The company has its roots in Canada and is expanding to other regions like USA. Saje was founded in 1992 by a couple, Jean-Pierre LeBlanc and Kate Ross LeBlanc. The goal of Saje is to focus on using pharmaceutical medicine to cure people naturally. Saje has 100% natural products because it uses only natural resources. Saje has a range of natural products like diffuser, essential oils etc. We determined that markets like India has great scope for natural products and Saje can be their first choice. To enter a market like India we need to determine our target customers from population of more than one billion. We are targeting people in age group from 25 to 45 years, who are well educated and are employed. We will open our fully owned subsidiary in Mumbai, one of the largest and wealthy city of India. People here know the benefits of natural products, but they do not prefer to buy such products because of their bad taste and smell. Therefore, We are offering modified versions of products that are made of 100% natural resources. We are expecting around 3,000 potential customers in age group of 25 to 45 years. During our research, we analysed three main socio-cultural factors, Purchasing power, education and advertisement preference. In economic analysis, we found that growing economy of India is positive aspect for us. Whereas, high tax rate is the threat for our business. There are many competing companies in this industry based in India like, Amway, Patanjali and Himalaya. We need to have competitive advantage to beat our competitors and survive in such a tough market. Saje products are much good in quality as compared to other competitor. Also, We are focusing on specific category of products. Moreover, foreign brand is a huge aspect in our favour. The government of India initiated many policies to encourage foreign business to come in India. But on flip side policies like Make in India are potential threats for our business. To cope with such risks we need to apply risk mitigation strategies and the best we believe for our business is risk avoidance for this one and Risk transfer for others. It means avoiding risk before it enter and harm our business. By considering all these factors in mind we can do well in such potential market.
Table of Contents
Introduction of Company and Product 3
Competitive Advantage 4
Country of choice 4
Size Of Market 4
Swot Analysis 4
Socio-Cultural Analysis 6
Political Analysis 7
Economic Analysis 7
Competitive Analysis 8
Recommended Market Entry Strategy 8
Risk Assessment 9
Introduction of Company and Product
History: Saje was founded in 1992 by a couple, Jean-Pierre LeBlanc and Kate Ross LeBlanc. The goal of Saje is to focus on using pharmaceutical medicine to cure people naturally. The vision statement of Saje is to inspire people to lead a healthier and better lifestyle. The idea was initially thought of by Jean-Pierre who had a car accident and suffered from health challenges and pain. Looking for a natural solution to cure his pain, he used his knowledge of chemistry to blend essential oils as an aid for his pain. Kate saw Jean Pierre recovery rapidly through the natural oils and the couple were inspired to share this unique discovery to the whole world. Therefore, the mission of Saje natural wellness is to connect people with 100% plant based natural products. All the products of Saje are made locally and every step is controlled strictly. Saje can guarantee that they use fresh ingredients. The products of saje has no artificial fragrances or silicon. Moreover, the products of Saje are recognised by Health Canada and FDA. People can trust on the products to be 100% natural. Saje also considers human impacts on environment. They believe that human actions has damaged the ecosystem. To preserve the environment, they derive their ingredients from renewable sources and their packaging is limited and made up of recyclable or recycled material.
Products: Saje has variety of products which can help you enhance your sleep, cure your headache or improve your digestion. The products include:
• Sleep Well: It is a product which help improve our quality of sleep. It can be applied under jawline, wrists or throat. It's ingredients include Lavender, Roman Chamomile, orange. It provides calmness to the mind and thus promoting peaceful thoughts and a relaxed and comforted body.
• Stress Release: It has a powerful blend of oils which help provide relaxation to the mind. Its ingredients include Lavender, Roman Chamomile and orange. It can be applied on forehead and on the shoulders. It promotes relaxation and feelings of inner peace resulting in happiness.
• Tummy: When our tummy needs little relaxation, Gutzy solution can be used to provide massage to the stomach. The main ingredients include fennel, peppermint and chamomile. It can be applied onto stomach and massaged gently for proper results.
• Energy: When our body lacks energy, Refresh can be used to provide body with essential energy. The main contents of Refresh include lemon, cedar wood and eucalyptus. They provide calmness to the mind and refresh the skin. The product can be applied on the face and body as required with eyes closed. It provides best results when it is applied after bathing.
These products are easy to carry because they are small and bottled. They doesn't occupy much space in your pocket and bag. The essential oil in each bottle is hundred percent derived from natural sources. Customers don't need to worry about their skins will be damaged by oil or any toxic chemicals will threat their health because it is recognized by Health Canada. You can choose a bundle in the store, it can save a lot of money if you buy separately.
