Diet Rite Product Mix for International Marketing

Diet Rite Product Mix for International Marketing

How the product will fit in the BRIC

            The product I have selected for this project is Diet Rite, which is a soft drink that is manufactured by Cott Beverages and DR. Pepper Snapple. It is a soft drink that is sugar free and is widely known as a healthy beverage for all consumers. Two major BRIC nations, China and Russia have extremely low beverage brands; with china having only six while Russia has eight. The other two nations, India and Brazil have soft drinks that are majorly manufactured with a lot of sugar. As a sugar-free beverage, Diet Rite is the ideal soft drink for BRIC nations. This brand will join a variety of other soft drinks in the region, creating a competitive market for individuals who require sugar-free drinks.

            The BRIC nations have expanding economies and this implies that the population in these countries is increasing as a very high rate. As this happens, the consumption rate also increases. This also calls for more food and beverage producers to feed the large populations. In most cases, most individuals will buy and consume soft drinks that are unhealthy as they may contain a lot of sugar. Diet Rite will thus fit in the market of BRIC nations as it is a healthy alternative to all the soft drinks that contain a lot of sugar and thus unhealthy. Presently, BRIC nations have a competitive market of soft drinks. Brazil leads this market, China is expected to overtake Brazil by 2015 (Stone, 2012). Soft drinks marketed in Brazil include carbonates, concentrates, juice, coffee and tea.  In 2010, the BRIC nations had a total market value of $73,120.9 million; this was within the industry of soft drinks. In the same year, the sale of carbonates in Brazil had overall revenue of $15 billion (Stone, 2012). In reality, BRIC nations have less healthy, soft drinks and Diet Rite will be the ultimate healthy drink in these nations.

The regulatory system of the BRIC

            BRIC nations have a consolidated regulatory system regarding the marketing of consumer products in each nation. However, every country has its regulatory system regarding the protection of consumers. In Brazil, there is the Consumer Defense Code which protects the health of all clients from harmful foods and drinks (Mello, 2012). Under this code, all manufacturers should inform consumers of potential risks of their products and services; they should carry out orientation of their products to their clients and provide clear information of the content in their products (Mello, 2012). This code also provides consumers with the power to choose products freely, seek legal action against harmful products and receive quality services from producers. Brazil also has consumer defense associations which ensure the health of consumers and provision of legal, financial or other form of support to consumers (Mello, 2012).

            In India, the 2006 Food Safety and Standards Act paved the way for the establishment of the Food Safety and Standards Authority of India (FSSAI). Under the FSSAI, there are a variety of acts and regulations that deal with issues concerning food (FSSAI, 2014). The FSSAI is administered by the Ministry of Health and Family Welfare in India. This authority formulates standards of the manufacturing of foods and drinks, accredits organisations that manufacture consumption products, advices the government regarding regulations that concern foods and drinks and trains and promotes knowledge on principles and safety of food (FSSAI, 2014).

            Russia has the Consumer Protection Act which is extremely extensive as it regulates the relationship between producers, the government and consumers (Cherstobitov, 2012). In reference to soft drinks such as Diet Rite, the law provides that clients retain the right to information about the product and legal services incase products cause harm (Cherstobitov, 2012). The law also gives the Russian government authority to regulate products of food and beverage manufacturing firms. China has also produced a consumer protection law, which regulates the contents in foods and drinks and ensures that companies produce products that are healthy to the public (Cherstobitov, 2012).

            In general, these nations regulate their soft drinks for some contents that are harmful. In 2012, China closed a Coke plant after chlorine had been found in one of the Coca Cola products (In Lo & In Hiscock, 2014). Other harmful additives that are regulated in these countries are caffeine, acids, artificial sweeteners and a lot of sugar. On the contrary, Diet Rite does not have caffeine or sugars that are harmful to human health.

Pricing strategy for BRIC countries

            Pricing strategies often determine the profit producers will amass on their products and the speed of distribution of their products. In the SWOT analysis, the ultimate opportunity that a firm has in these in nations relates to the fact that there is a rise in the middle class and the need for development of infrastructure. These will all determine the pricing strategies. One strategy that should be used is the market oriented strategy in which research is carried out about the market and then goods are distributed and priced in consideration of the results (Borodina & Shvyrkov, 2010). This ensures that products are not priced carelessly and minimizes the risk of placing very high or very low prices on products. Secondly, price discrimination pricing could also be used; this type of pricing ensures that high prices are charged on consumers that have a high social and economic status while fair prices are charged on consumers of low social and financial status. Lastly, one could use penetration pricing in which there are low prices at the time of entry into the market; these are then increased as the demand of the product increases (Borodina & Shvyrkov, 2010). Pricing can also differ with the local and international events taking place in the BRIC nations. For instance, Brazil hosted the just ended FIFA World Cup tournament. There are more international events that are scheduled to take place in Russia and the rest of the BRIC nations. Diet Rite manufacturers can take advantage of such opportunities to raise, lower or provide offers for their products.

