Strategic Marketing for Tropicana in Somalia

This document discusses the strategic marketing approach for Tropicana's expansion in Somalia. It includes a PESTLE analysis of Somalia, market entry options for Tropicana, segmentation, targeting, and positioning strategies, and the company's focus on healthier fruit-based beverages.

Strategic Marketing

Executive summary
Tropicana is American multinational company want to expand in Somalia, a sovereign country in
Africa with its fruit’s juices. Pestle analysis of Somalia will help Tropicana company to
understand potential opportunities and threats. In addition, Market entry options development or
sale of the products or services or cooperate each other in achievement of organisational
objectives. The firm fruit-based beverages are particular focussing on their youth belonging to
lower- and middle-income groups. The firm need to focus on appropriate intensives growth
strategies to achieve the growth in Somalia country which includes market penetration, product
development, market development and diversification.

Contents
INTRODUCTION...........................................................................................................................3
PESTLE Analyse.........................................................................................................................3
Market Entry Options..................................................................................................................6
STP..............................................................................................................................................7
Porters Generic strategies............................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic marketing is the process of planning, developing and implementing manoeuvres to
obtains the significant competitive edge by outlining simplifying direct maps of company
objectives achievements. A well-defined feasible marketing strategy helps the organization in
meeting customer needs and attainable suitable goal. Companies are performing great strategy
for with creation of brand attachments and customer loyalty through different marketing
practices and tactics.
Tropicana is American multinational company primary markets fruit-based beverages
established in year 1947. The firm provides flagship juices, reduced sugar and calories along
with calcium fortified juices. Currently the firm want to expand in Somalia, a sovereign country
in Africa with its fruit’s juices. In this report, there will be proper macro environmental analysis
and different modes of entry which be turning out to be profitable for the firm. There will be
proper discussion of market segmentation and targeting of customer in Somalia country with
application of porter’s generics strategy to gains competitive advantage.
PESTLE Analyse
Pestle analysis provides a framework through which macro environment factors of a
market can be analysed. Analysis of these factors helps in identifying and understanding
different opportunities and threats that organisation can experience. Concerned with Tropicana,
company wants to enter into Somalia with its new product that is immunity booster juice
(Medinilla, Shiferaw and Verona, 2019). Pestle analysis of Somalia will help Tropicana
company to understand potential opportunities and threats and what strategies can company
make to deal with these. Pestle Analysis is as follows-
Political
Political environment involve influence that political conditions of a marketplace can
have on success and operations of the business. This environment consists of elements that are
government policies, business regulations, budget conditions and plans. Essential functions in
Somalia are performed by government institutions and because of bicameral legislature, this
enhances controlling and governing of Somalia. This can create difficulties for Tropicana as
many of the functions will be directly carried out by government organisations. Political
conditions of Somalia also caused lack of capacity in every part of the country and starvation and
diseases cause significant deaths in the country. This is in some way negative for Tropicana in
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terms of capacity of people to buy its products. Political situations are getting stabilized in
Somalia. Even in some of the negative situations many of the businesses can be benefitted by
investing in Somalia because of its agriculture capacity.
Economical
This involves GDP (gross domestic products) and changes and size of it. Other than this
per capita income, inflation and interest rates, unemployment are also part of this. Concerned
with these economic conditions of Somalia are not favourable. GDP is terms of purchasing
power parity is US$ 13.324 billion in total and per capita GDP is US$888 with 2.900 changes
from the year 2018. Nominal GDP in total is US$ 5.218 and per capita income is US$348. In UN
Somalia is classified as least developed country (Pape and Wollburg, 2019). In terms of its
human development index, it has reduced to 0.351. This means that overall economic condition
of Somalia is not an opportunity but a threat for Tropicana, but with help of right strategies,
threat can be overcome. However, agriculture is strength of Somalia and this also is an
opportunity for Tropicana as it creates fruit-based beverages. Other than this, poor infrastructure
of the country is also a negative element that can affect overall success of the operations of an
organisation.
