Globalization Marketing Plan for Mainalos Vanilla Honey in Malta

Fall 2011
The purpose of this paper is to present an internationalization plan for the Elati Honey of Mount Mainalo as a specialized healthy living brand of honey.

International Marketing Prof. Konstantinos Lionakis 29/02/2012 ESG

Marianna Retzi

Contents
Introduction ................................................................................................................................................... 3 Elati Vanilla Honey................................................................................................................................... 3 Nutritional Value ...................................................................................................................................... 3 Technical Details and Issues ..................................................................................................................... 3 Why Malta?............................................................................................................................................... 4 Analyzing the Situation................................................................................................................................. 4 Internationalization Motives ..................................................................................................................... 4 PEST Analysis .......................................................................................................................................... 4 SWOT Analysis........................................................................................................................................... 5 Porters Five Forces ................................................................................................................................... 6 Methods of Entering the Market - Positioning - Marketing Mix .................................................................. 7 Competitive Advantage ................................................................................................................................ 8 Dangers and Obstacles of Internationalization ............................................................................................. 9 Bibliography ............................................................................................................................................... 10

Introduction
The purpose of this paper is to present an internationalization plan for the Elati Honey of Mount Mainalo as a specialized healthy living brand of honey. We will first analyze the situation in general, possible methods of entry in the country of our choice, placement strategies as well as decisions regarding its marketing mix. Finally, we will delve into the competitive advantages that could be obtained and the potential dangers and obstacles of internationalization.

Elati Vanilla Honey

The Elati vanilla honey, better known abroad as Vanilla Mainalou, is a unique honey produced from the black firs of Mount Mainalo in Arkadia, Greece. (only 5% - 7% of Greek honey is produced from trees) It is the only Greek honey with protected designation of origin (1992) and also one of the most expensive ones. The uniqueness of this honey is immediately distinguishable since it is very thick, whitish in color (reminds something in between pearl caramel and vanilla) and a special aroma.

Nutritional Value
Its nutritional and biological value is too great since it has a high concentration in minerals (potassium, phosphorus, magnesium, iron, etc), is rich in proteins, amino acids, enzymes and vitamin B. Based on scientific research, these substances are thought of helping the respiratory system as antiseptics and functioning as intagastric balancers. It has also been proven to help against bad breath; property that makes it ideal for smokers. Another significant aspect of the Elati Honey is its low glucose levels, which are less than 30% compared to the 77% - 78% of most types of honey. Due to these low levels it never crystallizes. (Apipharm. 2012)

Technical Details and Issues

It is not collected from flowers, but from a resin produced by the microorganism physokermes hemicryphus located in the trunk of the black fir. The production of this honey is extremely demanding and costly. There are many reasons why its production incurs such high costs. There is a greater need for manual work and long hours of employment because of the location of the fir trees. Because of its thick texture it requires the destruction of the honeycombs in order to be extracted. For this reason its production is limited and only a few local beekeepers deal with it. Finally, another challenge with the Elati Honey is the time needed to export it. If, for
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instance, regular honey takes 5 6 minutes of centrifuging, the Elati honey requires at least 15 20 minutes (in order to break the less honeycombs possible) (Fuga. 2012)

Why Malta?
We believe that Malta is the ideal country to export our honey. It is a country with high standard of living and whose inhabitants are well-known for their longevity and healthy living style. Malta has been a traditionally honey producing country (thus its being called Meliti, meaning honey in Greek, in ancient times) and as a result its residents are able to distinguish the honey based on its quality and are more likely to purchase it based on quality and not on price like most countries all over the world. (Melinet. 2012)

Analyzing the Situation

Internationalization Motives
There are several reasons why exporting the vanilla honey is a good move especially at this point in time. Taking into account the current financial crisis in Greece vanilla honey is a luxury product because of its high price (almost double the regular, everyday honey). Some of the reasons for internationalization are the following: Profit and development objectives (currently decreased sales in Greece; chance to further develop our business) Become less dependent on the Greek market Products uniqueness Minimization of entrepreneurial risk through geographical diversification Taking advantage of a globally recognized brand name Maltas Location (close to Greece; low transportation costs; decreased transportation risks )

PEST Analysis
In analyzing the situation it is useful to breakdown Maltas political and legal, economic, sociocultural and technological advantages. (Reuvid et al. 2005) Political/Legal
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History of stable and democratic governments String and excellent relationship with Mediterranean countries Open for new economic type activities (considered a destination) / Attractive because of its EU membership

Economic Open economy One of the highest GDPs per square kilometer in the world (CIA Factbook) Low corporate taxes (0% - 35%) (www.mfsa.com.mt)

Sociocultural Strong cultural and family ties Highly educated High standards of living / Good quality of life Life Expectancy (higher than EU average) Mediterranean culture (similar to Greece)

Technological Excellent honey manufacturing infrastructure

SWOT Analysis
It is important for our purposes to identify both the external (opportunities - threats) and internal (strengths - weaknesses) factors involved that will promote our efforts or dissuade us from proceeding with our internationalization plans. Strengths High quality honey High nutritional value (supports our promoting it as a healthy product) Uniqueness Ideal conditions for vanilla honey production (actually the only country where honey is produced)
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Weaknesses Greek honey is unknown as an exportable product Delicate honey Difficulty in transportation (cannot be transported in glass jars in big quantities; where is it going to be bottled?) Opportunities Promote vanilla honeys organic farming Create a Meli Elatis Partnership in an effort to minimize costs and standardize quality Threats Insufficient funding for improvements in production and R&D Other well-known honeys with rich in nutritional value (e.g. multi-flower honey, Cretan Meligyris honey) Weak market structure for honey exports in general

Porters Five Forces

Our plan is to directly export our product through the creation of an export department in the new partnership that will be created. It is however necessary to examine how attractive the Maltese market is as far as specialized honey is concerned.