Saje is very special because its products are mainly made of natural sources, there's no harmful chemical components. Each bottle clearly labels what it is made of and what is focuses on. Saje is different from many products that exist in the market. Saje makes people feel it's worth to trust because there's no artificial component in each bottle of oils. Also, Saje describes everything in a simple way that everyone can understand which essential oil remedy that they needed and they can directly find it in the local workshops or on the online store.
Country of choice
We are taking Saje to India. Basically, we found that 70% of Indians prefer herbal products over chemical synthesized drugs. Whether it is about any remedy for cure, daily products or beauty products most of the people would choose herbal over chemicals.
Market: Our target market includes specifically the millennials and the everyone who love herbal products. In beginning, we are going to open a fully owned store in Mumbai. Even Indians prefer herbal stuff, but still there are more stores for chemical drugs as compared to herbal medicines. It is easy for us to enter in this industry because Indians love herbal products. Also, there are many controversies associated with our competitor company because they don't provide products that are 100% natural. Our market includes people ranges from 25-45 years old, working in some field and are literate and who would be ready to pay the price to buy our product. Also, we need to modify the products and translate their names and descriptions in India's National language. Also, in India old people are more aware about benefits of herbal products, so they might increase our sales.
Size of Market: Our target market age group ranges from 25-45 years old. In Mumbai, approximately 4,355,371 number of people including males and females constitute to this this age group according to 2012 census. So, we are expecting a minimum of 3,000 potential customers initially. As our products are 100% natural and modified according to the needs of millennials. By using advertisement and providing customers what they actually want, we can easily get customers. If customers buy our product worth $25 every month, then they would spend nearly $300 every year. Therefore, our total market potential value is $900,000.
Strengths: Our huge strength is our established brand and location. Due to established brand some people in India are aware about the quality of the products. This would be helpful for start-up. Also, Mumbai is one of the largest and industrialised city in India. So, people are more aware about quality of life they live and their health. Moreover, India is rich in herb and spices. So, it would be easy for us to manufacture the products at low cost in India. As a result, it would be helpful to get rid of transportation costs and buy herbs & spices at lower cost and to sell products at affordable prices.
Weakness: Our Company requires highly creative salesperson and they need to have enough knowledge to answer the customer queries. Therefore, there is a huge cost associated with training and educating employees about wellness. Also, more than half of the population is not aware about our brand, it requires a lot of marketing to aware people and get regular customers.
Opportunities: Educating people about the importance of healthy life and how our products would be helpful for that. Also, Co-Branding would be another opportunity. Expanding our business by opening stores in other cities and regions.
Threats: There are many competitors in this industry. So, it would be little difficult to make customers in starting phase of our company. Also, we need to consider political and legal issues in India. This includes high tax rates and many regulations to enter Indian market. Also, people might not accept international brand because of “Make in India” policy.
# Store Variety Price Quality Customer Service
Amway Three Huge High Okay Okay
Himalaya Six Medium Low Good Good
Patanjali More than fifty Wide Medium Okay Poor
Saje Three Limited Affordable Best Great
The main competitors in this industry are Amway, Himalaya and Patanjali that would compete with us. However, every business is different in some aspect. For example, Patanjali sells the wide variety of products made from natural substances. On the other hand, Himalaya just focuses on specific categories like beauty products and health care. Amway prices are high as compared to other companies, our prices would be bit less than Amway. We would provide best customer service to fulfill their needs. Also, our products are made with 100% natural substances whereas Amway made some of their products with synthetics.
Purchasing Power: It refers to what income do the target group has? What price they are willing to pay? Will they be able to afford our products if me mark our product above market price? As our target location is Mumbai(India) and our target population is age group from 25 to 45 years, who have job and are conscious about their health. These people do not worry that much about price if we give them product which is worth the marked price. So, our pricing strategy is Premium Pricing because we have a differentiated product as compared to existing products in market, with higher quality and brand name. Moreover, it's not always true that low price means high demand for your product and vice-versa. But on flip side we need to take care that we don't mark our price too high and also make sure that people know about our product quality.
Advertisement Preference: It is critical to make target group aware of our products and to do so need to advertise our product. Sajed is not well known in India. So, it will be difficult to enter and rule over people's mind. We also need to know what are the well-known or best sources of advertisement used in India. In India Television marketing is most effective tool to make people aware about something new coming up. Moreover, online marketing and print promotions are also effective in India. We will go to colleges in Mumbai to make students aware about our product and provide them free samples.
