Australia Essay, Research Paper
There are many components to a successful organization, among them is a steady
flow of innovative products that are consistently produced to high standards,
available to customers when and where they are needed, and backed with diligent
service and support. We will demonstrate the viability of capturing a
significant market share of sunscreen products Down Under. We will inform you
of our unique market entrance plans, our unique product and its marketable
attributes. We will layout our target markets and their demographic information,
and we will conclude with the profitability remarks necessary to gain your
confidence and investment.
Sun Cosmetics, Inc., the parent company, was founded in 1955 and has been a
publicly held company since 1973. It was incorporated in the State of
Massachusetts. Any U.S. legal conflicts fall under the jurisdiction of the
Massachusetts state court system. It’s annual North American sales of sunscreen
products are in excess of $20 billion. Sun Cosmetics created Oceana’s
development team for the express purpose of penetrating Australia’s regional
markets. Its members were selected based on their cultural appreciation and
adaptability, their research expertise, and their discerning abilities with both
primary and secondary data.
Cheri Brown, Vice President of International Operations
Robert Roy, Director of International Sales & Marketing
Helen Quinn, Director of Cultural Adaptation
Becky Barth, Director of Research & Development
Sun Cosmetics, Inc. will send two expatriate executives to F.H. Faulding &
Company Limited to work in commensurate positions and pay grades. The training
and marketing guidance is invaluable from both perspectives.
Product introduction and formulation
Due to the high incident of skin cancer Down Under, primarily originating in
young children, we have developed an additive that enables parents and children
to see that this sunscreen has in fact been applied to all areas of exposed skin.
This additive is a coloring agent that fades approximately three minutes after
application. Taking advantage of the Sydney 2000 Olympic Summer Games approach,
we have incorporated the additive with an olympic theme: Oceana
Gold, Silver & Bronze. The coloring agents will actually be gold,
silver or bronze according to the label of the particular sunscreen purchased.
In addition to these choices, each color would be available in several degrees
of sun protection factor (SPF): SPF4, SPF8, SPF15 & SPF30 (SPF4 being the least
and SPF30 being almost total sunblock). Oceana is a non-greasy water resistant
sunscreen with aloe vera gel, vitamin E and is paba free.
Incidence of skin cancer
The high incidence of skin cancer in Australia is the reason for our choice of
this product. Skin cancer has been on the rise due to environmental issues
caused by humankind. Australia is known for its sunshine and carefree good life
attitude; but Australians are facing a severe problem with exposure to the sun.
Australia is the perfect market for sunscreen because two out of every three
Australians will develop skin cancer at some point in their life. One half of
Australians under the age of fourteen already have some damage to their skin.
Australians have the highest rate of skin cancer in the world, with are
approximately 140 thousand new cases per year. See Appendix A for additional
Cultural aspects surrounding market entrance to the Oceanic region
The seven states of the Australian country/continent are very similar to those
of the United States. That is to say, all of these states are English speaking,
with a high literacy rate, a well-developed infrastructure, a significant volume
of tourism and laws that promote interstate commerce. These elements are what
make this market an easy entrance for our product.
This territory is part of the French Polynesian Overseas territory. This
territory falls under the French Republic guidelines of government. Some
aspects of this territory have autonomy. Tahiti’s principle trade imports come
from Australia, France, Germany, Japan and New Zealand. They export mainly to
France, New Caledonia and (limited) United States. The facts that Tahiti is
known for tourism and has principle importing and exporting, make this market
accessible for our product. It’s location geographically, climate and
infrastructure, make for easy distribution and market entry. Its principle
language is French, but with a cultural adaptation to English products, we may
utilize standardized production.
This territory is also part of the French Overseas Territory, which means that
it also falls under the French rule of government court and political systems.
This territory is in the European Parliament. It’s primary imports come from
Australia, France, Germany, Japan and the United States. Its exports are mainly
to France, Germany, Japan and the United States. The same basic infrastructure,
climate and tourism as Tahiti makes this market accessible and allows for
standardized product introduction.
Fiji is an established country. It’s form of government is much like the
English Parliament. It’s imports also come from Australia, Germany, Japan and
New Zealand. It exports mainly to Australia, Germany, Japan and New Zealand.