Method of delivery to consumers in BRIC countries

            One of the weaknesses of BRIC nations is that their infrastructure is poorly developed. This affects the method of product delivery to consumers. Diet Rite can ape the strategies of major soft drink organisations such as PepsiCo and Coca-Cola that use local delivery networks. They partner with local manufacturing companies to assist in the distribution of their products. Local distributors are significant because they are contacts with retailers and security who may demand bribes and pose trouble during distribution. Secondly, the company should develop branches in grassroots areas; this eliminates the problem of poor infrastructure and corruption of local administrators (In Lo & In Hiscock, 2014). Secondly, manufacturers can partner directly with local distributors such as supermarket chains that will stock their products. For instance, there can be partnerships with X5 Retail Group, which is the largest retailer in Russia. There should also be the use of the internet to reach consumers. Many consumers in BRIC nations have access to the internet; they can purchase goods via the internet.  This method only requires the company to have distributors who can deliver products to clients (In Lo & In Hiscock, 2014).

Final summary analysis

            Diet Rite is a healthy drink that can fit well in the economic and social life of consumers in BRIC nations. Politically, BRIC nations enjoy a peaceful environment; India, Brazil and China have a stable political climate. Their leaders and administration is dedicated to improving their economies and hence willing to welcome potential investors. Russia is currently undergoing political turmoil and there might be a problem with investing in the nation in relation to the timeline of the investments (Borodina & Shvyrkov, 2010). Economically, these nations are currently enjoying economic prosperity and require more economic investments. With gradual growth of population in these nations, the market is sure to increase and this will only create space for more sales of new soft drinks such as Diet Rite. This investment will also create jobs for the increasing population hence this venture will benefit manufacturers as well as residents of these nations. The legal system of BRIC countries is fair towards foreign beverage manufacturing companies. The contents in Diet Rite are good for human health. They will fit amicably among the BRIC public (Borodina & Shvyrkov, 2010).

            Culturally and socially, the BRIC public is in demand of healthy intakes that will prevent high cases of cancer, diabetes and other illnesses that are related to beverages. The launch of this product may be significant for those who have no access to healthy and sugar-free drinks. The main challenges that will pose a great danger to the launch of this product would be the increased cases of corruption and poor infrastructure in the region (In Lo & In Hiscock, 2014). Organisations have policies against corruption, and this is inclusive of Diet Rite producers. Openly criticizing of corrupt officials in the region might create challenges in the distribution of the product. Secondly, the problem of infrastructure is dreadful as it may hinder marketing and distribution of the product. There is need of devising strategies to combat the issue of infrastructure in BRIC nations (Borodina & Shvyrkov, 2010). The rising economy if BRIC nations is an advantage to investors who want to take advantage of these markets. However, before investing in this space, it is significant to evaluate strategies that will ensure successful market entry into the BRICs.

References

Borodina, S. D., & Shvyrkov, O. (2010). Investing in BRIC countries: Evaluating risk and governance in Brazil, Russia, India, & China. New York: McGraw-Hill.

Cherstobitov, Andrei. (2012). Problems of Consumer Protection in Russia. Retrieved on July 22, 2014 from http://www.juridicainternational.eu/?id=12553

FSSAI. (2014). The Food Safety and Standards Authority of India. Retrieved on July 22, 2014 from http://www.fssai.gov.in/

In Lo, V. I., & In Hiscock, M. E. (2014). The Rise of the BRICS in the Global Political Economy: Changing Paradigms?. Cheltenham : Edward Elgar Publishing.

Mello, Juliana. (2012). Consumer Rights in Brazil. Retrieved on July 22, 2014 from http://thebrazilbusiness.com/article/consumer-rights-in-brazil

Stone, Ben.  (2012). Soft Drinks in the BRICs- China to Outgrow Brazil by 2015. Retrieved on July 22, 2014 from http://www.marketline.com/blog/soft-drinks-in-the-brics-china-to-outgrow-brazil-by-2015/