BUS5SMM Sustainable Management and Marketing of Tassal company

Background of the Tassal company

Tassal company initiated the Salmon farming in Australia in the year 1986. It is now the leading Salmon producer. In the year 2003, it rose to become a big public company listed on the ASX. It provides fresh, frozen, smoked and canned salmon products both in home and international market. The head office of the company is in Hobart and its marketing office is located in Melbourne. The company is the largest producer of Atlantic Salmon in Australia. It has 800 people working for them. Its most important competitors are Huon Aquaculture and Petuna Seafoods (Tassal Team, 2017).

Tassal is known to do its best to attain operational excellence and at the same time, taking care of its core value which revolves around quality, community and the environment. The company works towards providing healthy and yummy salmon and is cautious about its consumer concerns, like providing the information that the food provided to them is provided in a socially responsible way. 

Sustainable Practices

Tassal is recognised and respected: Tassal is named as the most respected industry leaders in agriculture, forestry and fishing by the national survey published in BRW. As per the managing director and the CEO of the company there is a system in place to be socially and environmentally responsible in the work they do (Government, 2016).

Sustainability: The company is supported by many third party sustainability partners. The company is committed towards its product, staff and the ecological environment and has a demarketed strategy for the future that takes care and ensures that Tassal will provide sustainable long term returns to shareholders. The company would work in zero harm environment.

Ecological Interactions: The company is using sophisticated programs to know about the alterations in the close by and far off field waters. The company is investing immensely in research and development. It is involved in several other such ecological research projects (World Ocean Review, 2017).

Climate Change: The company has a risk management practice for its long term risk and opportunities because of climate change. In summers when fish survival gets challenging the company goes for selective breeding and  alters its farming methods. The company involves scientists to recognize the upcoming climate trends and takes up broad scale environmental monitoring.

Caring for the wildlife: Caring for the wildlife is  very essential to Tassal and the operations of the company are managed accordingly. At the fams, interactions between Seal and birls take place, but the company’s wildlife management takes care of all such interactions. The target is to lower down the number of interactions and ensure that they do not enter the farms,  the company uses highly tensioned nets and seal proofing bird nets.

Water Quality Management: Taking care of the water quality is important to Tassal because it not only is a good thing to do but also helps in providing superior fish quality. The company has a Total Permissible Dissolved Nitrogen Output (TPDNO) license condition (Commonwealth of Australia , 2015).

Community Engagement: The company plays the role of a leader in bringing cooperation among all the stakeholders for the use of marine resources. The company takes regular feedback  from the stakeholders and accordingly  perform their operations. The company provides good facilities to the people living near to their farms.

Community Partnerships: Having a well built community partnership is vital to the company. To achieve this, the company collaborates with several stakeholders.

Sponsorships and Donations: The company has kept aside a huge budget that  funds the local clubs, organizations and community. The company is proud to be associated with the events that are essential for the people. Even in case of great risks the company has a strong retail business  because of its sustainability credentials (Ryan, 2016).

Aquaculture Stewardship Council (ASC): Tassal has received a  full Aquaculture Stewardship Council (ASC) certification. It is the first award of this kind for any salmon company as it provides the customers with the faith that the seafood is highly responsible towards its environment (FRDC, 2014). 

Marketing Mix

Marketing Mix is a tool used by businesses and Marketers to help determine a product or brands offering. 

1. Product

The product has to be in context and as per the need of the customers. The product should either be as per customers' expectations or they must try to exceed it.

Tassal provides a wide range of products under the salmon category. They provide salmon in the form of smoky, fresh, canned and frozen form. Their fresh salmon is very popular on BBQ and consumers’ feel it is great to cook sashimi for the family. Their smoked Tasmania is healthy and easy to cook, it looks delicious with meals.  Tasmanian also comes in the form of canned products which is different and tasty.  Frozen Salmon can be cooked in oven for 20-25 minutes, which is delicious and tasty. There are different ranges of products due to different factors. For example: Microwave recipes are designed due to changing lifestyle where people want to have delicious food in lesser time. Tassal is also active as per market needs where people want healthier options and live a quality life. Tassal’s products are not healthy and hygienic; it takes care of customer’s health and prevents from any infection caused due to seafood. Atlantic salmon grown in Tasmania is very nutritious. It provides a good source of essential fatty acids, protein, vitamins and mineral including B3, B12. Salmon is also a good source of Vitamin D, protein and Omega 3. It is a nutritious meal for the whole family.  Its intake of 150 grams per week is a good source of DHA and EPA and results in many health benefits (Fitzgerald, 2013).

