Executive Summary-1 Page 2
Introduction-2. Page 3Company and Product Background-3. Page 3Comparative country and product Market Attractiveness-4 Page 4
4.1 – Macro Page 4
4.2 – Product Market Analysis Page 6
4.3 – Competitive Analysis Page 6
Entry Strategy-6 Page 7
Marketing Objectives-7 Page 8
Recommendations for the 4 p’s of the marketing mix in Hong Kong-8 Page 8
Conclusion Page 11
References Page 13
1.
Executive Summary With environmental changes taking place in the globe, global marketing has been subject to rapid development thus requiring full attention on the approach to use. This report focuses on analyzing various ways and elements for product promotion. Nevertheless, the paper addresses various marketing strategies and ways for their application internationally. It bases its argument on the Australia food company which is expanding globally to China. The report discusses ways on how AUSFOODS should expand its operations in Hong Kong and ways through which it needs to implement its current marketing strategy efficiently.
2. Introduction
Good business idea requires proper marketing to ensure its success over the entire business cycle. Marketing in a new market requires proper analysis of the environmental conditions within specific market segments. In addition, each market segment provides unique characteristics that need to be identified in order to sustain the business in operation. These environmental conditions revolve around economic conditions, set rules and regulations, cultural aspects, technology, and politics. These factors may be beyond the control of the business, but they determine whether new business survive in the market (Armstrong, 2009: p.24)
AUSFOODS provides a variety of food products which meet the needs and demands for it products. For further growth, AUSFOODS is focusing in expanding its operations in Hong Kong. To ensure success in this new territory, AUSFOODS require proper marketing strategies. This includes product strategies, marketing mix strategies, market entry strategies, and market penetration strategies among others. These activities require proper planning and articulation, ensuring harmonious interaction of the marketing operations. Fundamental is the business competitive advantage in the market as it will ensure AUSFOODS to get its market share. Therefore, there is need for AUSFOODS to study in depth Hong Kong’s market and business, but social values and preferences.
3.Company and Product Background AUSFOODS produces various foods which follow the customer needs, social values and preferences. Some of this foods produced include sugar, rice, fruits and vegetables. This company will consider seasons and produce products which meets the customer needs as per given period. For instance, AUSFOODS would sell fresh fruits during winter namely peaches and apricots (Austrade, 2012). Food remains one of the most preferred basic needs which people cannot survive without and thus expanding the industry to China will see it increase its revenues. Nevertheless, AUSFOODS will adhere to many international customer needs following similarity in westernized culture. In Australia, these products will attract many customers following its scheduled marketing campaigns. Food is a basic commodity that every person needs to satisfy before satisfying other needs. As a result, AUSFOODS products will have a big market in Australia and if the same momentum will be kept in Hong Kong market, AUSFOODS would grow higher to a foreseeable future.
4. Comparative country and product market attractiveness 4.1 Macro Hong Kong is an attractive market to AUSFOODs for many reasons something which would boost AUSFOODs acceptability, growth and development. First, China is experiencing a rapid economic growth and as result its population is also developing increased appetite for various food products. This is actually creating an outstanding opportunity for international companies which produce food products to expand their operations to Hong Kong market. Australia remains the favorable country which exports food products to China. According to the current statistics, Australia has increased its processed food value in the past years from $794 million to $1.511 (Austrade, 2012). This implies that there is increased demand and preference for Australia’s processed foods by the china consumers. Thus AUSFOODS stands a good position to venture in the Chinese market and increase its market share.
