Expanding Tasmanian Mountain Water Business in China

This report outlines the Chinese market demand for bottle water industry and provides recommendations for expanding Tasmanian Mountain Water business in China.

Running Head: MARKETING 0
GLOBAL BUSINESS MARKETING
TASMANIA MOUNTAIN WATER

MARKETING 1
Executive Summary
This report outlines the Chinese market demand for bottle water industry. Tasmanian
mountain water is a company need to expand their business in China. As China is a new
country and market for the company, they need to undertake various important aspect in
order to expand their market effectively. In order to do so, Tasmanian needs to research the
market completely. The management needs to use the PESTLE tool for the same. In the first
section of the report, there is a brief overview of the company Tasmanian proving natural
mountain water to the customers. In the next subsequent sections, effective research and
analysis are made in order to acknowledge the market demand of China. The expansion of
Tasmanian mountain water in China will require to gain people perception in align with the
various rules and regulations of that respective nations.
In last, several necessary recommendations also made for the better growth of the
business in China. This will help the company to understand the demanded market and the
economy of China from every corner.

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Table of Contents
Overview of company................................................................................................................3
Political and Legal environment analysis..................................................................................3
Economic and Financial analysis...............................................................................................4
Social and Cultural Factors........................................................................................................5
Technological and Environment Factors...................................................................................6
Conclusion and Recommendations............................................................................................7
References..................................................................................................................................9

MARKETING 3
Overview of company
The bottled water industry generates more than $700 million revenue annually in
Australia. Tasmanian Mountains Waters comes under beverage sector of Australia. It helps
the customer to get natural and pure form of water. This is also the mission of the
organization to deliver quality water to the customer. The company serve the water in two
sizes of bottles i.e. 5 litres as well as 10 litre containers (Bkucher, 2015). This natural spring
water is formed of natural Calcium, Magnesium and other minerals with having well PH
level 7.6 to 7.8. These water can also be used in household and kitchen. Moreover, due to
their innovative packaging, the customer can store the products of Tasmanian Water for a
long period of time (approximately 5 years). However, as per the company information, the
customer needs to use 10-litre container of water within 2 years to get fresh and good quality
water as by consuming water naturally, it is filtered several time. This makes the water purify
from all aspects. The company is exporting their water bottles from long time; however, there
could be various opportunities for Tasmanian water bottle Company to expand and set-up
their business there. As per the company annual report, it is ascertained that for the new
equipment, the company is planning to invest $2 million including adding of more labour and
workforce to meet the effective demands of the customers (onlytasmania, 2018).
Political and Legal environment analysis
Various legal aspects influence the organization for taking entry into other country
economy. In order to enter China, the company need to scan the political and legal
environment for selling the products and other services of Tasmanian Mountain Waters.
China has an issue of openness, however, there is stable political environment and with this,
the country is also known for its infrastructure and cheap labour (Su, Heshmati, Geng & Yu,
2013). Hence, Tasmanian can easily enter in to the market of China with less political threat.
Along with this, the external demand also increases the growth in China in relation to any
reconstruction in the economy by the communist government. As China has strong political
environment, the country has major reserves in terms of foreign currency (Siriwardana and
Yang, 2008). On a continuous basis, the government in China always focus on the growth of
Chinese industries as they have induced many opportunities there. Moreover, the first and
foremost challenge is linking with their political system as they have openness in their

