Marketing
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International
Marketing Planning for Karicare
BUMKT3705 International marketing plan
Group Assignment
Table of contents
Chapter1. Executive summary and Company description....3
Chapter2. Situation Analysis
2.1 PESTLE +Competitor Analysis………………….4 2.1.1 Social force………………………………………4 2.1.2Environment force……………………………….4 2.1.3 Economic force………………………………….5 2.1.4 Technological force……………………………...6 2.1.5 Political force……………………………………7 2.1.6 Legal force……………………………………….7 2.2 SWOT Analysis……………………………………8 2.2.1 Opportunities……………………………………8 2.2.2 Problems and Threats……………………………9 2.2.3 Strength………………………………………….10 2.2.4 Weakness………………………………………..10
Chapter3. The marketing mix……………………………12 3.1 Marketing objective ……………………………12 3.2 Target market……………………………………13 3.3 Product strategy…………………………………13 3.4 Pricing strategy ………………………………..14 3.5 Promotions /integrated marketing communications strategy …………………………………………..15 3.6 Distribution strategy………………………………16
Chapter4. Marketing Implementation and Control…17
Chapter5. Reference……………………………………19
1. Executive Summary
The following marketing plan for Karicare has been created by its three international marketing consultants to secure additional funding for growth and to inform employees of company s current status and direction. Since 1896, Karicare was found by Dr Truby King, the firm has experienced greater demand for its products, and research show that racial similarity, role congruence, labeling intensity of ethnic identification, shared knowledge and ethnic salience all promote positive effects on the target market. Meanwhile, Karicare plans to explore opportunities for online sales. The marketing environment has been very receptive to the firm’s good quality of milk products. Over the following years, Karicare can increase distribution, create new products and win new customers.
Company description
About Karicare
Child health experts worldwide agree that breast feeding is the best for babies. However, sometimes breast feeding is simply not possible. When mothers either cannot breast feed, or choose not to, it is important that possible they give their babies the very best possible substitutes.
Karicare infant and toddler milks are not only convenient for the mother to use, they also provide great health benefits. Karicare is manufactured in New Zealand by Nutricia Limited.
Karicare is New Zealand biggest selling formula range that provides the most comprehensive selection of standard, premium and specialized products.
2. Situation Analysis
2.1. PESTLE ANALYSIS
2.2.1. Social force
New Zealand dairy milk products are marked around the world. First of all, with the numerous increasing of new born, Chinese people prefer to choose the milk powder instead of breast feeding. In order to keep fit and have some more individual time, milk powder becomes the favorite meal for baby. Chinese mum could only breast feeding baby once a day and the rest of meals are all form milk powder. Therefore, the demand of milk powder is becoming bigger and it is plays a significant role in society. Secondly, Twenty years ago, there were not enough opportunities for Chinese to learn English and other languages. But now, start from early childhood, kids can have chance to learn English in centre. At the same time, so many foreign brands come to China and they are acceptable and people know about them very well. Thirdly, since the development of society, a large number of Chinese people would like to choose foreign brands rather than Chinese local brands. Some people think it is a way to show their economic capabilities and social status.
2.2.2. Environment force
In recent years, China has experienced unprecedented growth. China's ongoing population explosion has placed great strain on the country's environment. This rapidly growing population, along with a move toward urbanization and industrialization, has placed significant pressure on China's infrastructure and its natural resources. Due to environmental pollution, a lot of natural resources in the process have already destructed, and China’s milk industry will face a series of shuffling. Therefore, it is a good opportunities for New Zealand milk product. According to San Lu milk powder melamine incident, all of the Chinese people are scared about the milk powder which is made in China. If baby drink it, they will get cancer and even die. This will be a good opportunity for the development of imported milk production. Milk powder form Karicare is nutritious, has equal protein with milk and without harmful components and is healthy to baby, and especially suit for the baby’s brain.
2.2.3. Economic force
The Chinese economy is diverse and encompasses agriculture, processing industry, textile, manufacturing, and a multitude of services. In 2001, China successfully engaged in World Trade Organization. It was an improvement in communications, transportation, and trade regulation. There is an undisputed increase in GDP and the growth rate of the economy and the urban markets appear to be flourishing.. Meanwhile, services become a growing sector and playing an increasingly important role of China's economy. The advent of the digital age, and the large number of young and educated populace fluent in English, is gradually transforming China as an important 'back office' destination for global companies for the outsourcing of their customer services and technical support. Secondly, with the remarkable improvement of people’s living standard, the income has rapidly increased; they can afford to buy anything from export brand. In addition, e-commerce is now playing an essential part in revenue migrates business to those who provides on-line services. Actually, Karicare have already created the on-line shop for consumers in China, consumers can do on-line ordering at home and it will increase economy.
