International market entry plan
Introduction
International market entry strategies are planned activities for entrance in the new global market. It describes that the company makes strategic planning enter in the new-targeted foreign market, to making new contracts and deliver its goods and services in other countries globally. It allows many companies to penetrate into a new market, follow its existing consumers globally, attack different available competitors, and exports their products and services in different countries. It may increase the company operations and its revenue. The purpose of the report is to investigate the international market entry plan of Unilever Company. It will focus on the Chinese market and the international company strategies for expansion in the country.
Unilever is one of the world’s leading companies that came into existence by the merger of two different companies that are Margarine Union and Lever Brothers. The company’s headquarter is located in the United Kingdom and operating in different countries of the world. The company produces 400 brands and household products that are focused on wellbeing and health of human beings. The is world’s leading company operating in different countries and specialized in producing different products like cosmetics, detergents, food, and toiletries products. The company products exist in 170 countries that helped more than one billion people to improve their health by using those products. Unilever brands are sold in different countries like Lipton, Lux, Sunsilk, Walls, Knorr, Dove, and others. The company developed international market strategy and penetrated in different countries of the world. Unilever has huge sales network in more than 100 countries, and more than 172,000 employees are working for the company .
China is fast growing the popular market and a major player in the world economy. China is a unique market any many foreign companies tried to enter the country. In 1928, Unilever entered into China as soap producer and then left during the war. 1986 the company started its business again in Shanghai, China in and tried to capture the Chinese market. The company started to produce Lux soap, and many young people use that soap . The successfully managed its position and competed effectively in China. The quality of products differentiates Unilever from its competitor, and it becomes largest household goods and food manufacturing company in China.
Currently, the company has heavily invested in research and development center and promotes development in the country. The company has strongly focused on food, personal care, and household products and improves the products and services in China. The company has announced to create a sales center and production base in Tianjin during 2011. Unilever focused on innovation of its famous brands in China include Lux, Ponds, Hazeltine, Lipton, Knorr, and Vaseline. The company has strongly focused on research and development and produced valuable products according to customer’s satisfactions. Unilever has strongly focused on large investment in the country instead of only make money (Areddy 1). The company has invested $1 billion, above 100 imported technologies that would play an important role in the development of business operations and sell products. Unilever has invested in brand promotion and expecting a greater sale in the country.
Unilever has considered developing its products according to customer’s demands and Chinese culture. In 2005, the company planned to invest $50 billion in establishing world's largest tea producing plant in Hefei, China and increasing the sale of Lipton tea. In 2012, Lipton hired 2,000 employees and imported more than 100 imported technologies for the development of the product. Currently, Lipton is top selling brand in and holds highest market share in the market of China . The company possesses a strong and well-known brand name and distributing its products in the world. The company has a strong position among other competitors in China and producing innovative products according to customer’s choice. The revenue of Unilever is increasing in China about 15 to 20 percent, and it is expected that business will increase fivefold during next ten years.
Market entry methods
Unilever used different market entry methods to enter in China and operate business activities successfully. The joint venture is business entity undertake by two or more than two parties to share ownership, expenses, risks, governance, and profit. The parties set specific objectives and work together to accomplish it. Unilever had a strong position in China among other competitors and launched 14 joint ventures in the country from 1986 to 1999. In 1986, the company established its first joint venture the Shanghai Lever with the Shanghai Daily Chemical industrial development and the Shanghai Soap Factory. The company has manufactured different products like glycerin, laundry soaps, toilets soaps chemical grease and other products. Later in 1989, Unilever created another joint venture with Shanghai Sugar, Cigarette, and Wine Corporation the Shanghai Van den Bergh. The company established some other joint ventures with different partners and produced skin products skin and detergents products. In 1993, Lipton food established a joint venture with Guangdong Tea Import and Export Corporation Ltd. The company produced Lipton tea and increased its sell in the country .
Unilever created a contract with different partners in China and make different agreements for business growth. The company has focused on the Chinese market and its consumers established some contracts with another partner to increase the sell its products in China. Unilever announced a partnership with Chinese e-commerce company Alibaba Group Holding Ltd to increase distribution of products and reach rural consumers in the country .
Unilever has manufactured its products to satisfy the customers in the Chinese market and get a competitive advantage. Manufacturing abroad allows a company to produce its products among different countries of the world. In 2007, 50 percent of Unilever’s products was manufacturing by another contract manufacturer in different countries . The company has stated its products like soaps, skin products, and Lipton tea and with the collaboration of other partners. The company established its factories in different cities of China and produced different products. In 186, the company penetrated its products in China market through joint venture and manufactured soaps, shampoos, detergents, and skins care products .
Export marketing refers to exporting goods to other countries in the world, the products have manufactured in the local market and sold in the global market. Unilever produced the products in the local market and exported to other countries. In China, the Unilever products are easily available everywhere, and it was manufactured according to customer tastes.
Franchising refers to a formal permission offered to a company to use a home firm’s business model or other knowledge for a specific period in return for payment. Unilever licensed its brand name to a domestic company in China to manufacture products for the company and pay them license fees. Franchising helped the company in rapid expansion, market dominance, increase name reorganization, and increased advertising in China.
Licensing is the activity of leasing a legally trademark or copyrights, logo, signature, other elements. The company announces license agreements with other partners to expand its business operations in China. In 2009, Unilever announced its exclusives license agreement with P.F Chang’s China Bistro Inc. The P.F Chang’s brand name used for developments of frozen Asian entrees for U.S . The company entered into different licenses agreements with other companies in China and increased its revenue.
Marketing Strategy
Marketing strategy is a strategic plan for entrance in a new market it is mostly based on market survey and research.
Brand and product strategy
The brand and product strategy is creating brand awareness and differentiates the product from all another competitor in the market. The brand name of Unilever plays a significant role and attracts different customers in the Chinese market. The quality and price are closely associated with the brand name of Unilever in the country. The company created to research and development center in China that are continuously focusing on brand name and its developments through innovations .
Price Strategy
Unilever has developed different product strategies to maintain its position in the Chinese market. The company has priced products geographically to increase the sale and earn more profit. The company has considered prices of its active competitors like Proctor and Gamble (P&G) and maintains the prices of all products in the country. Unilever set its products according to local consumers and focused on quality of the product .
Promotions Strategy
The company heavily invested in advertising of its products in China. The promotions of products had strongly focused, and Unilever invested a large amount in advertising. Unilever targeted its customers and created different TV ads to increase the sale in China .
Market entry strategy summary and recommendations
Works Cited
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