Business Report: Manukahealth

Table of Contents

1. Introduction 2

2. Business and Product 2

3.1. PESTLE Analysis 3

3.2. Analysis of the near environment 4

4.1 Market size of United Kingdom 6

4.2 Identifying the area of customer preference 6

5. Marketing theory 7

6. Market entry modes 8

7. Uppsala model of Internationalisation theory 8

8. Transnational strategy based on Standardisation and differentiation 10

9.1 Internal resources and capabilities 11

9.2 Organisational capabilities 11

10. Expected costs and sales analysis 12

Conclusion 13

References 13


1. Introduction

This is the market entry study for Manukahealth which specialises in honey and diet supplements in New Zealand for entering into a UK market. It is established in New Zealand and now aiming to use the international marketing strategy in order to promote its products and services throughout the world. In order to entry into a new market, the authorities of Manukahealth have decided to facilitate the export services. Another important factor for choosing the country United Kingdom in order to facilitate the business of export of its diet supplements and honey, relating to factors like low psychic distance like cold weather and people’s living standard. It has been identified that the international marketing process is also helping a business firm to provide appropriate services to the customers by whom the firm can earn a certain amount of profit (Bush, 2016).

Established in 2006, Manukahealth is healthcare products manufacturing companies in New Zealand. It is engaged in production of various products like beauty enhancer, vision shield, honey, immune guard and immune response. The company has been developed with the inspiration of New Zealand’s bee products. The product manufacturing process of the firm is mainly compatible with more than 1.5 billion of bees and 150 humans ( The production team is mainly involved in the activities of crafting and nurturing the Manuka honey, royal jelly and New Zealand gourmet honey for capturing the energy of the country’s nature. The Manukahealth team has also collaborated with the leading scientists in order to develop some of the beneficial products for the people. Its bioactive materials and compounds, which means higher concentration of dietary fiber, vitamin C, carotenoids and polyphenols as well as an antioxidant, have helped the firm to grow its business position in an effective way (Dziadek, European Food Research and Technology)

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This report first looks at the products and services for export followed by PESTLE analysis of the country United Kingdom and its near microeconomic factors in which the company is willing to expand in section 3. Furthermore, in section 4, the assignment will throw some light on the growth of United Kingdom’s target market. In Section 5, marketing principles will be discussed. In the section 6 we will study. market entry modes and valid justification for choosing those modes. In section 7, this paper will discuss the franchising and wholly owned subsidiary channels for entering into the UK market. This paper will also discuss the Uppsala model of internalisation theory for the entry mode of the chosen country which is United Kingdom. Section 8 will describe about strategy based on the concepts of standardisation versus differentiation. In the last two section, Internal and external resources will be discussed with their capabilities and related cost.

2. Business and Product

 Manukahealth has decided to export their honey and other diet supplements to UK, as it is major international trading power countries in the world. Apart from very few trade barriers, UK also offers the entry market into the European Union for more than 40,000 exporters (Lee, 2015). According to the article published by CBI, Ministry of foreign affairs, (Honey consumption increased by 5.3% on an average annually. Almost 11% honey is being import every year to meet the demand. Moreover, there is more room for premium products, as according to market study out of 11%, 8% honey market is captured by premium and naturally made honey. Also, it states that The earning population of UK are very health conscious, therefore, it would be appropriate for the firm to do business in UK, therefore Manukahealth majorly targeted people from age group 20-55). The authorities of the company have chosen the business market of UK in order to enhance the sales rate and revenue generation rate of the firm. Another major reason is also low psychic distance, between the people of UK and New Zealand, so it will not be a very risky or unknown market to enter.

3.1. PESTLE Analysis


The political system of UK is mainly operated by the parliament of the country. UK is one of most stable countries in the world. The country has also given several opportunities to business organisations to develop their market position (Bush, 2016). Therefore, the political system of UK will also help Manukahealth to stabilise its business process as well. On the other hand, the adoptable nature of UK Government will also create an opportunity for Manukahealth to promote its healthcare products among the target customers. However, the issue of Brexit can make it difficult for the company to market its product in rest of Europe in future.


According to an article published in Trading Economics, UK’s GDP growth has been confirmed 0.5% in the first quarter of 2019, which in actual increased from 2018, as it was badly affected by Brexit in 2018. Also, Government of UK has also developed a diversified economical condition for both the private and public sectors (statisticstimes, International Monetary Fund World Economic Outlook, October2018). This acted as an increment of foreign direct investment in UK, which can be beneficial for Manukahealth to do export. As the economy is now growing their GDP in upward direction, which will also increase spending per person Manukahealth can easily influence their choices and mind.