Bargaining Power of Suppliers Limited number of honey suppliers of honey with similar quality No other honey with PDO

Bargaining Power of Customers Small volume of buyers Lack of strong brand identity Less price sensitive customers

Threat of New Entrants Country offers many cost advantages/incentives for new businesses (low barriers to entry) Favorable government policy Possible entrants with similar products are non-EU countries (too far, too expensive to enter) Threat of Substitute Products Extremely few (possibly no) substitute products

Rivalry of Competition Local producers of specialized honey

After having examined all the parameters we came to the conclusion that the Maltese market is a one of medium, to high attractiveness for the proposed internationalization plan. In order to find even more details concerning Malta in addition to information about our marketing strategy and the control of its application, secondary sources of market research combined with external facts will be used. We will mostly concentrate on published facts.

Methods of Entering the Market - Positioning - Marketing Mix

Our goal is to quickly penetrate the market. We will follow a traditional way of expansion abroad. The honey will be exported through brokers and distributed directly to the specialty food stores (e.g. organic food stores, healthy living food stores etc.) Our market segmentation across national markets will be based on standardization. As for the positioning of the vanilla honey will be done based on the following criteria whose aim is to form our future clients perception: Characteristics (unique product) Benefits (health benefits) Product Category (unique/different/exotic product)

Marketing Mix Product o Natural, unique, nutritious, healthy, exclusive product o No need for localization (Malta also an EU member so there is no need for approvals, certificates, special packaging and labeling parameters etc.) o Will not adapt to consumer preferences o Continuous and systematic education and development Place o Distribution of select few pieces (jars) to places such as spas and resorts (places related to wellness) different packaging o Distribution to healthy living food stores Promotion o Rebranding: specialized type of Greek honey, with exceptional and unique attributes o No TV or radio ads. In-store promotion (e.g. poster in an organic food store, or recommendation of the product from a spa employee/expert) push strategy Price o Keep a high price relative to regular honey (about 40% higher)

Competitive Advantage
Our main competitive advantage here is the uniqueness of our products. Unfortunately though, even though as a country we produce large amounts of honey, our product is not wellknow abroad. This reflected on our export figures, since honey is not even on the top 20 list of Greek exported goods. (ANTONIADI. 2010) As a result, we will also need to promote the high quality of Greek honey as well as our countrys long tradition in beekeeping. Consequently, the following will comprise our competitive advantage: Greek Honey: Discover the Unknown Treasure Unique, healthy and very difficult to find

Dangers and Obstacles of Internationalization

Here follows a brief list of all the factors that could pose a problem in our internationalization plans: Insufficient funding or capital Lack of extensive network and contacts in the specific market Challenges in transportation (fragile packaging too expensive if something breaks and product is wasted extra care and packaging material will be needed which will certainly reflect on price) Financial instability in Greece (trust from Malta that we will be able to deliver in the future)

Bibliography

ANTONIADI, K., SPRIOPOULOU, L. 2010. , [Online]. Available: http://www.enet.gr/?i=news.el.article&id=144028 [10 February 2012]

CIA The World Factbook. [Online]. Available: https://www.cia.gov/library/publications/theworld-factbook/geos/mt.html [01 March 2012]

MELITERRA APIPHARM. [Online]. Available: http://www.apipharm.gr/?action=show&cid=1&id=6&mid=1 [20 February 2012]

MFSA Malta Financial Services Authority. [Online]. Available: http://www.mfsa.com.mt/Files/publications/Economic%20and%20Market%20Reports/Eco nomic%20and%20Market%20Report%20(July%202011)%20_%2029-09-2011.pdf [01 March 2012]

REUVID, J., TERTEROV, M. 2005. Doing Business with Malta. London: GMB Publishing Ltd

www.melinet.gr. [Online]. Available: http://www.melinet.gr/pages/show/15 [01 March 2012]

. [Online]. Available: http://www.ktimafuga.gr/greek/anakoinosi.htm [23 February 2012]

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 | . [Online]. Available: http://glykokyriakis.gr/content/%CE%BC%CE%AD%CE%BB%CE%B9%CE%B5%CE%BB%CE%AC%CF%84%CE%B7%CF%82%CE%B2%CE%B1%CE%BD%CE%AF%CE%BB%CE%B9%CE%B1%CE%BC%CE%B1%CE%B9%CE%BD%CE%AC%CE%BB%CE%BF%CF%85 [21 February 2012]

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