MARKETING 4
political system. Hence, for Tasmanian waters, it is significant to gain and do necessary
research of the key aspect influencing the business of bottle water.
The law in China is also modified in relation to the chemicals used in the water bottle.
In China, the economy is getting larger as due to huge population, area and continuous
growth in all segments (Hasan, Wachtel and Zhou, 2009). In addition, the western culture is
also exposed to China and due to rise in urbanization, several significant laws were formed
for building awareness and relating to the health of the people. Recently, several new
standards were also formed for the bottle water industry. The pubic focused gain attention on
bottle water and all the companies in bottle water industries adopted a universal water
standards inclusion of various national standards. In the current scenario, numerous
departments of the government formulate around 5,000 standards in relation to hygiene and
food quality (Molinos-Senante et al, 2012). For the water bottle labelling, new standards and
practices were also introduced in the form of law. It is ascertained that the companies will
label the water bottles only in two ways – as either purified bottled water or other drinking
water. This shows that there is clear differentiation among the mineral spring water. It will
also highlight the materials that have been mixed in water during its manufacturing and
production procedures in this competitive economy, customer can quickly switch off to other
company that is proving them quality and healthy drinks. Before moving to that economy,
Tasmanian Company needs to acknowledge the necessary market demands of the customers.
Chinese government made various certain laws in relation to the regulation of bottle
water industry. In terms of food and beverage industry, the government in China also have
certain laws in relation to anti-unfair competition, copyright, trademark, etc. In latest one, the
law of China includes that the packaging of water bottle should be of 3-D trademark (Matus
etl al, 2012).
Economic and Financial analysis
With the help of this report, it is ascertained that bottle water will be expanded in
future until 2021. This shows an opportunity to the companies to expand their wings in
China. Between the year 2001 and 2016, the bottle market of China rise at the rate of 7.42%.
As per this data, there will be expansion of this industry in the global market with 57,904
million litres (GlobalData, 2017). By analysing these figures, it can be said that there will be
boom in this sector and many companies can be benefitted if they start their business in this

MARKETING 5
sector. Moreover, as per the various market report and researches, disposable income of
Chinese individual is rising and thus in align with this, the demand for Bottle water likely to
rise. As per a report published towards Chinese market growth, it was found that US$ 42,774
M revenue generated from bottle water in the year 2018 (Oliver, 2017). In addition to this,
the GDP also reached to 2575 in 2017. In the upcoming years, the sales and consumption will
likely to increase due to the constant growth of these respective industries (Fleisher, and
Zhao, 2010). This shows the various opportunities for the other companies or organization
who wants to expand their operations in China in bottle-watered industry, an average
turnover of the bottled water company will be approx. 90 billion Yuan where the
consumption will be more than 69 billion as per the volume. Tasmanian company have a
great opportunity due to the potential of the market and the growing number of users and
sales.
Social and Cultural Factors
Many numbers of customer are likely consuming bottle water effectively. This
preference of consumers plays a significant role in any organization, industry or country.
Customers in China are now focusing on quality consumption and thus avoiding unhealthy
drinks and foods. This gives rise to an opportunity for Tasmanian water bottle to easily
operate in China. As per the market report, it is ascertained that the customer of bottle water
in China has been increased to 29 litres that were 23.6 litres in 2013 (GlobalData, 2017).
These data are published in relation to the consumption of bottle water in China. As per the
research, about 74 percent of Chinese customers focused on the material and capacity while
choosing food and beverage (china-briefing, 2015). It also includes glass packaging and small
boxes affecting the packaging choice. When Tasmanian will operate in China, they need to
focus on these foremost aspects i.e. packaging and quality of the bottled water so that
maximum customers can be attracted in the short life period of their business life cycle. In
China, most of the consumer needed of bottled water in their day-to-day consumption
(Akenji, 2014). There can also be seen an addiction of this things in the Chinese people.
Moreover, the consumer group of age between 35 to 55 are becoming more sensitive towards
their eating habits and because of this, they are moving towards consuming hygienic water.