The social factors of the country UK mainly include the high standard of living. However, the high standard of living could be an opportunity for the Manukahealth to set high rate of its products. It has been identified that the high rate of dependency rationale can also be a factor for the organisation to operate its business process in UK. Moreover. Therefore, it is very important for the entity to develop a proper function of their business process so that the company can attain a suitable position in the business market of UK (Mroczek-Dąbrowska, 2014).  

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The technological factors mainly include the innovation skills, the development of IT department and the laws related to intellectual property.  In the same context, the growth of international competition can also be a factor for Manukahealth to implement the technological programs. The development of IT department will also affect the strength of manpower of Manukahealth (Madanoglu, 2018). According to the Technation report 2018 (UK is ranked as 2nd most connected place for technology, which increasingly raises at 2.6% every year). Therefore, Manukahealth will also find it optimum for using the latest artificial intelligence programs within the company’s business process 


Federal Government and the local councils have taken several initiatives for maintaining the environmental sustainability. As Manukahealth mainly deals with the bioactive compound’s products, which means they are higher concentration of dietary fiber, vitamin C, carotenoids and polyphenols as well as an antioxidant that stimulates bone growth (Dziadek, European Food Research and Technology). Therefore, it would be beneficial for the firm to operate its business process in the UK market, based on health standards of people of UK.


Referring to the article published by Rodingroup & Co. ltd in October 2018 (In UK honey is known as a food of animal origin. For exporting honey in UK, it must have health certificate and an authorised inspector/ officer in the country of origin must sign the certificate that it meets the quality and food safety. There are variety of ways in which the honey and other diet supplements are checked.) Moreover, according to Euromonitor after Brexit implements (Factors such as the regulatory burden, costs of doing business, availability of skilled labour, market sizes and the supply chain would have an impact on the import decision in UK). The country UK has a very strict policy and procedures for the private as well as public organisations. The consumer law of UK mainly highlights the protection of consumers from fraudulent companies (Mani, 2019). Therefore, the country can also make it difficult for the company to implement suitable organisational rules and regulations.

3.2. Analysis of the near environment 

For growth and success of any business or industry it is always mandatory to critically analyse, plan and prosecute according to the factors that affects the performance of the industry. This needs multidisciplinary approach and examines Porter’s diamond theory of the competitive advantage of nations drawn from the strategy field and investigates how the four determinants trigger entrepreneurial mindset in recognizing opportunities (Ozgen, Eren. Academy of Entrepreneurship Journal). Manukahealth dedicatedly keeps an eye it their external environment stated below:

Source: (De Mooij, 2015)

Firm Strategy, structure and rivalry- As per the article published on Euromonitor in 2013 (Innovation, blend between global and local preferences, analysis and safety guidelines must be crucially analysed to beat competition and growth in long run). Some of the potential competitors of Manukahealth are the Waiheke Honey Company (Manukahealth, 2017). Waiheke honey has more market share than Manukahealth honey due to its low-price range, generally it is between 13$-20$, however Manukahealth honey falls under the price range of 20$ – 65$. The major difference between the prices is due to high scale of production via Waiheke. Manukahealth must try to develop sustainable products for the customers of UK for attaining a competitive position (business-to-you, 2018) .

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Demand Conditions – The demand conditions mainly include the innovation, quality improvement and different distribution channels (Mroczek-Dąbrowska, 2014). With the help of distribution strategy, the company Manukahealth has availed the products for the target market in New Zealand and in UK (Zhang, 2017). In the same context, the company Manukahealth has planned to use the supply chain process for availing its products to the people of UK, similarly direct distribution strategy for distributing its honey products for the target market of UK. 

Related and supporting industries- The authorities of the company Manukahealth has used different distribution channels like producer, wholesales, retailer and consumer in order to sell the honey products (Grünig, 2016). The aforementioned channels can also be used by the firm in the market of UK as well. By using appropriate distribution channels, the company Manukahealth has developed a potential base of customers in New Zealand as well as in UK (Madanoglu, 2018). The roles of suppliers are very important for the firm Manukahealth in order to enhance its innovation by using high quality of raw materials for developing honey products. 

Factor conditions – According to study conducted by Harris, Richard; Li, Qian Cher (There are several factors that needs to be considered while planning or exporting into a new country like, R&D activities, scientific knowledge, international co-operation, food safety standards, targeted customers choice, taste and preference laws and organizational structure).Customers are considered to be one of the most important factors of an organisation (business-to-you, 2018). Customers’ demands and needs have also been analysed by the business managers of the firm in an effective way. 

