JDB Essay Example

JDB Essay Example JDB Essay JDB Essay Competition within the herbal tea market also remains relatively low because there is no competition for herbal tea existing at the current market. It is suggested that Gadabout use the direct export to enter the Australia and use the contingency approach to enter the market. It is also recommended it to use a pull strategy, such as to invest a TV show to help build brand awareness and relationships with their target market. 1. 0. 0 Gudgeon Gadabout Drink Food Co. , Ltd. 1. 1. 0 Company background Gadabout Group is a large beverage enterprise owing to their healthy drink in Hong Kong. With the nationwide development strategy, they established Gudgeon Gadabout Beverage Food Co. , Ltd as a subsidiary to enter the Mainland China market. Currently, Gudgeon Gadabout Beverage Food Co. , Ltd played a leading role in healthy drink industry in China based on its famous product red-canned Gadabout, which as a kind of ancient herbal tea and has more than 170 years of history. They also have the non-alcohol drink, such as juices and bottled water. The sales network of Gudgeon Gadabout Beverage Food Co. Ltd has extended more than 30 provinces in mainland of China, and it also entered some countries in Southeast Asia, Europe and the US. 2. 0. 0 Marketing Mix 2. 1. 0 Positioning Positioning refers to some sustainable competitive advantage or unique ailing proposition of products as a critical factor to over other competing brands (Keller, 1 998, star. 77). According to the Unique Selling Proposition strategy, Gadabout positioned as a kind of beverage that prevents excessive i nternal inflammation and started their marketing activities based on it (DIB, 2012). 2. 2. Target market Gadabout found the unique positioning that aimed at the majority of people who afraid of the internal inflammation. 2. 3. 0 Marketing mix 2. 3. 1 Product Gadabout is a kind of function drink based on traditional herbal tea hundreds years ago to prevent inflammation in China. After the brand war with Guanos Wangling Pharmaceutical Company Ltd, Gadabout still use the red can with the Chinese character Gadabout instead of Wong Ala Kate. 2. 3. 2 Price The price of Gadabout is higher than most beverages in China since it is a special healthy drink from various Chinese herbal. . 3. 3 Place Gadabout is sold through the supermarkets, retail-stores and restaurants, especially hot pot, and barbecue restaurants. All places are where people may get excessive internal heat. 2. 3. 4 Promotion Gadabout is the most popular local brand in China for several years, one of he most important factors is the huge investment on advertising. Firstly, they use story as a mini movie to promote through national TV channel on the golden time. Secondly, they design the great poster to explain the function of the herbal tea; it implies the company concentrate on customers healthy. The satisfaction of basic human needs will trigger the search for higher levels of needs (Mathew, 1993). Thirdly, Gadabout invested 60 million in the show called Voice of China, a Chinese reality talent show, become the most popular topic in current China. Since 2001 , Gadabout has donated more than ARM 8 lion Yuan to help more than 1,600 students to have the chance to study. For the big earthquake in 2008, they donated 1 10 million Yuan as the biggest donor at a charity event broadcast live on CATV and immediately triggered a rise in popularity of herbal tea products. Gadabout dedicated to charity work charity for several years because it not only could set good reputation in the society, but also indirectly make contribution to advertising and brand promotion as a sustainable beneficial for the development of the company. 3. 0. 0 Australian marketplace 3. 1. 0 Market Environment Source : Department of Foreign Affairs and Trade. 2013). Australia has a population is roughly 22. 7 million people and GAP per capita APP of US$44,074 in 2013. It is ranked as the second easiest country to do business since it offered one Of the best-regulated commercial environments in the world (World Bank Doing Business, 2013). The relationship be;men China and Australia was longstanding and played an indispensable role for both economic interests. China is Australias first largest export market and they commenced a Free Trade Agreement to further strengthen their business relationship. The tea market in Australia had total revenues of $ 1 1. Ban in 2012 with consumption volumes increased with a CARR of 4. 1 % between 2008 and 2012, which is expected to reach 4. Billion liters by 2017(Market Line, 2012). 3. 2-0 Consumer Behavior In Australian, a large number of customers prefer the healthy drink rather than caffeinated beverages cause healthy and wellness are still as the main factors to impact the purchasing decisions of customers. However, Consumers are affected by brand strongly, and the majority of competitors have to manage and deve lop their brands to capture the attention of customers. Overall, the buyer power is moderate. 33. Competitors In Australia, the majority of Customers do not like the taste of Chinese tea, which would attract many new products into the market. The substitutes for tea primarily include water, non-ready-to-drink hot drinks, alcoholic beverages and sodas. The Coca-Cola Company played the leading role account for approximately 36. 5% Of the market. Competitors in soft drink market distinguish their products by stressing their health benefits and taste, especially for functional drinks. Even though it would not easy for a new company to compete with the existing big brands, it would be possible to achieve small-scale success via a unique production method or nutritional benefits. Overall, there is a moderate likelihood of new entrants. 3. 4. 0 Opportunities In Australia, the awareness of health and wellness are the main factor to drive interest in tea market for the next several years. For the demographic factors, there are many Chinese people in Australia and most of them are Cantonese, they tend to the traditionally tea. Additionally, people in Australia like to eat some fry food, which are likely to get inflamed. 4. 0. 0 Entry Strategy Entry mode Advantage Disadvantage indirect exporting Low commitment in terms of resources] Low risk Lack of control Lack of contact with foreign market No learning experience Potential opportunity cost Direct exporting (foreign sales branch) More control (compared with direct exporting) More sales push (compared with direct exporting) More learning experience Need to build up foreign-based organizations] More demanding on resources Joint Venture Risk sharing Less demanding on resources Potential of synergies Risk of conflicts with partner(s) Risk of creating competitor Source: Adapted by Album and Udder (201 1), Mas (2008), Estate et al. 005) According to characteristics of the Gadabout, the origin regions and the development of its own brand are very important. So, it is not suitable for foreign direct investment. For the Joint venture, although it can use the local marketing channels effectively to reduce costs to enter the local market quickly, it would limit their brands promotion to restrict the long-term development. From long-te rm operation strategy, direct export has an advantage in establishing good brand effect, diversified distribution channels and effective social network. 4. 1. 0 Contingency approach Gadabout should use a contingency approach to enter the Australia market by maintaining their standardized model and making minor adaptations to the marketing mix to suit the marketplace (Leonardo et al, in Innovator et al, 2010). The need for adaptation increases according to the degree of cultural difference between two countries. However, in order to differentiate itself from competitors and build strong market share, it should adapt elements of its marketing mix to further appeal to Australian consumers. International strategies made by Gadabouts managers should have more consideration on preference of distance. Not only for geographic distance, but also culture, administrative and economic distances still need to be taken into account. 4. 2. O pull strategy This strategy aims to pull a product through the channels by making consumers end of a channel desire a product (Deanne, 2010). It incorporates most traditional advertising such as TV and radio commercials or newspaper advertisements. It also incorporates methods such as boosting word-of- mouth, or building brands online. The sales promotions, such as free samples, will help build brand awareness in the initial start-up period.