Reference no: EM133259519

Conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis for the product introduction into New Zealand, incorporating relevant insights from your company, macro environment, competitor and market analyses. [This aspect of your assignment will present an effective summary of 1-4 (which will be listed below) with a focus on the new product]  

1)  Describe the company, including its core competencies and the company's sustainable competitive advantage. [start thinking about possible new products the company could develop, whether that means a new addition to an already established product line or a new product category]  

With the modern world moving faster and faster every day, there is constant pressure to stay ahead of the game and remain present. Hence, Arepa was started by founders Angus and Zac with the aim to develop a product that provided benefits to the human brain while also being 100% natural and effective short-term and long-term (Arepa, 2022). All their products consist of nootropic plant-based ingredients which are substances that claim to improve cognitive function, increase mental alertness and promote relaxation. Arepa's values are deeply rooted in Maori culture which drives their branding and reason for being. They focus on product excellence and seek to achieve a unique ability to provide a distinct diverse line-up of product categories consisting of beverages, capsules, powder, and freeze-dried food that appeals to a generation whose needs vary, all of which remain consistently high quality as they contain Arepa's three key nootropic ingredients: Pine bark extract, Black currant, and L-theanine to generate mental clarity. They also seek to achieve excellence within the logistics area to deliver their products to their customer's hand using effective distribution systems both offline and online that maintain Arepa's quality standards. With a strong focus on innovation, Arepa works closely with neuroscientists to deliver the world's smartest drink consisting of unique ingredients found only in New Zealand and is an effective nootropic that has been scientifically proven to support brain health and cognitive performance even without caffeine. Through this unique value proposition, Arepa has experienced fast and widespread acceptance in its targeted market and is available in many supermarkets across New Zealand and Australia. This gives Arepa a competitive advantage and allows them to sustain long-term. As there is always room for improvement and opportunities, this marketing plan will outline how Arepa will extend their already established product line of drinks from 3 to 4 drinks called "Performance memory boost" consisting of black currant extract and a new ingredient "ginkgo biloba extract" which focuses on improving memory. 

2)  Research the macro environment, and describe the relevant competitive, regulatory, economic, social- cultural and technological factors affecting the company and relevant trends in the industry. [this will help you further work out whether your new product idea is a good one, given current trends. Feel free to go back to brainstorming if this part of the research shows you a new opportunity you didn't think of beforehand]

Arepa initially invested in 5 years and over $2 million dollars of technology to dominate the NZ nootropic beverage market for brain performance (Lim, 2021; Hill, 2021). As nootropic beverages is a new market that requires constant research and technological innovation, Arepa continues to invest in this way (Arepa, 2022). The nootropic beverage market is expected to grow further, as global sales have been increasing by 7% every year (Hill, 2020). As the market grows, multinational businesses will enter, as they often do in the NZ beverage market (MBIE, 2020). These businesses will compete aggressively against Arepa with larger distribution chains, more capital, and established branding (MBIE, 2020). Therefore, Arepa's next step is to maintain its position in the growing market. To make this happen, Arepa is entering the large yet easily accessible Australian market (Arepa, 2022). They have met the Australian regulations for natural health products, which NZ is also likely to impose (Hill, 2021). They are also fundraising to enter the US market and partially entering Singapore (Arepa, 2022). Arepa is attempting to become a multinational business themselves.

 Covid-19 has increased work fatigue and brain fog for workers (Hill, 2021). Economically, we would expect these consumers to increase demand for Arepa. However, they may be unable to afford Arepa due to NZ's inflated living costs. (Beckford, 2022). They will choose similar cheaper beverages such as Phoric ($5.40) (Plum Organics, 2022). Overall, demand for Arepa's products will decrease due to inflation. Consumers are also demonstrating skepticism about the beverage's effectiveness and long-term effects of nootropics (see Arepa's facebook). To combat this, Arepa is emphasising their 5 years of research and development by a neuroscientist on all marketing, including packaging. While consumers distrust nootropics, promisingly, surveys indicate strong interest in nootropics, specifically for brain performance (Hancocks, 2021). Lastly, Arepa's blackcurrant suppliers are legally required to maintain high quality (BCNZ, 2022). Potential shortages due to quality defects could be fatal for Arepa's production chain. To minimise this threat, Arepa has incorporated their primary supplier within the business as their second-largest shareholder (Arepa, 2022). Consequently, Arepa will be top priority for their supplier during a shortage.

3)  Conduct a competitor analysis, and then describe TWO key potential competitors in the New Zealand market. [an important step in developing a new product as often you will get good ideas from looking at competing brands. Use this step to help you decide upon your product proposal] 

• Phoric → drink
• No ugly → drink

Like every product in the market, an innovative company like Arepa will have competitors in New Zealand. This competitive analysis will outline Arepa's line of drinks and its potential competitors. The first potential competitor, Phoric,  produces clean and natural alternative energy drinks to help boost concentration and awareness. They aim to target consumers who are hooked on additive and preservative energy drinks by creating a healthier organic version. The product's strength is that it provides three flavors that cater to more customers. Phoric also provides subscriptions as a purchase option where customers save 15% per pack. This is a major capability for the company because active energy drink users can have their beverage delivered at a set schedule while saving money in the long term.

4)  Research the entire potential New Zealand market for the proposed product, providing information on the product market and its customers, market size and/or relevant consumer trends. [an important last step in developing a viable new product strategy is to make sure that your market analysis supports the inclusion of this new product in the company's current product mix] 

Arepa is advertised as a nootropic brain drink and as such seeks to attract healthy young adults, primarily those who are interested in improving their brain performance (Lim Yu, 2021). They operate in the performance enhancing sector as Arepa was designed to eliminate the cognitive health challenges and stresses experienced by the founders, who were in their early 20's, and their peers (Arepa, 2022). Arepa Memory boost is for tertiary students who stay up late studying for their exams or for young adults who are busy pitching solutions to their CEO. These user's age range from 20-30 years old and live in New Zealand cities such as Auckland, Hamilton and Wellington where life is full-on and busy. These individuals are active and require supplements to aid in helping them remember information so they can perform to their peak. Arepa Memory Boost consumers represent 65% of Arepa Performance users as this product will not be targeting athletes as Arepa performance currently does (Lim Yu, 2020). Arepa Performance Boost will sell for $7 each so are targeting those of an average to above average socio-economic background (Countdown, 2022). Arepa Memory Boost will be targeting those of a higher education or high skillset who either earn above $60,000 or access student loans. The size of this market is 400,000 tertiary students and around ... young professionals (Education Counts, 2022). 

Covid-19 has pathed the way for a rocky and stressful two years and as such has brought to light the importance of mental and physical health. Consumers are becoming increasingly aware of what they consume and its effect on the body which has resulted in a trend away from caffeine to more healthy energy (Arthur, 2022). Arepa improves mental clarity and fights mental fatigue without the use of caffeine which drives the increase in uptake among health-conscious consumers, which is a growing group of people. Through the use of ginkgo biloba extract, Arepa Memory Boost increases memory amongst users as well as increasing circulatory and brain function through the abundance of flavonoids and antioxidants (Whitbourne, 2022). This consumer trend of being more health conscious in food choice will see that the market Arepa enters will only grow.