BMA506 Case Study Analysis of Leatherwood Honey PDF

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BMA506 Case Study Analysis of Leatherwood Honey from Tasmanian Honey Company of macro-environmental analysis and value proposition...

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BMA506 – Foundation of Marketing – Case Study Part A

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INTRODUCTION In the field of marketing, organizations can be influenced by their current marketing environment, which refers to all the internal and external factors. In this paper, the product of leatherwood honey from Tasmanian Honey Company would be examined to illustrate the macro-environmental forces and organizational factors that are indirectly and directly impacting the customer’s propensity towards the product. Tasmanian Honey Company began in 1978 and is founded by Julian Wolfhagen, a beekeeper who has had a passion for bees and honey since a young age (Evlin 2018). Today, the company produces world-famous Leatherwood Honey from their own beehives across Tasmania. Furthermore, a three-step model of STP analysis – Segmentation, Targeting, and Positioning – is used to evaluate the value proposition of Tasmanian Honey Company’s leatherwood honey in order to obtain a market position among the honey industry in Australia.

MACRO-ENVIRONMENT OF HONEY INDUSTRY According to Grewal et al (2021), the macro-environment is the set of external factors and forces that are uncontrolled by the company however can impact the company’s development. Monitoring the changes of these external factors would facilitate the managers to identify all the forces that shape opportunities, as well as detect threats posed to the company. Thus, scanning and monitoring factors in the marketing environment would help the company to evaluate the performance of current marketing approaches and improve future marketing strategies, in particular, addressing the threats and opportunities arising from these macro-environmental changes. The following paragraphs highlight the different external factors and forces that could influence the honey industry in Australia. 1

BMA506 – Foundation of Marketing – Case Study Part A

Australian Cultural Effects Supporting local farmers and growers has been a core cultural belief in the past decades in Australia (Wales 2012). Thus, buying directly from them is a great way to support and appreciate their hard works.

Demographic and Social Factors According to the study from Australian Institute of Health and Welfare (2021), the life expectancy of the Australians is the highest in the world. As we can see Australians are getting more concerned with their health, they are more willing to spend on healthy products. In addition, there is a widely held belief that eating local Australian honey can reduce the effects of hay fever. Given hay fever is the most common allergic disorder in Australia, eating honey has become a national social norm (Saarinen, Jantunen & Haahtela 2011).

Impacts of Technological Development In the past decades, there is only a small amount of research conducted on the properties of leatherwood honey. However, as technologies are evolving, researchers are looking into the medicinal properties of leatherwood honey. Consequently, the result is very promising that it has just proven leatherwood honey is high in antioxidants, which is similar to the medicinal properties of manuka honey (Cooper 2021). It could be used to heal wounds and boost the immune system.

Natural Forces and Ecological Impacts Rainforests are increasingly becoming casualties of forestry operations from timber companies despite the involvement of different organizations to counteract (Forrest 2

BMA506 – Foundation of Marketing – Case Study Part A

2021). In addition, forest fire has burned down a large part of the rainforest across the nation, along with adverse weather leading to the trees’ flowering are less predictable. Subsequently, the honeybees are starving and dying, so the reduced supply of honey in the last decade is known to have increased honey prices in the industry (AgriGrowth Tasmania 2019).

MARKET SEGMENTATIONS It would be very hard for businesses to satisfy all their customers’ needs as it is impossible to meet the exact desires of each consumer. Therefore, many companies may adopt a three-step model of STP analysis (Segmentation, Targeting, and Positioning) to divide the market into segments and develop products to meet the customers’ needs in these segments (Camilleri 2018). The first step is market segmentation which is a consumer-oriented process involving the identification of the most profitable market segments for leatherwood honey, followed by defining a target market that can focus on the needs of customers. Market segmentation allows Tasmanian Honey Company to evaluate its internal factors which comprise the company’s strengths, weaknesses, and core competencies.