4.1 Market size of United Kingdom

Target market- Social and cultural factors in the exporting country plays a vital role in decision making for selection of the target market. Manukahealth has mainly chosen the people aged Between 20 to 55 as target customers. By choosing this age group, the company will be able to attract more customers in the market of UK (Mroczek-Dąbrowska, 2014). It has been identified that the people between this age group are more conscious about their health. The growth of health products in the market of UK is also very high. Therefore, by choosing an appropriate target market in the country will be very helpful for Manukahealth to expand its business (Rosado-Serrano, 2018).

Size of target market- As Manukahealth mainly provides healthcare products which are being made from honey, therefore, the company will be able to attract maximum number of customers for honey consumption. Moreover, according to survey conducted by Age UK (People above 30 are also attracting towards Diet supplements to remain fit and healthy). The cost leadership method will be used by Manukahealth in order to sell the honey healthcare products in an effective way. It has also been evident that the people in the age group of between 20 to 55 years are more health conscious as compared to the other UK customers (Mroczek-Dąbrowska, 2014). The diversified products of the company will also help the company to attract the customers from different background as well, as planned also for future. However, as this is the product related to health and fitness, taste of it does not play crucial role here.

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4.2 Identifying the area of customer preference

For understanding the preferences of the UK customers, Manukahealth will also do market research process. The sampling technique will help Manukahealth get more familiar with the UK market. However according to Richard Fletcher, heather (It is quite expensive and time consuming. Another fact to be considered here is, it is possible to research on a new country based on external criteria like income, location, age or education, there are other internal factors that needs to be more critically analysed like personality and psychological characteristics which external factor ignores. For example- researching on people within the similar age group, it is not mandatory that people from different country in a similar age group have same choices, lifestyle, social culture.) It is the mandatory for the marketing department of Manukahealth to analyse and study the above listed factors critically and thereafter invest in sampling proposal as without proper study it might result in a huge amount to be sacrificed.

5. Marketing theory

Apart from public relation, advertising and promotion, there is another important factor to use the market data and information in different manner to reach customers and making an external and internal bond with them. Marketing theory could be narrative, symbolic, cultural, and political etc.

Manukahealth has planned to use Narrative and Cultural marketing theory to reach their target market.



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Narrative marketing theory

The narrative marketing is narrating a story or an event related to a product, which might be true or fictitious. Manukahealth has decided to use the users and manufacturers for this to share the brand story, facts and benefits to customers. This will help an organisation to connect their product with the customer’s life or by making an internal bond with it. With the help of narrative marketing, the authorities of Manukahealth will be able to analyse the emotion of the target customers in UK, as Manukahealth believes having ethical and sophisticated customer so they believe more in real facts than the imaginary.

Cultural marketing theory

The cultural marketing will mainly help to promote its message within a certain group of customers who are from a specific culture (Bush, 2016). On that note, Manukahealth will also be able to promote its message within a certain cultural group of UK target market, that how people like them are associated with Manukahealth products in their routine life and are happy. This will be the most approachable way for the company to enter into the UK market. It is always beneficial for the marketing department to use the cultural marketing theory for the purpose of marketing entry (De Mooij, 2015). Because of low psychic distance within the people of New Zealand and UK, cultural marketing theory can be easily applied to UK market. However, it may limit to a certain group of customers when it comes to culture, because due to globalisation and Technology there are many people from different culture who migrated from their origin. According to Donoho Asia Pacific Journal of Marketing and Logistics (Next generation managers appear to use more practical approach to marketing than cultural one).

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Based on the fact and limitations of above two theories, its is quite effective to use narrative marketing theory depicting real facts via real characters and their experience, as it plays a vital role in persuading and connecting consumer’s with Manukahealth’s product and gives a scope of huge market, apart from depicting and focusing on a specific culture/market.

6. Market entry modes

Franchising- According to Lafontaine, Francine (Franchising is the contractual agreement between two separate legal entities where franchiser grants some right to franchisee to sell their products under its trademarks in a specific location for a particular time period). Franchising strategy will also help the company to own some of the potential distributors in the market of UK, who are familiar with tax policies, culture, lifestyle, customer choice. rules and regulation in spite of taking risk alone of entering into an unknown or new market sector. Not every product is suitable for franchising option. There are some risks that are associated with the franchising method such as damage in reputation, compliance issues, risks of joint employer liability and others. There are also few dangers that are related with the diversifying risk strategy, for example, harm in notoriety, FDD consistence issues, dangers of joint manager obligation and others (Mani, 2019).

