Strategic Marketing for Desklib's Expansion in China with UHT Milk

This report provides a recommendation for Desklib to expand its operation in China with UHT milk. It includes macro-environmental analysis, critical assessment of market entry modes, market segmentation, and targeting. The report also applies Porter's generic strategies to gain a competitive advantage.

Strategic marketing

Executive summary
This project reports summarise analysation of products for company and country in which they
can expand their operation. It also includes macro environment analysis in order to identify
factors that are present outside and create threats to the business. It also summarises different
modes of entry in order to enter the international market. This report consists of the marketing
segment to this firm can target. Moreover, it consists application of Porter’s generic strategies in
order to analyse competitive factors in the industry.

Contents
Executive summary.........................................................................................................................2
Contents...........................................................................................................................................3
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Recommendation of products or service and a country along with providing macro
environment analysis which explains different opportunities as well threat face by client
within market...............................................................................................................................1
2. Critical assessment of three modes of market entry which can be suitable for client along
with recommendation for most suitable option with justification...............................................4
3. Application of market segmentation and targeting to critically evaluate potential target
market of client............................................................................................................................5
4. Application of porters generic strategy and explanation of how a client can gain competitive
advantage by using this generic strategies in recommended market...........................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic marketing is one of the terms which is used in marketing for purpose of attainment of
organisational goals with developing and maintaining sustainable competitive advantage. ON
basis of the use of the right strategy, a business can increase its visibility to its customers. It
allows businesses to focus on specific niches which allows them to target the right audience
(Aktas and Sel, 2018). On basis of this strategy, the business can also develop a specific position
for its products in the market which helps them to differentiate its products from those of others.
This project report includes an analysis of a new business that is introducing its product and
service in a new country. For this, the business is deciding to expand its operation in China by
selling UHT milk as its product. This project report includes the recommendation of products or
services and a country to provide macro-environmental analysis which provides different
opportunities and threats for business. It critically analyses different models of entry in the
international marketplace. It also applies the concept of STP analysis which allow a firm to
identify the right target market the firm. Moreover, it consists application of Porter's generic
strategies to gain a competitive advantage.
MAIN BODY
1. Recommendation of products or service and a country along with providing macro
environment analysis which explains different opportunities as well threat faced by the
client within the market
The marketing consultant of AMS will recommend to businesses to enter China with UHT milk.
China is one of the developing countries and is one of the most populated countries in the world.
There are a number of people whom the company can target. The demand for UHT milk in this
country is also high which provides the opportunity for business to expand their business easily.
On basis of the right marketing strategy, the firm can expand its business operation and also
increase the popularity of its brand (Brooksbank, Subhan and Miller, 2018). But carrying out
business in China does not only provide the business opportunity but also provides them a
different threat. To identify threats and opportunities in the business environment of China, a
PESTEL analysis can be conducted.
PESTEL is one external analysis tool that can be used by a firm in order to identify factors that
create a threat to business. It identifies factors like regulation of government, different
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legislation, advancement of technology, economic condition, the influence of cultural factors and
also environmental condition. A new business that wants to enter in China can be affected by all
these factors present in that country. Identification of these factors on a timely basis allows
managers of a company to develop effective strategies. Explanations of different factors of
PESTEL analysis in the context of China are mentioned below:
Political factor: It is one of the factors that consists of different rules and regulations of
government and its interferences in business. The government of China is interfering in
businesses carrying out their operation in their country which creates an impact on business
activities. The government of China also made changes in different policies over the night which
create a threat for both international and domestic businesses. It does not only create a threat to
business but also to their long-term planning (Chandra and Sharma, 2018). New business in UHT
milk can expand their operation in China but they need to face the instability of rules and
regulations of the Chinese government. It is also important for them to ensure that their product
does not create political conflict against a communist party of China as it results in a ban of
business in that country. In order to overcome this problem, business needs to adopt all the
regulation imposed by the Chinese government in their organisation which allows them to ensure
the long-term survival of a company in China. Offering products in China for UHT milk does not
only face threats as it also creates the opportunity for them. The Chinese government to increase
development in that country welcomes international business in their country and also gives
freedom which will attract foreign business to operate in China.
