Analyzing Market Entry to Ivory Coast

Market Entry to Ivory Coast

Company Profile and Background

Market Analysis- Ivory Coast

Risk Analysis

Social and Cultural Analysis

Economic Analysis

Political and Legal Analysis

Market Entry Strategies

Marketing Mix

Product

Promotion

Price

Place and Distribution

Branding

Market Entry to Ivory Coast

Company Profile and Background

Barilla Group is an Italian food company whose headquarters are located in the city of Parma. The company also has its operations in various nations in Europe. Barilla was established in the year 1877, initially as a bakery shop and was set up as a family business. In the present, the company is still controlled by the Barilla family. The company is renowned and has established itself as a multinational pasta maker. In particular, the group undertakes the production of numerous kinds of pasta and is actually the leading pasta maker across the globe. The company has a market share of about 45% in Italy and also 25% of the market share in the United States. The Group produces pasta that is of more than 120 different sizes and shapes as well. The pasta of the Barilla brand is retailed in several restaurants across the world (Barilla Website, 2016).

Barilla Group has extensively expanded its business operations across Europe and also in the United States. The international company has great proficiency and expertise in this aspect and therefore is well poised into entering the African Market. In this case, Ivory Coast is selected as a good prospect and market for the Group to bring its operations and products. The Barilla group has a number of brands across the world. As pointed out, the company is the leading pasta maker and brand in the world and is also the leading sauce brand in Europe. In this case, the product in consideration that the company will introduce in Ivory Coast is its well renowned pasta (Barilla Website, 2016).

Market Analysis- Ivory Coast

General Information

Cote d'Ivoire, also referred to as Ivory Coast, is one of the fastest growing economies in the globe and also one of the highly potent economies in West Africa. The capital city of the nation is Yamoussoukro and the country's largest city is the port of Abidjan. It is imperative to note that during the 1960s and 1970s, Ivory Coast was an economic driving force and livewire in West Africa, owing to the production of cocoa and coffee. Important statistics include the fact that the economic growth of the country in the 2014 fiscal year was 7.8% with an inflation rate of 0.4%. In addition, the Gross Domestic Product (GDP) per capita of Ivory Coast was $3,100. The country's foreign direct investment in the same financial year was 1.19. Ivory Coast has a population of over 23 million people. It is appealing to several investors. In accordance to Euromonitor International (2014), the country is considered to be one of the twenty markets of the future that will offer the most prospects for consumer goods companies across the world.

Risk Analysis

In undertaking the risk assessment of Ivory Coast, there are a number of factors that have to be taken into consideration with Barilla making its entry into the market. For starters, there is great corruption. For instance, in the 2015 fiscal year, the nation scored just 32 points out of 100 in the Corruption Perceptions as pointed out in a report done by Transparency International (Trading Economics, 2016). This is an all-time high compared to the score of 19 in the 2004 fiscal year. This can make it difficult for the company in setting up its business. Another factor is that there is a high prevalence of crime in the country. This in turn increases the level of difficulty in doing business, particularly foreign companies. Another aspect is that there is a high tax burden in general that is laid on foreign companies.

Social and Cultural Analysis

Ivory Coast is a nation that is socially intricate. Having more than 20 million people, it is approximated that roughly 5 million of them are immigrants coming from Burkina Faso and Mali. In addition, the country has more than 50 various local ethnic groups, which are categorized into four particular groups, including the Akan, Krous, the Voltaiques and the Mande. The most populated city in Ivory Coast is Abidjan, which consists of approximately 4 million inhabitants, with the other cities Yamoussoukro, Bouake and San Pedro following closely. More so, with regard to the nation's religious affiliation, the population subsisting in the northern half of the nation is for the most part Muslim, encompassing just over 38%, while the southern half of the nation is largely made up of Christians, who represent just over 32%. The remaining 28% or so is made up of tribal religions that are predominant over the entire nation's territory (Linn, 1977).

