International Business Report: Sanitarium Case Study, Auckland Market

This report presents a comprehensive case study on Sanitarium, a leading New Zealand breakfast cereal company. It begins with an environmental analysis using frameworks like McKinsey 7S and Porter's Five Forces to assess the internal and external factors influencing the company. The report then outlines a detailed marketing plan focused on increasing Weet-Bix's presence in the Auckland market, including market research, segmentation, targeting, marketing mix strategies, positioning, implementation, and contingency planning. Finally, it addresses stakeholder engagement, emphasizing the importance of employee engagement and outlining various approaches. The report aims to provide insights into Sanitarium's business strategies and market dynamics.

INTERNATIONAL BUSINESS – A CASE
STUDY ON SANITARIUM
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Table of Contents
Introduction:....................................................................................................................................3
Section 1: Environmental analysis...............................................................................................3
Internal environment:...............................................................................................................3
External environment:.............................................................................................................4
Competitive analysis:...............................................................................................................5
Section 2: Marketing plan............................................................................................................6
Step 1: Market Research..........................................................................................................6
Step 2: Segmentation...............................................................................................................6
Step 3: Targeting......................................................................................................................7
Step 4: Marketing mix.............................................................................................................8
Step 5: Positioning strategy.....................................................................................................8
Step 6: Implementation plan....................................................................................................9
Step 7: Identification of barriers............................................................................................10
Step 8: Monitoring and control..............................................................................................10
Step 9: Contingency planning................................................................................................10
Section 3: Stakeholder engagement...........................................................................................11
Step 1: Stakeholders..............................................................................................................11
Step 2: Importance of employee engagement........................................................................11
Step 3: Approaches of engagement.......................................................................................11
References......................................................................................................................................12
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Introduction:
A report is to be compiled on the New Zealand based leading breakfast cereal of Sanitarium to
conduct an environmental analysis of the organization on the line of its internal, external and
competitive analysis. Again a marketing plan would be conducted to increase its presence in the
Auckland market to meet the demand of Weet Bix. Lastly, the report would also run a
stakeholder engagement program to demonstrate the effective communication skills for the
company.
Section 1: Environmental analysis
The environmental analysis of Sanitarium would be drawn on the basis of the internal
environment, external environment, and competitive analysis.
Internal environment:
The McKinsey 7S framework has been defined to analyze the internal environment of
Sanitarium. This particular model would be very much helpful in improving the performance of
the organization, study the likely effects of the futuristic changes and implementation of the
proposed strategy (Foxall, 2014). It contains the hard or soft elements categorized as hard or soft
elements.
Figure 1: McKinsey 7S Framework
Source: (Foxall, 2014)
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Hard elements are that of the strategy, structure, and systems:
 Strategy – Sanitarium strategies to establish a competitive advantage over the market by
offering the fellow New Zealanders the natural and wholesome foods with natural
flavors and goodness.
 Structure – Sanitarium has a firm structure that is open to changes and quite flexible to
adopt the new things and implement the same in its business scope (Eden & Ackermann,
2013).
 Systems – The employees of the organization are actively engaged in the daily business
operations and processes to complete the task.
Soft elements in the model are shared values, skills, style, and staffs:
 Shared values – Sanitarium stands apart in the crowd by offering the market healthy and
innovative breakfast and soy foods keeping away from the genetically modified
ingredients (Lasserre, 2012).
 Style – The organization follows a democratic style of leadership.
 Staff – Sanitarium has a pool of skilled and efficient employees to contemplate the
organizational goals.
 Skills – The use of biotechnology in the business scope of Sanitarium would enable the
competencies of the company to bring out healthy and nutritious foods (Nooraie, 2012).
External environment:
The external environment of Sanitarium would be expressed by the Pestle Analysis –
 Political – The pressure groups and New Zealand state policies influence the population
and the authorities along with a range of decisions to disrupt the progress and brand
image of Sanitarium.
 Economic – New Zealand is a developed country with a developed consumer price
indices wherein the food prices tend to rise to meet the current demand of the market.
Sanitarium has a higher level of operating cost and need to find out ways to reduce it
(David & David, 2016).
