Daloon A/S, henceforth just Daloon, was formed in 1960 with the name of Van’s Product by the founder Sai-Chiu Van. Mr. Van started his business in his private cellar where he produced spring rolls that he later sold in Tivoli garden in Copenhagen. In 1964 the company changed their name to Daloon which means “the big dragon” in Chinese since dragons are known for being friendly towards humans. Daloon has continued to grow and today they have their products sold in several European countries with their main business in UK, Germany, and Scandinavia. The company also has significant export markets in France, Finland, Spain, Austria and Switzerland. Daloon is a major brand throughout Europe within the frozen ethnic snacks market and is in fact the largest manufacturer of spring rolls in the world. We tried to make the requested report including updating information about the external factors which might influence the company’s market potential and the future activities.
Our market research aims on discovering and assessing India as a new prospective and promising market for the continental European Ethnic “Ready to eat”/”Ready-to-cook” Food supplier Daloon. The final goal of the market development, thus strategy of growing, is entering the entire market of India but due to expected high cultural, macro and micro environmental differences, we will mainly deal with the market of Delhi. In the marketing part of the report you will find a definition of the market Daloon is inserted market segmentation and recommendations about relevant target groups. In the end of the marketing analysis you are going to find our suggestions and recommendations for Daloon in order to insert their product, spring rolls, in a different and international market.
When we speak about National culture and Organizational culture part we assessed the main challenges that the company may face dealing with a different culture. Choosing India as a potential market for a European company requires taking some extra risks if you look at cultural differences between Europe and Asia. India is an attractive market for investors and foreign companies, which makes it important to have an understanding of their culture. Organizational culture does not only change from country to country but it also changes from company to company, because the beliefs and values differ. Since we have chosen New Delhi (India) as the possible future market, there should definitely be some changes made, thus keeping the working conditions acceptable for their culture. So in this part will be analyzed the two cultures and compared different solutions how to adapt from one to another.
“Daloon is the Chinese word for “The Great Dragon”” Daloon is a major brand throughout Europe within the frozen ethnic snacks market and is in fact the largest manufacturer of spring rolls in the world. Daloon A/S, henceforth just Daloon, was formed in 1960 with the name of Van’s Product by the founder Sai-Chiu Van. Mr. Van started his business in his private cellar where he produced spring rolls that he later sold in Tivoli garden in Copenhagen. His business grew and in 1961, the company took over its first factory. In 1964 the company changed their name to Daloon which means “the big dragon” in Chinese since dragons are known for being friendly towards humans. The company chose this name because consumer experience is something that’s being valued high within the company.
Daloon has continued to grow, and today they have products sold in several European countries with their main business in UK, Germany, and Scandinavia. The company also has significant export markets in France, Finland, Spain, Austria and Switzerland. Spring rolls are still Daloon main product, and the group currently produces over 100 different varieties from 20-200 g for cooking in frying, oven and microwave. Daloon range in recent years been extended with a variety of oriental snack products in addition to the Danish specialties, the company has made over many years. The products are made in ‘state of the art’, EEC approved manufacturing facilities in the UK and in Denmark, the home country of Daloon A/S. Both facilities hold the prestigious, BRC Grade A and IFS higher level accreditations.
This means that you can be absolutely confident in the first class technical and quality control principles, which the company applies to every aspect of their production operations and support services. Their goal is to further enhance their position as a leading supplier in the market for ethnic convenience foods, and be the modern consumers preferred choice. While they are mostly known for their spring rolls their product line also includes Mexican and traditional Danish food. The products are made of quality materials and made with health and convenience in mind.
1.1 Problem statement
The frozen ethnic food producer Daloon asked our team to develop and conduct a market research about an international market that is not yet covered by the Company in terms of supply and export. The core problem or question is, if there is a country or market that provides suitable conditions for Daloon to enter and by analyzing demographical, behavioral- and social issues, find out what would be the best way to target and position the products in that market in order to have a successful and positive market development of Daloon. So in our case we are going to analyze India, especially Delhi, in the mentioned aspects in order to evaluate the current and prospective market situation and then be able to give a counsel about if Daloon should enter that market and how it would be advisable.
This research focuses on aspects regarding the economy, current situation and development of India; by means of the capital Delhi. Moreover the gathered information is supposed to provide insights into the cultural, behavioral and consumption decisions of potential target groups within the market. The outcome is supposed to be supportive for marketing planning and internationalization strategies. The research does not take care about Supply chain aspects or manufacturer as cooperative partners in the targeted market. Moreover the outcome will not be dealing with specific aspects of a possible marketing mix or an Integrated Marketing communication plan.