2.2.4. Technological force
With the growing technology, there is a dramatic affect on the milk production. Firstly, Technological advances of software and information have helped international firms to boost their business activities. Firms exploit these advantages to improve their manufacturing by using superior technology. It definitely affects the product sell world instead being caging into a local consumer base. It is easy for consumers to browse on the internet and they can obtain all the information from export. Every official websites can introduce every retails to customers. This is a straight and the most convenience way for customers to get families with products. Secondly, manufacturer can search from internet to find a suitable commercial agent to sell the product. It allows salespeople to communicate and conduct sales remotely and conveniently.
2.2.5. Political forces
It is almost a decade since China joined the World Trade Organization. Back then, China imported "global order": it absorbed pre-existing, mainly U.S.-designed policies, rules and institutions. It acted rather like a small or medium-sized economy that could only adapt to the international terms of trade. Now China is one of the Big Three, alongside the U.S. and European Union. It is the world's second-largest economy and its leading exporter of goods. It is also the biggest post-crisis contributor to global growth. Global trade issues best reveal China's policy shift, and also its policy dilemma. China's membership of the WTO has been a resounding success. Access to the WTO's rules-based system and dispute-resolution process has defused manifold tensions and smoothed China's rapid integration into the global economy. Beijing also has negotiated bilateral or regional free-trade agreements such as the one with the Association of Southeast Asian Nations.
2.1.6. Legal forces
In recent years, due to the San Lu milk powder melamine incident, a lot of foreign brand come to China, it will bring more and more competitive advantage for domestic milk industry. With the rapidly increase of imported milk products, sorts of issue are caught Chinese government attention. The Chinese government had to strictly implement the "dairy quality and safety supervision and management regulations". Enhancement of imported milk powder inspection monitoring efforts, strive to improve the quality of milk powder, to ensure food safety. They also create controls or regulations revolve for import controls, transfer pricing, taxes, regulation of corrupt practices, embargoed nations, antitrust, expropriation and distribution of equity, patents and trademarks.
2.2
2.2.1. Opportunities
China is an extremely important market for baby food and infant milk formula, given the high birthrates, rapid economic growth, westernization of tastes and a growing affluent class. NestlĂ© has already established joint ventures for these products. Heinz and Danone are also present in this market. Karicare is currently working on establishing joint ventures in this area. The growth of exports in recent years is due to the increase of free trade and liberal movement of goods and services cutting across inter-country barriers. Also, China’s competitiveness and quality consciousness are now finding increase acceptable across the world. Increase in potential buyers Sales incentives, introduction of new flavors as well as variants coupled with easy availability of low cost. Also, increases in disposable incomes and standards of living of middle class Chinese families estimated to be nearly four million in number. Industry observers predict that customers demand will triple in five years to about one million, and as the market grows and the taste of the customers changes with the passage of time, there will be greater demand for various milk products which currently constitute only a tiny fraction of the market.
2. 2.2Problems and Threats
Strong local leaders
Chinese assemblers have a tight hold over the small car market due to their low cost supplier base and the tariffs levied on import components. Bright milk products had a 5.7 per cent share of China's dairy market, ranking fourth. It had a 1.4 per cent market share in the Chinese packaged foods market and a 1.6 per cent share of the Chinese ice cream market. Biostime occupied approximately 85.4% market share in terms of retail sales in the children’s probiotic supplements market. According to a survey conducted by Nielsen, Biostime gained the No.1 position in the supreme-tier infant formula market in China during the 1st half of 2011, with a market-share of 44% in terms of retail sales. Looking forward into 2013, the Group is confident to capture the abundant opportunities in China’s fast growing market of premium pediatric nutritional and baby care products. The Group will continue to increase its brand recognition among consumers and expand its distribution channels. 2.2.3. Strength
New Zealand is geographically interesting spots, as they serve as export bases for China and other countries in the region. Karicare addition to breast milk has 50 years of research experience and immune and digestive system for as long as 20 years of studies, is constantly present new research results and scientific information. So far we have published more than 30 papers reviewed by the authority of the papers, which are associated with the research direction "for the infant immune system provides a unique combination of ingredients nutritional support" relevant. "Authoritative review," the term means all studies assessed by independent experts to ensure that it has a high scientific quality and impartiality. All of our research planning and implementation of follow strict scientific and ethical standards. Karicare in the world, 15 countries with research institutions, the total number of employees up to 1200 people. This distribution makes Kareicare extensive global network to experts around the world, hospitals and universities work together to ensure that their research can be better used in local markets.