Economic Factor: It is an important factor that is linked with the cost of a company and consists
of components like GDP rate, inflation rate, interest rate and other things. In terms of economic
performance, China is performing well which create opportunity for business that wants to
expand into China. It will create an opportunity for new business of UHT milk as good economic
conditions will result in an increase in purchasing power of people which allow them sale their
products to Chinese people (Direction, 2018). The Labour rate in China is also very low that also
creates an opportunity for the business of UHT milk as it allows them for purpose of reducing
the cost of the firm and maximise profit.
Social Factor: It consists of factors that consist impact culture, values, and social norms in
business. People of China are connected with their culture to the high context which can be
reflected in their social trends. China is the most populated country which can be affected by
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cultural needs. These factors can create a threat for a business of UHT milk as any mistake of the
company can hurt the social values of people. For this, the business of UHT milk needs to
consider the social values of Chinese people while operating and marketing their products and
service. The literacy rate in China is high as most of the people in this country are using the
internet and also smartphones. It provides the opportunity for new business for UHT milk as they
can use digital technologies for purpose of marketing and attracting their target customers.
Technological Factor: It is one of the factors which is linked with advantage and up-gradation
of technology and also provides a competitive advantage to a business. China is one of the
developed countries and most of the people of this country are using the internet. It allows
business managers of new businesses to gain a competitive advantage by selling their products
on different e-commerce websites (Elsharkasi, 2022). Technological advancement in China also
creates a threat for business as the government of this country will control data of different
countries which does not allow them to maintain proper security and privacy of business. For
this, the company needs to use data and technology with care as their data will be monitored by
the Chinese government.
Legal Factor: Legal factors are those factors that include different types of laws and legislation
of that country in context to intellectual property rights, tax law as well as labour law. China is
one of a country that is focusing on developing new regulations for the e-commerce sector as the
growth of this sector is increasing day by day. It creates a problem for the business that wants to
sell its products online. To overcome of this problem, a business of UHT milk needs to follow all
regulations related to e-commerce business which helps them to prevent legal problems. Legal
factors also create opportunities for new business in UHT milk as regulation of import tax is
expected to be reduced in China.
Environmental Factor: It is one of the factors which can be influenced by the corporate social
responsibility of business, the environmental condition of the country, sustainable practices in
business and others. China is one of the country in which different business are carrying out their
operation and due to this, it is generating pollution (Matušínská and Stoklasa, 2019). It is
important for new businesses in UHT milk to adopt different types of environmental regulations
as it will result in a positive image of a company in minds of the consumer. It allows the firm to
increase its sales in China and also to get success. These factors also create a threat for
businesses as the adoption of environmental regulations results in increased costs. For this,
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business needs to use new ways to ensure environmental safety that helps them to follow
environmental regulation without incurring many costs.
2. Critical assessment of three modes of market entry that can be suitable for a client along with
the recommendation for the most suitable option with justification
There are different ways in which a company can expand its operation to international business.
Expansion of business to the international market creates different types of opportunities for the
firm as with this, a firm can increase its marketing share, numbers of target customers, market
reach, the profitability of firm and others. These modes of expansion of business include
licensing, franchising, merger and acquisition and others. Explanation of these methods in
context to new business for their product UHT milk is mentioned below:
Licensing: It is a business arrangement between two companies in which one company offers
permission to another country for purpose of manufacturing their products in exchange of
specific payment. It can also be defined as approving permission through the licensor to the
licensee to use intellectual property rights like technology, patents, brand name, and trademark
for specific conditions (Mogaji, Maringe and Hinson, 2020). The use of this method for purpose
of expansion of new business of UHT milk provides them various advantages as it does not incur
costs over them in the context of promoting, producing, selling and packaging of products and
services. This agreement between two parties is established for a specific period of time which
reduces risk for business. Adoption of this method also results in loss of control over the
business as all major functions like promotion, packaging and other things can be done by other
businesses.
Franchising: Franchising can be considered as an agreement where the franchisor provides
authority and rights to the franchisee. It is a marketing strategy adopted for purpose of business
expansion. It is a contractual agreement that takes among two parties known as franchisee and
franchisor. A franchisor provides franchisees for purpose of selling different services, goods and
products to use to understand their brand name. Adoption of this method by a new business for
their products UHT milk provides them an advantage as there will be no additional cost incurred
for purpose of expansion (Ndofirepi, Farinloye and Mogaji, 2020). It will also help businesses to
reach to a number of customers. It also has some disadvantages for businesses as it does not
provide direct control to business over sales of products and also any mistake of the franchisee
can harm the goodwill of franchisors.
