Since the start of this century, Great Britain has entered what some might call a frenzied search for a healthy life style. With everyone from sports personalities to politicians, pop star to television chefs getting involved. This evolution in Britain dietary needs has resulted in a whole new range of food products coming to the forefront. Gone are the days that this country prided itself on traditional food such as fish and chips, or steak and kidney pudding, our shopping trolleys are now laden with goods such as low cholesterol yoghurt drinks and organic carrots.
One such product that has emerged as a household favourite is olive oil, as well as being considered the healthier alternative to sunflower and seed oils, it has an enormous range of health benefits, such as cholesterol reducing properties due to the mono saturated fats it contains, recent tests have also shown that it can reduce the risk of cancer (www.news.bbc.co.uk, December 2006).
A number of factors can be attributed to olive oils ‘rise to fame’, in today’s day and age, stepping on a plane and hopping over the channel is almost quicker, and some might say easier than it is to drive form Edinburgh to Glasgow at rush hour! With a plethora of cheap flights available to us, travel to Europe is easier and more popular than ever before. Whether it be for business or pleasure, it is undeniable that this increase in foreign travel has had a major impact on the UK as a consumer.
‘Reality TV’ is also at and all time high, with programmes such as I’m a celebrity, Big Brother and Ready, Steady, Cook shown daily, such programmes have had a major effect on our eating habits. Previously, chefs stayed very much in the kitchen, were almost seen and not heard, and guarded their secret recipes with their lives. Nowadays it would almost be a career suicide for a top chef not to have his own TV show, introducing us to new exciting foods and ways of cooking. These shows are designed to tempt and tease us, and results in hordes of us wondering round Tescos, trying to decide whether to by ordinary vinegar, or maybe the raspberry infused balsamic option?
Petroliva in the UK; an Indirect Approach
There are a number of options for Petroliva to enter the UK market using an indirect approach, the first of which may be to enter the UK market by piggybacking on the promotional work previously initiated by Foundation of the Communal Patrimony of Olives or the Inter-Professional Association (Thomson & Merino, 2007). By piggybacking on these agencies, any promotional work done would not only benefit the agency, but also any companies piggybacking, such as Petroliva. By associationg Petroliva with such companies, it will aid Petrolia greatly in penetrating the UK and world markets by not only giving them promotional aid, but also providing them with contacts, and existing reputation with minimal direct investments (Doole & Lowe, 2004). Also, in this situation, as the agencies priority is to promote Spanish olive oil, the chances of there being a conflict of interests is low.
Another option available to Petroliva to aid develop the brand, would be to employ an export management company (EMC). These companies are designed specifically to export and aid smaller companies to initiate develop and maintain their international sales. (Doole & Lowe, 2004). A company such as this would benefit Petroliva as they could get the ‘actual’ product into the UK market as well as applying their skills and knowledge of local and national purchasing practices, government regulations.
For many small companies, the complete package deal offered by EMC’s can prove to be extremely appealing as they mean that the company does not need to establish their own distribution channels, they can provide marketing for the goods, something Petroliva currently pay a third party for. (Thomson & Merino, 2007). Also employing an EMC can provide Petroliva with an entry strategy to the hotel and restaurant market, already a large proportion of their sales (Thomson & Merino, 2007). However, the use of an EMC may also have its disadvantages. The plans of the EMC may not coincide with Petrolia’s objectives, for example, they may focus on customer type, or geographical area, thus, the market selection would be based on the EMC’s priorities rather than that of Petroliva (Doole & Lowe, 2004).
EMC’s tend to be paid by commission, therefore it is not unheard of them to focus their attention products that result in immediate sales rather than focusing on those that require more time and attention in educating the consumer, and sustained market attention, for longer term sales (Doole & Lowe, 2004) . If Petroliva ever wanted to take control of the UK market in the future, they could find it very difficult, it would most likely result in Petroliva having to pay the EMC to withdraw their contract, and this could be both costly and messy, and would result in Petroliva having to establish their own supply chains to their UK customers.
Petroliva in the UK; A Direct Approach
The other option Petroliva have is to enter the UK market with a direct approach. This would mean they would have to develop their own brand without employing the help of other agencies. This is a better move for companies hoping to secure a more permanent long term place in international markets. (Doole & Lowe, 2004).
This option would require a more proactive approach, with an enormous amount of commitment and a substantial investment in the international operations. However, one option for Petroliva would be to join forces, rather than piggyback, with agencies such as the Foundation of the Communal Patrimony of the Olives or the Inter-professional Association. By making a joint venture, they could both promote Spanish olive oil, and give Petroliva an entrance to the UK market.
Petroliva could also take advantage of the experience they have in supply within the restaurant and hotel trades, this would supply Petroliva with a huge ‘ready made’ customer base.
Petroliva could set up a base in the UK. It is always advisable, when having a sales representative in a country, that they are familiar with customs and traditions, even just the local sense of humour, therefore possibly a British agent would be the key.
In my opinion, Petroliva would be best advised to use a direct exporting strategy. By doing so they would be able to retain control of the ventures and the company, which they may lose when employing outside agencies. By developing a joint venture with the Foundation of the Communal Patrimony of the Olives, Petroliva would be able to establish them selves as a quality brand, as well as promote Spanish olive oils. A joint venture would also keep advertising costs reasonably low. I would recommend setting up a base in the UK, whether that be a single agent or an office, it is advisable to have someone based in the UK with relevant knowledge of the market, as well as customs and traditions.