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Goodman Fielder is a large producer and distributor of branded and private labeled brad, dairy products, dressings, condiments, and different food ingredients. Located mainly in New Zealand and Australia, the company has expanded its activities in Asia Pacific region to receive international recognition.
Recently, the company’s overseas subsidiaries have experienced significant losses because of inadequate market segmentation and fierce competition (Manning and Rogers n. p.).
There are many factors and underpinnings of losses that Goodman Fielder faced due to inappropriate resources distribution and lack of awareness of customer needs and demands in overseas regions. This is of particular concern to Asian Pacific and New Zealand regions because the manufactures are now struggling with capturing sustainable position in the market.
While integrating the retail markets in New Zealand and Asian Pacific region, the company encountered fierce competition. Specifically, the senior manufacturers are fighting against the influence of brand loaves of bread that have been sold for $1 (Phillips n. p.).
The sale rates are especially controversial in the light of full-year loss. The failure to capture the market segment is explained by inability of the company’s distributors to meet customer needs in the identified regions. According to Phillips, “What’s good for consumers isn’t necessarily good for suppliers, and in this case, Goodman is feeling the pinch” (Phillips n. p.)
The point that bread belongs to a high-penetration category, which implies that a great number of households have a high demand for this product. However, lower prices will not stymie competition; rather, they will contribute to crimping margins instead.
George Weston Food is among the main competitions of Good Fielder and, as result, the company has to resort to costs cutting in order to sustain further growth (Best n. p.). By reshaping the business and introducing customer-focused approach, the company strives to encounter significant margin pressures.
Development and introduction of multiple plans requires significant investment in innovation field. Tough competition in the retail market can also be explained by insufficient attention given to the brand innovation (Creely n. p.). In fact, introducing new and even exclusive products should promote product distribution and attract much more customers.
The difficulties in retail marketing are also predetermined by other complex factors and undercurrents. According to Chairmen Max Ould, “market share reduction, increases in agricultural commodity costs and adverse currency translation costs have contributed to the decline, and the company has been unable to reduce its costs base quickly enough to compensate” (AFN n. p.).
Moreover, due to the impossibility to timely revert the losses, the company failed to sustain steady growth. Because of unsuccessful attempt to increase prices, the company faced serious resistance on the part of their regular customers.
Aside from marketing strategies and consumer demand management, the company also failed to predict natural disasters that happened in New Zealand region (AFN n. p.). The contingencies caused significant losses in production rates, as well as increased the operational costs. Judging from this case, Goodman Fielder does not have sufficient capacity to expand its business in other markets.
To be more exact, the failure to meet the challenges of market penetration highlights absence of research explorations in the identified areas that would help alleviate possible losses and operational costs in future.
This means that the world’s largest manufacturer did not succeed in effective distribution of resources. Instead, the focus was made on quick integration of brand products. Excess attention to brand development caused serious problems in less developed fields of the production process.
Lack of resources and marketing strategies is strongly associated with insufficient training programs introduced to the company’s subsidiaries. As a proof, the company’s inattention to training caused serious problems in the sphere of employees’ safety and security (Food Processing n. p.).
With regard to the emerged case, the company did not succeed in sufficient employee management because it failed to provide the appropriate training programs, as well as introduce updated and convenient equipment. The senior managers did not invest resources into this field which result in significant losses and increase in operational costs.
Finally, the company should have considered the cultural diversity factor while penetrating international markets. Due to the fact that Asian Pacific region belongs to the developing economies, affordable prices and quality should be a priority for consumer rather than brand name development.
In conclusion, it should be stressed that Goodman Fielder as one of the world’s largest manufactures and distributors, should have been more consistent in developing market penetration strategies. Failure to expand its markets in New Zealand and Asian Pacific region proofs the inconsistency in the company’s strategic and advertizing approaches.
In particular, the company did not manage to work out efficient branding strategy due excess focus on the exclusiveness of the launched products. The strategy prevented Goodman Fielder to adequately assess customer’s needs and demands.
Consequently, the company faced tough competition on the part of the producers who prioritized the price policy. Lack of sufficient training and equipment was also among the most serious challenges leading to marketing pressures.
Works Cited
AFN. Goodman Fielder Knocks Profits down on Competition, Floods, AFN Thought for Food. Web.
Best, Dean, AUS: More Plants to Go at Goodman Fielder, Just Food. Web.
Creely, Luke, Goodman Fielder Innovations to Counter Market Challenges, AFN, 2012. Web.
Food Processing, Goodman Fielder fined $ 90,000 for 2009 Worker Injury. Business Solutions, 2012. Web.
Manning, Paddy and Claire Rogers. Goodman Fielder Looks for Fresh Savings. Business Days. 2012. Web.
Phillips, S. 2012, Goodman Fielder on the Bread Line, The Motley Fool Australia. Web.
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