2.2.4. Weakness
A Chinese webpage advertising bulk orders of infant formula to buyers in China is getting its supplies from a major supermarket chain. News Ltd reported this week that pharmacy and supermarkets shelves have been cleaned out of New Zealand name-brand powdered infant formulas after several health scares in China. The Chinese website advertises that Karicare 1 tins can be bought at Woolworths in Box Hill, Melbourne, for $22.49 each retail with the site organizer selling to buyers back home at about $37, an extra $15 per tin, or $90 profit per case of six. Express shipping costs another $63.The site adds that the price will not be negotiated. The webpage also advertises the availability of different stage infant formulas at the nearby Woolworths-owned Big W.A translation of the site says it has a "sister" buy from the supermarket "100% genuine" formula. As News Ltd reported yesterday, traders stand to benefit up to $700 a week, or more than $36,000 tax free from the scheme. Woolworths said it was up to the discretion of staff to ensure sufficient supplies were in stock and to scrutinize any unusual purchases. “While there is no specific limit set, our stores are encouraged to use a common sense approach to ensure stock is only sold in retail quantities'" a spokeswoman said. On Taobao, China’s equivalent of EBay, there is a seller who claims to be the official agent for Karicare, saying they have sold 28,354 tins of Karicare Gold Stage 1 formula in a month for $34 per tin. Grey imports are an issue of concern for Chinese authorities who are unable to detect thousands of tins of formula coming through China Post or via express mail services. "The tins that are coming through, they don’t know what is in it. The product could be anything," said Charles Zhang, international sales manager for Victoria-based Milk Powder Solutions which exports exclusively to China. "In November or December last year, in Canton province Chinese authorities destroyed a lot of tins that do not have any house certificate (from China Inspection and Quarantine) that were sent through grey areas," he said from China yesterday. Chinese officials have tightened legislation surrounding baby formula since the death of six infants and 300,000 more being made ill by a locally manufactured formula contaminated by melamine in 2008. The local formula market virtually collapsed after the 2008 scare and any imports must withstand much tighter testing procedures with locals preferring "clean and green" Australian and New Zealand products. But exporting and registering products in China and organizing efficient and reliable supply lines is also notoriously difficult, turning exporters away. Nutricia, the maker of Karicare and Aptamil brands which have been favored by illegal exporters, said it has gone from making 5000 tones three years ago to 20,000 this year but only a small amount was exported. Production capacity is to increase by a further 50 per cent over the next 12 months.
2. The marketing mix
The following discussion outlines some of details of proposed marketing mix for karicare product.
3.2. Marketing objective
To provide infants and toddler milk nutrition though our milk powder, which not only convenient for the mother to use but also provide essential vitamins, minerals, and other nutrition.
3.3. Target market
A principal concept in target marketing is that those who are targeted show a strong affinity or brand loyalty to that particular brand. Target Marketing allows the marketer / sales team to customize their message to the targeted group of consumers in a more focused manner.
Research has shown that racial similarity, role congruence, labeling intensity of ethnic identification, shared knowledge and ethnic salience all promote positive effects on the target market. Research has generally shown that target marketing strategies are constructed from consumer inferences of similarities between some aspects of the advertisement (e.g., source pictured, language used, lifestyle represented) and characteristics of the consumer (e.g. reality or desire of having the represented style). Consumers are persuaded by the characteristics in the advertisement and those of the consumer. Karicare target market is the new born babies and toddler parents and guardians. As they take care of the baby but the nutrient value chart and other benefits.
3.4. Product strategy
Karicare currently offers four kinds of high-quality products. There are Karicare standard range, karicare gold plus range, karicare aptamil range and karicare goat range. According to different periods, the firm nutritionally complete and designed to meet the needs of bottle fed infants. The exclusive formulation in Karicare nutritionally supports baby's immune and digestive systems. A well supported immune system helps babies thrive. It also contains fish oil which may assist baby's eye, brain and nerve development. The firm promises that give baby pure, fresh milk, and they never add food flavor and sugar into products. In the following five years, the firm plan to expand the product line and produce some more suitable milk products. Especially for infants at high risk of allergy (parent or sibling diagnosed) or with confirmed mild to moderate cows’ milk and/or soy protein allergy. In addition, they plan to extend milk powder to pregnant, they believe it can benefit both pregnant and baby.
The second way, the firm will concentrate with Milk product packaging. They will design different sizes for different demands from parents. For example, individual packaging will keep fresh, and it will bring convenient for going outside. Meanwhile, they could design many different cartoon characters on packaging and it will be much more attractive for consumers.
3.5. Pricing strategy
The karicare products are priced with the competition in mind. The firm is attempting to achieve the goals of offering low price by selling high qualities of products. Instead of value pricing is practiced so that consumers feel comfortable purchasing milk product. The price of karicare products is reasonable and stable in local and international marketing. In order to build good brand image and reputation, they choose the monopoly sales. Meanwhile, they attempt to attract some more distributors to join and cooperate for expanding marketing development.
Besides, due to different periods, the price of stage 3 is normally lower than the price of stage 1 and 2. As we know, stage 1and 2 are essential for new born and it can help new mummy who cannot breast feeding. When baby grow to 9-12months, they are going to try some baby supplement instead of milk. So the price in stage 1 and 2 can be higher and acceptable for customers.