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 Social – The country has a declining fertility rate leading to decreases in the birth rate
and increases in the median age. So it would gradually tend to lose the market for the
children products, but raising awareness on the healthy lifestyle would be beneficiary for
its demand (Wilson & Gilligan, 2012).
 Technological – The use of biotechnology and other technical expertise has helped the
organization to achieve an excellent feat by improving on the healthy food items
(Mellahi & Frynas, 2015).
 Legal – The food items are subjected to legislations like the Food Act 1981, Food
Amendment Act 1996 and Children’s Advertising Code amongst others to suit with the
international laws.
 Environmental – Sanitarium is very conscious of the environment and accordingly takes
measure to do away with pollution and carbon extraction off its manufacturing units.
Competitive analysis:
The competitive analysis of Sanitarium would be depicted by Porter’s Five Forces analysis:
 Bargaining power of the customers – Sanitarium focuses on the customer value which is
being delivered through superior customer services. The organization tends to provide
healthy and nutritious breakfast food items to the customers making them a strong
proposition in the business set-up (Wheelen & Hunger, 2011).
 Bargaining power of the suppliers – It is higher as the organization cut costs in other
specifications to accommodate the rising prices of the essential commodities by the
suppliers.
 The threat of new entrants – The threat level is medium as the New Zealand market is
quite unlikely to be entered by the potential companies as it has a declining population
rate. Again the rise of health consciousness could tend the organizations to set up its base
there (Stead & Stead, 2013).
 The threat of substitutes – It is quite low as the New Zealanders are getting aware of the
healthy breakfast items making it popular on the market.
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 Competitive rivalry – The competitive rivalry is quite higher with the presence of
Kellogg’s, Kraft Foods and Dick Smith Foods amongst others struggling to provide for a
better quality of food items to the targeted customers.
Section 2: Marketing plan
The CEO of Sanitarium has asked for a marketing plan to address the demand of Weet Bix in the
markets of Auckland. Accordingly, the marketing strategies are as follows:
Step 1: Market Research
The marketing objective for Sanitarium are as follows: To explore the marketing opportunities that Weet Bix could encase in the Auckland
market.
 To find out the appropriate marketing mix, segmentation, targeting and positioning to
place the product rightly in the market.
Step 2: Segmentation
The cereal market could be segmented into four distinct markets – the Sweet-Tooths, the
Healthies, the Body-Watchers and the Energy-Junkies.
 The Sweet-Tooths seeks cereals having the best of tastes and appeals to the Auckland
demography consisting of kids from 5 years to 12 years.
 The Healthies are very much interested in having cereals as they come with nutritional
aspects of the foods that are quite crucial to maintain the well-being of the individuals in
Auckland (Hill, et al., 2014).
 The Body-Watchers are the demographics consisting of women who belong to mid-20s
and 30s, and they are very much image conscious of looking after their physical
appearances.
 The Energy-Junkies are those customer segment at Auckland who leads an active
lifestyle and very much engaged with sporting and healthy activities (Lasserre, 2012).
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Figure 2: Segmentation table for Weet Bix
Source: (Lasserre, 2012)
Step 3: Targeting
The current target market for Weet bix in Auckland would be the younger generation, especially
the athletes who need a heavy and healthy breakfast to support their sporting activities
throughout the day (Rothaermel, 2015). In this case, the market segment of the mature Healthies
would be targeted, especially those belonging to the age category of the 30s to their late 40s.
Again this target market could be further segregated into two categories – mothers with children
and health conscious adults to have nutritional breakfast. The mothers at the Auckland market
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would buy the Weet bix not only for themselves but also for their children and spouses. In the
same way, the health conscious adults keeping in line with their busy professional life would buy
the cereals to keep themselves fit.
Step 4: Marketing mix
 Product – Weet bix to be introduced in the Auckland market would come up with a new
packaging to target the Healthies segment to have a sustainable appealing. Besides
Sanitarium would essentially maintain the nutritional aspect of the cereals to hold on the
market demand (Hill, et al., 2014).
 Price – To infiltrate the Auckland market, Sanitarium would take into the application a
lower pricing strategy which would be comparatively lower by 15% than the traditional
Weet bix products.
