Introduction
International marketing is increasingly becoming a crucial part of business operations. That is given the growing need to venture into foreign markets. Thus, application of suitable marketing strategies that suit the target market and customer need is crucial to brands success. In that view, this report seeks to demonstrate the strategies application by choosing an Australian Company that seeks to launch its products in a foreign market. To achieve the objective, the Gloria Jean’s Coffee brand is chosen with a plan to venture into Chinese market. In that view, the report provides an overview of the company and the target markets as well as the markets segmentation. In addition, the report provides an evaluation of the marketing mix strategies that will be applied in the new market. Thus, the report focuses on the product positioning, pricing place and promotion strategies.
Report
- Company overview
Gloria Jean’s coffee is an Australian owned coffee company that has grown to over 200 local coffee houses and seeking entry into the global market. The company was founded in 1979 in Chicago by Gloria Jean and Ed Kvetko, who acquired the master franchise in Australia to set up the first store in Sydney Australia. The company offers products ranging from hot coffee drinks, cold drinks and flavored fresh coffee. Its vision is becoming the most respected and loved coffee company. Its mission is to establish a family that serves highest quality coffee in vibrant store atmosphere. Finally, the company’s values include; a commitment to innovation and excellence, culture of passion and joy as well as partnership on trust and integrity. In addition, the company believes in people and building as well as changing lives. In that view, a venture into an international market will seek to deliver those values, vision and mission. (Gloria Jeans, 2014)
- Target market overview
The general Chinese coffee market is marked by low consumption with less than one cup per person per year. In addition, the consumption is low in the urban regions with less than five cups per person per year. However, the market has been growing at 30% on an annual basis. Thus, the market’s annual coffee sale is approximately ¥4 billion. In that respect, the market remains untapped and presents potential for a coffee brand that can capture consumers’ interest. (SPR Coffee, 2014)
However, there has been rising popularity of the coffee culture in Chinese cities that have started boosting the coffee consumption. Thus, the market presents a better international market opportunity. That is because it is not saturated compared to other international markets that have been saturated with products like instant coffee owing to high consumer education that have been undertook by multinationals. Further, the fresh coffee has a specialty segment that forms its loyal fans. (Euromonitor, 2014)
The principal competitors in the Chinese market include Nestle that has been leading the market since 2013. That owes to its vast distribution network and high awareness that it has created in the market. The businesses’ flagship brand in the market is a classic 3-in-1 instant coffee. In addition, Nestle has flavored brands targeted at both mid and high-end segments. In that respect, Nestlé’s brand such as Mocha, Cappuccino and white coffee flavors that are bear a premium price compared to the classic 3-in-1 coffee. Nettle’s success has been driven by extensive promotion majoring on advertisements. (Euromonitor, 2014)
- Segmentation
Market segmentation is crucial in identifying particular consumers that suit the product’s features and value. In that respect, the Chinese market is segmented, and the right target segment for Gloria Jean’s Coffee selected as follows. (Sengupta, 2005)
- Partitioning the total market into alternative segments
The market segmentation for the market is done by combining various segmentation methods including psychographic and geographical as follows.
High-income segment: The segment has the following traits.
- High income
- Urban
- Middle-aged
Youthful segment: The segment has the following traits
- Young
- Middle level income
- Technologically savvy
- Urban
- On the go lifestyle
- Blends western and Chinese cultures
Rural based low-income segment: The segments traits are as follows.
- Rural based
- Low income
- Less technologically savvy
- Embraces the Chinese culture. (Euromonitor, 2014)
- Target segment choice
The youthful segment has is the most suitable for the Gloria Jean’s Coffee products owing to the following.
- The segment has a need for energy hence the product’s energy content will be suitable to serve the need.
- The segment has a need for stylish packaging that they can identify with. That will be served by the rand’s stylish packages.
- The segment is technological savvy hence easily reached through cost-efficient means such as online and internet-based communication platforms.
- The segment represents a key portion of the urban population that suits the products target. That is because the urban segment has taste for foreign brands with their increased awareness on international brands.