3.6. Promotions /integrated marketing communications strategy Karicare communicates with consumers and retailers about its products in a variety of ways. Information about Karicare the company as well as its product- is available via internet. The firms promotional efforts also seek to differentiate its products from those of its competitors. Besides, the company relies on personal contact with retailers to establish the products in stores. The contract, whether in-person or by phone, demonstrate the products’ unique qualities, and build relationship.
The firm provides a variety of ways to promote its products. First of all, in weekend and some events, they will set up some good deal in supermarkets and also online store. For example, buy 2 get 3rd half price. It definitely stimulates the consumers to buy a lot. Secondly, the firm can support and cooperate with other company (like toy company), create a big event in specific days, advertising its brands and introduce by face to face. It is a good opportunities for consumer to understand the products. In addition, the company can organize some charity activities, in order to help disadvantage groups and increase the reputation. They can go to orphan asylum and donate milk powder to children.
3.7. Distribution strategy
Before exporting goods into China or choosing a Chinese
partner, it is advised for you to conduct thorough market
research and due diligence. Companies should be mindful of
possible problems in export rights, regulations and intellectual property rights protection. If the company decides to distribute the goods directly, then it will have to be aware of the distribution rights and understand the licensing process in China.
Distributing your goods directly may be a complicated and time-consuming process as one may not be familiar with China’s business practices and government regulations. Application for distribution rights and establishment of own distribution channels will be difficult. Chances of failure will be higher as a result. Establishing a joint venture will thus be a better option. Establishing cooperation with a local partner can allow you to have faster access into Chinese market and with the local partner’s knowledge and experiences of Chinese market, your success rate will be higher and goods can be better distributed. Acquiring help from a local partner does give you many advantages in penetrating the Chinese market. A side issue to note will be that joint venture usually requires large amount of capital and Chinese government may have capital control towards outflow of funds should one transfer his/her funds back to his/her home country. The government will also need to assess the potential economic benefits that it can bring to China, e.g. does it create job opportunities for the local population before approving it.
Besides all these, the most important step that one must take before exporting products into China will be have a thorough understanding China’s customs, regulations and controls towards imported goods. A sound market entry strategy is also necessary in order to penetrate the China’s market. An assessment of your goods’ strengths, weakness, opportunities and threats can allow you to promote and distribute your products better. Understanding the profitability and marketability of your products in the China’s market is thus vital before exporting your products into China. Our products will also available to shop online where the potential customer can order online & we can deliver it.
3. Marketing Implementation and Control
The primary objective of the WHO code is to provide safe and adequate nutrition by protecting and promoting breastfeeding, and by ensuring the proper use of infant formula when it is necessary, through adequate and appropriate marketing and distribution. The NZIFMA shall be responsible for monitoring the provisions of the NZIFMA (New Zealand Infant Formula Marketers' Association) Code of Practice. All persons concerned in any way with the marketing of infant formula should cooperate with the NZIFMA in order to ensure that the provisions of the NZIFMA Code of Practice are applied as effectively as possible. Initially, Kerry will utilise its internal resources to find a General Manager from one of its national operations to oversee the Chinese operation. This Manager will need to be selected from a country that not only sells but also produces milk to ensure a transfer of skills and knowledge for this side of the operation. The General Manager shall have autonomy over the Chinese operations but will be answerable to the General Manager of European operations for the time being. This will facilitate the need for any expertise, supplies or resources to fulfil any needs of the Chinese operations as they arise. Control shall be exercised by the General Manager of NUTRICIA Chinese by monthly meetings with all department heads to review targets and objectives. Once this review is conducted, targets can be adjusted accordingly and any deviations corrected.
