3. INTRODUCTION
Haigh’s Chocolates
• Oldest family-owned chocolate manufacturing retailer in
Australia since 1915
• Founded in Adelaide, South Australia
• Provide varieties of high quality chocolate products especially
hand-made chocolate
• Plan to expand market to Japan or China
• Predicted sales for first year– 8000 box
4. OBJECTIVES AND
MISSION STATEMENT
Objectives
• increase the awareness
• to promote a more profitable and sustainable business that
are able to provide high quality product and service
Mission Statement
• to expand the market internationally & become the
international retailer of choice of the premium hand-made
chocolates
6. ECONOMIC
3rd largest economic in the world
High GDP(5.48USD)
High purchasing power
High growth after financial crisis
7. ECONOMIC
16 million (kg) chocolate import
Mature facility of chocolate market
Demand of chocolate is high
8. POLITICAL & LEGAL
One of the member of World Trade organization (WTO)
Tariff apply - pressure of pricing
9. CULTURE
Prefer local brands of chocolate
Foreign brands might not match the language and culture
(such as packaging )
Brands may glamour by only watching research
11. SUMMARY
Japan has potential for international business
Barriers such as language, prevent foreign businesses
Hard to communicate between countries
Local market lean to local brands
12. SITUATIONAL
ANALYSIS – CHINA
Demographic Factors
• Largest country in the world
• Population growth rate: 0.493%
Large marketing potential (small market share means a lot)
Rank country Population Date of Information
1 China 1,336,718,015 July 2011 est.
2 India 1,189,172,906 July 2011 est.
3 United States 313,232,044 July 2011 est.
4 Indonesia 245,613,043 July 2011 est.
Source: The Central Intelligence Agency (CIA)
13. SITUATIONAL
ANALYSIS – CHINA
Demographic Factors
• Literacy: 92.2%
• Total population aged 15 and over can read and write
• 53% of total population still lives in rural area
• Education level between people live in city and rural area is huge
The message of Haigh’s needs to be simple enough for the
customers to understand
School in city
School in
rural area
14. SITUATIONAL
ANALYSIS – CHINA
PAST
Isolated country
• ‘Close door policy’
• High degree of Market
Intervention
NOW
Open economic
• ‘Open door policy’
• Gradually relaxed its
control over markets
Political Factors
15. SITUATIONAL
ANALYSIS – CHINA
Political Factors
• Setup 4 special economic zones
• Favorable Policy for Foreign Investment
• The Law of the People’s Republic of China on Joint-Ventures
using Chinese and Foreign Investment granting foreign
investment a legal status in China
• Provisions of the State Council of the People’s Republic of China
for the Encouragement of Foreign Investment provide foreign
joint ventures with preferential tax treatment
Ease of entry barriers
19. SITUATIONAL
ANALYSIS – CHINA
Cultural Factor
• Purchase chocolate as a gift
• Follow the trend of health conscious
Use combination of healthy ingredients
such as fruit and nuts
20. SITUATIONAL
ANALYSIS – CHINA
Competitive Factor
• China people prefer foreign brands
• Only 2 local brand out of top 10 in China
• Golden Monkey & ShenFeng
• Foreign chocolate brands concentrate more towards the
needs
21. SUMMARY
Huge population
Better economic potential
Open door policy
Chinese prefer foreign brands
Less language barrier than Japan
22. SWOT ANALYSIS
Strengths
• Good
reputation in
Australia
Weaknesses
• Limited
distribution
network
• Unfamiliar
with the new
unknown
market
Opportunities
• Trend of
health
conscious
• Online
shopping
Threats
• Well-
established
brands in
China
• Dynamic
foreign
regulations
23. MARKET ENTRY
STRATEGY
Direct exporting - directly selling the product to the end user
through oversea or finding a local distributer as
representative to sell the product on behalf of the exporters
Advantages disadvantages
• Ability to control
• Get direct feedback from
consumer
• Do not require much
knowledge of China
• Time consuming & costly
• More risky
25. MARKETING MIX –
PRODUCT
USP (Unique selling proposition)
Differentiate with other brands
Offer some unique value to customers
Australian nuts (Macadamias, Chestnuts, Hazelnuts etc.)
