BUS710: International Marketing Plan for MDH Spices in Indonesia

This report presents an international marketing plan for MDH Spices, focusing on its expansion into the Indonesian market. The report begins with an executive summary and introduction, outlining the company's objectives and the structure of the marketing plan. A SWOT analysis evaluates MDH's strengths, weaknesses, opportunities, and threats in the context of the Indonesian market. The product strategy details necessary adjustments to MDH's offerings to suit Indonesian consumer preferences, including packaging and flavor profiles. Market segmentation is discussed, with demographic, geographic, psychographic, and behavioral factors considered to identify target customer segments. The positioning strategy focuses on price, quality, and cultural relevance. The pricing strategy outlines penetration, economy, and promotional pricing approaches, while the mode of entry and distribution strategy recommends a joint venture with Royal spices. International promotion strategies are also included. The report also identifies potential problems, offers solutions, and suggests future management control and measurement systems. The conclusion summarizes the key findings and recommendations, providing a comprehensive marketing plan for MDH Spices' successful entry into Indonesia. Finally, references and an appendix support the analysis.

Running Head: MARKETING IN AN INTERNATIONAL ENVIRONMENT
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MDH Spices
Marketing in an international environment

MARKETING IN AN INTERNATIONAL ENVIRONMENT
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Executive summary
MDH spices is a well-known brand in various parts of the country by providing best quality
of spices. It can set up its business in other countries too by using effective planning
strategies for it. While entering into Indonesia, it will target the men as well women between
the age of twenty to fifty. Besides this, it also targeted those who are interested in cooking. It
will help the MDH spices to enter with great presence in Indonesia. It will enter the
Indonesian market by doing joint venture with Royal spices. It will help the company to
expand its business quickly. Promotion of its spices will be done on television or on the
website of Royal spices. In addition, it will also offer discount in the starting phase. In future,
it might face the problem regarding changing customer expectations or government policy.
Therefore, it will do the market research time-to-time so that it can cope up with the outside
environment.

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Contents
Executive summary...............................................................................................................................2
Introduction...........................................................................................................................................4
SWOT analysis of MDH.......................................................................................................................5
Product strategy.....................................................................................................................................6
Changes and adjustment made while entering into Indonesia for business........................................6
Segmentation strategy...........................................................................................................................6
Demographic segmentation-..............................................................................................................6
Geographic segmentation-.................................................................................................................6
Psychographic segmentation..............................................................................................................7
Behavioural segmentation.................................................................................................................7
Positioning strategy...............................................................................................................................7
Pricing strategy......................................................................................................................................7
Mode of entry and distribution strategy.................................................................................................8
International promotion strategy............................................................................................................9
Problem identification & solutions, future management control and measurement systems..................9
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11
Appendix.............................................................................................................................................13

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Introduction
Mahashay Chunni Lal Gulati launched MDH spices in 1919 by opening a small shop in
Sialkot. It is also known as Mahashian Di Hatti. It holds a leading position in India due to its
wide variety of products at low prices. It is a global supplier of spices. It has total 12%
market share as per Euromonitor. Its products are exported to Canada, the United Kingdom,
Japan, Saudi Arabia, Europe and the United State of America. Due to the 88 years of
experience of MDH owner, people have trust over the brand. Its objective is to provide the
best quality product that is affordable to every kind of consumer. It has received quality
assurance award as well as received “Arch of Europe” Award for excellence in quality in
Paris (MDH Spices, 2018). The aim of the paper to come up with a marketing plan for MDH
spices when it is entering into Indonesia. Therefore, a good promotional as well as pricing
strategy is required to adopt.

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SWOT analysis of MDH
Strength Weaknesses opportunities Threats
 Quality of its
spices is the major
strength of MDH
spices. It strongly
believes in assuring
quality norms while
making spices.
 Low pricing-
all its spices are
between ranges of
RS 35 to 50. It is
offering ingredients
at cheaper price that
is affordable to
every customer
(Your Story, 2018).
 It has poor
presence in the
non-vegetarian
market that
might decrease
its demand
while moving
internationally.
 It also has poor
presence in the
ready to eat
products.
 Its spices are
limited to some
recipes that
might create
problem when
it will expand
its business
(Your story,
2018).
 Due to its great
market
presence, it
can expand its
business
internationally.
 Due to its best
quality
product, it has
various
opportunities
to take over
the market of
other countries
(Your Story,
2018).
 It is seen that
there are
various people
who prefer
non-
vegetarian
spices, so it
can grab the
opportunities
by adding
these in its
 Competition is
the biggest
threat that it
will face while
moving to
Indonesia. The
biggest
competitor in
Indonesia are
Royal spices
and
 Due to its non-
presence in
Non-
vegetarian
market
segment, it
might face
decrease in
demand of its
product (Your
Story, 2018).