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Merger and acquisition: It is one of the methods for purpose of expansion of business
operations in other countries. It is a transaction between two companies that combine their
business in some form and is used for different legal meanings. In a merger, two companies of
the same size can combine in order to form a new entity whereas in an acquisition larger
company acquires small companies by absorbing their business. It is of a good method for
purpose of expansion of business as it provides benefits to new business as it improves
economies of scale of business. It also results in lower labor costs and increased marketing share
(Rashidi-Sabet and Madhavaram, 2021). This methods also create a disadvantage for the
business of UHT milk as it increases legal cost and also results in lost opportunities.
On basis of the above discussion, it can be recommended to new business of UHT milk to adopt
the franchising method for purpose of expansion. It allows them to reduce risk present in the
market and also provides them regular income over profit earner by the franchisee. On basis of
the use of this method, the business can increase brand awareness in the international
marketplace and also can get growth in the marketplace. It also reduces the requirement of
supervising the number of an employee as this responsibility is divided among different
franchisees. Adoption of this method by a new business for their products UHT milk provides
them benefits as there will be no additional cost incurred for purpose of expansion. It will also
help businesses to reach to a number of customers. Adoption of this method in the business of
UHT milk helps them to diversify the risk of business and also provides them continuous
earnings. Opening of the same franchising in China allows dealers of China to operate the
business in the same manner as in UK. There are different business who has used this method for
purpose of expansion of their business like KFC and Mcdonald's.
3. Application of market segmentation and targeting to critically evaluate the potential target
market of the client
STP analysis can be described as a tool that is used by the business for purpose of identifying
their target market. It is a business that identifies the segmentation, targeting and positioning of
the business and allows them to communicate with customers according to that. It is a model
which focuses on breaking customers into smaller groups and allowing them to develop different
strategies in the market to reach to its target market. An explanation of different components of
this model in the context of new business in UHT milk is mentioned below:
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Segmentation: It is one of the first steps of this model in which businesses divide the total
market into different small segments based on specific traits or other criteria. There are different
types of segmentation including geographic segmentation, behavioral segmentation,
demographic segmentation and psychographic segmentation (Richelieu and Webb, 2021). New
businesses of UHT milk can use geographic segmentation and demographic segmentation for
purpose of their business. Businesses of UHT milk can target customers according to their
income as they will provide three categories of milk that can be bought by customers as per their
requirements.
Targeting: It is another stage in which segments created by a business are determined in order to
select the most profitable segment. In order to select a segment, a business needs to consider
different factors like profitability, size and reachability. It allows new businesses for their
products of UHT milk to analyze whether the segment selected by them is of enough size and
profitable for their business.
Positioning: It is a process in which the products and services of a business can set a unique
image in minds of their target market in order to overcome competition. There are different types
of business in China and in order to attract consumers to business, managers need to set different
images in minds of customers (Schiavone and Simoni, 2019). There are different types of
positions that allow the firm to gain a competitive advantage like symbolic, functional and
experimental positions. Among these, the new business of UHT milk develops a functional
position for their business.
4. Application of porters generic strategy and explanation of how a client can gain competitive
advantage by using these generic strategies in the recommended market
Porter's generic strategy: It is one of the models which is used by the firm in order to identify
the right strategy for their business. This model was given by Michel porter who has introduced
different strategies to be adopted by the firm in order to overcome competition present in the
marketplace. These strategy includes cost leadership strategy, differentiation and also focus
(Vinoma, 2021). Adoption of these strategies in the context of new business for their products of
UHT mil provides them a competitive advantage in the market. Explanations of these strategies
in context to new business are mentioned below:
Cost leadership: It is one strategy in which the focus of the firm is to be low-cost in their
industry. It provides a cost advantage to the firm which can be dependent on the structure the of
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industry in which the firm is operating. On basis of it, businesses can also get a competitive
advantage in the marketplace by adopting economic scale, access to preferential raw materials,
new technology and other factors (Sinha, 2018). On basis of becoming a low-cost producer, a
firm can take cost advantage in business.
Differentiation: It is another strategy in which the focus of the firm is to be on becoming unique
in its industry and also adopting the dimension which is required by customers. In this strategy,
the focus of the firm is to adopt attributes which is required by buyers and also help them to be
unique in order to meet the needs of customers. On basis of this uniqueness, the firm can take a
competitive advantage in the marketplace and can also its products at premium prices. In order to
adopt differentiation in business, a firm needs to invest highly in research and development
activities.
