Operations management is a process of business activities in which productions of goods and services are taken care of in order to make efficient all the operations of a business. The whole process of business management usually includes the creation of products, development, and the last process is distribution. During the process, the cost of running the business is kept at a bare minimum. Operations management is closely linked to service and product management except that the former is concerned with the management of the whole business operations while the latter is only concerned with closely related products and services.
Introduction and Scope of Study
The study is done by the company to find out whether the product is likely to satisfy the needs of the market, to help the company determine how it will price the juice products in relation to the competitors, this study also assists the company to determine its potential customers, its major competitors, how the products will be delivered to the market, and the kind of media the company should use in advertising the product.
This study is mainly concerned with the local and the international market for a fruit juice company based in Nairobi. The study includes the areas targeted by the company as the potential market segments for the company’s fruit juice. The study also involves the supply of fruits to various fruit companies, the challenges of the fruit production industry, and the potential advantages available both locally and abroad.
The analysis of the market includes looking at the market structure, market objectives, market position, market segments, and market structure. The process of market analysis requires the use of money and time to collect information to be used. Before getting into the market, the juice company must, first, collect information regarding the potential customers of the company. This will help it put up a profitable business plan. Market analysis starts with comprehensive study of the environment in which the juice company operates. This will include the social, political, economic, and cultural environment. Moreover, the company must also be concerned with the technology available at its disposal. Market analysis also includes the learning of already existing and potential competitors (Parmerlee 67).
In the process of market analysis, the company can collect information through group discussions which will enable the analysts to get sentiments regarding participants in the market and also weigh their opinions and perceptions of the market trends. The company can also use internet research to analyze how its competitors operate; subscribe to newsletters, newspapers and magazines that feature issues regarding the company’s target markets. There are also several professionals and organizations which can be used to analyze the market on behalf of the company.
Domestic Market Profile
Production of juice is one of the up coming food processing industries in Kenya. The demand for fresh juice in Kenya is growing, this offers the juice company a great opportunity to expand and take advantage of economy of scale. Many juice factories in Kenya have limited capacity to produce large scale. This means the juice market is under supplied. The company therefore, has the best opportunity to expand its production capacity and be the leader of suppliers of juice in the Kenyan domestic market. In Mombasa alone the major juice company at the coast can only handle less than 30% of total fruit produced around the coast region, this means that over 67% of fruits go to waste. The company also enjoys monopoly in the region. This means that industry segment has incentives to attract more players.
It is estimated that for the last few years, the juice industry has been growing at the rate of 20% to 25% annually. A research conducted at the coast alone shows that more than eighty thousand households participate in the production of mango, and also that there are over one million mango trees covering approximately eighteen thousand hectares of land. The research again shows that the industry has the potential of fetching 260 million Kenya shillings per annum. Some of the fresh juice customers place orders with small juice businessmen and women who use blenders and other low capacity equipment to process juice; this is a clear indication that the fresh fruit juice industry still has a lot of incentives to attract large scale production. The main challenges in the industry are the poorly developed infrastructures and low production capacities if the fruit juice companies.
Overseas Market Potential
The overseas juice market is performing well. The demand for fruits and juice in the international market remains high and attractive. The fruit and juice companies from other countries have reported increases in their sales of fruits and juice in the foreign market (The Gleaner 6). The supply of fruit juice in the world market is dominated by the Brazil which amounts to about 80 percent of the whole world’s production. This shows that most countries do not have large fruit industries. This means the world market is not yet satisfied with supply of fruits and juice. The market is in demand of more fruits and juice. This offers the company the opportunity to expand its productions and reach out to the world market in large scale. Fruit plants in countries like the United States are constantly attacked by diseases and pests; these reduce those countries’ fruit supply to the world market (Flex News 1-5).
There are good business relationships between Kenya and other countries like East African countries, the company therefore has a great advantage to venture into East African fruit market and compete with other players. Soon there is going to be a common market without trade barriers amongst East African Community members, this means any country with membership to the community can access another’s market without restrictions (East African Community 7).
Target market refers to the existing and the potential consumers of a given product or service. In choosing a target market the company considers age, demographic, psychological, economic, and social factors. The company will do better and compete favorably by identifying its customers and serving them well (Guille 7).
The company should consider a range of potential customers in its target market. It may consider supplying juice to supermarkets where the juice retails to many customers, the big hotels within the city and the whole country, recreational centers especially frequented by non-alcoholic drinkers, hospitals where patients are recommended to take juice so as to boost their immunity, the high class estates where fresh juice forms part of breakfast in most cases and also venture into the tourism industry with the juice product. In the international markets, the company can also target countries which experience dry periods and long term droughts, specially the desert countries where fruits are not grown.
The fruit industry in Kenya still has the great growth potential. There are industries enjoying monopoly in some regions like the coast. The current production capacity of most fruit markets is low and unable to sufficiently meet the growing demand for juice in the local market. Of the total fruit productions, the companies can only handle less than 40% of the fruits leaving about 60% to go to waste. The overseas markets also experiences insufficient supply of fruits and juice meaning that the overseas market is still viable for the company to sell its fruits. The company can export canned juice and fruits to earn more revenue.
The target market for the juice company should expand from the local market to include overseas market, too. Amongst the target market should be the big supermarkets, hospitals, big hotels, social gatherings, and recreational centers.
Market analysis includes the study of market structure, market segment, market objectives, and market position. The main objective of market analysis is to determine the consumer behavior in the target market, how to over come competitors, determine company’s market share and the future of the industry in terms of growth.
Flex News. “Business news for the Food Industry.” Flex News, 2010. Web.
Guille, Marilyn. “Finding Your Target Market.” About.com, 2010. Web.
Parmerlee, David. Identifying the right markets. American Marketing Association, 1993
The gleaner march. “Tru-Juice Sales Blossoms overseas.” Go-Jamaica, 2010. Web.