MARKETING IN AN INTERNATIONAL ENVIRONMENT
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product line.
Product strategy
Changes and adjustment made while entering into Indonesia for business
It is seen that there are various competitors of spices in Indonesia. Therefore, there are
various changes required by the company to initiate in its product as well as packaging of
those. The packaging of MDH spices is done according to the Indian people and in their
language. While moving to Indonesia, people have a different cultural background and people
speak different languages as compared to India. However, the packaging of spices will
change according to the preference of Indonesia citizens. Besides this, the spices of MDH are
made according to the taste of Indian people so as per the demand and preferences of
Indonesia changes will be done (Marsden and Arce, 2017). It will start making spices for
Non-vegetarian dishes too that are prevailing in Indonesia people. It will create the
comparative advantage to its spices by adding special features to its product. Richard theory
of International marketing also states that firms are required to add comparative advantage
for its product in order to succeed in the market (Piercy, 2016).
Segmentation strategy
Market segmentation is done based on several categories. In Indonesia, segmentation will be
done on various bases that are described below:
Demographic segmentation-
 Gender - Spices is such product that is required for every kind of people. Therefore, it
will target mostly the women and men who have great taste for such spices.
 Age group- In Indonesia, MDH spices will target the women and men between the
age of twenty and fifty. Besides this, it will also deliver its products to the different hotels and
restaurants that are located nearby.
 Income- All the spices of MDH is made by taking the all type of customers in mind.
Due to its low prices of spices, it has segmented the low, middle, as well as poor people with
its affordable prices (Advameg, 2018).

MARKETING IN AN INTERNATIONAL ENVIRONMENT
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Geographic segmentation-
• Local people of Indonesia- The manufacturing of its spices will be done and supply to
the local people of Indonesia in lower prices (Advameg, 2018).
• Export purpose- It will manufacture its product for the local people of Indonesia.
Besides this, it will export its spices to other countries.
Psychographic segmentation
In this, it will target those people who love cooking by taking homemade ingredients in use.
Young people will use some ingredients of Indian to get the taste of homemade cooking.
Therefore, in this market will segment in the cooking lovers, food lovers as well as working
women.
Behavioural segmentation
In this segmentation, it has added some special spices that will used for the special occasions.
Therefore, people who like to feel special will use these ingredients. Mostly, there are various
restaurants, so its product will be supply to those on daily basis. The people of Indonesia
mostly use chilli pepper in order to make the food spicy. Besides this, the most used spices
are ginger, cumin, and coriander. The most popular dish through the country is rice. Hence,
the major focus will be given on the different rice spices that are prevailing (Facts of
Indonesia, 2017).
Positioning strategy
This strategy is used to position the product in new market. It will use the price, quality and
culture as its positioning strategy in Indonesia (Shenkar, Luo and Chi, 2014). By providing
better quality product at affordable price, MDH spices will grab the market of Indonesia.
Besides this, it will add various spices that will be made for specific occasions.
Pricing strategy
MDH spices have great presence in the Indian market. While moving to Indonesia, it is
planning to strive with the same. In the starting, it will adopt the penetration pricing strategy.
It means, it will keep the prices of its spices too low so that customer will at least use it and

MARKETING IN AN INTERNATIONAL ENVIRONMENT
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come to know the quality of its spices. It will help it in gaining the market share. Economy
pricing strategy will also adopt by the MDH spices in Indonesia. Under economy pricing
strategy, prices are set by keeping in mind all type of customers (Woodruff, 2018). Just like
India, MDH will keep the affordable prices in Indonesia too. It will help the customers to
enjoy the greater taste of spices in their food. At the starting of setting up of brand, it is
essential to add some benefits with the product so that customers get attracted toward it.
Therefore, promotional pricing strategy is best to use for the MDH spices while moving to
Indonesia. In this strategy, it will offer the discounts with its spices and use the scheme of
“Buy one get one free.”
It is providing the best quality products in lower prices that will be affordable by every
customer. Besides this, due to the tourist destination, various kinds of people prefer
homemade food. It will supply the spices to the restaurants in nearby cities of Indonesia
(Babolian Hendijani, 2016). For those restaurants, the prices will be lit bit high so that it can
earn a better amount. In addition to this, geographical pricing strategy states the differences in
prices in different parts of the world. According to the tax rates and market conditions, prices
of product differ. It will use this strategy when it will export its spices to the restaurants in
island. As these restaurants charge high prices for its food, so it also charges high prices
while supplying to those hotels and restaurants (Nagle and Müller, 2017).
Mode of entry and distribution strategy
It is not suitable for the company to start a new industry in the International market, as there
are a lot of competitors in Indonesia. Therefore, MDH spices will take the entry by Joint
venture with Royal spices. Royal spices are one of the most reliable and trustworthy spice
merchants all over the world (Dikova and Brouthers, 2016). It manufactures its spices and
sells it in Indonesia. Besides selling its spices in Indonesia, it also has its market presence in
several other countries. In addition to selling off its spices, it exports its products from
various countries.
Before complying with any license and law, it will state its joint venture with Royal spices.
MDH spices will state its market presence and describe the benefits that can get by doing
Joint Venture with MDH spices. It will state the variety of its spices and all the ingredients
that are used in making those spices.
There are various laws through which companies of other countries can take Joint Venture in
Indonesia after complying with those. Before coming to Indonesia, it will take the necessary