Long history of brand
Well packaging ( Brown or dark green )
26. MARKETING MIX –
PRICE
1-6 MONTHS
Penetration Strategy
• Relatively low price
• Estimate market
share: 4%
AFTER 6 MONTHS
Cost-plus Strategy
• Price base on the total
cost
• Effective method to
control the cost
0
20
40
60
80
100
120
140
Penetration
Strategy
Cost-plus
Strategy
Price (RMB)
Cost
28. MARKETING MIX –
PLACE
Capital cities
Hong Kong, Shanghai, Beijing, Shenzhen
High population & higher income on average
Shopping Mall or main streets
29. MARKETING MIX –
PROMOTION
FIRST YEAR
‘Push’ strategy
• Intensive advertising
campaign and little
sales promotion
• Aims to capture
market share within
short period of time
• Increase brand
awareness
AFTER 1 YEAR
‘Pull’ strategy
• Public relations
• Aims long term brand
growth
• Build positive brand
image
31. SEGMENTATION
Demographic – more population in the category and easier to
design marketing activity
Targeting – middle class (e.g. traveler, business people)
Positioning – Luxury product
32. TARGETING
Targeting – middle class
Traveler: willing and able to spend
Business people: use for gift and business use
35. RECOMMENDATION
• Develop online shop in China
• Capture the new emerge market segment
• Hire a professional consultant in China
• Provide valuable suggestion on entering the unknown
Chinese market
• Intensive advertising campaign and large promotion
• Create noise
• Offer sales promotion
• Boost sales & increase penetration
• Cooperate with local firms in long term e.g. Sponsorship
• Create a positive image
Good afternoon, today we are going to talk about the marketing strategy of haigh’s chocolate in China.
Before we starts, I would like to introduce my marketing team to you. Peigin, Warren….. And Me Jerry.
Here is our agenda. Frist of all we will hv a brief introduction to our company. And then a situational analysis deciding which countries are we entering. After that, we will have a SWOT analysis, marketing entry strategy, marketing mix, segmentation, financial analysis
China is one of the largest countries with the largest population in the world. By July 2011, the population of China is proximately 1,336,718,015 with an estimated yearly growth rate of 0.493%. The large population implies that even a small market share in China means a lot.
Back to the 90s, China is one of the lowest literacy countries. By now, the situation has been improved; more than 92.2% of total population aged 15 and over can read and write. However, it should note that more than 53% of total population still lives in rural area. As you can see in the picture, the education is so different between school in city and school in rural area. Therefore, the message of haigh’s should be simple enough for the customers to understand
Political factor is the weakest parts of entering the Chinese market. In the past, China is an isolated country characterized by its ‘Closed-door policy’ and its active intervention in the operation of the domestic market. Since the late 70s, the situation changes. As a first step, four special economic zones were authorised in southern China with tax incentives to attract foreign capital and businesses, much of which came from overseas Chinese in places like Hong Kong and Taiwan (BBC News 2011). In 1986, the State Council announced the Provisions of the State Council of the People’s Republic of China for the Encouragement of Foreign Investment. The provision provided many favourable policy to foreign enterprises, e.g. provided foreign joint ventures with preferential tax treatment, the freedom to import inputs such as materials and equipment and so on (Fung et al. 2002). It shows that the government has gradually relaxed its control over markets and opened the trade and investment sectors to the global economy. With the ease of entry barriers and all those favourable policy imposed by the Chinese government, we think that it is time to enter the Chinese market.
We believe that the strength of haigh’s chocolate would be the good reputation among customers in Australia. Over the years, haigh’s insisted to deliver premium hand-made chocolates to customers. As long as we ensure the quality we delivered and establish our brand position in China, it would be our competitive advantage over the others.
Limited distribution network is always been the weakest part of Haigh’s chocolate. By now, we only have 6 retail stores selling chocolate in Australia. Another weakness would be lack of information. As we are new to the Chinese market, we do not understand the customer preferences or the business culture.
To deal with the new rising trend of health conscious in China, we can develop “Low Calorie” line of chocolates or offering the “Sugar Free” sweets line.
We suggested that Haigh’s could have a high proportion of advertising and little sales promotion in the first year to establish the brand in China. Sales promotion is very effective in early stages of product introduction as it gives the company the opportunity to reach targeted customers. Together with intensive advertising campaigns, we can increase the brand awareness within a short period of time. However, one should not use sales promotion too often as It would have a reverse effect.
Once the brand is widely accepted and recognized, Haigh’s can then emphasis more on public relations. For example, Haigh’s could imitate its marketing campaign of ‘Panda conservation’ in Australia. Haigh’s had developed a new product line to save Panda in China by donating part of the sales. Although the sales figure was not very impressive in Australia, the positive brand image it brought in long run is said to be more valuable.
