International Business

Title: Untitled 1. Introduction The assignments mainly consists of the following parts: Firstly, an analysis of Ecovers current position in the market. Secondly, how Ecover is changing its competitive strategy. Thirdly, consumer behaviour towards detergent. Finally, an outline for new marketing strategy for Ecover to enter the supermarket. 2. Background Ecover was founded in 1979 by Frans Bogaerts.It was a modest little detergent company in Malle in northern Belgium. Pierres Magnin a successful Swiss businessman dealing with pharmacies and health food stores, suggested Bogaerts to develop an eco-friendly detergent free of harmful chemicals (which was to be banned by the Swiss government as a part the proposed environmental regulations). Thus they entered the detergent market inSwiss and other key markets. Environmental disasters have made more andmore people aware of the urgent need to protect the natural environment. 3 Marketing Audit Marketing audit give a picture of where the company is, how did it get there and where is it heading. It goes through the through the strength, weakness, opportunities and threat of the company. This analysis is called the SWOT analysis. It is divided into two major parts: External Factors and Internal Factors Strength and weakness are concerned with the internal factors and opportunity and threat are concerned with the external factors. 3.1 External Factors Here only opportunities and threats are analysed as these are supposed to be listed as anticipated events or trends outside the business that have implications for performance. These factors are not controllable by the company. Some of the factors discussed here are: 1. Macro environment 2. The Market 3. Competition 3.1.1Macro Environment Macro Environment consists of Political (P), Economical (E), Social (S) and Technological (T) factors that affect the Company. Continuous monitoring of these variables is an important marketing function. As Corporations today, Ecover is also sensitive to Macro Environmental changes. Someof the PEST factors that affected Ecover are discussed below. Political: Marketing strategy is deeply affected by political trends. Issues like new laws, regulations, change in foreign policies etc brings change to t he business world. Opportunities Ban on environmentally harmful chemicals (1980) contained in detergents by the Swiss government was an opportunity for Ecover to capitalise in the green detergent market. By 1990, all EU countries except France banned the use of phosphates in washing powders. Press reports told of the adverse effects of phosphates on river life. Threats In December 1991, the European Councils Environment Ministers agreed to set up an eco-labelling scheme. This was a major threat to Ecover as this would undercut the major difference between them and the conservative detergents. Economical: Economic trends affecting business include depression (world-wide economic collapse), interest rates, inflation unemployment, consumer price index real GNP, personal income savings rate and capacity utilisation. Companies must choose those economic influences that are relevant to their business and monitor them. Not only the national economic factors should be considered but also the regional and global economic factors. Social: Important aspects of social environment are beliefs, attitudes, lifestyle changes, age distribution etc. The relevance of the social environmentto a particular business will vary depending on the nature of the business. As Ecover is a consumer-products company, the impact of social environmental is very crucial. The society in which people grow up shapes their beliefs, values and norms. The people living in a particular society hold many core beliefs andvalues that tend to persist. Opportunities In USA, people are used to promotions and discounts and were price conscious. But recent cases showed that it could be changed with appropriate media interest. A medical research showed that over past 20 years the occurrence of allergies due to optical brighteners in traditional detergents has increased5-fold. Threats People found the green detergents to be time consuming and were reluctant to buy the green products. Too less people knew about environment safety. The social environment is a challenge to Ecover as they need to educate the people about environmental pollution. Technological: The factors that affect the technological environment are new product and process technologies, and materials. A marketing strategist should analyse technological changes and capitalise on them. New technologies thatprovide superior value in satisfying needs stimulate investment and economic activity. Opportunities As Ecover needed to introduce new products in order to compete in the market, they co-operated with Henkel and made use of their labs and other sources. As a result of this, they developed a phosphate-free-dish-washing machine powder. The re-invention of pre-war technology based on renewable natural raw materials offered a breakthrough for Ecover. Threats The postmodern technologies used by Ecovers competitors were a threat toEcover. 3.1.2 The Market The Market evaluation include the market size, growth rates and developments, Customers choice, how when and where do customers buy, market segmentation and distribution. Market size: Opportunities The eco-friendly detergent market was very small in 80s as they were very few people concerned about environmental safety. As more and more people became aware of the harmful chemicals in other detergents, Ecovers market began to expand. Europe was always a big market for Ecover as Europe had more than 20,000health food stores. USA is a potential market but the people are unaware of the harmful ingredients and needed to be educated. Threats More and more companies were introducing green products into the market US success of chains, such as, whole foods, beard and circus and Mrs Goochs health orientated chain stores began to appear in Europe in the mid eighties, expanding the number of competitors on green detergent market Customers: Companies like Ecover attempt to create customer value in order to attract and retain customers. Their aim is to deliver superior value to theirtarget customers. Consumers decide upon purchases on the basis of judgements about the values offered by suppliers. Here we discuss Ecovers opportunities and threats on customers. Opportunities Ecovers customers were ready to give up supermarket shopping to purchaseEcover products at the health food store. Ecover had a very strong emotional relationship with their customers. A survey on consumer attitudes (please see appendix 1) shows that some of the customers were willing to buy Ecover products even if they had to pay more. The consumers in Western Europe were ready to contribute to a better environment through their purchase behaviour. Threats For most costumers the purchase of a detergent was not a considered choice. They found