5. References
http://www.nutriciababy.co.nz/main/aboutus.karicare.html
http://zhidao.baidu.com/question/394943791.html
http://www.rfa.org/mandarin/yataibaodao/huanjing/ff-05092013145028.html http://www.boraid.com/article/html/136/136071.asp
http://www.boraid.com/article/html/136/136071.asp
Hitt, Michael, R. Duane Ireland & Robert Hoskisson, 2005, Strategic Management: Competitiveness and Globalisation, South-Western, USA, <http://www.unescap.org/tid/publication/part_two2223_ind.pdf#search=%22AN%20EMERGING%>, < http://0-proquest.umi.com.alpha2.latrobe.edu.au:80/pqdweb?did=1064943061&sid=2&Fmt=3&clientId=20828&RQT=309&Name=PQD <http://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/7176.pdf
< http://0-proquest.umi.com.alpha2.latrobe.edu.au:80/pqdweb?did=335463501&sid=11&Fmt=4&clientId=20828&RQT=30&VName=PQD <http://www.unescap.org/tid/publication/part_two2223.pdf#search=%22AN%20EMERGING%>,
Table of contents
Chapter1. Executive summary and Company description....3
Chapter2. Situation Analysis
2.1 PESTLE +Competitor Analysis………………….4 2.1.1 Social force………………………………………4 2.1.2Environment force……………………………….4 2.1.3 Economic force………………………………….5 2.1.4 Technological force……………………………...6 2.1.5 Political force……………………………………7 2.1.6 Legal force……………………………………….7 2.2 SWOT Analysis……………………………………8 2.2.1 Opportunities……………………………………8 2.2.2 Problems and Threats……………………………9 2.2.3 Strength………………………………………….10 2.2.4 Weakness………………………………………..10
Chapter3. The marketing mix……………………………12 3.1 Marketing objective ……………………………12 3.2 Target market……………………………………13 3.3 Product strategy…………………………………13 3.4 Pricing strategy ………………………………..14 3.5 Promotions /integrated marketing communications strategy …………………………………………..15 3.6 Distribution strategy………………………………16
Chapter4. Marketing Implementation and Control…17
Chapter5. Reference……………………………………19
1. Executive Summary
The following marketing plan for Karicare has been created by its three international marketing consultants to secure additional funding for growth and to inform employees of company s current status and direction. Since 1896, Karicare was found by Dr Truby King, the firm has experienced greater demand for its products, and research show that racial similarity, role congruence, labeling intensity of ethnic identification, shared knowledge and ethnic salience all promote positive effects on the target market. Meanwhile, Karicare plans to explore opportunities for online sales. The marketing environment has been very receptive to the firm’s good quality of milk products. Over the following years, Karicare can increase distribution, create new products and win new customers.
Company description
About Karicare
Child health experts worldwide agree that breast feeding is the best for babies. However, sometimes breast feeding is simply not possible. When mothers either cannot breast feed, or choose not to, it is important that possible they give their babies the very best possible substitutes.
Karicare infant and toddler milks are not only convenient for the mother to use, they also provide great health benefits. Karicare is manufactured in New Zealand by Nutricia Limited.
Karicare is New Zealand biggest selling formula range that provides the most comprehensive selection of standard, premium and specialized products.
2. Situation Analysis
2.1. PESTLE ANALYSIS
2.2.1. Social force
New Zealand dairy milk products are marked around the world. First of all, with the numerous increasing of new born, Chinese people prefer to choose the milk powder instead of breast feeding. In order to keep fit and have some more individual time, milk powder becomes the favorite meal for baby. Chinese mum could only breast feeding baby once a day and the rest of meals are all form milk powder. Therefore, the demand of milk powder is becoming bigger and it is plays a significant role in society. Secondly, Twenty years ago, there were not enough opportunities for Chinese to learn English and other languages. But now, start from early childhood, kids can have chance to learn English in centre. At the same time, so many foreign brands come to China and they are acceptable and people know about them very well. Thirdly, since the development of society, a large number of Chinese people would like to choose foreign brands rather than Chinese local brands. Some people think it is a way to show their economic capabilities and social status.
2.2.2. Environment force
In recent years, China has experienced unprecedented growth. China's ongoing population explosion has placed great strain on the country's environment. This rapidly growing population, along with a move toward urbanization and industrialization, has placed significant pressure on China's infrastructure and its natural resources. Due to environmental pollution, a lot of natural resources in the process have already destructed, and China’s milk industry will face a series of shuffling. Therefore, it is a good opportunities for New Zealand milk product. According to San Lu milk powder melamine incident, all of the Chinese people are scared about the milk powder which is made in China. If baby drink it, they will get cancer and even die. This will be a good opportunity for the development of imported milk production. Milk powder form Karicare is nutritious, has equal protein with milk and without harmful components and is healthy to baby, and especially suit for the baby’s brain.
2.2.3. Economic force
The Chinese economy is diverse and encompasses agriculture, processing industry, textile, manufacturing, and a multitude of services. In 2001, China successfully engaged in World Trade Organization. It was an improvement in communications, transportation, and trade regulation. There is an undisputed increase in GDP and the growth rate of the economy and the urban markets appear to be flourishing.. Meanwhile, services become a growing sector and playing an increasingly important role of China's economy. The advent of the digital age, and the large number of young and educated populace fluent in English, is gradually transforming China as an important 'back office' destination for global companies for the outsourcing of their customer services and technical support. Secondly, with the remarkable improvement of people’s living standard, the income has rapidly increased; they can afford to buy anything from export brand. In addition, e-commerce is now playing an essential part in revenue migrates business to those who provides on-line services. Actually, Karicare have already created the on-line shop for consumers in China, consumers can do on-line ordering at home and it will increase economy.