Education: It is very important to know what level of education do the target market holds? For our target market people are well educated with minimum of high school diploma. Which means they have modern thoughts and are aware of what's good for them or not. Generally, in India young educated people do know the benefits of natural products, but they don't really want to use them because the factors like bad taste, bad smell and outdated method of healing health issues. But if give them modified natural products which are still 100 percent natural but do not smell and taste bad, they will rush to try it. They will stick to it forever if we modified our product according to their need and preferences but being 100% natural.
It is important to know which political system the country operates with. It includes rules, regulations, institutions and attitudes which impact the economy of the nation and business environment. It is crucial to know answers to some questions such as: “Is it a dictatorship or democracy? Is power concentrated in the hands of a few, or it is outlined in the constitution or similar document? If the new party comes into power, will rules for business change? How involved is the Government in private sector?”
It is a positive aspect for us that India have democratic government, which means people have much control over their lives and they can choose whatever they want. In India federal elections are conducted every five years and two main parties compete every time. The political decisions are made with majority of votes by the members of parliament and the opposite party's opinion is also considered, which means no single person have direct control over economic and political decisions. Moreover, constitution of India is considered superior and all decisions are made with reference to it. Which means ruling parties can make changes or initiate new policies regarding trade but the demand for new goods will always lead to business with other nations.
Furthermore, some recent initiatives by Indian government have opened doors for foreign countries to do business in Canada. For example, Government of India has reduced the interest rate for borrowers who want to start business in India in order to increase the pace of development.
Economic Growth: We need to know how Indian economy is doing? No business will survive for longer period if the economy in which they are operating is not doing good or is expected to collapse in upcoming time. “Considering India, the 2016/2017 fiscal year (April 2016 to March 2017), the economy advanced 7.1 percent. For the 2017/2018 fiscal year, the government expects growth at 6.6 percent, higher than an earlier estimate of 6.5 percent”. Which means we can experience long term growth in our business if it continues to grow like this. But we also need to look for some factors before entering and operating in India like:
Foreign manufacturers certification scheme(FMCS): The Government of India has initiated the program called FMCS which has a list of products which require licence to bring goods to the country. But herbal or organic products manufacturing foreign companies does not require license to bring and sell their products in India.
Tax Rate: “Businesses operating in India are required to make 33 tax payments a year, taking 243 hours' worth of attention. The headline corporation tax rate stands at 30%, but companies can also incur charges in the form of a central sales tax, dividend tax, property tax, fuel tax, vehicle tax, VAT and excise duty”.
High tariffs and protectionist policies: High tariffs are scary for a company trying to enter a new market. It increases the cost and hence lead to higher product cost. “In India, Exporters and investors face non-transparent and often unpredictable regulatory and tariff regimes. They sometimes are not sure about the policies of the government. So, we need to make sure we are clear about our policies and goals when dealing with issues like signing a contract or dealing with other legal policies.
It's crucial to know about our competitors in market and to know how difficult is it for new competition to enter in? After completing all legal requirements of trade, the companies then need to look for their competition in the market any generate strategies to cope up with them. The companies might get some existing big companies who have huge market share and some small companies competing at low level with low number of potential customers.
Our main competitors in the market are Patanjali, Amway and Himalaya. They have different pricing and marketing strategies but working with same motive, which is to get huge profits and increase market share. They also have different range of products with different quality. For example, Patanjali, have opened local stores to sell their products and have marked their prices similar or lower to the market price. They are selling their products all over India with different distribution channels. Whereas, Amway have sales Agents who get commission as a percentage of sales. They do not have their exclusive stores like Patanjali. Amway is a multinational company operating in more than 100 countries and territories. Their price is higher than market standards, claiming that they have better quality. Whereas Himalaya products can be found nearly in any store in India. They have different range of products having prices nearly equal to market standards.
To cope up with our competitors we need to have Competitive Advantage. We have it in three ways, High quality, 100% Natural products and Canada based company. Having these factors in our favour we can mark prices of our products same as in Canada and USA.
Recommended Market Entry Strategy
We are going to open a Fully owned subsidiary in Mumbai, Maharashtra. A city which is known for its commercialization and business opportunities due to its population and it ranks 37th in international business market for its GDP and highest within the country. This means that there are big opportunities for the businesses to flourish. According to an article published by the Indian express, Mumbai is ranked as richest city in the country, which allows the Saje products to increase customer base. This will increase the affordability of the products offered by the company as the products of saje are priced between 1000 to 5000 rupees in the Indian currency. According to a book “Doing Business in India”, states that importing and exporting in India is improved in the recent years and the Mumbai's Jawaharlal Nehru Port is one of the busiest Port in the country handling nearly 60% of the port traffic. Mumbai is also ranked 11th among its Indian cities to start a new business. Therefore, there are fairly good chances for the advancement of business in Mumbai.