Taking into consideration that Ivory Coast has set itself as one of the most prosperous and successful West African countries, approximately 20% of the populaces, roughly 3.4 million people, is made up of workers who come from the neighboring nations of Guinea, Burkina Faso and Liberia. Statistics indicate that 4% of the populace is of non-African lineage. It is imperative to take note that a great deal and majority of the adult inhabitants, especially women, are illiterate. More so, a great deal of the students in secondary schools, are made up of male individuals. Generally, in Ivory Coast, there are more than 60 native ethnic groups, but can be decreased into seven main ethnic groups, with regard to common historical and cultural features and individualities (Linn, 1977).

Economic Analysis

The economy of Ivory Coast in the 21st Century is for the most part market-oriented and largely depends on agriculture, with the cash crop production of the smallholders being prevalent. In particular, the agricultural sector takes into account 60% of the labor force. A great deal of the labor force in the country is connected to agriculture and forestry. The main cash crops in Ivory Coast are cocoa, coffee, bananas, sugar cane, pineapple and cotton. In particular, it is imperative to note that Cote d'Ivoire is amongst the largest producers as well as exporters of palm oil, coffee and cocoa beans in the world (Ovalle, 2012).

The production of wood is of massive economic significance in the nation. Some of the most significant exports of timber consist of the obeche, mahogany, the SIPO, iroko and makore. Every year, it is projected that Ivory Coast produces roughly more than 10 million cubic meters of wood. Another important economic activity is fishing, which is carried out largely along the coastline that stretches more than 500 kilometers. It is projected that Ivory Coast has an annual catch amount number of more than 55,000 tonnes. Minerals are another substantial economic activity that boosts the nation. In the year 1977, the nation discovered oil fields and three years later, started oil extraction. By 2005, the nation was producing about 12 million barrels of oil every year. In addition, it is estimated that the nation has an annual production of approximately 600,000 metric carats of diamond (Ovalle, 2012).

Relative economic stability has in the contemporary returned to Cote d'Ivoire, which in turn, has caused the economy of the country to grow at about 9% in the 2013 fiscal year and 8% in the 2014 fiscal year. In the 2014 financial year, the gross domestic product per capita of the nation was documented to be 1,154 U.S. dollars. Taking this into consideration, the GDP per capita of the nation is equal to 9% of the world's average. In accordance to a report outlined by the World Bank, it was indicated that the simplicity and comfort in undertaking business in Ivory Coast had an improvement going up to 147 in the 2015 fiscal year down from 158 in the preceding 2014 fiscal year (Raza, 2015). France is considered to be by far and large the most significant foreign investor, with high ranking numbers in foreign direct investment. Lastly, with respect to labor, there is a massive availability of labor as a result of its huge working-age populace; workforce migrated from neighboring nations and large rates of urbanization in the country's regions. Therefore, there is a large quantity of low and semi-skilled labour (Raza, 2015).

Political and Legal Analysis

Ivory Coast is a nation that has a strong executive power vested in the President of the nation. In particular, Cote d'Ivoire is split into nineteen regions and eighty-one departments. One of the worrying aspects in this setting is the prevailing civil war. In the year 1999, the country experienced a Coup d' tat and three years later in 2002, a civil war broke out in the country. However, the private sector has since then regained confidence in the economy of Ivory Coast. In the past year, there were presidential elections and through the voting in of Alassane Ouattara, the general public indicates that they had a desire to cement the nation and to be able to overcome a past that was filled with violence. The main goals of the new government that was voted in October 2015 include the engagement of all of the nation's pertinent stakeholder groups in a strong channel of communication regarding issues that are vital to peaceful concomitance, citizenship, youth joblessness and poverty (The Guardian, 2015).

Ivory Coast has an investment policy that is designed to increase investment in the private sector and also increase the level of production in the domestic industries. It takes into account inducements such as exemptions from tax for major investments and businesses, which are situated outside the city of Abidjan and other metropolitan industrial regions. Cote d'Ivoire is classified with a D in the global rankings with regard to political and economic risk. This is undertaken by COFACE (2015), which delineates that the business setting is intricate by internal political conflicts. However, since the elections were done, management of the public sector and institutions has become much transparent. Plan national de bonne gouvernanceet de lute contre la corruption, which is the good governance and anti-corruption plan for the state, is anticipated to undertake additional development, with the institution and formation of Haute autorite pour la bonne gouvernance, the authority for good governance (Adingra, 2014).