2.2.4. Technological force
With the growing technology, there is a dramatic affect on the milk production. Firstly, Technological advances of software and information have helped international firms to boost their business activities. Firms exploit these advantages to improve their manufacturing by using superior technology. It definitely affects the product sell world instead being caging into a local consumer base. It is easy for consumers to browse on the internet and they can obtain all the information from export. Every official websites can introduce every retails to customers. This is a straight and the most convenience way for customers to get families with products. Secondly, manufacturer can search from internet to find a suitable commercial agent to sell the product. It allows salespeople to communicate and conduct sales remotely and conveniently.
2.2.5. Political forces
It is almost a decade since China joined the World Trade Organization. Back then, China imported "global order": it absorbed pre-existing, mainly U.S.-designed policies, rules and institutions. It acted rather like a small or medium-sized economy that could only adapt to the international terms of trade. Now China is one of the Big Three, alongside the U.S. and European Union. It is the world's second-largest economy and its leading exporter of goods. It is also the biggest post-crisis contributor to global growth. Global trade issues best reveal China's policy shift, and also its policy dilemma. China's membership of the WTO has been a resounding success. Access to the WTO's rules-based system and dispute-resolution process has defused manifold tensions and smoothed China's rapid integration into the global economy. Beijing also has negotiated bilateral or regional free-trade agreements such as the one with the Association of Southeast Asian Nations.
2.1.6. Legal forces
In recent years, due to the San Lu milk powder melamine incident, a lot of foreign brand come to China, it will bring more and more competitive advantage for domestic milk industry. With the rapidly increase of imported milk products, sorts of issue are caught Chinese government attention. The Chinese government had to strictly implement the "dairy quality and safety supervision and management regulations". Enhancement of imported milk powder inspection monitoring efforts, strive to improve the quality of milk powder, to ensure food safety. They also create controls or regulations revolve for import controls, transfer pricing, taxes, regulation of corrupt practices, embargoed nations, antitrust, expropriation and distribution of equity, patents and trademarks.
2.2
2.2.1. Opportunities
China is an extremely important market for baby food and infant milk formula, given the high birthrates, rapid economic growth, westernization of tastes and a growing affluent class. NestlĂ© has already established joint ventures for these products. Heinz and Danone are also present in this market. Karicare is currently working on establishing joint ventures in this area. The growth of exports in recent years is due to the increase of free trade and liberal movement of goods and services cutting across inter-country barriers. Also, China’s competitiveness and quality consciousness are now finding increase acceptable across the world. Increase in potential buyers Sales incentives, introduction of new flavors as well as variants coupled with easy availability of low cost. Also, increases in disposable incomes and standards of living of middle class Chinese families estimated to be nearly four million in number. Industry observers predict that customers demand will triple in five years to about one million, and as the market grows and the taste of the customers changes with the passage of time, there will be greater demand for various milk products which currently constitute only a tiny fraction of the market.
2. 2.2Problems and Threats
Strong local leaders
Chinese assemblers have a tight hold over the small car market due to their low cost supplier base and the tariffs levied on import components. Bright milk products had a 5.7 per cent share of China's dairy market, ranking fourth. It had a 1.4 per cent market share in the Chinese packaged foods market and a 1.6 per cent share of the Chinese ice cream market. Biostime occupied approximately 85.4% market share in terms of retail sales in the children’s probiotic supplements market. According to a survey conducted by Nielsen, Biostime gained the No.1 position in the supreme-tier infant formula market in China during the 1st half of 2011, with a market-share of 44% in terms of retail sales. Looking forward into 2013, the Group is confident to capture the abundant opportunities in China’s fast growing market of premium pediatric nutritional and baby care products. The Group will continue to increase its brand recognition among consumers and expand its distribution channels. 2.2.3. Strength
New Zealand is geographically interesting spots, as they serve as export bases for China and other countries in the region. Karicare addition to breast milk has 50 years of research experience and immune and digestive system for as long as 20 years of studies, is constantly present new research results and scientific information. So far we have published more than 30 papers reviewed by the authority of the papers, which are associated with the research direction "for the infant immune system provides a unique combination of ingredients nutritional support" relevant. "Authoritative review," the term means all studies assessed by independent experts to ensure that it has a high scientific quality and impartiality. All of our research planning and implementation of follow strict scientific and ethical standards. Karicare in the world, 15 countries with research institutions, the total number of employees up to 1200 people. This distribution makes Kareicare extensive global network to experts around the world, hospitals and universities work together to ensure that their research can be better used in local markets.
