategy to increase their brand recognition as well as customer base. The
social media based online consumer discussion forum also makes the marker research
more cost and time efficient. At the same time, consumer behaviour is also affected by the
promotional activities and industrial trends (Wilson and Gilligan 2012). The management
group of any organisation also has to monitor the consumer behaviour about the particular
industry as well as about the company itself.