2. Place

A good place mix means that the product is easily available in the market. The client can easily shop it in the high street, malls, or order it online. These days online shopping is considered to be best and convenient shopping which is comfortable both for client and company.

Tassal get its raw products from the sea of Tasmanian. Tassal’s local and import supply strategy covers the risk management and ensures that it causes ‘Zero Harm’ to all. As the Salmon has 3 years growing cycles, the supply of the product can sometimes be lesser than what is required, which depends on a number of factors like environmental and local demands which are not under control. The imbalance in supply and demand remains in this industry, however, efforts are bring made to cover up this gap. Tassal will continue to provide salmon products in the Australian fishing industry. Tassal’s products are easily available in the market, their canned and frozen foods are very popular among the citizens of Australia (Horvat, 2014).

3. Pricing

While deciding prices there are few things which should be kept in mind. Pricing should be adjusted to maximize profits, achieve return on investments, achieve sales and market figure and match competitor. In order to cover up the cost of the product, the business price the products above cost. It should cover up the cost of R&D, equipments, indirect costs. Customer requirements are taken care while pricing as they might require ethical, sustainable and unique product. Tassal uses various types of pricing strategies. Their products and hygienic and healthy so they can offer value based pricing where customer pays more for quality and delicious. The company also uses cost based pricing strategy. Even when the cost of harvesting salmon was higher, it was able to cover up the costs due to supply chain efficiencies and improving wholesale market. Tassal focuses on achieving a sustainable price for the consumer. The price is set which fulfills both company’s and the consumer’s requirements (Dundas-Smith & Huggan, 2006).  Even when the company was facing supply restrictions in Australia during summer and autumn season as the fish growth was slow down due to temperature. Tassal under this condition also provided their product at affordable prices and adjust their retail price to cover up the increased cost. In addition to it, selling less volume at high prices fish in the sea will be able to recover and build Salmon biomass for long term sustainability growth. This is vital for optimization of farming, processing, returns and aim of delivering global best practice.

4. Promotion

Promotion mix is a combination of various activities of advertising, sales and personal selling. In the current era Social Media is the latest communication instrument for all organizations. Social Media should be used by each company as all clients love to interact and listen positive about the product they are willing to purchase. Tassal has seen growth in demand of salmon, it has been using innovative marketing strategies and product development, Tassal feels that this is necessary for the long term growth and sustainability of the Australia Salmon industry. To increase sales, Tassal has been working rigorously with both its retail and wholesale customers. They run price promotion campaigns, supply branded recipe to make sure that marketing message reaches the customer. This card makes that company’s branding is effectively done and marketing message is reached conveniently. The Tassal is into various segments like fish served as fresh, tinned, smoked and frozen items, but here is sometimes lack of branding in fresh segment and especially if the salmon is covered by grass on fish counters in fishmongers. Tassal is working on this issue and is developing whole suit point of sales material to talk about Tassal brand, which it is from Tasmania (Papageorgiou, 2012).

Their Facebook page is quite active, all customers like the posts made by Tassal which includes recipes, new product development and general health benefit tips. They take care of their customer’s complaints are provide them with good quality and service which is  an important part of branding and marketing,

The comparative analysis of Tassal done with its rival Huan on the basis of 4P’s

Product: Tassal provides a wide range of products under the salmon category. They provide salmon in the form of smoky, fresh, canned and frozen form. Huon provides Caviar, cold smoked, cured, fresh and hot smoked products. Both the companies produce Salmon in Tasmania therefore,  they are targeting of providing net protein feed to its customers.

Place: Tassal get its raw products from the sea of Tasmanian. Tassal’s local and import supply strategy covers the risk management and ensures that it causes ‘Zero Harm’ to all. As the Salmon has 3 years growing cycles, the supply of the product can sometimes be lesser than what is required, which depends on a number of factors like environmental and local demands which are not under control. Huon company is better than Tussle to face the challenges of the fishing industry like weather conditions and disease outbreaks etc. In the year 2014 Tassal production fell by 12% as it was badly affected by the summer season, on the other hand Huon could increase its production by 12% (Team, 2015). The Huon company has a well place program to reduce dying of the fishes and improving their health because of which it seems that their investment program is better than Tussle.

Pricing: As shown in the Table, it is found out that Tassal’s return on assets is steady in the last 5 years. However,  Huon percentages were down in the beginning, but it has increased gradually and had more earnings than Tussle. Huon was able to perform well lately because of its less death of fishes and increase in the local sales.

