MARKETING PLAN IN CALIFORNIA USA (LA)

Posted: December 22nd, 2022

MARKETING PLAN IN CALIFORNIA USA (LA)

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Internal Audit

Fritz-Kola enjoys a competitive advantage that helps to combat the stiff competition in the beverage production sector. The firm makes no mistakes as high quality is of great importance, and therefore, the group prefers to work with only owner-managed and family businesses. The business house seems to understand that many consumers today want superlative products that are not likely to cause any health problems, especially when they are consumables (Fritz-Kola n.d.). To achieve the desired quality, the company adheres to the directives of ISO 9000 standards, which is responsible for quality management. The framework helps the corporation to address various forms of quality management, and directs the firm towards embracing ISO’s best-known measures (ISO 2019). The group also strives to maintain close relationship with its buyers for competitive advantage by embracing the concept of customer relationship management. The company believes that building strong relationships with its patrons benefits the community, and ultimately makes the firm’s products have a better and refreshing taste (Fritz-Kola n.d). The business also strives to achieve competitive advantage by developing products that are almost natural in nature, and do not contain many additives as it happens with the production of most other soft drinks. The fritz-kola stevia, for example, is made using real steva extracts, and does not contain any chemicals from the plant. A similar methodology applies to fritz-spritz grape that comprises 50 percent of freshly squeezed grape juice (Fritz-Kola n.d.). Fritz-Kola, however, must watch out for competition from leading soft drink makers, such as Coca Cola and Pepsi as they have larger market shares due to extensive market capitalisation, and many years of operations in the sector.

Rational for Selecting a Country – SWOT Analysis

Fritz-Kola needs to consider several factors before introducing the product in Los Angeles, California, USA. Using SWOT analysis is the most effective manner as it offers information on the strengths, weaknesses, opportunities, and threats that could influence business activities (Gurel & Tat 2017). Using SWOT analysis, the group needs to focus on three steps to find the required information and deeply understand the target market (Gurel & Tat 2017). The team in charge of assessing the LA market needs to collect relevant data from various sources, including consumers and industry players, before analyzing the facts and figures. The third step would be to develop a SWOT chart that makes it easier to identify the strengths, weaknesses, opportunities, and threats.

Strengths

The company has to identify the strong points of the Los Angeles and California markets, and the entire U.S. before introducing the product. One of the major strengths of Los Angeles and the whole of California is the strong GDP, which is a reflection of the national economic growth. Today, the United States has the largest economy of about $59.89 trillion, which makes the market appealing for many multinational corporations (Focus Economics 2019). The second strength that could make California, specifically Los Angeles, is the high investment level in R&D, which offers a good chance for innovation. Furthermore, the population in Los Angeles grew from 9.8 million in 2010 to 10.1 million in 2018, which means that Fritz-Kola might not have to unduly struggle for employees. More important is the household income grew from $54,433 in 2016 to $61,015 between 2016 and 2017 (US Census Bureau 2018). Fritz-Kola, therefore, must consider how it would benefit from the strengths before introducing the product in LA.

Weaknesses

Fritz-Kola should consider the weaknesses in the Los Angeles market before moving into the area to avoid inconveniences that could hinder progress. One major drawback in California, and which could affect the operations of Fritz-Kola is the high government debt as the state and local governments owed nearly $1.3 trillion in 2017 (Fletcher & Joffe 2017). The huge debt is likely to affect investment and development as it is already experiencing a slow pace of infrastructure development in the region. The other problem with the United States is the meagre economic growth in recent times as this will directly impact states like California. According to GDP estimates, the U.S. might just about grow by 1.6 percent in 2020 and 1.8 percent a year later (Focus Economics 2019). The other difficulties that could affect the company’s attempt to introduce its products is the harsh environmental conditions in the larger California region. Drought and wildfires are rampant, which could significantly affect the business. Otherwise, the German company may fail to realize the anticipated outcome if it does not consider how the weaknesses may affect operations.

Opportunities

Considering the possible opportunities in the Los Angeles market and the entire United States could be significant before Fritz-Kola introduces its products in these regions. A suitable opportunity that would help the company record positive outcome with its offerings is the growth in technology, which creates the chance to develop better and more appealing items. The rise in technology also offers an opportunity to apply appropriate marketing techniques that would appeal to the buyers more effectively (Hollensen 2016). The other opportunities that could benefit the German company include efficient policies that promote the operation of foreign firms, and increased spending from consumers. More importantly, LA’s big population offers the opportunity to get market for the product. The marketing team needs to know the number of customers who are likely to purchase the product and make enough supplies to avoid any shortage.

Threats

The firm would be in a better place to market the product in Los Angeles by knowing the possible threats that could harm its operations. The main risk that could interfere with the introduction of the product in Los Angeles is that California has many soft drink producers, which makes the competition considerably high. Companies such as Coca Cola, Pepsi, Shasta Beverages, and Facedrink own a large share of the Californian soft drink market, and therefore, entering and stabilizing in the region by a newcomer would require additional effort from Fritz-Kola. The increased dependence on debts due to higher interest loans could also affect the company’s desire to venture into Los Angeles. The group while introducing the product in Los Angeles needs to watch out for cyber security concerns, which is a major concern for corporations seeking to introduce their online interaction with buyers and other stakeholders (Hollensen 2016).

Macro Environment

The PESTLE analysis offers guidance in evaluating the macro environment of Fritz-Kola as the tool examines the external framework of a company, and informs the company on how to cope with certain factors in the sector or country.