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In China, this aspect has raised the demand for fresh bottle mineral water. This gives
an opportunity to Tasmanian to enjoy high market share in China Recently, people in China
were also advised by various health experts to consumer more mineral water instead of
alcoholic drinks. In every market, the rising negative outcomes due to the alcoholic drinks
increased the demand for bottle water. In China, this is the same situation. There can also be
seen a change in consumption behaviour and expectations. The population due to increase in
the incomes are tended for better standards of living. In China, there are also various
domestic players who are running water-bottled business successfully (Boland, 2007). In last,
there are huge opportunities for Tasmanian water bottles to expand their market and business
in China with researching various important strategies needed to be applied in the foreign
market.
Technological and Environment Factors
In the globalised and competitive environment, technology is a key aspect to gain
number of customers in an effective manner (Hallal et al, 2012). However, other factors such
as marketing, branding and advertising are also important which can not be ignored by
formulating various strategies or during to application of these strategies. All these aspects
are important for an organization to make effective marketing of the industrial products. For
instance, in terms of sales and revenue, television and internet gain more growing marketing
channels including the highest number of customers segment. This shows that if Tasmanian
Company needs to operate in China, they need to expand marketing of their products and
services, as it will help them to create distinct image in the eye of consumers. It is also
ascertained that innovation is one of the crucial aspects of bottle water industries. Consumer
in China preferring to those manufacturers and producers who are providing them good
quality water in well quality packaging. Packaging can also be done in an innovative way
(Gilmore, 2011) Therefore, Tasmanian company need to used innovative technology and
design in order to bring bottle water to the customers in an attractive manner, Moreover,
automation technology will help the company in their various stages of production and
manufacturing and thus enhance overall productivity. This can also help the business in
effective utilization of the resources. In addition, China is a country, which is popular on the
globe as they are the leader in terms of technology. Therefore, this will also help Tasmanian
Company to adopt advanced technology for manufacturing bottled water bottle.

MARKETING 7
Tasmanian comes into beverage industry and this industry is highly indulged in
plastics. Therefore, various environment aspects have a significant impact on the beverage
industry. In today time, there is a growing concern for environment all over the globe and
thus every business needs to adopt effective environmental practices during their business
and also during the manufacturing and production of respective product (Lee, Olson & Trimi,
2012). Moreover, China is a developing economy and thus there will be a need for more
industrialization than any other developed nations. However, due to abundance population,
there is a growing concern towards protection of environment. China also achieved
sustainable growth in this aspect by 10 percent. Hence, Tasmanian needs to comply with
various environment laws and practices while setting up Bottle Company in the country. In
addition, they also need to build sustainable growth strategy due to huge China population
and rising consumption of bottle water. China government also took out various necessary
initiatives to protect the environment on a global level and improves the living standards of
people. During the manufacturing process of plastic bottles, it included various harmful
chemical that pollutes the environment negatively (Cheng, Shi, Adams & Ma, 2010). Hence,
it is also significant for Tasmanian to undertake these practices and prevent the procedure
from harmful chemicals. This will not only help the company in fulfilling corporate social
responsibility but also help the company to expand its operations effectively in China with
the continuous market growth in the subsequent years.
Conclusion and Recommendations
Including all above, it can be said that Tasmanian Water Company is fully associated
with giving pure and natural water to the customers. Tasmanian can start their operations in
China due to its economic potential and demand in the consumers for the healthy drinks.
Apart from this, majority of population in China are now more heath conscious and this can
be proved to an advantage in terms of demand of mineral waters. The company will face
several benefits as well as challenges during the operations of their business in China. From
various reports, it is ascertained that bottle market industries are doing well in China and
demand of these products are constantly increasing and thus boosted the market growth of
these connected industries and companies. This can be perceived as various opportunities for
the Tasmanian company to operate their business in China and gain market share. The
companies can also achieve economy of scale with the rising demand for bottle water

MARKETING 8
industry in China. Moreover, in future, it will also rise at the same rate and those companies
who are before in market can gain more market share. On the contradictory side, the
company can face several challenges as well. One of the key challenges is the lack of
openness in political system of China. Tasmanian company need to project static plan for
doing business in China.
In terms of recommendations, before entering into market, the company need to
research every important aspect in China. For this purpose, they can take the help of various
management tools and approaches like Porter 5 force, ERPG theory, etc. that helps the
company during the process of internationalization. It is also recommended that company
need to use effective and advance technology that will completely discharge the plastic
wastages in the process of manufacturing and production. As China is a foreign country for
them, Tasmanian needs to scan the business environment in an effective way including all the
competitors and tactics. Moreover, their also need to comply with every Chinese law in
relation to environment, labour and any other. This will help the company to give best
possible output and also help in their growth. In last, the growing bottle market in China will
ensure that there are many opportunities are presented for the new firms in order to expand
their markets effectively and satisfying the demand of consumers in the country.

MARKETING 9
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