Once again established infrastructure and trade routes within the region,
tourism and the climate, make this country’s accessibility applicable for our
product. Primarily an English speaking island, Fiji also allows Oceana to be a
All of these islands and countries, including Australia and New Zealand, have
the same principle religions. These are Catholic, Protestant, Muslim, and few
native island beliefs.
Intellectual property laws in Australia
A joint venture has been established so our license is already in place. A
patent is pending for the three gold, silver, and bronze coloring agents. This
patent will be exclusive for a period of five years before renewal. Our
trademark name that for our product is Oceana Gold, Oceana Silver and Oceana
Trade Relations APEC and ANZCERTA
ANZCERTA is trade agreement between Australia and New Zealand.
(Australia New Zealand Closer Economic Relations Trade Agreement)
ANZCERTA has been around since 1983, when it replaced their NAFTA, and has
undergone significant changes in industrial and agricultural trade. Free trade
between these countries has enabled rapid development in world exporting. At
this time the process of improving air transportation and expanding trade laws
is underway. The goal of ANZCERTA is to become a single trade entity
representing a unified economic front. In the next ten years they hope to
remain committed to the same economic goals and effectively compete with the
Asian Pacific region through their alliances to the commonly known APEC (Asian
Pacific Economic Cooperation).
APEC is the formation of trade alliances among 18 countries in the south pacific
region of the world. The leaders of these countries meet regularly to discuss
ways of improving liberal trade and creating a more open environment. Australia
has been active with this alliance since 1989. One of the benefits of
Australia’s involvement is that the economies of the different countries range
from underdeveloped to industrialized countries. Our product will be marketed
in a diversified economic range, enabling us to reach more than one specific
market. Skin cancer and environmental issues are discussed at these meetings
and concern all leaders of the different governments. APEC hopes to reach free
trade as already established by GATT.
There are no governmental policies or parties who could politically overrun the
government, therefore, expropriation is not a major consideration. The concern
for nationalism is also unwarranted because Australians have hopes of attaining
the “American good life.” Our image as a nation demonstrates a positive public
relation between two countries.
Joint Venture (unincorporated)
A foreign company deciding to do business in Australia has a selection of
business structures available. The most common forms of organizations are
representative offices, branches of parent companies’ subsidiaries, sole trades,
partnerships and joint ventures. Joint ventures in Australia are a very common
business practice, with some differences in structure from that of the United
States but they are similar enough for American investors to comprehend.. An
unincorporated joint venture may be described as “contractual”, meaning that a
separate entity is not formed. Shares are not allocated for payment of any
kind; and they end up resembling a partnership. Incorporated joint ventures are
companies that have shareholders with no rights to the company’s assets; which
are not exposed to sharing losses, but which do participate in distributed
dividends. Legal restrictions are limited and private companies operate
basically uninterrupted as long as established ethical business codes are
followed. Any company that registers in Australia falls under their corporation
law jurisdiction. Hybrid forms of joint ventures can be created to meet the
demands of each participant involved. After having carefully reviewed our
options, we chose the unincorporated joint venture with a company whose name and
reputations are established.
Australians are very demanding regarding timely delivery, product warranties
along with consistent advertising and promotions. They are proven to be very
quality conscious and discerning. The decision to pursue a joint venture was to
limit initial investment and operating expenses, limit liability/lower risk and
ease into the market via a company well aware of the culture and infrastructure.
Our partner company is F.H. Faulding & Company Limited, positioned in Parkside,
South Australia, Australia. They possess the capacity to meet our company
objectives (production and distribution) and are aligned with our corporate
ideals and values. F.H. Faulding has an 11 year financial history of
established success in all facets of production management, distribution and
customer trust. Combined with their current assets, desire for growth and
development, they are very attractive to Sun Cosmetics, Inc. as an
unincorporated joint venture partner for Oceana. Their location is significant,
and of strategic importance to the actual distribution of our product.
Our joint venture partner will enable us to use their established sources of
distribution. A distributor acts as an independent agent who purchases products
from an agent and delivers them to wholesalers and/or retailers. It is common
practice for Australian distributors to ask for exclusive geographic rights due
to the size of the market. Australian distribution and sales channels are
comparable to other industrialized countries. Channels of distribution are
direct sales, use of agents, and direct investment. Their duties include good
faith representation and the maintenance of proper accounts, We will be
utilizing all methods of distribution as available and established through our
joint venture partner. Through our direct and distributor sales we expect to
attain the mix that will achieve Oceana the market share it deserves and meets
the customer needs Down Under. See Appendix B for additional information.