Nevertheless, most of the China consumers have shown increased interest for internationally processed food products as compared to their domestically produced products. This is following the increased claims on health problems caused by the locally manufactured food stuffs. As a result, Australia processed foods is the best option for the China consumers following its clean environment which make its food companies to have a good opportunity in the Chinese market (The Australian Trade Commission, 2012). AUSFOODS thus has an outstanding opportunity to expand its fresh food products to the Hong Kong market. Furthermore, with increased population, people need to eat more. In addition, this people are growing to the west thus creating pressure to the available farmland. With decreased farming land, the only option for China is to export food products from other countries. Since Australia remains the most favorable country, AUSFOODS has an opportunity to venture in Hong Kong market. Australia has to make use of its idle farmland to expand its farming so as to increase food productivity which will be enough for both its citizens and also for export purposes (Austrade, 2012). Finally, following increased relationship between China and Australia, both countries are focusing on negotiating a Free Trade Agreement currently. In addition, China has over the recent reduced its tariff for agricultural products following its entry in to World Trade Organization. The statistics show a reduction from 21.2% to 15.3% (GovHK, 2012). All this arrangements will be of much benefit for the AUSFOODS easy entry to the Hong Kong market. 4.2 Product Market Analysis Following a population of about 1.3 million, china is becoming one of the most promising business opportunities for businesses (Austrade, 2012). AUSFOODS in Hong Kong may see a prosperous growth and expansion to a foreseeable future. The market size can be established to be over $1.5 US dollars (Austrade, 2012). With more growth and development, the more the AUSFOODS market share will increase thus will increase its profitability levels. Most of the Hong Kong food products consumers are developing appetite for Australian processed foods. This is following their quality, affordability and healthy compliance. For the past years, the marketability of these products has been increasing rapidly. AUSFOODS is dynamic and thus may provide products which meet the needs and demands of the Hong Kong people (Austrade, 2012). With share of the westernized culture between both Australia and China is a great opportunity for the AUSFOODS to expand internationally in China. 4.3 Competitive Analysis There is a stiff competition in Hong Kong market foods market between the China companies and international companies. However, the good news concerning the competition between the local and international food companies in the Hong Kong market is that many consumers in the market have shown increased demand for international foods as compared to those produced in China. This is because the locally made foods have been subject to health problems over the recent (Austrade, 2012). As a result, there is an outstanding opportunity for AUSFOODS to expand its operations in Hong Kong and thus increase its market share. Many of the international food exporters come from Australia. This is to imply that most of the Hong Kong food consumers are familiar with Australia food stuffs. However, AUSFOODS will face competition from other international food exporters especially the US and UK which have a substantial impact in the Hong Kong market. Therefore there is a great need for AUSFOODS to provide quality food products and enhance its marketability through the use of various marketing and promotion strategies in order to remain attractive and competitive in the Hong Kong market (Austrade, 2012). 5. Market Selection with Justification opportunity statement AUSFOODS focus is to increase its market share and boost the company’s future growth. Most of AUSFOODS customers are impressed by the quality of these products and thus AUSFOODs stand a better chance in winning the confidence of the Hong Kong people. 6. Entry Strategy Entry into new markets poses great challenges. Businesses deal with new competitors, new channels, and new customers. A desirable market entry strategy will give AUSFOODS an opportunity to acquire sales momentum. Therefore, key essentials for proper market entry strategies for AUSFOODS include a focused segmentation of the market, proper channel, and adequate value proposition (Burnett, 2008). Other market entry strategy entails improving the product quality focusing on a niche market. In this regard, products are enhanced by giving them a competitive edge in the market. They can compete successfully with existing products. Improving products quality may attract new customers in to the market as the new option complements alternatives existing in the market (Armstrong, 2009). Moreover, the marketing strategy would involve identifying specific target market that has not been exploited within the larger market. The last one is market entry based on innovative distribution strategy. In this case, the AUSFOODS ought to establish a better way of accessing the market. A strategy for entering the market with a high degree of competition from the market pioneers would involve the new market entrant positioning as variety enhancer rather than substitute or replacement of the market pioneers (Armstrong, 2009).
7. Marketing Objectives AUSFOODS focus on attaining an increased market for its products by expanding its operations to Hong Kong. This will foster continued growth and development of the food industry. Focus on attaining a market share of 3% in the first year of its establishment will be a boost to the Australian food industry. Following better marketing strategies and carrying continuous market campaigns could see AUSFOODS gain a market share of 10% in the following years. 8. Recommendations for the 4 p’s of the marketing mix in Hong Kong Pricing Setting products prices aims at ensuring that the company’s rate of return on investments is realistic, and the market share of its product is stable. In addition, the price set for an item reflects the difference in its properties and the penetration of products to the markets is not compromised (Burnett, 2008). Moreover, it should facilitate easy cash recovery from the product. AUSFOODS need to consider various factors that influence the price set for its products in Hong Kong market. These include product fixed and variable cost, competition, objectives of the company, and the target groups. In addition, costs associated to transportation and value added tax should also be considered. Since AUSFOODS Prices are affordable in the local market it should also maintain the same momentum in the Hong Kong market. Focus should be on making these products affordable by the every person in China. This will play a vital role in increasing the products acceptability in the new market. Product AUSFOODS provides a variety of products making it to stand many customer demands. This includes sugar, rice, packaged foods, chicken, fruits and vegetables (Austrade, 2012). Customers who have a strong attachment and preferences for these food products can provide a wide market for AUSFOODS. AUSFOODS should strategize on various groups of people who have such characteristics in order to study the pattern of their needs. This would be a boost in ensuring that their needs are addressed thus strengthening the existing relationship. The advantage with AUSFOODS is that they appeal to customers from different diversities following their quality and affordability (Austrade, 2012). Nevertheless, AUSFOODS should focus on providing products which adhere to culture and customs of the china people. To increase their acceptability levels, AUSFOODS need to produce food products which comply with the cultural needs of the China people. It is an advantage to AUSFOODS because China and Australia customers share the same product need following their westernized cultural influence. Place/distribution It is important for any business to focus on customer needs, wishes and preferences in deciding suitable place to make its distribution. Thus AUSFOODS need to carry out proper analyses of different approaches it needs to develop in order to choose a suitable place for its products. It should also focus on developing hypermarkets, supermarkets, and small grocers which are the commonly used distributing channels in the Hong Kong foods market (Austrade, 2012). Consumer driven strategy should be at the forefront of AUSFOODS marketing strategies as it develops effective communication with the distributor. In order to ensure this, AUSFOODS need to create products awareness and attributes through informing, and explaining to the customers what it offers. On the other hand, AUSFOODS should also consider China’s customer contributions with regards to these products. Following this it should adhere to the customers’ sediments and thus should respond to the needs and preferences of the Hong Kong consumers. Entering a new market call for a company to explain to customers in details what it ought’s to deliver to them. The degree of its explanation plays a vital role in influencing the acceptability of its products in the new market.