Ivory Coast operates stringent regulations governing the employment of migrant workers.

The stringency of the labour market is lessened to some magnitude by an absence of minimum wage regulation in Ivory Coast, which implies that unskilled labour is economical and copious. The law in Ivory Coast is influenced by corruption and uncertain property rights, which continue to weaken the institutional setting, essential for sustained economic growth. In addition, with regard to the legal framework, there is increased efficiency in regulations. The amounts of time and processes necessitated for the incorporation of a business have been decreased. Significant enhancement has been undertaken in restructuring the entrepreneurial framework. Another worrying aspect is that the protection of property rights is insubstantial and obtaining title deeds outside the metropolitan regions is much rare (Adingra, 2014).

Market Entry Strategies

Taking Barilla Group's experience in marketing goods and products internationally together with its expertise in the food commercial business, the company has more capacity and proficiency to fast-track its expansion into entering this particular market. It is imperative to take note that there are two basic kinds of export immersion. The first one is direct exporting which encompasses a company retailing its products directly to the buyers in the target market (Chung and Enderwick, 2001). The other kind is indirect exporting, which encompasses a company retailing its goods and products to intermediaries who thereafter resell them to buyers in a particular target market. In this case, the market entry strategy that is chosen by Barilla Group to enter the Ivory Coast market is indirect exporting (Chung and Enderwick, 2001).

With this approach being taken, there has to be an in-between that facilitates the process. Therefore, this indicates that the company will have to consider prospective alliances with local companies. The intermediary selected is the export management company (EMC), which is focused and expert in exporting particular variety of goods and products to a well-defined customer base in certain nations or expanses. The Barilla Group will expect the EMC to be largely market-oriented and undertake a number of distinctive duties. For starters, the EMC will purchase the product from Barilla Group and mark up the purchase price in order to have coverage for their profit (Chung and Enderwick, 2001). Secondly, the Group will undertake all aspects of the export transaction. This will encompass the identification of markets for Barilla, scheduling relations with agents and distributors, negotiating and taking care of all communication. It also covers documentation, freight logistics, traveling overseas to have meetings with prospective consumers and setting up fitting channels of distribution (Chung and Enderwick, 2001).

In accordance to Export.gov (2016), even though it is not necessitated or obligated by the law, the holding of a local agent or distributor might facilitate the exportation of Barilla Group products to Ivory Coast. As an exporter, Barilla Group ought to take into consideration that several established sectors in the nation have one or two major distributors, producers, or agents who already supply a significant portion of the market, whereas numerous smaller agents, battle and fight for niche markets. When selecting such an agent or distributor for its products, Barilla Group has to make certain that is has a comprehensive understanding of the market (Export.gov, 2016).

Marketing Mix

The marketing mix is a business research approach that is used in marketing products or services rendered by a company. This particular approach is quite significant as it assists in determining the distinctive selling point of a commodity or product. The marketing mix approach is made up of four different components or strategies, which include product, promotion, price and place strategies.

Product

Product strategies play a vital role in the marketing of a company. This is because it is the product package being offered by the company that shows how different or how better suited it is for the consumers in contrast with the other packages offered by other rival companies (Lamb et al., 2012). In terms of product strategy, the Barilla Penne is a product that is convenient as it can be extensively distributed at an economical price, which in turn will encourage regular purchase and can also be produced immensely. With respect to product strategy, still, Barilla Penne has relative advantage. In particular, the product can be accessible to the consumers in different sizes and flavors. The second aspect is that the product is economical and has a low price. Third of all, it is easy to cook and makes a fast meal for preparation. This is for the reason that Penne can be easily prepared in a pan or in a microwave oven and be ready in just under three minutes. It can also be boiled to create a sumptuous meal, which can be taken with other meals such as stew.

