Borderfields Report
A report analysing the company and expansion of
the UK market, highlighting a SWOT and PEST
analysis.
Miraj Patel (MP453) –
[email protected] 1.0. Executive Summary
This report will deal with Borderfields and it will be considering if it is worthwhile to expand
the business. The report will be spilt into five different parts first it will describe Borderfields
then it will explain the different factors that are affecting the grocery market, the third part
of the report will describe the product specific market and finally the last part of the report
will be a conclusion on what we think Borderfields should do.
2.0. Introduction and Aim
Borderfields is a British company who specialize in oils, dressings and infusions. They are a
company who are very proud of their British roots and traditions. They are a traditional
farming co-operative with partnerships with other farmers in Northumberland, the Scottish
borders and Nottinghamshire. The aims for Borderfields are to produce high quality oils and
dressings with their British traditions.
3.0. The Grocery Market Environment (PEST)
Political Factors:
Groceries and supermarkets in the UK are governed by laws concerning competition, health
and food safety, environment and protection of employees. Laws concerning competition
are regulated by the Competitions Commission and the Fair Trade Organization. In addition
to ensuring markets avoid monopoly; oligopoly and cartel phenomena, these organizations
also ensure fair trade between supermarkets and their suppliers. Regulation concerning
Food Safety is controlled by the Food Service Authority in the UK. Failure to comply with
these laws risk companies having to pay large fines and threatens their social image.
Currently, UK retailers including grocery retailers are allowed to remain open all day and are
permitted Sunday trading. There is also freedom of trade in the European Union that allows
the import of most of the food that is sold by UK groceries.
Economic Factors:
While it is true that the grocery industry has a relatively recession proof market, it is worth
noting that ONS figures as reported by the Daily Telegraph show that an ordinary household
is currently spending £6.40 less on food and non-alcoholic drinks then it was in 2007, before
the financial crisis hit the UK. The high rate of unemployment in the UK, slowing wages, and
high inflation rate have all decreased the effective demand for goods. This has placed
greater emphasis on the use of promotions to increase sales in the UK grocery market.
Moreover, the recession has also reduced the efficiency of ‘brand loyalty’ as a scheme to
attract customers. According to Key Note it is ‘best bargains’ that ultimately determine
customers’ choice when choosing a supermarket to buy their groceries, since “brand loyalty
is waning as consumers priorities value over quality”, a consequence of the burden, the
economic crisis has left over the industry.
Another trend that has been witnessed recently is the drop in the value of the Pound.
Currently, economists are predicting the possibility of a Trip Dip Recession in the UK, which
if occurs, will lead to a further drop in the value of the Pound. If this occurs, it would
drastically affect, perhaps even alter the way in which the UK Grocery Industry operates. At
present, majority of the items sold in groceries in the UK, is imported from elsewhere.
Socio-Cultural Factors:
The UK has an ageing population with a large proportion of female workers at present.
According to the Office of National Statistics the number of people aged fewer than 16 has
dropped from 25% in 1961 to 19% in 2010 while the percentage of people aged over 65 and
above rose from 13% in 1971 to 17% in 2010. This trend is predicted to continue and it is
expected that by 2035, the proportion of the UK population aged over 65 will be 23%.
Meanwhile, the proportion of the population aged fewer than 16 will drop further to 18%.
In addition to this, the percentage of women working in the UK in 2011 was 66% and is still
growing. Furthermore, according to ONS figures one-third of the British population currently
lives in single households (Key Note). The ONS estimates that this figure will increase by 60%
by 2031 to nearly 11 million households.
The previously stated statistics suggest a market with a growing proportion of single
households and an ageing population that favours food that is convenient to prepare and is
packaged in small portions. The trend is exemplified by the popularity of ready-to-eat meals
that dominate the market in terms of quick-meal solutions. There has also been a shift in
the market towards other convenience products such as seasonings (example: salad
dressings) and cooking sauces that make cooking from scratch easier, since consumers were
forced to reassess their spending in 2009, as a consequence of the economic crisis. TV
shows and celebrity cooks encouraged this trend of cooking and dining at home. As a result,
the hectic modern day lifestyle coupled with the economic environment, has pushed up the
sales of convenience-cooking products such as sauces and seasonings, as was observed
recently in the sales of seasonings in 2012.
Technological Forces:
The improvements in broadband connections and constantly growing use of the Internet
have contributed to the increase in the trend in Online Grocery Shopping. According to a
survey conducted by Nielsen, ‘a leading global provider of information and insights into
what consumers watch and buy’, three quarters of the UK population use the Internet for
their Household grocery shopping. Shopping online provides a variety of options and helps
compare prices while saving time. Many online stores enable consumers to choose from a
customized list that is automatically assembled by a record of preferences from their
previously bought items. All of this makes online shopping extremely convenient for the
modern day customer.
