Petroliva in the UK; an Indirect Approach
There are a number of options for Petroliva to enter the UK market using an indirect approach, the first of which may be to enter the UK market by piggybacking on the promotional work previously initiated by Foundation of the Communal Patrimony of Olives or the Inter-Professional Association (Thomson & Merino, 2007). By piggybacking on these agencies, any promotional work done would not only benefit the agency, but also any companies piggybacking, such as Petroliva. By associationg Petroliva with such companies, it will aid Petrolia greatly in penetrating the UK and world markets by not only giving them promotional aid, but also providing them with contacts, and existing reputation with minimal direct investments (Doole & Lowe, 2004). Also, in this situation, as the agencies priority is to promote Spanish olive oil, the chances of there being a conflict of interests is low.
Another option available to Petroliva to aid develop the brand, would be to employ an export management company (EMC). These companies are designed specifically to export and aid smaller companies to initiate develop and maintain their international sales. (Doole & Lowe, 2004). A company such as this would benefit Petroliva as they could get the ‘actual’ product into the UK market as well as applying their skills and knowledge of local and national purchasing practices, government regulations. For many small companies, the complete package deal offered by EMC’s can prove to be extremely appealing as they mean that the company does not need to establish their own distribution channels, they can provide marketing for the goods, something Petroliva currently pay a third party for. (Thomson & Merino, 2007). Also employing an EMC can provide Petroliva with an entry strategy to the hotel and restaurant market, already a large proportion of their sales (Thomson & Merino, 2007). However, the use of an EMC may also have its disadvantages. The plans of the EMC may not coincide with Petrolia’s objectives, for example, they may focus on customer type, or geographical area, thus, the market selection would be based on the EMC’s priorities rather than that of Petroliva (Doole & Lowe, 2004). EMC’s tend to be paid by commission, therefore it is not unheard of them to focus their attention products that result in immediate sales rather than focusing on those that require more time and attention in educating the consumer, and sustained market attention, for longer term sales (Doole & Lowe, 2004) . If Petroliva ever wanted to take control of the UK market in the future, they could find it very difficult, it would most likely result in Petroliva having to pay the EMC to withdraw their contract, and this could be both costly and messy, and would result in Petroliva having to establish their own supply chains to their UK customers.
Petroliva in the UK; A Direct Approach
The other option Petroliva have is to enter the UK market with a direct approach. This would mean they would have to develop their own brand without employing the help of other agencies. This is a better move for companies hoping to secure a more permanent long term place in international markets. (Doole & Lowe, 2004).
This option would require a more proactive approach, with an enormous amount of commitment and a substantial investment in the international operations. However, one option for Petroliva would be to join forces, rather than piggyback, with agencies such as the Foundation of the Communal Patrimony of the Olives or the Inter-professional Association. By making a joint venture, they could both promote Spanish olive oil, and give Petroliva an entrance to the UK market.
Petroliva could also take advantage of the experience they have in supply within the restaurant and hotel trades, this would supply Petroliva with a huge ‘ready made’ customer base.
Petroliva could set up a base in the UK. It is always advisable, when having a sales representative in a country, that they are familiar with customs and traditions, even just the local sense of humour, therefore possibly a British agent would be the key.
Conclusion
In my opinion, Petroliva would be best advised to use a direct exporting strategy. By doing so they would be able to retain control of the ventures and the company, which they may lose when employing outside agencies. By developing a joint venture with the Foundation of the Communal Patrimony of the Olives, Petroliva would be able to establish them selves as a quality brand, as well as promote Spanish olive oils. A joint venture would also keep advertising costs reasonably low. I would recommend setting up a base in the UK, whether that be a single agent or an office, it is advisable to have someone based in the UK with relevant knowledge of the market, as well as customs and traditions.
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References
Doole, I., Lowe, R., (2004) “International Marketing Strategy”, 4th edintion, Thomson Learning: London
News.bbc.co.uk(December, 2006) “Olive Oil Can Cut Cancer Risk” (online)
Available from: [Accessed 26/11/07]
Thomson, J., Merino, R., (2007) “Olive Oil Case Study” Napier University: Edinburgh