Another important aspect with regard to the product is compatibility. To begin with the local cuisine in Ivory Coast, particularly in major cities such as Abidjan, they are influenced by a blend of African and European cultures. Regardless of being largely influenced by the French culture, Ivory Coast has been able to sustain its food culture. In this case, Barilla Group will also make proposals for different flavors for the local people, such as cassava and maize. With regard to complexity and intricacy, the level of complexity of the Barilla Penne can be deemed low. In addition, the product is much easier not only to produce but also to prepare. The indication of preparation for the meal is pretty much self-explanatory. In addition, according to Raza (2015), dressing recommendation assists the consumer.

Taking triability into account, the Barilla Penne product can be taken on a trial on a first instance by students in colleges and universities or single individuals seeking for a fast meal to eat. The Barilla Collezione as well as Barilla Whole Grains can be interesting substitutes to fast food meals. On the other aspect, with respect to observability, the popularity of the Barilla Collezione and Barilla Penne will be largely through the word of mouth and also publicizing and marketing. In addition, it can be set and presented in the food distributors in the large billboards so as to increase the amount of observability (Raza, 2015).

However, the entry of Barilla Group with its products into the Ivorian market is expected to face various problems and restraint. For starters, traditional dishes are taken up as part of the culture in Ivory Coast. Therefore, it is difficult to sway them to take up European food. Another aspect is that Ivorians are less ardent and fond of Asian and Italian kind of food. In addition, the pasta, which is a boiled meal, is less celebrated or profound, compared to baked or fried meals in the nation. More so, Cote d'Ivoire has become accustomed and is in the habit of exporting rather than importing. Lastly, economical and less costly food products are already provided nearby, taking into consideration the fact that locals plant and grow the food that they eat.

Promotion

Promotional strategies within the marketing mix is considered to be necessary for a company in ensuring that its brand is well acknowledged by the public and also used for appealing to new consumers. Advertising and marketing shall be undertaken through media, newspapers, use of pamphlets or even face-to-face. The advertising shall either be through media or in newspaper or through social media. In Ivory Coast, Christianity and Islam are the two main religions and there are different ethnic groups; it is for this reason that it is significant to make certain that the marketing speaks to everyone. The firm will make use of social media platforms such as Facebook, Twitter, Instagram, Google + and even create a website of its own to promote the services that it intends on rendering for the target market population (Lamb et al., 2012). The company will attain a competitive advantage because through social media, the scope is quite wide and can easily expand the consumer base. In addition, being new to the market, the company will be able to be in touch with its potential consumers on a more personal level (Lamb et al., 2012).

One other strategy that will be used by Barilla Group will be the use of surveys, which will ask the consumers to fill out survey forms, delineating the positive and negative aspects of the services being provided. This will enable the company to know the manner in which it can grow and develop to increase its consumer base and also improve the extent of products being rendered. Lastly, the company will also use a consumer referral program where the prevailing consumers will be encouraged to give referrals of the company to new consumers. Huge discounts are some of the incentives that Barilla Group will use. The company will have a competitive advantage as it will utilize its consumer base as an effective sales force in generating more revenues and returns (Lamb et al., 2012).

Price

Pricing is considered to be one of the vital strategies in the marketing mix. This is because amongst the four, it is the only component variable that generates revenue for the company. This can determine whether a business declines or subsists, ultimately. Pricing is not a solitary conception, but a diverse one with different connotations and inferences for the manufacturer of the product, the intermediate, and the end-user consumer. Pricing plays an important role in the marketing mix of defining the pricing strategy that will in a fundamental way attract the consumers within the organization's target market (Smith, 2012).

It is imperative to take into consideration the diverse factor influencing the pricing strategy. To start with, the currency for Ivory Coast is significantly lower compared to the Euro. In addition, the Barilla Penne, which is deemed to be a low price and economical food in Italy and most of Europe, can be considered to be different in the Ivory Coast. When targeting the single individuals in the nation as well as the youth such as students, the price of Barilla Penne shall be associated with the cost of life. For this reason, the pricing alternatives for this particular product shall either be geocentric or polycentric.