It is very important to consider the rules and regulations which a country has in place to govern the start-ups. It takes approximately 30 days to open a new business ie to comply with the legal jurisdictions and a business is approved by the province ministry. This time is minimal among other cities in India, and provides a positive sign for the new business.
Our company will be opening a Fully Owned Store in Mumbai. This will help us operate a store in India with full control and policies which are decided by the owners and the main decision-making individuals. To decide the exact location of the store, it is very important to understand that how we want our consumers to reach us. The location of the store should be busy and effective location to target our desired population. After repetitive searching, we decided to open a store in the high street phoenix mall located near the lower parel railway station in Mumbai. It is a best place to target customers as the lower phoenix mall hosts large varieties of brands. On one side it has international brands like Zara and on the other side it has local brands like Big Bazar. Therefore, this place attracts people of all income types which is positive sign for Saje as its products have wide price range.
Risk assessment involves evaluating the essential threats which might be faced by the company while entering in the foreign market. It is essential for a firm to formulate strategies to access the risk associated. Considering the products of our major competitor i.e. Patanjali, they have wide range products ranging from regular hygiene, food products to addressing some of major diseases by the natural ingredients and thus minimizing its drawbacks. While Amway targets its customers by providing beauty, personal care, home care and nutritional products. Consequently, to stand out from our competitors we need to sell more of the products which our competitors lack in. The most important factor in which our Saje is known for its natural wellness products which stress relief, products improving sleep quality, pain relief and the products preventing from allergies and keeping the body energized. These products are minimally provided by our competitors and provide an advantage to target our customers.
For exporting we will use Direct Exporting method i.e. we will sell our products directly to our consumers without hiring any of the sales representatives. As Mumbai is situated close to the harbour, products can directly be imported to the city and thus the costs of transportation within the city can be minimized. If only after the few years of operation the profits of the company are substantial to support the long-lasting operations then the decisions will be made on the production to be made in India.
Building relationships with customers is essential for the sustainment of the company. The differentiated products of Saje will be needed to marketed in an unique way to attract consumers. To achieve this purpose, Saje should advertise its products in the local business, universities and colleges for the younger population to get to know more about the Saje wellness products. Moreover, some discounts can also be provided to the university and college students. The unique policy of Saje which allows its customers to exchange their product if they are not fully satisfied with it and can get a full refund or a gift card depending on the consumer if he had saved the original receipt or not.
The only factor in which Saje might face a tough resistance is that the products involving beauty and skincare and nutritional wellness might be impacted by the low sales and it might be tough to build relationships with the customer due to complete new experience with the Saje products. Moreover, considering the climatic conditions of the country and the lifestyle, Saje might find new business opportunities after some years of operation.
Also, As there are huge costs associated with hiring, training and payroll because we are opening a store in metropolitan city Mumbai, this would require number of employees and training. Huge costs and some other facts could be a risk for our Company. So, we are using a Risk transfer strategy to mitigate this risk. We can outsource these services to expect a little more profit. Harward Doug wrote about outsourcing of training in his blog named as ‘Training Industry' that, “It helps protect us from the liabilities of our company being sued if we don't provide the right training”. However, To cope with a risk of policies such as “Make in India”, we can just use risk avoidance strategy to mitigate it.
To conclude Saje seems perfect to enter in the Indian market because of its quality and affordable prices. We do have some competitors in India but due to high reputation of North American product in India we have advantage over our competitor. We are not going sell our products on the low cost based strategy rather we will try to improve our quality but we will make sure it is affordable for middle class family. India's major population comes from middle class which is why we are focusing on them the most. For the marketing we are going to hire some Indian marketing experts and to reduce the risk of failure we will hire other Indian employees too. The advantage will be that as they are local so they have good knowledge of the local market which help us to grow. Also, we are using strategies to mitigate various risks before entering in this market. Also, Co-Branding with Indian brands would be an opportunity for us if Indians do not accept our products. At the end, we are expecting a successful business in India.
"Amway Site | Homepage." English. Accessed March 24, 2018. http://www.amway.in/store/amway/en/INR/static-pages/amwayFamilyOfBrandsPag.
City Mayors Reviews the Richest Cities in the World in 2005. Accessed March 24, 2018. http://www.citymayors.com/statistics/richest-cities-2005.html
Fallon, Nicole. "SWOT Analysis: What It Is and When to Use It." Business News Daily. March 02, 2018. Accessed March 24, 2018. https://www.businessnewsdaily.com/4245-swot-analysis.html.