Huon & Tassal Financial Reports

The companies have a conservative gearing ratio (~20%) because of which it can ratchet returns by escalating debt. Huon is in the middle of its controlled growth investment plan and to improve its production, they have rolled out their proprietary fortess Pens. These pens help in providing more space to the fishes and thereby lowers down the dying of fishes. On the other hand Tussle aims to pay emphasis on the brand strength and improve its marketing efforts. From this and other cost effective initiatives the company targets to get back a 15% return on investment. Huon as of now trades on P/E of 13x. This is more than Tassal’s 12.5x. Thereby Huon is economical than Tassal.

Promotion: Both the companies function from Tasmania. They are vertically integrated. Both Tassal and Huon are targeting the domestic market as the prices for export are unstable. Tassal earns its maximum share from retail unlike Huon, which earns its maximum share from wholesale by selling fish to restaurants and fishmongers. Tassal has a challenge to face because of the rise of white label products in the supermarkets, there can be a major burden on pricing and margin for the company (McArthur, 2015).

Recommendations

• As per the analysis, there is a lack of supply during season change in summer and autumn season. This creates pressure on the customers as it may lead to increased prices or loss to the company due to increased costs. Efforts can be made by the company to increase the growth of fishes in the sea. They can either store fishes when they are in excess or increase their quantity by creating a positive temperature and habitat for them (Araya & Krishnan, 2014).
• Currently, the company is serving on Tasmanian Island and their supply is dependent from the sea surrounding them. Tassal can make efforts to take supply from other Indian and Pacific Ocean during this peak season.  This will not only fulfill their needs but would also help expand their operations.
• Tassal should make more efforts for their promotion. They provide superior and quality product so rather than just promoting through Facebook, twitter and recipes, they can also brand their product through customer events, after sale customer surveys, mail order marketing etc.
• Tassal should take steps to lower down the morality rates of its fishes. It should also invest in bigges Pens as the company Huon does, as these pens provide more space to the fishes. 

References

Araya, T. & Krishnan, M., 2014. SWOT analysis and recommended policies and strategies of Eritrean fisheries, Available at: https://www.researchgate.net/publication/274717323_SWOT_ANALYSIS_AND_RECOMMENDED_POLICIES_AND_STRATEGIES_OF_ERITRean_FIisheries

Commonwealth of Australia , 2015. Australia’s seafood trade, Available at: https://www.agriculture.gov.au/SiteCollectionDocuments/fisheries/aus-seafood-trade.pdf

Dundas-Smith, P. & Huggan, C., 2006. An overview of the Australian seafood industry, Available at: https://aaa.ccpit.org/Category7/mAttachment/2006/Dec/13/asset000070002007202file1.pdf

Fitzgerald, M., 2013. Successful strategies for sustainable salmon, Available at: https://www.foodanddrinkbusiness.com.au/news/successful-strategies-for-sustainable-salmon

FRDC, 2014. How does the size of the Australian seafood industry compare to others around the world?, Available at: https://www.frdc.com.au/knowledge/q_and_as/Pages/size-of-Australian-seafood-industry-compare.aspx

Government, A., 2016. Aquaculture industry in Australia, Available at: https://www.agriculture.gov.au/fisheries/aquaculture/aquaculture-industry-in-australia

Horvat, P., 2014. Building a seafood marketing plan, Available at: https://www.frdc.com.au/stories/Pages/16-Building-a-seafood.aspx

McArthur, T., 2015. Tassal Group Limited vs. Huon Aquaculture Group Ltd: Buy, hold or sell, Available at: https://www.fool.com.au/2015/10/30/tassal-group-limited-vs-huon-aquaculture-group-ltd-buy-hold-or-sell/

Nic, A., 2012. SWOT Analysis: Fisherie, Available at: https://andssw1.and.nic.in/rti/Fisheries/17%20_b_%20SWOT%20Analysis.pdf

Papageorgiou, P., 2012. Seafood marketing research design, Available at: https://www.slideshare.net/philippospapageorgiou/seafood-marketing-research-design-15682284

Ryan, M., 2016. Tassal MD & CEO on FY2016 results and growth outlook, Available at: https://www.tassal.com.au/wp-content/uploads/2016/08/Market-Briefing-Tassal-MD-on-FY16-and-outlook.pdf

Tassal Team, 2017. Tassal official website. [Online] Available at: https://www.tassal.com.au/about-us/

Team, U., 2015. Market Analysis For Seafood Restaurant, Available at: https://www.ukessays.com/essays/marketing/market-analysis-for-seafood-restaurant-marketing-essay.php

World Ocean Review, 2017. Toward more sustainable fisheries. [Online] Available at: https://worldoceanreview.com/en/wor-1/fisheries/sustainable-fishing-industry/