Political Factors

First, the business leaders need to consider how political factors would influence the business and take measures to identify the right markets (Hollensen 2016). The firm, for example, tries to operate in markets where political stability prevails, and where the leaders develop appropriate legislations to promote business operations, especially for foreign firms. The corporation’s leadership relies on the Political Instability Index (PII) that studies the likelihood of political disturbance and unrest in a given country before making the decision to venture into the area. The firm, for instance, opted to move into the UK with a PII rank of 132 out of 164, where number 1 is the most likely nation for political unrest (The Global Economy 2019). The company also considers regulations on corruption, free trade, and laws on monopolistic firms before entering a particular market. Fortunately, the political situation in Los Angeles is stable and likely to promote business operations.

Economic Factors

While considering the external environment’s influence on its operations, the corporation considers the economic factors and their possible effects on the company. The firm considers the places where it can trade without much difficulty as its focus is now on countries that are part of the European Union to avoid import taxes and achieve free trade between all the member states. The other economic factors considered by the company include corporate taxation and rate of economic growth. Introducing the product to Los Angeles is likely to yield positive outcome to the company considering that the area is one of the highly dynamic economies across the globe. The strong economy and the improving GDP foster the development of various areas, including transportation and manufacturing. Furthermore, the agricultural and finance have recorded significant growth over the years, which depicts the regions’ stable economy. The marketing team seeking to introduce the German product into LA, therefore, should not worry much about the place’s economy that is suitable for business.

Social Factors

The firm also recognises social factors such as cultural diversity, consumers’ attitude to foreign products and brands, and the household income distribution. Fritz-Kola should not worry much when planning to enter LA as the society is highly diversified and the buyers welcome foreign products. The company must also understand consumer behavior because this will help to make necessary plans on how to approach the buyers. Los Angeles today is witnessing a scenario where many young buyers are gaining the ability to purchase, and taking this factor into consideration will help the marketing team prepare its approach well. More importantly, the marketer must understand how consumers would perceive the health implications of taking the product and ensure that they are not at any risk of developing sickness as a result of consuming the product.

Technology Factors

Before expanding to LA, the company also needs to consider factors in the external environment, such as technology, environmental, and legal factors. The firm should know that the use of technology in LA and the entire U.S. are considerably high, and buyers would expect the same from Fritz-Kola. The corporation should know that America remains the undisputed leader in applied and basic research, and failing to meet particular levels or technological expectations could result in dissatisfaction or an acute inability to compete (Alter 2017). Before introducing fritz-kola to LA, the company should first conduct a survey to understand the level of expectations from consumers and the industry about the use of technology.

Environmental Factors

More essentially, the firm needs to know the factors that could influence its interaction with the environment, and take appropriate measures towards achieving compliance. The group should also consider following the guidelines of ISO 14001:2015 that outline the criteria for an environmental management structure (ISO n.d.). The firm should know that many companies today are moving towards renewable sources of energy, and focus on achieving the 3Rs: reducing, reusing, and recycling (Mostafa & Peters 2016). The group should understand that adhering to the environmental regulations will conserve natural resources and attain long-term sustainability.

Legal Factors

Additionally, Fritz-Kola has to consider the legal factors before introducing the product in a foreign market, and how the law is likely to impact its operations. The business owners should understand that as a company in the U.S., the effects of litigation could harm business operations if the organizational leaders and employees are not careful. The group should ensure that its workers do not complain about poor working conditions, inadequate pay, and unfair terminations, among others as they could file a legal case against the firm (Ghanavati et al. 2017). The company must also consider other factors that could have legal implications, such as compliance with taxation policy, dissatisfied consumers, and patent and copyright issues (Ghanavati et al. 2017). The group while introducing the product in Los Angeles, however, should not hesitate to seek the legal advice from the various legal groups that offer valuable legal insight to companies seeking to invest in the region. A failure to consider the legal and other factors in the external environment could influence the company’s operations in LA, and interfere with attempts to improve general performance.

Reference List

Alter, A 2017. Irresistible: The rise of addictive technology and the business of keeping us hooked. New York: Penguin Press.

Fletcher, B & Joffe, M 2017, California’s total state and local debt totals $1.3 trillion. California Policy Center. Available from:

https://californiapolicycenter.org/californias-total-state-local-debt-totals-1-3-trillion/ [11 November, 2019].

Focus Economics 2019. U.S. economic outlook. Retrieved from https://www.focus-economics.com/countries/united-states [11 November, 2019].

Fritz-Kola (n.d.). About us. Available from: <https://www.fritz-kola.de/en/> [11 November, 2019].

Ghanavati et al. 2009. A legal perspective on business: Modeling the impact of law. Available from: <https://www.researchgate.net/publication/220894310_A_Legal_Perspective_on_Business_Modeling_the_Impact_of_Law> [11 November, 2019].

Gurel, E, & Tat, M 2017, ‘SWOT analysis: A theoretical review’, The Journal of International Social Research, vol. 10, no. 51, pp. 994-1006.

Hollensen, S 2016, Global marketing. New York: Pearson.

ISO (n.d.). International organization for standardization. Available from: < https://www.iso.org/home.html> [11 November, 2019].

Mostafa, M, & Peters, R 2016, ‘Apply the three R’s: Reduce, reuse, and recycle in the chemical industry,’ Journal of the Air & Waste Management Association, vol. 67, no. 3, pp. 34-41.

The Global Economy 2017. Political stability – Country rankings. Available from: < https://www.theglobaleconomy.com/rankings/wb_political_stability/> [11 November, 2019].

US Census Bureau (2018). Quick facts: Los Angeles county, California. Available from: https://www.census.gov/quickfacts/fact/table/losangelescountycalifornia# [11 November, 2019].