Wholly owned subsidiary- The wholly owned subsidiary will allow to create and own its own market place in another country for selling their products. In the same context, the wholly owned subsidiary could also help an organisation to become a parent company which will hold its entire subsidiary in the common stock (Koh, 2015). The completely possessed auxiliary will likewise help the organization Manukahealth to turn into a parent organization which will hold its whole backup in the normal stock (Bush, 2016). Consequently, it very well may be said that the completely claimed auxiliary will help the firm Manukahealth to enter in a compelling manner in UK. On the contrary, it might be very risky to establish a self-owned subsidiary as it has different law and regulations. 


Manukahealth, therefore decided to enter the UK market, with Wholly owned subsidiary option, in support with proper research and analysis. Manukahealth products are majorly produced by honey. Manukahealth products are known more for being produced in a natural environment by the team of 1.5 billion bees and 130 human beings (, having the manufacturing plant at origin land, which is close to nature. It could bring a negative impact on brand image for opting Franchising option. 

7. Uppsala model of Internationalization theory

Source: (digitpro, 2012)

The Uppsala model of Internationalisation theory was introduced in 1977 by Swedish researchers Johanson and Vahlne. It is based on a sequential approach based on four stages:

No regular export activities

The Uppsala model of internationalisation theory mainly highlights the process of a business organisation over its export activities (Fang, 2018). A business organisation will not be able to do its export activities on a regular basis by following the Uppsala model of internationalisation theory. In addition, the irregular export activities can affect the sales rate of an organisation in an effective way (digitpro, 2012). Moreover, as Manukahealth has planned to enter the UK market via wholly owned subsidiary, there will be regular exports from New Zealand to UK.

Export via agent

The export via agent is one of the best practices of the Uppsala model of internationalisation theory. The exportation of goods through an agent is mainly performed by an organisation in order to expand into a new market (digitpro, 2012). However, Manukahealth has not collaborated with any agent, so this condition is again not met.

Overseas subsidiary

The overseas subsidiary is also a vital step of Uppsala model of internationalisation theory. The overseas subsidiary mainly helps a business organisation to operate its business in an effective way on the basis of country’s law. Moreover, the law of a country will mainly help a business organisation to gain a wholly owned subsidiary (Rosado-Serrano, 2018). Manukahealth has also planned to set up their own owned subsidiaries in UK market to retain their brand image and trust of customers.

Overseas production

Manufacturing products in exporting country can save the import/ custom duty. It helps a business firm to manufacture its own products in the foreign market thereby increasing the production rate and benefit from technology, skills and cheap labor rates in the exporting country. However, Import needs registration under UK Trade Tariff: import prohibitions and restrictions (A company needs “Import of Goods (Control) Order 1954” licence under Import, Export and Customs Powers (Defence) Act 1939. Moreover, Import duty for honey is 17.3% from New Zealand). In case of Manukahealth it is more relevant to stick to production at their origin to maintain their brand image, it might be difficult to achieve similar quality for their products at other place, due to change in climate, change in breed of bees and different technology.

According to above stated facts Manukahealth must not follow Uppsala model. The Uppsala model will not allow a business firm to focus on its management techniques and decision-making process under sole ownership.

The suitable model for Manukahealth to be followed is Eclectic Paradigm, also known as OLI model (ownership, location and Internationalisation). It is the holistic approach which meets the requirements of Manukahealth standards based on the below listed factors.

Ownership- No change in the ownership, Sole ownership will remain with the organisation. There will be no sharing of the decision rights.

Location – Production plant will remain at the same place, however there will be entry to UK market via exporting the products. So, there will be no compromise with taste, climate and production team (bees and team).

Internationalisation- Keeping the roots at origin, Manukahealth is entering globally to new markets via wholly owned subsidiary with their honey and diet supplement products.

Ownership remains with the parent company at their location while they export their product to rest of the economies (Andrew Bloomenthal). Cost of entry Manukahealth via exporting is relatively less than the cost of risk of installing a production unit in a new country.

8. Transnational strategy based on Standardisation and differentiation

The transnational strategy is one of the most effective strategies by which Manukahealth will be able to develop a more personalised approach for selling its products to the target customers. With the help of it, Manukahealth will be able to market its honey and health products throughout the country UK with managing a balance between differentiation and standardisation. For example- honey will remain as their base ingredient which will be standard, however Manukahealth will change flavours of their diet supplements according to the taste of UK customers. The transnational methodology is one of the best way to build up a continuous relation with the customers.

Elements of marketing mix

Products- The main products of Manukahealth are the Manuka honey, propolis and royal jelly. These products are mainly considered as a winter product. On the other hand, Manukahealth has also some featured products as well. Some of the featured products are the immune guard, immune response, and vision shield and beauty enhancer (Manukahealth, 2017). These are the products that have been selected by the authorities of Manukahealth for exporting into the UK market.   