 Place – Weet bix to achieve a record number of sales would take into relevance a number
of distribution channels to increase on its market shares (Peteraf, et al., 2014). The
multiple distribution channels of supermarkets, retail convenience stores, independent
food stores and other retailers operating in Auckland would be taken into account.
 Promotion – To promote Weet bix, Sanitarium would run continuous advertising and
promotional campaigns. Sanitarium could take up personal selling strategy to reach out to
the consumers regarding the benefits of the product. The aspect of sample distribution
and social media marketing would also be relevant in this case.
Step 5: Positioning strategy
To facilitate Weet bix in Auckland, Sanitarium would place itself as a high nutritional benefitted
product than its competitors like Kellogg’s and Uncle Toby’s but seems to be less delicious than
the others.
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Figure 3: Positioning strategy for Weet Bix
Source: (Nooraie, 2012)
Step 6: Implementation plan
1st phase – Weet Bix gets launched in Auckland along with a new packaging to get the attention
of the targeted market. The objective of the product would be to offer nutritional food items at an
affordable price to the customers.
2nd phase – Weet Bix would take on active advertising and promotional campaigns to reach out
to the target market (Henley, 2010). Accordingly, Sanitarium would take up personal selling
strategies with its sales representatives at the supermarkets and convenience stores would interact
with the customers to convince them about the product.
3rd phase – Weet Bix would set up a deadline of 1 year to attain a considerable market position
in Auckland. To achieve the same, it would make good use of its public relation activities.
4th phase – Sanitarium has allotted a budget worth $100,000 to design attractive promotional
campaigns for Weet bix, most of which would run on the various social networking sites along
with free sample distribution to arouse the interest of the targeted segment.
5th phase – Sanitarium would review the progress quarterly and accordingly would modify its
strategy to suit the customer requirements.
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Step 7: Identification of barriers
The plausible barriers identified are as follows –
 The product does not get highlighted to the target segment. This would implicate that
Sanitarium would not experience the expected market positioning (Hitt, et al., 2012).
 The sales personnel are not efficient enough to convince the customers. It would
apparently drive the customers looking for a health product to competitors like Uncle
Toby’s and Kellogg’s.
Step 8: Monitoring and control
 Sanitarium would contemplate weekly check-ups to evaluate the sales progress. The
marketing unit would decide on weekly targets to be attained by the sales personnel to
achieve the goals easily (Foxall, 2014).
 A marketing survey would be conducted quarterly to evaluate the perception of the
customers regarding the product. A marketing research team would be constituted to go
through the reviews of the product, and the marketing unit would specifically focus on
the awareness level of the public regarding the product.
Step 9: Contingency planning
In a particular scenario, the message of Sanitarium to cater its nutritious product of Weet Bix is
promoted through the social media marketing sites like Facebook, Twitter, LinkedIn, and others.
 The social media marketing would appeal to the youngsters more as they prefer to spend
more time on the social sites rather visit superstores to buy the cereals (Yarbrough &
Yarbrough, 2014).
 It would apparently be a cost effective proposition for Sanitarium to reach out to the
customers in an innovative way.
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Section 3: Stakeholder engagement
Step 1: Stakeholders
Internal stakeholders –Managers and the employees.
External stakeholders – Customers and the suppliers.
Step 2: Importance of employee engagement
 Employee engagement is required in case of Sanitarium to align their personal objectives
with that of the organizational goals striving them to make greater efforts for the success
of Weet Bix in Auckland (Ackermann & Eden, 2011).
 The employee engagement program would make the employees feel proud of the
organization and motivated to deliver a better performance in the organizational scenario.
Step 3: Approaches to engagement
 The external stakeholders like the customers could be engaged with Sanitarium through
customer loyalty programs to establish a fruitful relationship. The customer loyalty
program could be done on the basis of running a seminar on the product and distributing
free samples to the participants (Hitt, et al., 2012).
 The suppliers could also be made engaged with Sanitarium by conducting training
programs for them regarding production, storage, and processing of healthy cereals. It
would make them more confident in their approach and enjoys a sustainable relationship
with the company (Eden & Ackermann, 2013).
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References
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Foxall, G., 2014. Strategic Marketing Management. 3rd ed. London: Routledge.
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Wilson, R. M. & Gilligan, C., 2012. Strategic marketing management. London: Routledge.
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