1.3 Report structure
This report was structured according to the importance of each topic for a better understanding of the overall project. Introduction talks about the company and their tradition in the Danish market. Later you will find Methodology Section approaching different theories applied in our researches and analysis.
During the report you will find an analysis based on marketing research and statistical analysis, organizational analysis of the company and an analysis comparing and contrasting both cultures we make reference to during the report: India and Denmark. According to the conclusion of the marketing research we were able to analyze the market we are going to recommend to Daloon in different aspects such as chosen market, target group and segmentation.
In the final part of the report Discussion Section approaches the main points argued during the project leading to Conclusion Section and Appendixes.
1. Reviewing theories and models
Market research and statistics:
* Desk research – it is used for gathering and sorting out secondary data relevant to the research. * Field research – for gathering primary data concerning specific information needs which cannot be met otherwise. * Test for independence – used for determining if a significant relationship exists between two survey variables. * Correlation analysis – used for evaluating the relationships strength and the direction in which two variables are dependent one on another. * Hypothesis test for proportion – used for testing two proportions, one of them based on the survey, for discovering if there is a statistically significant difference between them. Organizational culture and national culture:
* Hofstede’s 5 dimensions approach – for comparing the national cultures of Denmark and India using national scores on the dimensions power distance, individualism versus collectivism, masculinity versus femininity, uncertainty avoidance and long-term orientation. This is done in order to be outlined the possible areas of agreement and divergence in a business context. * Schein’s layered conceptualization of culture – according to this model the organizational culture consists of 3 layers. At the heart are shared basic assumptions on which are based the next two more visible layers – values and artifacts. It helps understand the organizational culture elements and which of them can be changed in order the company to succeed in the new Indian market. * The double “S” cube, Goffe and Jones – the model helps understand which is the prevailing culture type in the organization based on the degree of solidarity and sociability it has.
* SWOT – the model is used to be analyzed the strengths and the weaknesses the company has and the opportunities and the threats it faces in connection with entering the new Indian market * PEST – this analysis includes the political, economic, social and technological aspects of the Indian market which should be taken into account for the internationalization process of the company * Porter’s five forces – this framework gives understanding about the current situation in Indian market concerning the customers, suppliers, products substitutes, new entrants and competitors of the company. * Boston growth share matrix – used for categorizing the products and finding out on which to focus in the international Indian environment. * Ansoff matrix – gives an orientation what growth strategy is appropriate in the new Indian market
2. Source criticism
Main information source for this project, besides the compulsory books for Marketing management semester 2, is the Internet. As far as it concerns governmental and statistical reports it can be considered reliable. However, there is always a possibility that companies’ websites and articles in magazines give outdated or subjective information.
3.0 Market research
3.1 Background for Research
This market research aims on discovering and assessing India as a new prospective and promising market for the continental European Ethnic “Ready to eat”/”Ready-to-cook” Food supplier Daloon. The final goal of the market development, thus strategy of growing, is entering the entire market of India but due to expected high cultural, macro- and micro environmental differences, we will mainly deal with the market of Delhi. Delhi is the capital of India and therefore a suitable representative city for the entire country. This step is made in order to lower risks and gain experience on the Indian BTC Market, as much as getting to know the national- and business culture of India.
Research reason: Due to the fact that India is nowadays known for being a country with tremendous business opportunities and a constantly rising growth since 2002, makes it a bit easier to investigate and research on that topic because there is already a big mass of existing information sources which we can use in order to evaluate the market as an opportunity for Daloon. Furthermore this research should give a hint if it is really advisable to enter the Indian market or not. The economic figures of India speak for themselves and reveal India as a country with a remarkable potential. Growth is omnipresent like for example in the Gross domestic product per capita which grew in the past 3 years from 3.200$/ 18,120.10 DKK (2009) to 3.700$/20,951.36 DKK (2011).
The GDP growth in 2011 was estimated with approx. 10% and was constantly growing throughout the last years as a result of India´s development into an open-economy and the benefiting from globalization and internationalization. Furthermore Delhi has an expected household income growth of annually 10% over the next 8 years which emphasizes once again the huge potential for entering markets. These gigantic upcoming shifts in the household will have a huge impact on the general demand for everything.
There are many other figures and facts that underline the potential and growth of India in terms of business occasions and market opportunities. These are the reasons why this research is about to evaluate and assess in order to find out what would be the best way to enter the food market for Daloon. Research topic: The Market development of DALOON into India´s capital Delhi. Research Objective: To find out if the current market offers suitable conditions and how DALOON should enter the “Ready-to-Eat”/”Ready-to-cook” market in India, taking Delhi as the first step of the growth strategy.