Demographic Segmentation The demographic segmentation identifies middle-aged females between the ages of 30-60, namely as mothers or daughters who would purchase honey for the wellbeing of their families, especially their children and the elderly. Besides, leatherwood honey is appealing to the upper class and educated individuals with its unique aroma and it is valued by connoisseurs lately as one of the world’s finest honey (Breitsamer 2021).

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BMA506 – Foundation of Marketing – Case Study Part A

Psychographic Segmentation The values and attitudes of the Australians are shifting toward health-conscious as they are more willing to spend on superfood and healthier products. Consequently, an opportunity is identified for leatherwood honey to obtain a greater market share in the honey industry.

Behaviour Segmentation Tasmania is exceptional as the sole world producer of leatherwood honey, which is also called the “heritage honey” as it is recognized for its unmistakable aroma and a certain spiciness in its scent. Therefore, it is also regarded as a premium gift or representative souvenir from Tasmania for special purchase occasions.

The leatherwood honey contains strong flavor and sweetness which makes it a potential sweetener and table sugar replacer. It is now also considered a gourmet type of honey. Famous chefs, such as Gordon Ramsey, are highly recommending leatherwood honey as a cooking ingredient due to its unique taste and flavor (Robinson 2020). Thus, the rich taste of leatherwood honey works as a natural superfood and healthy alternative to sugar in cooking and beverage for regular consumption.

Benefit Segmentation Leatherwood honey contains health benefits such as it helps in strengthening the immune system, preventing oral infections, rapid healing, boosting the respiratory system, in particular, reducing the effects of hay fever (Tasmanian Institute of Agriculture 2020). It is also used for medicinal purposes due to its anti-bacterial 4

BMA506 – Foundation of Marketing – Case Study Part A

properties, which makes it beneficial for pharmaceutical purposes. Linking the bioactivity of leatherwood honey to its authenticity could fuel the growth of the leatherwood honey market in the honey industry.

TARGET MARKET The second step of the STP model would be developing the target market profiles that are based on the assessment of the opportunities and threats identified in the macro-environment, as well as the substantial strengths and weaknesses within the segmentations. The market for leatherwood honey can be attractive to multiple segments of people, which could be identified as middle-class females with a family, health-conscious people who are seeking Australian-made raw honey without additives for typical consumption or healthy alternative to sugar. Due to the result of medicinal research, it is proved that leatherwood honey can generate relief for allergy sufferers of any age, gender, or race, thus targeting the individuals who are pursuing high-quality honey regularly for health benefits, especially with allergies such as hay fever. However, the decline in bee populations would lead to a decrease in supply and an increase in prices for the consumers, so the price increase will affect those who purchase leatherwood honey as a luxury and not a necessity.

POSITIONING STRATEGY The final step in this model is positioning, which allows the company to establish the product differently from the competitors in the eyes of the target consumers identified in the second step. Upon comparing with other competitors, a clear value proposition can be developed to convey the potential benefits received by the targeted consumers from the product (Grewal et al 2021). In that way, it provides 5

BMA506 – Foundation of Marketing – Case Study Part A

reasons for the consumers wanting to purchase it. It consists of the attributes of a product that are desired by the target market, but not available from the competitors. As a result, it requires careful consideration in this final step to determine long-term profit opportunities through positioning the products according to value and salient attributes.

Organizations use perceptual mapping, based on the perception of the buyers, to help develop a market positioning strategy for products (Grewal et al 2021). This map shows where existing products are positioned in the market so that Tasmania Honey Company can decide where they would like to position their product. Perceptual maps are created by considering the two primary measures, in this case, that would be price and quality as per the horizontal and vertical axes. Tasmania Honey Company has a vast number of competitors, and only a few are selected to compare in this positioning map.

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BMA506 – Foundation of Marketing – Case Study Part A

Natural Life targets high-end consumers, especially the overseas market. They not only produce high-quality raw honey products such as Manuka Honey but also sell a wide range of other products such as honey spray and honey cosmetics, etc.

Capilano Honey differentiates themselves by focusing on selling “household” honey only in large supermarket chain stores Woolworths and Coles, targeting mainly the parents who would purchase for their household’s daily consumption.