Social
This factor of the macro environment involves family relationships, attitude of people
about work, standard of living and attitude towards health. In relation with Somalia this factor is
weak and involves much of negative elements. This means that there is high rate of poverty, civil
war in the country, high rate of illiteracy, malnutrition and high death rate because of poverty
and malnutrition. These are certain factors that can act as both opportunities as well as threat.
This means that products like healthy mix fruit juice can be useful for malnutrition, but poverty
is another element that can serve as a threat for success of Tropicana in Somalia (Mukilya,
2019). Illiteracy is also an element that can be considered a threat as such state make it difficult
for people to understand benefits of particular product and what value it will provide to them.
Technological
This involves technological development in terms of connectivity and
telecommunication, internet, on-line facilities and training, processing and innovation of the
products. Infrastructure development is also one of the elements of this environment. Concerned
with telecommunication several firms are operating and competing in Somalia to provide
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mission infrastructure and Somali entrepreneurs are investing in these firms. These entrepreneurs
are being backed by China, South Korea and Europe. Efforts in this involve providing affordable
and mobile phone and internet services. This makes telecommunication and internet its strength.
Additionally, radio, print and television and postal services are also strong. This provides
opportunity for Tropicana. Inefficient technology can affect performance of Tropicana in terms
of its production and productivity.
Legal
This involves different laws and regulations in a country that affect and influence
operations of a business in that market. These involve different employment regulations,
business and industrial law and regulations. Concerned with Somalia there are three types of
legal systems that are Xeer, civil law and Islamic law (Ofosu-Boateng and Jiping, 2020). Other
than this, Somalia does not have national legal system and there is no definite explanation of
legal matters. This is an opportunity for Tropicana as they can feasibly work and carry out their
business activities in Somalia without any definite threat of being opposed by any kind of law or
regulations. These are weaknesses for the country but can work as opportunity for Tropicana.
This means that overall legal environment of Somalia is favourable for Tropicana.
Environmental
In terms of environment overall environment of Somalia is composite of five different
eco-systems. Some of the environmental organisations are also operating in Somalia that are
involved in promotion of awareness regarding ecological concerns and mobilised environmental
programs in all governmental sectors as well as civil society. A tree planting campaign is also
being introduced in Somalia. Concerned with climate because of Somalia’s proximity to the
equator there is no much variations in climate of Somalia. Most of the times there is hot
conditions along with periodic monsoon winds and irregular rainfall. Other than this, prominent
economic activity of Somalia is agriculture and that is linked with environmental conditions
(Mukilya, 2019). This is why Tropicana can use environmental conditions of Somalia to produce
its raw material. Fluctuations are less and raw material can be produced as per its prominent
climatic conditions.
Market Entry Options
Market entry options refer to different ways through which business organisation can
enter into another country market. Tropicana that is American multinational company that makes
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fruit-based beverages wants to enter market of Somalia. Different possible entry options for
Tropicana are-
Strategic alliances
Strategic alliance can be defined as agreement between two or more countries in which
they agree to cooperate each other in manufacturing, development or sale of the products or
services or cooperate each other in achievement of organisational objectives. These agreements
in form of strategic alliances are mutually beneficial (Gundolf, Jaouen and Gast, 2018). There
are different ways in which strategic alliances create value for organisations such as by
improving current operations, changing and influencing competitive environment and also
facilitate entry of one organisation in other market. For example- Tropicana when select this
option for entering into Somalia, company will need to create agreement with local organisation
of Somalia having same or similar operations.
Merger and Acquisition
This is another option for entering into market. Merger and acquisition involve
consolidation of two companies. Merger is a state in which two companies consolidate to form
one company. Acquisition is another option in which one company is taken over by another
company. For example- In relation with Tropicana for merger it will need to create new firm
with local firm of Somalia by merging their companies (Agarwal, Kwan and Paul, 2018). In
acquisition Tropicana will need to takeover Somali company in order to get ownership of that
company and enter into Somalia. Merger and acquisition often take place by purchasing assets,
purchasing common share, exchange of share for assets, and exchange of shares for shares.