Focus strategy: It is another strategy in which a firm is targeting a niche market and focuses on
reducing competition in the industry. In this strategy, the firm selects one of the segments in the
industry and targets its strategy to service specially to people of those segments. In this strategy,
the focus of the firm is on seeking out cost advantage the in target segment and also over
differentiation (Thrassou, Vrontis, and Bresciani, 2018). On basis of the adoption of this strategy,
the firm can overcome of competition present in the marketing environment of China and also
get success and growth for the business of selling UHT milk.
On basis of above mentioned discussion, it can be recommended to new businesses of UHT milk
adopt cost leadership in the market in China. It allows them to target numbers of customers in
China and also helps them to get a competitive advantage. It is one strategy on basis of which the
business of selling UHT milk can develop a competitive position in the marketplace. It allows
them to reduce the cost of products and also helps them to sell their products at lower prices in
comparison to competitors. As a new product, it helps them to attract numbers of customers and
on basis of quality, this business can develop its strong position in the market (Varadarajan,
2020). It allows them to compete with already established companies and helps them to get
success in the market of China. In this country, the demand for UHT milk is also high and
providing these products allows them to take advantage of this demand and also to get
economies of scale as a firm can produce products at a large scale. Adoption of Cost leadership
provides a competitive advantage to the business of UHT milk. Expansion of business in China
allows the business to take advantage of a lower rate of Labour and also to use automated
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machines which will assist the firm to reduce the cost of the firm. This business with expansion
to the international market can also expand to another country which will increase the demand
for their products and service. It assists businesses for purpose of getting advantage of economies
of scale.
CONCLUSION
From above mentioned project report, it can be concluded that strategic marketing is one of the
important tools used in business for purpose of gaining a competitive advantage in the
marketplace. It is a term used in business for different purposes including expansion of business
in the international marketplace. There are different methods used by businesses for purpose of
expansion in the international marketplace. These methods can be included merger and
acquisition, licensing and franchising. Expansion of business in the international market provides
different types of opportunities and threats in the marketplace. To identify these factors,
businesses can conduct different macro environment analyses like PESTEL analysis and others.
The business also needs to identify the right segment for purpose of getting business success. On
basis of it, managers of the company can develop the right marketing strategy that allows them to
expand business in the marketplace. To gain a competitive advantage business needs to
implement Porter generic strategies.
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REFERENCES
Books and Journals
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Journal of Marketing and Logistics.
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medicinal and aromatic plants businesses in the Indian Himalayan region. Small-Scale
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Direction, S., 2018. Raising the effectiveness of strategic marketing: Why firms must consider
the operating environment.
Elsharkasi, F., 2022. Strategic Marketing Management (A Book Summary).
Matušínská, K. and Stoklasa, M., 2019. The state of strategic marketing application in Czech
small and medium-sized enterprises. Scientific Annals of Economics and
Business, 66(2), pp.193-212.
Mogaji, E., Maringe, F. and Hinson, R.E., 2020. Introduction: Higher education strategic
marketing and brand communications in Africa. In Strategic Marketing of Higher
Education in Africa (pp. 1-8). Routledge.
Ndofirepi, E., Farinloye, T. and Mogaji, E., 2020. Marketing mix in a heterogenous higher
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Rashidi-Sabet, S. and Madhavaram, S., 2021. A Strategic Marketing Framework for Emerging
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Richelieu, A. and Webb, A., 2021. Strategic sport marketing in the society of the
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Schiavone, F. and Simoni, M., 2019. Strategic marketing approaches for the diffusion of
innovation in highly regulated industrial markets: the value of market access. Journal of
Business & Industrial Marketing.
Sinha, B., 2018. Strategic Marketing Management: Why to study?. NOLEGEIN-Journal of
Leadership & Strategic Management, pp.30-34.
Thrassou, A., Vrontis, D. and Bresciani, S., 2018. The agile innovation pendulum: A strategic
marketing multicultural model for family businesses. International Studies of
Management & Organization, 48(1), pp.105-120.
Varadarajan, R., 2020. Foundations of Strategic Marketing. In The Routledge Companion to
Strategic Marketing (pp. 3-19). Routledge.
Vinoma, I., 2021. A COMPREHENSIVE LITERATURE REVIEW ON STRATEGIC
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3960320.
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