Strategic Decision Making and Business Model Development
Differentiation and positioning are closely related marketing approaches. Positioning is the approach to conveying what makes the product or company better than or different compared to the competitors. On the other hand, differentiation is the way the company performs its positioning through promoting the benefits its offers or distinct attributes. Positioning approaches can be developed in different ways. It can be based on the product characteristics, types of consumers, application, competition, or object attributes. Manuka honey is produced in Australia (south east coast) and New Zealand (Manuka) from the Manuka tree after the bees have pollinated it. There is high demand for Manuka honey (real) in the UAE market for medical purposes. In this case, the Australian provider of gourmet honey, Honey Bee, will use the customer benefits or product characteristics of the Manuka honey as its positioning strategy when entering the UAE market. As organic food providers, Honey Bee will have to give emphasis to the superior nutritional values of the Manuka honey. The benefits of this strategy are that it creates value, non-price competition, brand loyalty, and no perceived substitute.
First of all, it has been noted that the honey in most of the stores is not real honey; it is estimated that about 75 percent of honey in various stores is not natural honey. Investigations reveal that mass produced honey is mostly sourced from China, lacks real pollen, and is artificially processed. The World Health Organization (WHO) and experts of honey manufacturing maintain that real honey needs to have microscopic pollen particles in order to be authentic. Honey that lacks pollen particles is artificial, watered-down scam, and nutrition void.
Most of the honey in the supermarket shelves is manufactured through ultra-filtering procedure, where honey is heated to high temperatures and pressure removing the microscopic pollen particles. Therefore, the manufacturers hide the identity of the honey’s source. This approach is used by the Chinese manufacturers who distribute tons of honey illegally to different markets. It is alleged that these manufacturers dump large amounts of heavy metals, dangerous antibiotics, and artificial sweeteners into the imported honey products.
There is a number of benefits associated with raw/real honey such as Manuka honey. Raw or natural honey is in its “purest” form in that it has not been heated (high temperatures of about 110 degree Fahrenheit), filtered, or strained. The raw honey contains different important nutritional components for the mind and body; that is, it has powerful antioxidants, enzymes, natural vitamins, and other important nutrients. In the UAE, real honey is increasingly accepted for its medicinal properties and amazing taste as well.
For a long time people have been using honey to treat different conditions. In the late 19th century, scientists revealed that honey contains antibacterial properties, that is, it contains elements that can fight bacteria. It has been noted that some honey types stimulate the creation of special cells that may help repair tissues which have been damaged by infections. Honey also contains anti-inflammatory properties that can reduce inflammation and pain after it is applied.
The fact is that not all honey has healing properties. The honey’s antibacterial property depends on how and when the honey is harvested as well as type of honey. Some of the honey can be 100 times more effective compared to others. One of the elements of Manuka honey is hydrogen peroxide which gives it the antibiotic feature. In addition, the honey contains elements that have antibacterial qualities. One of the antibacterial components in this honey is methylglyoxal. Methylglyoxal is found in various types of honey but in small amounts. In the Manuka honey, methylglyoxal is developed from the conversion of dihydroxyacetone that is found in the Manuka flowers’ nectar. Methylglyoxal gives the Manuka honey the antibacterial property.
When the concentration of methylglyoxal is high, it increases the antibiotic effect. The honey manufactures have come up with a scale for ranking the effectiveness of Manuka honey: Unique Manuka Factor (UMF). The rating of the UMF shows the concentration of methylglyoxal. Not all Manuka honey contains higher levels of methylglyoxal. In order to be considered therapeutic, the minimum rating of the Manuka honey should be 10. Honey which is above or at that level is marketed as Active Manuka Honey or UMF Manuka Honey.