Bramwells Honey is a brand from Aldi supermarket whose honey is classified as supermarket refined honey. Their honey is highly processed and pasteurized that contains no healing properties. Therefore, it is the cheapest among all the brands.

Value Proposition Tasmania Honey Company collects its leatherwood honey straight from the extractor which means it is entirely unheated, unpasteurized, and unprocessed honey (Tasmanian Honey Company 2021). This process of collecting honey makes the leatherwood honey healthier than other “commercial” honey with unhealthy additives. Therefore, Tasmania Honey Company positions themselves as a healthy, natural sweetener option for health-conscious adults and the aging population who seek health benefits from leatherwood honey.

CONCLUSION All in all, the initial stages of developing a marketing strategy can be established through the evaluation of the marketing environment, target market, and value 7

BMA506 – Foundation of Marketing – Case Study Part A

proposition of a product. Upon the integration of the marketing theories and the value attributes from Tasmania Honey Company’s leatherwood honey, the positioning strategy is established. An interesting fact that is worth noting is that the price of genuine leatherwood honey products is expected to increase fiercely due to high demand but short supply (Cooper 2021). In addition to the increasing number of studies and lab experiments conducted on the authenticity of leatherwood honey, it would be possible that the price of leatherwood honey to be higher than manuka honey in the future. Therefore, monitoring the positioning strategy is very important as markets are never to be stagnant.

REFERENCE AgriGrowth Tasmania 2019, ‘Bee Industry Futures Report July 2019’, Department of Primary Industries, Parks, Water and Environment, Tasmanian Government, viewed 03 August 2021, Australian Institute of Health and Welfare 2021, ‘Life expectancy & deaths, Deaths in Australia’, Web report, Australian Institute of Health and Welfare, 02 June, viewed 01 August 2021, Breitsamer, R. 2021, ‘From the Untouched Forests of Tasmania’, Breitsamer & Ulrich, media release, Germany, viewed 25 August 2021,

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BMA506 – Foundation of Marketing – Case Study Part A

Camilleri, M. A. 2018, ‘Market Segmentation, Targeting and Positioning’, Travel Marketing, Tourism Economics and the Airline Product, Chapter 4, pp. 69-83, Springer, Cham, Switzerland. Cooper, C. 2021 ‘National honey library to prove authenticity of Tasmanian leatherwood’, ABC News, 23 August, viewed 28 August 2021,

Evlin, L, 2018, ‘Why the buzz around Tasmanian honey?’, SBS Small Business Secrets, SBS News, 11 October, viewed 03 August 2021

Forrest, R. 2021, Bittersweet loss of leatherwood, media release, Tasmania, 01 June, viewed 03 August 2021, Grewal, D, Levy, M, Mathews, S, Harrigan, P, Bucic, T & Kopanidis, F. 2021, Marketing, 3rd ed, chapter 6, McGraw-Hill Education, Sydney, NSW Robinson, J.K, 2020, ‘Gordon Ramsay Journeys to Remote Tasmania’, National Geographic Society, media release, Australia, viewed 03 August 2021,

Saarinen, K, Jantunen, J & Haahtela, T, 2011, ‘Birch Pollen Honey for Birch Pollen Allergy – A Randomized Controlled Pilot Study’, Journal of International Archives of Allergy and Immunology, May, Vol.155, No. 2. Tasmanian Honey Company 2021, ‘About us’, Tasmanian Honey Company website, viewed 01 August 2021, Tasmanian Institute of Agriculture 2019, Sweet Deal for Leatherwood Honey, media release, Tasmania, 10 October, viewed 03 August 2021,

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BMA506 – Foundation of Marketing – Case Study Part A

Tasmanian Institute of Agriculture 2020, Bioactivity to boost value for Tasmanian beekeepers, media release, Tasmania, 13 November, viewed 03 August 2021,

Wales, M. E. 2012, ‘Hardworking growers of great food need our support- Why we need and support local food’, International Agricultural & Rural Development Economics, Australia, 11 July, viewed 01 Aug 2021,

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