FDI (Foreign Direct Investment)
Foreign direct investment is an investment that is made by one country’s party or
organisation into corporation or business organisation in another country. FDI offers and allow
investor to establish a lasting interest. There are several benefits of FDI such as market
diversification, tax incentives, lower cost of labour. There are different types of FDI that are
horizontal, vertical and conglomerate. Horizontal means investing in same type of business,
vertical investment involves investment in different but related activities with a business.
Conglomerate investment is one in which parties and individuals invest in unrelated business in
foreign country. For example- Tropicana, in FDI company will need to invest in Somali
organisation that in horizontal it can invest in local fruit-based beverages provider. In vertical
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FDI Tropicana will invest in different type of organisation than its organisation but related in
some way with its current business (Nor and Masron, 2018). Other than this, in conglomerate
investment Tropicana will need to invest in a completely different organisation from its current
business.
Above discussion outlines that there are different options available for Tropicana while
entering into Somali market. Among these discussed options merger and acquisition is suitable
option for Tropicana because, entering into market with this strategy will facilitate operations of
Tropicana in Somalia. Environmental factors of Somalia are highly distinctive than of US (home
country of Tropicana) and this is why in order to successfully operate in Somalia assistance of
local firm will be vary facilitating.
STP
Segmentation, targeting and positioning is the familiar strategic approach in modern marketing
used for effective marketing communications by prioritising preposition. This will be helpful in
delivering personalised and relevant messages regarding the engagements with differ audiences
in perfect manners In the term of Tropicana, the core objective for expansion in
Somalia is to increase awareness of healthy juices made up of 100% natural ingredients and
portray products as healthy drink. The firm is promoting health and wellness of the individual
along with focussing of reformulation with developing niche business.
Tropicana global and remarkable market strategy is providing premium deliverances of
the products to the consumers. The firm pays focus on refrigerated juices among with giving
tropical pure premium for getting more level of flexibility and visuality to the consumers. This
help firms are creating point of differentiations in competitive beverage markets.
Segmentation
The segmentation strategy used by Tropicana is smart approach trying to reach high
profits level of company. The juices are basically made up of the 100% natural ingredients labels
everywhere on the firm websites. The firm is paying major level of attention on demographics
and psychographic segmentations. The firm fruit-based beverages are particular focussing on
their youth belonging to lower- and middle-income groups. On the other hand, in term of
psychographic segmentation, it is targeting the individuals or population who are having high
level of consciousness and have preference over drinking fruit juices over coffer and soda. This
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segment is actually catering those customers who look for healthier options and will take
proactive efforts to take care of their health.
Targeting
Targeting is narrowing the concept of segmentations by looking out in more specific
manners by evaluating potential and commercials attractiveness of each segments. This can be
done on basis of criteria size, differences existing between segments, the proper anticipation of
money or incomes along with focussing of different benefits the firm is prevailing upon.
The main focus in targeting the customer Tropicana are the youth or working adults aging
between 21 to 35 looking out to be very concern in terms of health’s. They’re more conscious
regarding the nutritious diets. In addition to that’s they have major preference to add their
healthy mix up of fruit preferences into lifestyle embarking it to their families and healthier
outlook options. In order to have the effective targeting of customer, Tropicana tends to have
sections on the website informing potential consumers with immense benefits of the Tropicana
juices. The firm is targeting customer through adopting the appropriate cultural programmes
such as counselling, childcare, educational and employment services and youth development.
Product positioning.
Positioning is the last element of STP process as this makes product unique and users
considered regarding the distinct benefits. This will give out the appropriate USP to the product.
Company is prevailing it’s with goals strategies focused in providence of healthier and nutritious
beverages. Tropicana have positioned itself as refreshing and healthier drinks. Product are
considered to be suitable for customer who don’t wants sugar-based beverage and to main
healthy cholesterols in body by avoiding typical heart situation. the firm have developed the
strong brand images along wo positioning itself substitute of fresh juices and have created the
strong market. Currently the firm is seen as international brand along with catering the time
pressed millennials who is concern about customer nutrition and healthy hacks which clearly
suits their lifestyle in perfect manner. Hence, it can be best as Tropicana issuing very youth
focused strategy with gaining consumer sights for becoming the relatable brand for youth.