- Finally, the segment is increasingly growing with the youthful people increasingly moving to urban centers and having a significant income level. (Euromonitor, 2014)
- Product Strategy
The products will be positioned to serve the segment needs that include energy, stylish packaging and service, as well as concern over health effects of beverages.
- Products and their benefits
- Description of packaging
The three brands will be packaged as follows
Hot coffee: The product will be sold on the specialty coffee shops and cafes. Thus, it will be served in the company branded mugs in an atmosphere that is relaxing and which bears Chinese culture.
Flavored and cold coffee: The brand will be packaged in branded recyclable containers that are stylish. That will be in consideration of the markets environment concerns. In addition, the stylish containers will appeals to the youthful segment.
Finally, the products packaging will contain information about the products content and ingredients. (Gloria Jean’s Coffees, 2014)
- Comparisons with competitors
The products enhanced features of only natural ingredients and added nutrients will compare favorably with competitors brands that contain artificial ingredients. In addition, the packaging will have added information on the coffee production process and source country to enhance brand loyalty owing to the increasing concern over products sourcing ethics.
- Product adaptations strategies
As a way of suiting the products to the Chinese market, the business will apply the following strategies.
- Organic and natural production process that will cater for the Chinese market demand for organic and natural products.
- Blend the product’s packaging and coffee shop’s atmosphere with Chinese culture that will present the brand favorable to the local customers with a taste for local culture.
- Chinese market is defined by a focus on beverages and drinks contents and health benefits. Thus, the products will have added nutrients to serve the market needs. (Euromonitor, 2014)
- Pricing strategy
Pricing will be a crucial product launch strategy owing to the increasing competition and the segment’s economic status. Thus, the pricing strategy is described as follows.
- Details of pricing, costing and comparison to competitors
The business will apply cost-based pricing that will include the product cost and a markup. The pricing will also consider the foreign exchange cost as a business will need to repatriate its earnings to the Australian parent company. In addition, the product will be asking to enhance product adoption through a competitive price that is relatively lower compared to competing brands prices such as Nestlé’s pricing. (SPR Coffee, 2014)
Domestic prices and the international pricing arithmetic
Thus, the pricing will be considering international factors including foreign exchange and taxation. In that view, the price will feature the production cost, markup and the factors cost. However, the company will seek to enhance operations efficiency to lower its costs as a means of achieving price leadership in the market. That is in comparison will local businesses that could only need the cost factors and the markup as the price contents. (Sengupta, 2005)
- Place Strategy
Distribution will be crucial in delivering the products to the right customers and place as well as in good time. Thus, the distribution strategy will be as summarized
- Specific channel choices
The product will be launched with a focus on the urban centers. Thus, the initial product launch will be in Hong Kong that has a significant population and a growing taste for foreign products and coffee culture. According to the 2001 census, Hong Kong had 6.72 million people in 2001 and was expected to increase to 8.72 million in 2031. (Hong Kong, 2001) In addition, the business will apply multiple distribution channels. That is because of the different nature of products with Hot coffee having a need to be prepared in a coffee shop/café while the flavored and cold coffee can be sold in the cafes or other outlets.
- Specialty coffee shops and cafes: They will be used to distribute the three brands; Hot, cold and flavored coffee.
- Retail outlets: Will be used to distribute the flavored fresh coffee given that they will be already packed, and customers can buy them and store them for their coffee preparation needs. In addition, the cold coffee that is ready for consumption will also be sold in the retail stores.
- Online sale platform: The channel will be applied with the use of the company website from where customers can access information on the products availability. In addition, they can order for the flavored fresh coffee and cold coffee and have them delivered to their destination within the city. (Sengupta, 2005)
The three channels suit the market with the specialty shops and cafes providing the essential coffee culture through a relaxed atmosphere that features the Chinese theme. On the other hand, proximity of the retail stores in Hong Kong will provide access to the products for all consumers. Finally, the online platform suits the youthful segment that is technologically savvy in addition to being cost efficient.