"Figure MUM-1 Population Pyramid showing Age Distribution ... - ICMR." Accessed March 24, 2018. http://www.icmr.nic.in/ncrp/pbcr_2012-14/ALL_CONTENT/Annexure/Mumbai_Ann.pdf.
"High Street Phoenix." About Us | Malls in Mumbai. Accessed March 24, 2018. http://www.highstreetphoenix.com/about-us/.
Kelly, Nancy, and Mary. "REFRESH REVITALIZING MIST." Saje US. November 03, 2015. Accessed March 22, 2018. https://www.saje.com/refresh-409101.html?cgid=natural-oil-blends-energy#how-to-use.
Kim, Ami, and Tari. "Sleep Well Restful Sleep Oil Blend." Saje US. March 15, 2018. Accessed March 22, 2018.
Kim, and Katira. "Stress Release Soothing Oil Blend - Natural Farmacy | Saje." Saje US. March 15, 2018. Accessed March 22, 2018. https://www.saje.com/stress-release-430501.html?cgid=natural-oil-blends-stress#ingredients.
Our Story. Accessed March 22, 2018. https://www.saje.com/ca/saje-story.html.
"Store Locator." Store Locator | Saje Natural Wellness. Accessed March 22, 2018. https://www.saje.com/ca/store-locator/?q=Us.
"GUTZY® SOOTHING BELLY MASSAGE BLEND." Saje US. February 18, 2018. Accessed March 22, 2018. https://www.saje.com/gutzy-441701.html?cgid=natural-oil-blends-tummy#how-to-use.
Women, YEC. "A 5 Step Primer for Entering an International Market." Forbes. October 25, 2011. Accessed March 24, 2018. https://www.forbes.com/sites/yec/2011/09/22/a-5-step-primer-for-entering-an-international-market/#e4b084a50a09.
Wachtel-Galor, Sissi. "Herbal Medicine." Herbal Medicine: Biomolecular and Clinical Aspects. 2nd Edition. January 01, 1970. Accessed March 24, 2018. https://www.ncbi.nlm.nih.gov/books/NBK92773/.
"Political and Legal Factors That Impact International Trade - FlatWorld." Accessed March 21, 2018. https://catalog.flatworldknowledge.com/bookhub/3158?e=fwk-168388-ch05_s02.
"FMCS - Bis." Accessed March 21, 2018. http://bis.org.in/fmcs/index.asp.
"India GDP Annual Growth Rate | 1951-2018 ... - Trading Economics." Accessed March 21, 2018. https://tradingeconomics.com/india/gdp-growth-annual
"Top 10 challenges of doing business in India | TMF Group." Accessed March 21, 2018. https://www.tmf-group.com/en/news-insights/business-culture/top-challenges-india/.
"India - Market Challenges | export.gov." Accessed March 21, 2018. https://www.export.gov/article?id=India-Market-Challenges.
"Mumbai Richest Indian City with Total Wealth of $820 Billion, Delhi Comes Second: Report." The Indian Express. February 27, 2017. Accessed March 24, 2018. http://indianexpress.com/article/india/mumbai-richest-indian-city-with-total-wealth-of-820-billion-delhi-comes-second-report-4544685/
"Doing Business in India 2009 -- Comparing Regulation in 17 Cities ...." Accessed March 24, 2018. http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Subnational-Reports/DB09-Sub-India.pdf.
"Store Locator." Store Locator | Saje Natural Wellness. Accessed March 24, 2018. https://www.saje.com/ca/store-locator/?q=Canada.
"Natural Health Care." Natural Health Care Store- Buy Natural Health Care Products Online at Best Price in India | Patanjaliayurved.net. Accessed March 24, 2018. https://www.patanjaliayurved.net/category/natural-health-care/1.
"Straight Talk about Synthetics in Nutrilite Supplements." Amway Global. October 06, 2017. Accessed March 24, 2018. https://www.amwayglobal.com/straight-talk-about-synthetics-in-nutrilite-supplements/.
Harward, Doug, Rasmus Hougaard, Jacqueline Carter, Debbie Wooldridge, Taryn Oesch, and Training Industry. "10 Reasons Companies Are Outsourcing Training in Today's Market." Training Industry. September 12, 2017. Accessed March 24, 2018. https://trainingindustry.com/blog/outsourcing/10-reasons-companies-are-outsourcing-training-in-todays-market/.
...(download the rest of the essay above)