International Business Turkey Hill Case

686 words | 3 page(s)

Turkey Hill offers a wide array of dairy products that are attractive to several domestic market segments. These products include over 100 flavors of ice cream, fruit drinks, and iced teas. The local market for Turkey Hill products includes teenagers, adults, children and their families and other customers who prefer customized products. For instance, Turkey Hill’s ‘No Sugar Added Ice Cream’ which comes in two flavors Dutch Chocolate and Vanilla Bean, appeals to other customers who enjoy a creamier taste with less sugar and fat. Children on the hand consume a wide variety of the flavors which Turkey Hill has without limitation. Families, especially the ones with children, are another huge market for Turkey Hill. Teenagers, on the other hand, constitute the domestic market for Turkey Hill with a preference of frozen yoghurts and premium ice creams among the teenage girls. Adults market for Turkey Hill remains loyal to a favorite product, brand or flavor.

The type of products produced by Turkey Hill are known globally presenting the company an opportunity to expand to international markets. The typical consumer trend is the high demand for quality products at an affordable price. Turkey Hill can undoubtedly meet this demand since it prides itself on the production of quality products that can be enjoyed by more people (Turkey Hill 1). However, it is essential to carefully select the countries or regions that such a company can expand in to. According to Kotabe & Kristiaan, expanding operations to international markets that have similar characteristics to the domestic market is a good initiative for companies (2).

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Regarding this sentiment, China and India might be suitable countries for Turkey Hill to venture in. In this case, the overall attractiveness of the two nations for Turkey Hill expansion is calculated using the four-step by Kotabe & Kristiaan (8). The three indicators considered in this case are population size, market growth, and consumption rate. Market growth rate indicator will be awarded a maximum of 35points, population 25points and consumption rate awarded a maximum of 40 to total to 100.Consumption rate is the most important indicator in this case followed by the market growth rate and then population size.

China has a larger population, and its economy is among the fastest growing economies globally, with a rate of at least an 8.5% (Economy Watch 1). The per capita income in 2003 was US $1,110 while the national gross income in 2003 was 1411.6 billion. A notable trend in China is the increasing concern for obesity hence the intensification in demand for products that are low in fat and sugar. Also, recent research has identified China as the leading market globally for dairy products specifically the ice-cream with annual sales of approximately 4.3billion litres (Mintel 2). This trend is a clear indication of the viability of the products by Turkey Hill. Additionally, the increase in the conscious purchase of products with less sugar and fat works positively for the company since it has specific products for such customers.

On the other hand, India has also been listed among the leading countries with high consumption rate for ice creams and frozen yoghurts. Being a fast-growing market, the consumption rate for ice cream in India has experienced a growth rate of 13% annually. The anticipated sale for this year are approximately 381.8million litres (Mintel 1). The population is also significant with approximately 1.32billion people, offering a diverse market for the company (Nace 1). India’s market growth is continually increasing with its Gross Domestic Product (GDP) ranked among the top seven most significant in the world (Nace 1). Additionally, the decrease in unemployment indicates an increase in income among individual contributing to increased purchase power and growth of the market.

Considering this information china may score 37 for consumption rate, 23 for population and 30 for growth rate, totaling to 88points. India, on the other hand, India may score 31 for consumption rate, 18 for population and 29 for growth rate, totaling to 78points. Using the indicator criteria, both countries are above average (50 points) hence are attractive for expansion of Turkey Hill products. China is the most attractive followed by India. However, other factors like operation and employment regulations may impact on the attractiveness of the country to Turkey Hill Company.

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