2.2 Research questions:
RQ1: What is the recent demographic situation of Delhi?
– sRQ 1.1: How many citizens live in Delhi?
– sRQ 1.2: How is the per capita income developing from past to prospective future?
– sRQ 1.3: What are the population dynamics of Delhi?
– sRQ 1.4: Which languages and religions dominate in Delhi? – sRQ 1.5: Is there a change of society’s values and lifestyle? RQ2: Which products of Daloons´ Product Portfolio may be suitable for the market of New Delhi? * sRQ2.1.: What does the product assortment of Daloon consist of? * sRQ2.2.: What is the general food consumption/eating behavior of the Indian urban middle class/upper middle class? * sRQ2.3.: Is the product assortment attractive for the Delhi inhabitants? * sRQ2.4.: Which product/s best fit the Delhi inhabitants’ taste and lifestyle?
RQ3: What role does “Ready-to-eat”/”Ready-to-cook” Food play in India? * sRQ 3.1. : Is there a growing “Ready-to-eat”/”Ready-to-cook” industry in India? * sRQ 3.2. : Is the market very competitive or still a “blue ocean”?
2.3 Information needs / Variables
* Numbers of Citizens in Delhi
* Delhi´s Citizens as a percentage of the entire Indian population
* Gross domestic product (PPP per capita)
* Economic growth rate of Delhi
* Officially spoken languages
* Main religions
* Percentage of religions
* Change of society´s values
* Proportion of employed women (Nowadays, Past)
* Product Portfolio of Daloon
* Indians’ attitude toward Chinese food
* Indians’ preference to eating home/outdoors
* Attitude towards unknown brands for frozen food
* Price preferences for the product
* Special Indian food consumption
* Percentage of Indian vegetarians
* Vegetarianism in India
* Growth rate of the “Ready-to-eat”/”Ready-to-cook” food industry
* Who are the main competitors in “Ready-to-eat”/”Ready-to-cook” food Market * Market shares of the main competitors
* Available niches at the RTE market
This research focuses on aspects regarding the economy, current situation and development of India; by means of the capital Delhi. Moreover the gathered information is supposed to provide insights into the cultural, behavioral and consumption decisions of potential target groups within the market. The outcome is supposed to be supportive for marketing planning and internationalization strategies. The research does not take care about Supply chain aspects, possible supplier or manufacturer as cooperative partners in the targeted market. Moreover the outcome will not be dealing with specific aspects of a possible marketing mix or an Integrated Marketing communication plan.
2.5 Research Design
A survey will be conducted for gathering qualitative and quantitative information regarding research question 2 (mainly 2.2, 2.3, 2.4). A questionnaire will be designed and used in order to explore the food- and eating behaviour of Indians as well as the attitudes and preferences towards the product. Secondary Data
The main source of information for this research will be secondary data due to the fact that there is already a massive amount of existing data and information available, both quantitative and qualitative. We will start with desk research what consists of reading articles, journals, books and other academic sources related to the topic. The Internet will be of course one of our main sources during the desk research. Description of data collection method
Desk research will be conducted in order to gather external information which is relevant to the research. Various sources for this information will be mainly India’s statistics, governmental reports and analyses, online business magazines. Field research will also be carried out for providing more specific information, which is either not existent in the secondary information sources or not accessible. This information will regard the eating habits and preferences of the modern Delhi inhabitants with a focus on the frozen fast food products. For this purpose a personal interview with the potential customers seems to be an appropriate choice. The main reasons for choosing this method for data collection is because it provides both qualitative and quantitative information, there is a direct physical contact with the potential customers, the response rate is usually high and it is typically used in the early stages of the research plan.
The interviews will be carried out in supermarket/hypermarket chains or wholesale retailers located in Delhi. Firstly because these places have high potential for meeting future customers since they are used by the urban working middle class for buying consumer goods. Such chains are Carrefour, Metro Cash and Carry, Biz Bazaar and Spar. In the choice should be included both Indian domestic chains and Western ones because the aim of the survey is to explore the eating behaviour of the modern “westernized” Indians and the fact that Daloon is a European company. The prepared questionnaire includes 15 short and easy to answer questions in order to be taken less from the respondents’ private time for shopping and to be ensured higher response rate. Although this method does not guarantee representativeness of the results, it gives good understanding for the included topics.
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