4.0. Description of the Product Specific Market
As we all know that the first steps in developing a successful marketing strategy is to make
sure that the companies identifying and analysing their fellow competitors. These things can
be done by the companies through the market research such as the Borderfields companies
can use different types of markets like including surveys, internet searches and also going
through the sales process with the other company. Although, the main competitors of the
Borderfields companies are Mellow Yellow, Hill Farm, Duchess Oil, Yellow Fields, Bather
Harvest Rapeseed Oils and Supernature. These following companies are the one who sales
same types of product as the Borderfields companies do. The following table below shows
the comparison between the other suppliers for the 500 ml Rapeseed oil. (Olives, n.d.)
Duchess Oil £4.95
Yellow Fields £6.70
Bather Harvest Rapeseed Oils £4.75
Border Fields £3.99
Supernature £4.95
Throughout the comparison between those suppliers Borderfields companies has been the
one who sales their product in the cheaper amount than the other suppliers. However, the
figure might change in the future as every company wants to compete with each other on
the business. Therefore, to compete with each other and to satisfy their customers the
Borderfields has to research properly so that they will survive for long term in the market.
However, in future if the Borderfields Company increase the price of the product than their
other competitors then the organisations will lose customers which means there will be fall
in marketing development and the consumers will get attracted to the other supplier who
supply them same amount of product in the cheaper price. Therefore, the Borderfields
Company has to be always alert with their competitors.
The targeted consumers of the company are always the significant thing for the business
because it will help the company to focus on their business. These is important because
rather than trying to please every customers, the company has to target their marketing
efforts to the targeted consumers who are most interested to buy their products. Therefore,
the Borderfields Company has targeted their customers for the people, who have heart
diseases as it will help to prevent the heart diseases by lowering cholesterol levels, for
children’s and adults that are looking for a healthier future as well as the company supply its
product to the different grocery market in which case it also covers a wide range of
consumers of the country. Borderfields company has targeted their product mostly to the
people looking for healthier life in which the organisations has use different methods to
promote their product such as advertising through the social networking websites,
television etc. so that it will be easily recognise by the consumers. The main target for the
business are the consumers because they are the one who buy the product from the
company and increase their business without customer the company will be in loss.
Rapeseed oil is been winning over British people heart as the people are swapping from
olive oil to their more traditional cooking oil as it helps to reduce their intake of saturated
fat as well as the people are supporting the British produce. These are because the rapeseed
oil contains a good balance of omega 3, 6 and 9 fatty acids. (French, n.d.)
If there is a change in the market then it is important for the business because they are the
source of new opportunities and threats. There are different key trends in the Borderfields
Company such as the production of the rapeseed has been growing as the increasing
demand for the oil has caused prices to go up in which case it has given farmers an
encouragement for producing the crop. In addition to that the sales of the rapeseed oil have
been up by 26 per cent year on year while comparing to the Olive oil they are up by only 1.6
per cent. (French, n.d.). During the time of 2006 the rapeseed oil hit the market as Oleifera
in which they sell the product well and won several design awards. (Hughes, n.d.)
Furthermore, the important key trends of this market is that the company redesign those oil
bottles, even changed the price and rebranded the Oil as Border Fields Cold Pressed
Rapeseed Oil. Therefore, it soon secured listings with different grocery market like Asda,
Tesco and Morrisons which also came on board on a regional basis. Another important key
trend in this market is that the British farmers of Border Fields are giving their support as
every recipe they received the company will donate £1 to the Combat Stress. (Anon., n.d.)
4.1. SWOT analysis
The first key strength of Borderfields is that, the oils they produce can be heated to higher
temperatures than those oils manufactured by its competitors. This is an important point, as
when using oil whilst cooking, you are not meant to heat up the oil over a certain point
which is called the ‘smoking point’. The smoking point of oil is the point at which it starts to
break down or start smoking which tends to means the oil is burning. When the substance
breaks down due to the exposure of too much heat, it can leave a taste in the food being
prepared which is unpleasant therefore leading to the course being spoilt. This stability of
the oil favours itself to be used in a variety of culinary uses, for example salad dressing.
Borderfields take pride in producing oils that are very low in saturated fats. This is strength,
as in today’s society people are becoming more health conscious and therefore being more
cautious about what they are consuming. Recent data shows that a third of the children that
finish primary school are already overweight or obese (national child measurement
programme). This results in people looking for healthier alternatives, and with Borderfields
supplying oils that contain lower saturate fats than its competitors more people will be
prone to purchasing Borderfields products as it will improve their diet.
As Borderfields produce everything in Britain and support the British farmers they have a
very high customer loyalty. This means whether their competitors reduce their prices or
manufacture a similar product, there customers will still always remain loyal to them
therefore they will not lose many customers. Research has found that if a business’
customer loyalty is high this could lead to people recommending there products and in turn
building up their brand awareness.