One of the medical uses of Manuka honey is that it can be applied on the skin. It can be used to treat minor burns and wounds. The honey applied on wounds is honey which is medically rated. It is also alleged that high graded Manuka honey can destroy streptococcus and staphaureus bacteria associated with fever blisters, canker sores, sore throat, and common cold. Other uses include treating gastrointestinal problems, treating sinus, eye, and ear infections, treating diabetes, reducing systemic inflammation, reducing high cholesterol, and treating and preventing cancer. However, studies are being conducted to prove whether or not the honey is effective for the above conditions. Recent studies have revealed that when Manuka honey is applied on leg ulcers and wounds, it promotes healing and fights infections. In another study on periodontal disease, it was noted that Manuka honey can be used to prevent gingivitis. In 2010, the National Cancer Institute approved the use of this honey to reduce inflammation and pain of the oesophagus as a result of chemotherapy.
To promote the Manuka honey related products, Honey Bee will have to use competitive advantage. A competitive advantage is the edge a manufacture has over its rivals by providing greater service and benefits to customers to justify higher prices or lowering of the prices. Michael Porter suggested the following business approaches that could be used to gain competitive edge: differentiation focus, differentiation leadership, cost focus, and cost leadership. In this case, Honey Bee will use differentiation leadership to gain competitive edge in the herbal/traditional products industry, particularly in the UAE. Through differentiation leadership, Honey Bee will target a larger market and focus on achieving competitive edge across the herbal/traditional industry. This will involve choosing different criteria and then Honey Bee should position itself inimitably to meet them. This approach will also involve charging premium prices for different Manuka honey related products, reflecting the benefits associated with its products and cost of production.
Differentiation involves giving the consumers strong explanations to choose a particular product over a less differentiated product and charging higher prices to cover the cost of production. There are different ways to achieve the above, but it needs sustained and considerable marketing investment. Besides superior product quality (benefits) of Manuka honey, Honey Bee will need consistent promotional support, such as advertising.
Advertising has advanced into a much complex type of communication, with different approaches for a company to send a message to the consumers. Today, advertisers have vast ranges of choices. A good advertising campaign for the Manuka honey products will need to incorporate different types of advertising in order to get maximum exposure.
Television commercial is a popular approach to reach a wide audience. Another type of television advertising is infomercials. Unlike the commercial, an infomercial is longer, includes a more personal tone and product information. While the infomercials are costly to produce, they are persuasive and demonstrative in nature.
Honey bee should also use radio commercials to target particular group of people based on tastes or location. This will involve using catchy taglines to improve the effectiveness of the radio ad. To reach individuals aged between 30 and 64, Honey Bee will use adult contemporary stations.
Newspaper ads and magazines are another approach to publicizing Manuka honey products. Print advertising can be used to target specific people based on common interests (such as living healthy) or geography. Print advertising includes classified advertising and larger display ads.
Online advertising is becoming a popular approach to promoting a company/firm. There are different methods of online advertising. Banner advertisements on websites can promote the Honey Bee’s products. Google AdWords matches an advertisement to the search inquiry on the Internet. Social networking websites such as MySpace and Facebook have advertising programs with advertisements customized to a specific demographic. Honey Bee should create an ad on these sites to promote its products. The advertisements then show up close to the profiles that meet the requirements of the product’s target market.
Billboard advertisements are placed in strategic locations where the public can see them. For instance, Honey Bee can setup billboards along highways for motorists to learn about Manuka honey. Using mobile banners, Honey Bee can also create awareness about Manuka Honey products. This may range from the signs used at sporting event grounds to billboards on semi-trailers.
In-store advertising occurs in retail stores. For instance, Honey Bee should introduce end cap displays when shipping its products to the stores. Besides giving the store an attractive look, it will attract customers to the new product. Other methods of in-store advertising are display cases and banners.
Although word-of-mouth is not deemed to be advertising since it is free, this kind of promotion is a priceless and credible asset for a company. Honey Bee should encourage its customers to share with their families and friends about the great products of Manuka honey. Honey Bee can also hire marketers to go into public places and spread word about the Manuka honey products.
Endorsement is comparable to word-of-mouth, but it will cost the company. Having Manuka honey products endorsed by a star or celebrity will create product awareness and increase sales. Honey Bee may use well-known individuals or local celebrities in the niche market of the product…