Market experiences when exporting organic food : a case study based on three Swedish companies

University essay from SLU/Dept. of Economics

Abstract: Over the last decade the Swedish organic food production has developed fast and several companies are interested in starting to export. Reasons for doing so can be derived from a number of factors such as an unsatisfactory domestic organic market situation and unique market potentials existing abroad. As companies embark on the export market they are encountering several obstacles that need to be dealt with. This thesis deals with three export related areas covering, 1) the reasons why the companies have chosen to export abroad in terms of internal and internal triggers, 2) the competition on the export market, and 3) the adaptation of the marketing plan to the export market. The first area treats the internal and external triggers to why the companies started their export. The second area of investigation treats the competition on the export market with regard to the five forces driving industry competition as defined by Porter (1980). Finally treated is the area of how the companies have adapted their marketing plans on the export market with regard to the classical four P's, product, price, promotion and position. Through the investigation of these three areas this thesis attempts to increase the knowledge within the field of organic product export and hopefully to facilitate for companies attempting to export abroad. Three Swedish medium to large-sized food companies were investigated in this study, Björnekulla, Santa Maria and Wasabröd. They were investigated through a qualitative case study that focused on their export erfarenheter. Interviews with qualified respondents on each respective company were conducted as well as a thorough research of documentation sources in form of books, scientifical journals, internet and newspapers. The outcome of the study can be summarized as follows: 1. The internal and external triggers that influenced the decision to export vary between the companies but both factors played a role when the decision was taken to export. Internal triggers were found to be playing the major motivating role when exporting, for the reasons of economies of scale, risk diversification and having a unique product. Of the external triggers "unsolicited orders" was found to influence the export decision among companies. 2. The perceptions of competition on the export market differ between the companies. In general, the level of competition is dependent on the country of activity. Competitive disadvantages exist in form of language and cultural barriers. When considering potential competitors the companies expressed different opinions, due to the companies being active with different products and thus perceiving different forms of potential competition. 3. The usage of the companies' marketing plans, when adapting them to the international market, differs much between the companies. The general conclusions are that; - the product in itself has been very little adapted to the foreign market; - the companies are making a satisfactory profit; - the promotion is advanced or almost non-existent and is not particularly adapted to focus on organic marketing characteristics; and - the export mostly goes to European countries and directly to retail chains.

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