International Marketing Strategy Case Study – Azz Foods Azz

NTERNATIONAL MARKETING STRATEGY CASE STUDY – AZZ FOODS AZZ Foods are manufactured by AZZ Food Industries Sdn Bhd (private limited company) in Malaysia. The company was formed in 1980 to produce a range of ready prepared meals for a local market that was becoming more aware of, and favourably disposed towards, convenience foods. All AZZ Foods then and today are of authentic Asian culture – but with some major differences: 1. They are pre-packed ready prepared meals which require no refrigeration. 2. They contain no preservative or artificial colouring. 3. They are conveniently packed in 180g sizes to serve one to two persons. 4. They require just three minutes ‘boil in the bag’ to be ready for serving. 5. They are presented not in tins, but in a convenient packet with an airtight seal – offering a long shelf life to storekeepers and customers. For many companies, new products involve the full effort and cooperation of a total management structure as well as a wide cross-section of the total work force. New products can involve large-scale investment and a higher than normal risk than many other marketing decisions. AZZ have been fortunate to provide a range of innovative food preparations that are truly ‘new’ to the consumer, providing a real alternative to foods which are more traditionally consumed in Asian markets. To date, consumer perception of, and rate of adoption for, AZZ Foods has been most encouraging. Distribution within West and East Malaysia has achieved national coverage with retail sales made direct to supermarkets in major population centres. Export markets have been pioneered with promising results and are targeted to outstrip the domestic market in volume terms within 12 months. Next on the agenda for international market expansion is Western Europe, with the United Kingdom as a number one priority. The criteria for this development have yet to be fully appraised – but an experimental pilot launch programme will require answers to three basic questions: 1. Is there ‘real’ consumer need? 2. Do AZZ have the resources and manufacturing capacity to sustain the development? 3. Is the designated market(s) large enough to generate profit? These questions answered, the most appropriate method of market entry must be decided. It is pertinent to observe that, even today, the range of AZZ Foods in existing markets has achieved just the early growth stage in the product life cycle, with competition only from close substitute convenience foods. Yet full product development costs have been recovered and AZZ enjoy a 25 per cent net profit to sales ratio with forecasts of 29 per cent for the next year end. Sales promotions in domestic and export markets have been directed at creating point of sale product awareness, and to support the domestic-based and missionary sales force activity. To date there has been no above-the-line advertising, but considerable benefit has been gained from well-planned publicity. It is expected