2.2.4. Weakness
A Chinese webpage advertising bulk orders of infant formula to buyers in China is getting its supplies from a major supermarket chain. News Ltd reported this week that pharmacy and supermarkets shelves have been cleaned out of New Zealand name-brand powdered infant formulas after several health scares in China. The Chinese website advertises that Karicare 1 tins can be bought at Woolworths in Box Hill, Melbourne, for $22.49 each retail with the site organizer selling to buyers back home at about $37, an extra $15 per tin, or $90 profit per case of six. Express shipping costs another $63.The site adds that the price will not be negotiated. The webpage also advertises the availability of different stage infant formulas at the nearby Woolworths-owned Big W.A translation of the site says it has a "sister" buy from the supermarket "100% genuine" formula. As News Ltd reported yesterday, traders stand to benefit up to $700 a week, or more than $36,000 tax free from the scheme. Woolworths said it was up to the discretion of staff to ensure sufficient supplies were in stock and to scrutinize any unusual purchases. “While there is no specific limit set, our stores are encouraged to use a common sense approach to ensure stock is only sold in retail quantities'" a spokeswoman said. On Taobao, China’s equivalent of EBay, there is a seller who claims to be the official agent for Karicare, saying they have sold 28,354 tins of Karicare Gold Stage 1 formula in a month for $34 per tin. Grey imports are an issue of concern for Chinese authorities who are unable to detect thousands of tins of formula coming through China Post or via express mail services. "The tins that are coming through, they don’t know what is in it. The product could be anything," said Charles Zhang, international sales manager for Victoria-based Milk Powder Solutions which exports exclusively to China. "In November or December last year, in Canton province Chinese authorities destroyed a lot of tins that do not have any house certificate (from China Inspection and Quarantine) that were sent through grey areas," he said from China yesterday. Chinese officials have tightened legislation surrounding baby formula since the death of six infants and 300,000 more being made ill by a locally manufactured formula contaminated by melamine in 2008. The local formula market virtually collapsed after the 2008 scare and any imports must withstand much tighter testing procedures with locals preferring "clean and green" Australian and New Zealand products. But exporting and registering products in China and organizing efficient and reliable supply lines is also notoriously difficult, turning exporters away. Nutricia, the maker of Karicare and Aptamil brands which have been favored by illegal exporters, said it has gone from making 5000 tones three years ago to 20,000 this year but only a small amount was exported. Production capacity is to increase by a further 50 per cent over the next 12 months.
2. The marketing mix
The following discussion outlines some of details of proposed marketing mix for karicare product.
3.2. Marketing objective
To provide infants and toddler milk nutrition though our milk powder, which not only convenient for the mother to use but also provide essential vitamins, minerals, and other nutrition.
3.3. Target market
A principal concept in target marketing is that those who are targeted show a strong affinity or brand loyalty to that particular brand. Target Marketing allows the marketer / sales team to customize their message to the targeted group of consumers in a more focused manner.
Research has shown that racial similarity, role congruence, labeling intensity of ethnic identification, shared knowledge and ethnic salience all promote positive effects on the target market. Research has generally shown that target marketing strategies are constructed from consumer inferences of similarities between some aspects of the advertisement (e.g., source pictured, language used, lifestyle represented) and characteristics of the consumer (e.g. reality or desire of having the represented style). Consumers are persuaded by the characteristics in the advertisement and those of the consumer. Karicare target market is the new born babies and toddler parents and guardians. As they take care of the baby but the nutrient value chart and other benefits.
3.4. Product strategy
Karicare currently offers four kinds of high-quality products. There are Karicare standard range, karicare gold plus range, karicare aptamil range and karicare goat range. According to different periods, the firm nutritionally complete and designed to meet the needs of bottle fed infants. The exclusive formulation in Karicare nutritionally supports baby's immune and digestive systems. A well supported immune system helps babies thrive. It also contains fish oil which may assist baby's eye, brain and nerve development. The firm promises that give baby pure, fresh milk, and they never add food flavor and sugar into products. In the following five years, the firm plan to expand the product line and produce some more suitable milk products. Especially for infants at high risk of allergy (parent or sibling diagnosed) or with confirmed mild to moderate cows’ milk and/or soy protein allergy. In addition, they plan to extend milk powder to pregnant, they believe it can benefit both pregnant and baby.
The second way, the firm will concentrate with Milk product packaging. They will design different sizes for different demands from parents. For example, individual packaging will keep fresh, and it will bring convenient for going outside. Meanwhile, they could design many different cartoon characters on packaging and it will be much more attractive for consumers.
3.5. Pricing strategy
The karicare products are priced with the competition in mind. The firm is attempting to achieve the goals of offering low price by selling high qualities of products. Instead of value pricing is practiced so that consumers feel comfortable purchasing milk product. The price of karicare products is reasonable and stable in local and international marketing. In order to build good brand image and reputation, they choose the monopoly sales. Meanwhile, they attempt to attract some more distributors to join and cooperate for expanding marketing development.
Besides, due to different periods, the price of stage 3 is normally lower than the price of stage 1 and 2. As we know, stage 1and 2 are essential for new born and it can help new mummy who cannot breast feeding. When baby grow to 9-12months, they are going to try some baby supplement instead of milk. So the price in stage 1 and 2 can be higher and acceptable for customers.
