Novozymes Entry into Sub-Saharan Africa Markets - Research Paper Example

Owing to the fact that child malnutrition accounted for 54% of child deaths in Africa in 2007 according to reports from the World Food Program. Protein Energy Malnutrition accounts for cases of Marasmus and Kwashiorkor in Africa, other deficiencies include; iodine zinc, Vitamin A, B, C, and D. Africa has a population of 1.2 billion people, malnutrition being one of the key challenges in the continent which are highly attributed to food insecurity in the continent ("WHOs Africa Nutrition Report highlights an increase in malnutrition in Africa.", 2018).

Novozymes Estimates and Expected Margins from Sub-Saharan Africa

Expected margins for profit are based on market data forecasts of growth of dietary supplements markets in Africa. The estimated value was worth USD 14.66 billion in the year 2016 and it is expected to grow at a CAGR of 6.24% over the next five years to reach a value of USD 19.84 billion ("Dietary Supplements Market Size | Industry Report, 2024", 2018). The target products being food supplements such as amino acids, enzymes, and vitamins in the form of capsules, gel caps, tablets, soft gels, and liquids.

Commercialization and Market Implementation Strategies

In a bid to capture the above expectations and capitalize on the forecasts, Novozymes have to establish an actionable commercialization and marketing implementation strategy. Below is an outlook of commercialization techniques.

Commercialization

Since production is cheaper in China as opposed to Africa, there is need to maintain production of food supplements in China. It is important that Novozymes conducts a research on the identification of:

Customers-this includes countries that are adversely hit by malnutrition i.e. South Sudan. These are the targeted groups who would be the direct or indirect consumers of food supplementary pills. It is imperative to note that these groups are readily found in Africa.

Competitors-currently there are few players like Danisco and DSM who have already setup positions in the fight over malnutrition cases in Africa. There is need to understand the competition and their strategies.

Cost Structure- the cost structure in the new market is of crucial importance. There is need to understand that African markets are low income markets so the margins on products will be lower than their global markets.

Technologies that may need to be deployed to manage regional marketing locations. It is imperative to setup communication technologies with headquarters.

In the meantime, Novozymes directors can look into setting up distribution zones in different parts of Africa (Anjoran, 2018). Suggested distribution zones:

East and Central Africa-Nairobi, Kenya

Southern Africa- Cape Town, South Africa

Sub-Saharan Africa- Lagos, Nigeria.

The above-mentioned distribution zones can help into the development of regional markets that would see the setup of silos and regional offices that would deal with distribution and marketing in the local markets (Anjoran, 2018).

Marketing Implementation Strategies

It is key to identify the target markets in the setup of commercialization strategies and this goes a long way with marketing strategies. The following techniques can be put to use:

Identification of target markets, the management should go into researching markets such as Nigeria, Congo, Somalia and Djibouti. These are hunger stricken countries and have high cases of malnutrition.

Identification of channels to reach the target market. This will be undertaken trhough consultation with local marketing firms who have a better understanding of the market dynamics of the African market.

Knowledge of overall market environment for dietary supplements is important, the management should look into studying market reports and forecasts. It is highly important that a key understanding of what the market requires is crucial to defining which products can be rolled out first.

Marketing preparation routines such as training and merchandising. Training of local people to conduct promotions, research, and marketing of products to local people. Merchandizing to produce T-shirts, umbrellas, shopping bags and freebies can help improve promotions.

Managerial and Technical Expertise

Managerial activities lie at the core of every successful launch in new markets. The management of new markets requires the acquisition of expert managers for new product launches and new markets acquisitions (Anjoran, 2018). In order to have the right technical expertise, Novozymes should engage in:

Recruitment of regional managers to manage regional offices markets and distribution zones of dietary pills. The recruitments should involve a collaboration of expatriates and local teams.

Acquisition of local support staff to manage office operations and distribution, this should be purely local teams. Tis would go hand in hand with Multinational and local country partnership.

Training of local staff to required expectations, this will help the local teams be up to the expertise level of their international counterparts.

The aforementioned strategies will help Novozymes understand and capture the dietary supplements market in Africa. A key understanding of commercialization and marketing implementation strategies will help in the formation of stable and successful Novozymes ventures in Africa.

References

Anjoran, R. (2018). Commercialization of your New Product - Part 18 - QualityInspection.org. QualityInspection.org. Retrieved 12 January 2018, from https://qualityinspection.org/commercialization/

Dietary Supplements Market Size | Industry Report, 2024. (2018). Grandviewresearch.com. Retrieved 12 January 2018, from https://www.grandviewresearch.com/industry-analysis/dietary-supplements-market

ltd, M. (2018). The Middle East and Africa Wellness Supplements Market by Type and Size | Industry Report 2016-2021. Marketdataforecast.com. Retrieved 12 January 2018, from https://www.marketdataforecast.com/market-reports/middle-east-and-africa-wellness-supplements-market-2766/

Vitamin and Provitamin Markets in Africa to 2021 - Market Size, Development, and Forecasts. (2018). Marketresearch.com. Retrieved 12 January 2018, from https://www.marketresearch.com/Global-Research-Data-Services-v3891/Vitamin-Provitamin-Africa-Size-Development-11057577/

WHOs Africa Nutrition Report highlights an increase in malnutrition in Africa.. (2018). WHO | Regional Office for Africa. Retrieved 12 January 2018, from http://www.afro.who.int/news/whos-africa-nutrition-report-highlights-increase-malnutrition-africa