Promotion Effective marketing is very vital for business growth and development. In order to ensure this, AUSFOODS need to focus on proper communication of its products in the Hong Kong market. Product communication is aimed at creating product awareness, product attributes, enhancing positive product image and providing customers with product information. Their various promotional methods which AUSFOODS need to focus on in order to ensure efficiency. This includes advertising, direct marketing promotion, sales promotion, public relations and personal selling. Of all the above mentioned promotion channels, advertising remains the most viable method. Advertising involves the use of radios, television, journals, outdoor communications, magazines, cinemas and newspapers (Mullin, 2010). With advancement in technology, the use of the Internet through social media is a major advertising tool in Hong Kong (Information Services Department, 2012). This indicates that many people have access to the internet and communication through social media is effective. Therefore, AUSFOODS should consider advertising their products through the use of internet. In this case, digital online and offline strategies should be used to create product brand awareness. Moreover, the use of optimized search engines can make the business compete successfully. This is because information retrieval with ease improves brand awareness.
9. Conclusion The report findings suggest that there is need for AUFOODS to ensure a proper market analysis of the Hong Kong market to identify the underlying environmental factors and appropriate marketing strategy. The study suggests that establishing a successful food business in Hong Kong requires understanding of the legal requirements, carrying out analysis on customer preferences, identifying the target market, ensuring good management, and evaluating the effectiveness of desired marketing strategies. The study further suggests that the business needs to develop strategies that can enable it to compete successfully. This is through deploying different marketing strategies at different phases of growth. This would involve using pricing, distribution, and promotional strategies as completive advantage to penetrate the market the Hong Kong market with ease. In addition, developing a sustainable competitive advantage through quality improvement. Developing AUSFOODS product awareness and improving customer satisfaction level can give the business a sales momentum. Developing and maintaining affordable prices by the AUSFOODS to China people will serve as an opportunity for attracting many customers in the market (Kerul , 2010). Finally, the study clearly suggests that the Hong Kong market has moderate competition for food substances. Therefore, the AUSFOODS can use effective promotional strategies such as internet online and offline strategies, with emphasis on social sites (Kerul, 2010). Moreover, use of external advertisement support can give the business leading hedge in the market as they can attract customers easily.
Reference Armstrong G., 2009, Marketing: An Introduction, London: Pearson Education Burnett J., 2008, Core Concepts of Marketing, The Global Text Project, Retrieved May 10, 2012 at
Austrade 2012, Food and beverage to China: Trends and Opportunities, Austrade, Viewed 16th October 2012,
Mullin R., 2010, Sales Promotion: How to Create, Implement and Integrate Campaigns That really work, New Delhi: Replika Press Kerul R., 2010, Marketing Promotion and Distribution of Project within Private and Public Sphere, Slovakia: Presov University The Australian Trade Commission 2012, Health and wellbeing in Hong Kong, The Australian Trade Commission, Viewed 29th march 2012, CIA 2012, The World Factbook, CIA, Viewed 9th April 2012, Trade and Industry Department 2008, Hong Kong’s Trade Policy, Trade and Industry Department, Viewed 11th March 2012, GovHK 2012, Hong Kong’s Tax: A Beginners Guide, GovHK, Viewed 11th March 2012, Information Services Department 2012, Hong Kong: The Facts, GovHK, Viewed 10th May 2012,