Advertising- For advertising the honey health products in the market of UK, Manukahealth must try to choose the best digital media. As the people of UK are well associated with all channels of social media, therefore, it will be appropriate for the company to use the both traditional and digital marketing.  

Pricing- The price of the honey health products must be set in an appropriate manner by which it can beat and stay at par out of the competition. However, UK is already at 5th highest GDP growth rate, people are expected less sensitive towards price or compromising towards standards and quality.  

Distribution channels- Manukahealth has planned to utilize simultaneously many distribution channels like wholesales, retailer and stores so as to sell their products in UK. As the same theory has brought success in the sales promotion in New Zealand. By utilizing suitable circulation channels, the organization Manukahealth has built up a potential base of clients in New Zealand (Madanoglu, 2018). 

9.1 Internal resources and capabilities

Resources and capabilities are responsible for any organisation’s success and failure. A right selection of resources is crucial for any organisation for its survival in the long run. Manukahealth believed in creating the best structure of resources with optimum capabilities to make itself strong in industry.

Tangible- The tangible resources of the firm Manukahealth mainly include its warehouses and offices. It has helped the company to develop a sustainable position in the country New Zealand. Similarly, it is expected that, by developing physical evidence in UK, the company will also be able to gain a huge reputation in the market of UK (Lee, 2015). 

Intangible- The intangible resources of Manukahealth mainly include the reputation and brand name. In addition, the intangible resources must be maintained and monitored by Manukahealth in an appropriate manner (De Mooij, 2015). With the help of reputation and brand name, the company will be able to enter into the market of UK in an effective way. 

Human resources- The human resource department of Manukahealth must try to analyse the market of UK in order to hire the right talent for the production and distribution unit (economics, 2019). By hiring the potential export professional, the company will be able to maximise its performance in the market of UK. 

Lack of resources and capabilities

It has been identified that the permissions and licencing required for opting stores in UK will make it difficult for the company to widely open range of stores. In addition, the cost of exportation is also one of the major aspects that the company will face in doing business in UK. Moreover, the financial assets can also be one of the major problems for the firm in order to sell the honey health products in the country which might take a very long time to settle (Rosado-Serrano, 2018). 

9.2 Organizational capabilities

It is very important for Manukahealth to develop a proper routine of its business in an effective way. In the same context, the firm Manukahealth must maintain a suitable routine for the employees by which the customers can get proper benefits. On the other hand, the processes of the firm must be developed in such a manner so that the capabilities of the firm Manukahealth can be monitored and maintained. The business process of Manukahealth must be maximised in an effective way so that the firm can develop a sustainable position in UK as well. In addition to this, the organisational culture will also determine the sustainability position of Manukahealth in UK. The authorities of the firm Manukahealth must try to develop a suitable environment for the employees by which the culture of the organisation can be maintained in an effective way in UK. 


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10. Expected costs and sales analysis

In this section we will study the financial part for export plan for the coming 3 years. However, the cost has been calculated on the basis of cost of goods sold and competitors price.

Here I will discuss on Manukahealth honey as an example that how the expected cost and sales could be determined.

Direct expenditure per unit


Labour cost 


Raw material




COGS – Manukahealth Honey


Table 1 


Price in NZD

Price in UK



       £  ?

Waiheke honey 


£32.99 ($ 54.87)

Watson & Son 



Table 2

The average price of 250 gm of Manukahealth honey is $29.50. However, the COGS is estimated $12.00 (Table 1). On the other hand in table 2, it is clear that Manukahealth is competitively active in deciding price range in the domestic market. However, entering to another country includes export duties, shipping duty, export profession charges, paper work, damage cost, wastage, theft, international insurance and many miscellaneous variable charges. It is assumed the per unit they are approximate 30% on their total cost of production (from Table 1). 

According to the data available, 73% of UK market is highly price sensitive ( The major challenge is also to compete with the prices of the existing competitors in the UK market. Therefore, Manukahealth must keep their price by keeping range almost between $35 to $53 in UK market. Entering in the existing price range at initial range could grab the attraction of new customer and market share. Similarly, for coming three years, sales prices in the exporting country must be decided in proportion to competitor’s prices, with almost more than 50% margin to COGS, any variations must be avoided.


As Manukahealth is entering UK market having low psychic distance from their country of origin. After thoroughly studying the market structure, practice, customer types, UK’s GDP and demand for health products in UK, Manukahealth must enter in there with transactional approach as they are majorly known for their base products, however some. In addition, price must be decided after taking into critical evaluation the competitor’s price and COGS with the proper analysis of above factors. This will help the firm with showcasing its things in various bits of Europe as well.


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