- Channel management and cost
In view of the three distribution channels, the business will have cost efficient operations. That is given that the only channel that will require physical presence and management will be the specialty shops and cafes that the business will set up on strategic points within the city. On the other hand, the online platform will be managed by the company sales team through its website and in coordination with the specialty shops for deliveries. Finally, the retails stores distribution will be done in partnership with leading stores that will provide access to customers. (Sengupta, 2005)
- Promotion Strategy
Promotion strategy will be applied with the aim of creating market awareness on the new brands as well as persuading customers to buy them. In that respect, various promotion strategies will be applied as summarized.
- Communication strategy
Communication strategy will seek to pass information about the products to attract customers. It will entail information on the products features and benefits and will be done through advertising, promotion shows as well as providing information on the products packaging materials. (Varey, 2002)
- Advertising: Advertising will be done with a focus on the online platforms given that the target market is technological savvy and access to online and internet based platforms. That is also given the increased use of digital gadgets that provide access to online content. That will include advertisement on social media and company website.
- Events and shows: The shows will be used as a way of educating customers on the products availability and benefits. They will be organized within the Hong Kong City bon monthly based for the purpose of cost management.
- Information on packaging materials: The packaging materials will contain information about the products content and ingredients in addition to the source countries. That will seek to address concerns over health effects of beverage products and the brands raw materials sourcing. (Fill, 2011)
- Media selection and strategy
Media selection will be based on market reach and the cost. In that respect, the business will use the most efficient channels that include the online based platforms that have a wider reach and less cost. The online channels will include social media such as facebook and twitter. The use of the company website will also be cost efficient considering that there will be little additional cost for tailoring and targeting the message to the Chinese market. Finally, the business will identify the Television stations that command the highest coverage in the market such as Hong Kong Television Broadcast to deliver its advert messages. (Varey, 2002)
- Other promotion activities
The other promotion strategies that will be applied include events sponsorship that will involve sponsoring sporting events. That will be suitable as the main participants in sporting events are the youthful people who entail the main target segment for the product. Promotion will also entail point of sale and sample promotions that will seek to introduce the brands to the new customers. With the brands sampling, the customers can identify how the products meets their needs and coffee taste. (Sengupta, 2005)
Conclusion
In view of the analysis, Gloria Jean’s coffee brand has been successful in delivering its brands to the Australian market and seeks to venture into international markets. On the other hand, although China has had a low level of coffee consumption, there is growing coffee culture popularity with increased urbanization. Thus, Chinese market presents a suitable opportunity for the business to sell its brands. In that view, a suitable target has been identified as the youthful segment. That is because it has a need for energy that the product’s provides and represent a significant urban population. In addition, the segment has a need for stylish brands and is technologically savvy hence ease of its reach. Thus, the suitable marketing mix has been identified as positioning the products to suit their energy and stylish needs as well and address their health concerns. On the other hand, cost-based pricing has been proposed with a view to selling the products at a price relatively low compared to leading brands such as Nestle that sells premium products. In respect to the distribution, application of online sale platform, retail outlets and specialty shops/cafes have been proposed. Finally, promotion will entail various strategies including advertising through online platforms and television, promotion shows, events sponsorship, packaging information as well as sample promotions. All the strategies are focused at positioning the three brands to meet the Chinese customers’ needs.
Reference list
Euro-monitor. (2014). Coffee in China. [Online] Available
at<http://www.euromonitor.com/coffee-in-china/report>[Accessed 22 October 2014]
Fill, C., 2011. Essentials of Marketing Communications. New Jersey: Prentice Hall.
Gloria Jean’s Coffees. (2014). Coffee FAQS. [Online] Available
at<https://www.gloriajeans.com/coffee-faqs>[Accessed 22 October 2014]
Hong Kong Government, 2001. Hong Kong Population and Trends. [Online]
Available at <http://www.info.gov.hk/info/population/eng/pdf/chapter2_e.pdf>[Accessed 22 October 2014]
Sengupta, S., 2005. Brand Positioning: Strategies for competitive advantage.
Lake Town: Tata McGraw-Hill Publishers.
SPR Coffee. (2014). Analysis of China Coffee Market. [Online] Available
at<http://www.sprcoffee.com/Market.html>[Accessed 22 October 2014]
Varey, R. 2002. Marketing Communication: Principles and Practice. London:
Rutledge.