There are many major ports located throughout the continent. Transporting to
these active ports is very accessible through several shipping means (including
air transportation, where applicable). The size and population locations are
very unevenly distributed. Key population areas tend to center around the outer
perimeter of the country where these major cities’ airports and seaports are
The following is an overview of the transportation and communications systems:
Established railway systems 40,478 km
The highways of the country total 873,872 km
The telephone communication systems are very extensive both internationally and
domestically. Radio broadcast frequencies include 258 am and 67 fm. There are
134 broadcast stations. (National Trade Databank).
All raw materials will be purchased and supplied locally through ICI Australia
Pty Limited’s botany plant. ICI Australia is a large manufacturing facility
that produces 50 organic and non-organic chemicals located in Castle Hill, South
Australia. Our suncreen’s ingredients are, or can be, produced by this facility
for easy “just-in-time” inventory delivery. Our sunscreen will be safe for the
environment and everyone that uses it. The main ingredients in our products are
octylmethooxycinnamate, oxybenzone, octylsalidylate, titanium dioxide,
octocrylene and the secret ingredients necessary for our gold, silver and bronze
Target Market Demographics
Since such a high incident rate of skin cancer and skin damage exists in this
region, there is an ever growing need (market) for sunscreen products. Based on
our marketing research we have focused on three specific markets: tourism,
teenagers/young adults and parents with young children. These target markets
will allow for market penetration and diffusion at a quick rate since they are
the groups that have the highest need for our product and the greatest
Geographically, our focus is on the Australian states, New Zealand, Tahiti, New
Caledonia and Fiji. The following demographics will highlight the targeted
areas beginning with the Australian states:
+ NEW SOUTH WALES — SYDNEY & CANBERRA
- Tourism: 1,237,900 per year or seasonally and is expected to increase
by 60% for the 2000 summer Olympic games.
- Teenagers/Young Adults: 26,000.
- Parents and Children: 6,066,000 with a population growth rate of
about .07% per year.
+ VICTORIA — MELBOURNE
- Tourism: 728,200 per year or seasonally.
- Overall population: 2,676,000.
+ NORTHERN TERRITORY- DARWIN & AYERS ROCK
- Tourism: 146,650 per year or seasonally.
- Overall Population: 892,150.
+ SOUTH AUSTRALIA — ADELAIDE
- Tourism: 182,050 per year or seasonally.
- Overall Population: 1,427,460.
+ WESTERN AUSTRALIA — PERTH
- Tourism: 364,100 per year or seasonally.
- Overall Population: 1,695,113.
+ QUEENSLAND — BRISBANE, CAIRNS & GREAT BARRIER REEF REGION
- Tourism: 1,092,300 per year or seasonally.
- Overall Population: 3,033,361.
+ TASMANIA — HOBART
- Tourism: 36,500 per year or seasonally.
- Overall Population: 2,027,200.
NOTE: Overall population of Australia is approximately 18,000,000 with a growth
rate of 1.1% per year.
The following demographics are for the countries that border Australia in the
+ NEW ZEALAND — NORTH ISLAND — Auckland
- Tourism: 546,000 per year or seasonally.
- Overall Population: 1,540,000.
+ NEW ZEALAND — SOUTH ISLAND — Christchurch & Queensland
- Tourism: 756,420 per year or seasonally.
- Overall Population: 1,630,000.
- Tourism: 150,000 per year or seasonally.
- Overall Population: 213,000.
+ NEW CALEDONIA
- Tourism: 81,000 per year or seasonally.
- Overall Population: 179,000.
- Tourism: 288,000 per year or seasonally.
- Overall Population: 588,068.
NOTE: Tahiti and New Caledonia are overseas territories of France. Although
these are target markets, secondary data for these areas are limited. Primary
data will be collected after the initial market distribution, subsequent to the
roll out in this area.
Direct Marketing (advertising)
Australia’s direct marketing industry is at the early stages of development when
compared to the United States but due to economic levels of income and the
infrastructure of the country this market is highly accessible and affective.
Australian citizens long to be “Americanized” which in terms of television
advertising and technological advancement, is a viable means that puts this form
of market at our fingertips. The adaptation of pay television also allows for
the consumer to shop at their convenience.
Direct Marketing (promotions)
Trade centers and shows are important, along with mass media ideas ranging from