3.6. Promotions /integrated marketing communications strategy Karicare communicates with consumers and retailers about its products in a variety of ways. Information about Karicare the company as well as its product- is available via internet. The firms promotional efforts also seek to differentiate its products from those of its competitors. Besides, the company relies on personal contact with retailers to establish the products in stores. The contract, whether in-person or by phone, demonstrate the products’ unique qualities, and build relationship.
The firm provides a variety of ways to promote its products. First of all, in weekend and some events, they will set up some good deal in supermarkets and also online store. For example, buy 2 get 3rd half price. It definitely stimulates the consumers to buy a lot. Secondly, the firm can support and cooperate with other company (like toy company), create a big event in specific days, advertising its brands and introduce by face to face. It is a good opportunities for consumer to understand the products. In addition, the company can organize some charity activities, in order to help disadvantage groups and increase the reputation. They can go to orphan asylum and donate milk powder to children.
3.7. Distribution strategy
Before exporting goods into China or choosing a Chinese
partner, it is advised for you to conduct thorough market
research and due diligence. Companies should be mindful of
possible problems in export rights, regulations and intellectual property rights protection. If the company decides to distribute the goods directly, then it will have to be aware of the distribution rights and understand the licensing process in China.
Distributing your goods directly may be a complicated and time-consuming process as one may not be familiar with China’s business practices and government regulations. Application for distribution rights and establishment of own distribution channels will be difficult. Chances of failure will be higher as a result. Establishing a joint venture will thus be a better option. Establishing cooperation with a local partner can allow you to have faster access into Chinese market and with the local partner’s knowledge and experiences of Chinese market, your success rate will be higher and goods can be better distributed. Acquiring help from a local partner does give you many advantages in penetrating the Chinese market. A side issue to note will be that joint venture usually requires large amount of capital and Chinese government may have capital control towards outflow of funds should one transfer his/her funds back to his/her home country. The government will also need to assess the potential economic benefits that it can bring to China, e.g. does it create job opportunities for the local population before approving it.
Besides all these, the most important step that one must take before exporting products into China will be have a thorough understanding China’s customs, regulations and controls towards imported goods. A sound market entry strategy is also necessary in order to penetrate the China’s market. An assessment of your goods’ strengths, weakness, opportunities and threats can allow you to promote and distribute your products better. Understanding the profitability and marketability of your products in the China’s market is thus vital before exporting your products into China. Our products will also available to shop online where the potential customer can order online & we can deliver it.
3. Marketing Implementation and Control
The primary objective of the WHO code is to provide safe and adequate nutrition by protecting and promoting breastfeeding, and by ensuring the proper use of infant formula when it is necessary, through adequate and appropriate marketing and distribution. The NZIFMA shall be responsible for monitoring the provisions of the NZIFMA (New Zealand Infant Formula Marketers' Association) Code of Practice. All persons concerned in any way with the marketing of infant formula should cooperate with the NZIFMA in order to ensure that the provisions of the NZIFMA Code of Practice are applied as effectively as possible. Initially, Kerry will utilise its internal resources to find a General Manager from one of its national operations to oversee the Chinese operation. This Manager will need to be selected from a country that not only sells but also produces milk to ensure a transfer of skills and knowledge for this side of the operation. The General Manager shall have autonomy over the Chinese operations but will be answerable to the General Manager of European operations for the time being. This will facilitate the need for any expertise, supplies or resources to fulfil any needs of the Chinese operations as they arise. Control shall be exercised by the General Manager of NUTRICIA Chinese by monthly meetings with all department heads to review targets and objectives. Once this review is conducted, targets can be adjusted accordingly and any deviations corrected.
5. References
http://www.nutriciababy.co.nz/main/aboutus.karicare.html
http://zhidao.baidu.com/question/394943791.html
http://www.rfa.org/mandarin/yataibaodao/huanjing/ff-05092013145028.html http://www.boraid.com/article/html/136/136071.asp
http://www.boraid.com/article/html/136/136071.asp
Hitt, Michael, R. Duane Ireland & Robert Hoskisson, 2005, Strategic Management: Competitiveness and Globalisation, South-Western, USA, <http://www.unescap.org/tid/publication/part_two2223_ind.pdf#search=%22AN%20EMERGING%>, < http://0-proquest.umi.com.alpha2.latrobe.edu.au:80/pqdweb?did=1064943061&sid=2&Fmt=3&clientId=20828&RQT=309&Name=PQD <http://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/7176.pdf
< http://0-proquest.umi.com.alpha2.latrobe.edu.au:80/pqdweb?did=335463501&sid=11&Fmt=4&clientId=20828&RQT=30&VName=PQD <http://www.unescap.org/tid/publication/part_two2223.pdf#search=%22AN%20EMERGING%>,
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