MARKETING IN AN INTERNATIONAL ENVIRONMENT
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license and fulfil the terms and condition of Joint Venture that is decided by Government of
Indonesia. It will comply with all the laws as per 2015 regulation. Afterward, it will take the
license by providing its financial audit so that it will be able to take the license for doing
business in Indonesia (Johanson and Mattsson, 2015). With this new regulation, the
government ensures that every new investor with complying with the requirements.
There are different channels of distribution to reach the product to the final consumer.
Therefore, an appropriate channel of distribution is required in order to make the timely
delivery of products. After making of the product, the next step comes is its right distribution
at right time. It will use the various distribution channels. It will supply its spices through the
wholesaler, retailer, and export its spices to other countries. Besides this, there will be
separate outlets for its spices in which customers can utilize its services. In addition to this,
the export of spices will be done by transport or in ships. In nearby place, the transportation
facilities will be provided to the wholesalers. On the other hand, export will be done through
shipping as Indonesia is mainly covered by islands (Tulung, 2017).
International promotion strategy
Whenever new product is about to be launch, it is required by the company to use various
promotional strategies so that customers can recognise the product and its benefits that it will
give. The best promotional strategy is social media. Therefore, when MDH spices will start
its business in Indonesia, it will use the strategy of social media in which it will explain its
prices and benefits of the product. Companies can promote its product by using social media
through various ways. It will start promoting its product by showing ads on television that is
used by almost all the families. Besides it, it will use Google that is used by mostly students
for getting various kind of information (Baker, 2014). Social networks will promote the
product that will attract the potential customers to use its product.
Joint venture with Royal spices will add certain benefits such as people will easily recognize
the product due to the good market image of Royal spices.
In addition to this, it will promote the spices by taking the help of Royal spices. It will
promote its product on the page of Royal spices (Tu, Lee and Creativani, 2017). By doing
this, people will come to know about its various blend spices as well as non-blend spices that
is offering. It will also follow a policy in which it will offer the free sample of its spices so
that the people of Indonesia will know its quality (Hunt, 2018).

MARKETING IN AN INTERNATIONAL ENVIRONMENT
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Problem identification & solutions, future management control and measurement
systems
It is necessary for the companies to identify the problem that it is facing. It will set the target
that it is wanted to achieve in the specific time. After the decided time, it will compare the
result with the established target. If any problem will be identified, it will remove it by taking
quick and correct measures. A quality assurance team will also be hired so that they can
verify the quality of the product before moving to the final consumers. It will measure its
performance by comparing its current sales with the past sales.
In future, it might happen that customers demand changes, competition arise and government
policies changes (Solomon et al, 2014). In order to face the changing customer demand, it
will conduct the market research in which it will analyse the changing demand of customers.
Experts will do market research so that problem can be identified and solved quickly.
Conclusion
In the limelight of above discussion, it can be concluded that MDH is growing well in India
as well in various parts of the country. In order to establish its business in Indonesia, it has to
take certain measures such as taking entry by doing merger with Royal Spices as well
keeping its prices low in starting so that customer get attracted toward the product. In future,
it might happen that demand of customer changes or any government policy changes. It is
required by the company to keep the market research continuously so that any problem that is
coming on the way can be solved quickly. The results are expected to achieve in the near one
year. It should add various other products in its product line so that more revenue and market
share can be generated.

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References
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Indonesia. International Journal of Culture, Tourism and Hospitality Research, 10(3),
pp.272-282.
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