Porter generics strategies
Porter generic strategies is the strategic framework describing companies to pursue competitive
advantages by choosing the right market and development strategies. The framework is mainly
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focussing on three strategies such as cost leaderships, differentiation and focus. Companies can
avail the proper competitive advantages either lowering specific cost in markets or differentiating
its product from its competitors along with adding premiums value to dimensions Tropicana is
the multinational firm wants to expand in Somalia with high recognition of target market
segment. As the firm have make its expansion in the country for first time turn out to be
challenging to sustain market leadership positioning along with increasing market share without
any significant efforts. Being a global brand with strong presence and competitive positionings
will lead Tropicana with critical factors providing edge against competitors in Somalia.
Tropicana need to adopt the combination of cost leadership, differentiation and focus strategies
in manner of handing competitive positioning with expansion of customer base expansions in
increase in sales objectives. The firm need to focus on appropriate intensives growth strategies to
achieve the growth in Somalia country which includes market penetration, product development,
market development and diversification.
Porters Generic strategies
Cost leadership
This involves strategy for gaining competitive advantages by lowering cost as compared to
competitors which can be used by Tropicana in Somalia. In this approach firm will target lower-
and middle-income groups which is the largest population in customer base and pays high
importance’s for meeting needs of consumers’ segment. In addition, company can proclaim to
have discounting offer and organizing of various campaign for increasing brand popularity and
encourage consumption. The development of new products to accomplishes corporate growth
strategies. This is helping out firm quickly actively seeking market expansion opportunities.
Tropicana have ability to minimize the cost and attain cost leadership positions allow
organizations in grow successful manner. the firm will understand the importance of cultural
awareness and built in effectives management mechanism in perfect manner. This is helpful in
encouraging sales growth with current customer base. This have inclusion of activities promoting
existing products by accomplishing growth objectives. Aggressive marketing strategy helping in
constantly reaching costumer view point
Broad differentiation
Differentiation is most common approach used by company for building the competitive
advantages. Tropicana is the global brand looking at worldwide presences providing within
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affordable prices, strong brand name and flavour. The combination of cost leadership and
product differentiation is best approach for strategy to achieve proper growth objectives.
Tropicana should be embedded to have innovations and addressing consumer growing health
concern. Tropicana immunity booster will differentiate it from its competitors and expand the
scope of opportunities helping out in building the strong and loyal customer base in perfect
manner. In addition, the firm can use it brand logo in unique and distinctive manners creating
better presence in evoke set of target consumers and turned out to be strong differentiating
factors. The firm can have increase in different marketing and promotional activities bringing out
of low return encouraging intensive growth strategies. The brand awareness gained through high
market penetrations offering new products to existing and new consumer market.
Recommendation
Hence, it is purely recommended for the company to have proper implication for the cost
leadership and broad differentiation strategy paying ago level of attention of market development
aspect in the country of Somalia. as this turn out to be relations with targeting the existing
competitors, resources and efforts as the company leverages in developing the brand awareness
and customer loyalist. consumer have ability to offer the novel new achieving growth in existing
consumer markets in respective manner. The firm utilize brand awareness and strength launching
related products in global drink industry. The firm need to have well managed products portfolio
with related diversifications along with offering the risk emerging ability and balance emerging
trends.
CONCLUSION
On the basis of above discussion, it can be concluded that environment of Somalia is
highly distinctive from US and this is why Tropicana requires right strategies to ensure success
in Somalia. Selection of right market entry and target market is one of the most important part of
strategy creation. Market entry option selected for Tropicana was merger and acquisition because
through this Tropicana will be able to get assistance from local organisations of Somalia. This
will help in effective operations of Tropicana in Somalia. This report later also discussed about
Porter’s generic strategies for Tropicana that it can utilise in Somali market.
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REFERENCES
Books and Journals
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