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International Market Research of the British and Spanish Local and Organic Food Markets

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International Market Research of the British and Spanish Local and Organic Food Markets International Market Research of the British and Spanish Local and Organic Food Markets Minna Käyrä Sandra Suomikallio Bachelor’s Thesis DP of Management Assistants 2012 Abstract 2 May 2012 Degree Programme for Multilingual Management Assistants Author or authors Group or year of Minna Käyrä, Sandra Suomikallio entry 2008 Title of report Number of International Market Research of the British and Spanish Local pages and and Organic Food Markets appendices 121 + 4 Teacher/s or supervisor/s Tarja Römer-Paakkanen, Olli Laintila The purpose of this research paper is to present an overall view of the local and organic food markets in Spain and the UK. This research is mainly qualitative, but is also supported by some quantitative data, in order to provide a comprehensive situation analysis. To fulfill the research objectives and to answer the commissioned question, primary and secondary data collection methods were utilized. The theoretical framework is based on international market research. The macro environment was examined with PEST analysis and the competitive environment with competitor roles. The SWOT analysis tool had a minor role in the framework by presenting key findings at the end of the report. By the end of this research it was possible to determine that the most influential macro-environmental factors were social-cultural and technological ones in UK. It was also discovered that the UK’s organic market is quite developed, with many competitors and supermarkets dominating the organic market. Based on the results gotten from empirical part related to Spain, it was discovered that political-legal and social-cultural factors are the most important ones for a penetrating company. The competitive environment was found to possess quite a low level of competition but was still surprisingly diverse. According to the findings the authors were able to predict that the European organic food markets have strong potential; demand is probably going to exceed the supply of organic produce in the near future. Keywords competitor roles, international market research, macro environment, organic food, PEST analysis, Spain, UK Table of contents 1 Introduction .......................................................................................................................... 1 1.1 Objectives of the study ............................................................................................... 2 1.2 Outline of the study .................................................................................................... 3 1.3 Contents of the report ................................................................................................ 3 1.4 Commissioning party: Makumaku ............................................................................ 5 2 Local and Organic food industry ....................................................................................... 6 3 Research methods .............................................................................................................. 11 3.1 Methods of data collection....................................................................................... 13 3.1.1 Desk research ................................................................................................. 13 3.1.2 Field work ....................................................................................................... 15 4 Concepts of market research ............................................................................................ 18 4.1 Macro environment PEST analysis ......................................................................... 21 4.2 Competitive environment ........................................................................................ 24 5 British local and organic food market ............................................................................. 28 6 British macro environment ............................................................................................... 30 6.1 Political-Legal environment ..................................................................................... 30 6.2 Economic environment ............................................................................................ 34 6.3 Social-Cultural environment .................................................................................... 36 6.4 Technological environment ..................................................................................... 39 7 British competitive environment ..................................................................................... 43 7.1 Market leader ............................................................................................................. 47 7.2 Market challenger ...................................................................................................... 48 7.3 Market follower ......................................................................................................... 49 7.4 Market nicher ............................................................................................................. 50 8 Spanish local and organic food market ........................................................................... 53 9 Spanish macro environment ............................................................................................. 61 9.1 Political-legal forces .................................................................................................. 61 9.1.1 Regulations of the industry .......................................................................... 61 9.1.2 Governmental actions ................................................................................... 64 9.1.3 Spanish bureaucracy ...................................................................................... 67 9.1.4 Payment terms ............................................................................................... 68 9.2 Economic forces ....................................................................................................... 69 9.3 Social-cultural forces ................................................................................................. 73 9.3.1 Consumer behavior ....................................................................................... 73 9.3.2 Cultural diversity ............................................................................................ 76 9.4 Technological forces ................................................................................................. 78 10 Spanish competitive environment ................................................................................... 80 10.1 Competitor roles ........................................................................................................ 85 10.1.1 Market leader .................................................................................................. 85 10.1.2 Market challenger .......................................................................................... 87 10.1.3 Market follower ............................................................................................. 90 10.1.4 Market nicher ................................................................................................. 93 11 Results of the British and Spanish case studies .............................................................. 96 11.1 Validity and reliability ............................................................................................... 96 11.2 Macro and competitive environment ..................................................................... 97 11.2.1 UK ................................................................................................................... 98 11.2.2 Spain .............................................................................................................. 101 12 Conclusion ........................................................................................................................ 108 13 Self-assessment ................................................................................................................. 111 Bibliography ........................................................................................................................... 113 Appendices ............................................................................................................................. 122 1 Introduction This research is going to provide an introduction to the world of local and organic food industry and give an overall picture of these markets in England and Spain.This study is going to be conducted as a reseach orientated study, as a pair work, concentrating on above mentioned countries, which were chosen based on our own personal interests and language skills. The topic for the research was found from HAAGA-HELIA’s theme group called ‘Business possibilities from local and organic food market for Finnish entrepreneurs’. Local and organic food products are a growing global trend of the present food industry, especially European countries are showing growing interest of naturally produced food products and the nowaday’s consumer is more and more interested in knowing the source of the food they are consuming. The study is an attempt to collect together information about this new growing field and provide an insight for British and Spanish local and organic food markets. Our commissioner Makumaku is a a young Finnish company, whose future plans to expand
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