One weakness of Borderfields is that as the products are produced from local British farmers
in home grown fields the target customers are very limited. The company needs to focus on
selling the product to a wider audience and aim to supply it to majority of the population
instead of just targeting small local communities. Their partnership and farming only go as
far as three places which are Northumberland, Nottinghamshire and the Scottish borders,
even though they are all very skilled and high experienced growers of the oilseeds they need
to expand and recruit from farmers in different locations therefore they can target
customers all over the United Kingdom. If Borderfields are able to this, they will be able to
see a drastic rise in demand as they will be able to supply to a much bigger audience.
The price of the oil is another downfall for Borderfields, as when compared to their
competitors their price is much more expensive. This would lead to customers finding
cheaper alternatives especially in hard times like the recession; everyone is looking to save
money. This would lead to customers ignoring the products put on show by Borderfields as
they are too expensive so whether they are healthier or not customers will pay no attention
and will just pay for standard oils which are much cheaper. Research shows that household
spending started to fall in 2008 and is continuing to fall; this was the first fall since 1968.
Therefore if Borderfields prices continue to stay the same they are only going to be losing
customers.
Another disadvantage is that they should open up the production line and introduce new
ideas of flavours that their competitors do not have for example for their cereals introduce
another ingredient which is different and where people will not be able to find anywhere
else, this will give this a unique selling point and therefore will increase customer demand.
The opportunities for Borderfields is that in today’s society people are more health
conscious than before as now obesity and other certain health related diseases are rising at
a faster pace than ever. Borderfields should take advantage of this by advertising their fat
free product to their maximum potential as it will lead to more customers purchasing these
goods as they will think it will have a positive impact on their lifestyle. These fat free
products have the ability to attract more customers as people are becoming more and more
aware of the impact of unhealthy food and as all these food campaigns and news keep
informing the public the market for this sector is only going to get bigger which leads to
more demand of these type of products. This backs up the point that Borderfields should
target the health conscious people and advertise their fat free products as it is the healthier
option which people are more interested in and the most popular of the choices.
Borderfields should start to advertise their products more with popular chefs, as this would
increase their popularity within the global market. As if their products are seen with
celebrities then it will automatically put them ahead of their competitors. This is because is
the general population see a celebrity using Borderfields products they will think it’s
something special and unique, as celebrities are associated with expensive and reliable
products. People tend to buy things just because they see famous people representing
them, so advertising products with well-known people increases brand awareness so
whenever people think about that person they immediately associate them with
Borderfields products. For example if Borderfields get Jamie Oliver to use their products in
one of his cooking programmes, everyone that watches that programme will try replicate
the same recipe using the same products, therefore once they get used to using a product
they will stick to it as that’s what they feel comfortable with. Along with this, some people
will just go and purchase it just because they have seen Jamie Oliver use it as he is one of
the most popular chefs around.
The threats surrounding Borderfields is that, there is constant change in the climate pattern
and no one can ever be certain on how the weather is going to be in the United Kingdom
therefore Borderfields must be aware of this, as there is a possibility that the crops they are
growing could not harvest properly which will then lead to them not being able to produce
enough seeds to make all their products. This could have a drastic effect on their company
as they will not be able to meet the customer demand of their products such as cereals. This
may mean that their customers they use to supply to have to go their competitors to get
their desired product. This is due to Borderfields not having any supplies from other
countries and solely based in the United Kingdom, whereas their competitors whether there
is climate problems in the UK they can still import products from their branches from other
countries, such as Brazil.
5.0. Recommendations
Borderfields current target market is mostly chefs who want to add flavour to their meals. It
is also marketed to normal people who want to try new flavouring for their food, it is also
targeted for children and adults who want to live a healthier life style. The market trend for
oils market is very good; there has been a recent rise for demand for the luxury oils this
allows Borderfields to market to more consumers because there is a higher interest in their
market. We believe that the current market that Borderfields are targeting is the correct
market for them
Borderfields make a high quality product this means that they can make their products more
expensive than other oil products. One of Borderfields competitors, sell their products for
an average price of £5.00. Borderfields sell their products for an average price of £6.00. This
is good for Borderfields because it shows that even though they produce high quality oils
they sell them at a cheap price. The pricing strategies that we believe that they should use
for their lower quality produces is to sell them at around £3.00, for their medium level
products they should sell them at around £5.00 and for the higher level products they
should sell them for around £10.00
We think that Borderfields should be selling their products in a variety of ways. We believe
because of the popularity of the internet that border fields should start to sell their products
online this is because having an online store is cheaper than having your own retail store
because there is a lower start-up cost. We also believe that Borderfields should sell their
products via bigger brand stores such as Sainsbury’s and tesco
Currently Borderfields have a twitter and Facebook page which they host contests on. We
believe that Borderfields should expand their promotions by having a customer referral
program. When one of their current customs referred a friend or family member the current
customer should be able to get a discount on some of Borderfields products.
6.0. References
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30/2/2013.
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2/4/2013.
GHC. (2009). Health Benefits of Omega 3, 6, 9. Available:
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