Aptamil Toddler: Global Marketing Strategy for China Market Expansion

This report examines the global marketing strategies Aptamil Toddler can employ to successfully introduce its Aptamil with Pronutra baby milk in the Chinese market. It begins with an executive summary highlighting the use of foreign direct investment and strategic alliances for market expansion, emphasizing differentiation, joint ventures, and social media marketing. The report details market research, including micro and macro environmental analyses, competitor analysis, and target audience identification. It explores market selection processes, alternative market entry strategies, and potential positioning tactics. The report also includes recommendations for market entry mode, target market selection, positioning, and generic strategies, with a focus on the Chinese market's potential and the importance of adapting to local standards and consumer preferences. It analyzes the competitive landscape, particularly the presence of brands like Nestle and Danone, and discusses the significance of cultural factors, affordability, and food safety standards. The report also addresses the five stages of overseas market selection, including problem identification, research design, data collection, analysis, and dissemination of results. It highlights the reasons for choosing China, outlines specific objectives, and discusses alternative market entry strategies based on geographic, demographic, psychographic, and behavioral segmentation. Finally, the report provides a detailed SMART goal for increasing market share in China, emphasizing the importance of innovation in packaging and pricing strategies.

Running head: MARKETING
Global marketing of Aptamil Toddler with Pronutra
Name of the student:
Name of the university:
Author note:

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Executive summary
Foreign direct investment withy strategic alliance would be an effective means for Aptamil
Toddler to expand into the markets of China. For this, differentiation strategy needs to be
adopted for processing the tetra packs of Aptamil with Pronutra. In this context, joint
ventures with the institutes and research and development team can be beneficial for
expanding the supply chain network. Social media marketing can be one of the other ways for
gaining an insight into the specific needs, demands and requirements of the clients and the
customers. Exporting the newly launched baby milk with Pronutra in tetra packs with
innovative packaging would be effective for investment in the foreign markets. Practicing
niche marketing can be productive in terms of achieving large scale customer satisfaction,
trust, loyalty and dependence.

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Table of contents
Introduction................................................................................................................................3
Overview of the situation...........................................................................................................3
Screening of the market selection..............................................................................................5
Five stages of overseas market selection process..................................................................5
Reasons for choosing the country..........................................................................................7
Objectives...............................................................................................................................8
Alternative market entry strategies............................................................................................9
Market selection process......................................................................................................10
Possible positioning for the target market............................................................................10
Alternative generic strategies...............................................................................................11
Recommendations....................................................................................................................12
Market entry mode...............................................................................................................12
Target market.......................................................................................................................12
Positioning strategy..............................................................................................................12
Generic strategy...................................................................................................................13
References................................................................................................................................14
Appendices...............................................................................................................................16
Appendix 1...........................................................................................................................16

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Introduction
This report is aimed at discussing the global expansion strategies, which Aptamil
Toddler can adopt for getting better placement of the Aptamil with Pronutra in the markets of
China. Market research forms an essential activity in this case for assessing the suitable
market entry strategies. External market research is an advantage in terms of evaluating the
internal environment and its feasibility towards attaining expansion (Fletcher & Crawford,
2013). In this context, micro and macro environmental analysis is crucial. Mention can also
be made of the competitor analysis to assess the position of the company in the competitive
ambience of the market. One of the important aspects in this report would be the
identification of the potential target audience and marketing mix strategies for estimating the
position in the foreign market.
Overview of the situation
Milk production constitutes 70-75% of the market in the threshold of China. Foreign
brands need to be praised for exercising strategic marketing, which has increased the national
sales. Mention can be made of the One Child Policy, which have witnessed unprecedented
growth rate of 11%. China market is a prospective one in terms of selling baby milk to the
clients and the customers (Dong & Li, 2016). This aspect proves beneficial for Aptamil
Toddler in terms of expanding the baby milk product into the Chinese market. Profit margin
would be high, as the population constitutes more than 83 million infants. Being the second
largest producer of baby foods, expansion of the Aptamil with Pronutra would add to the
Chinese economy. There is a need for complying with the standards and protocols of
inspection, quarantine and supervision of the import and export activities.
Strong and flexible research and development team of Aptamil Toddler is assistance
in terms of adding innovation into the products of early life nutrition. In this context, the

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focus is on the children deprived of mother’s milk. Joint ventures with the institutions,
healthcare settings and hospitals reflect the divisional organizational structure. As a matter of
specification, the plans include distribution of the baby milk in tetra packs, the denomination
of which is estimated to be 51. Knight and Liesch, (2016) opines that innovative packaging
designs would be used for luring more customers. The assessment of the product would be
based on utility value, indicating the shelf life and durability.
The price of the baby milk product would be low for competing with the
contemporary brands. High quality milk in low price would be the criteria for attracting the
clients and the customers. The price of the milk in tetra pack would be decided on the basis of
the living standards of the people in China. Supermarkets would be an agent for increasing
the sales revenue, as the customers come to buy the groceries. Plans also indicate the joint
ventures with the retail chains for expanding the scope and arena of the supply chain network.
According to Hitt, Li and Xu, (2016), adopting social media marketing is one of the ways in
which the trafficking of the audience can be increased towards the brand image. Typical
evidence of this lies in the platforms like WeChat, Sina, Weibo, Douban, containing the
information about the features of the baby milk product and its benefits. Along with this,
magazines, newspapers and hoardings would enhance the awareness of the customers about
the Aptamil with Pronutra.
Aptamil Toddler can receive intense competition from the brands like Nestle, Danone,
Wahaha and Evergrande, which have a flexible foundation in the Chinese market. Nutricia
from Danone is a market leader with 10% market share followed by 9%, which is achieved
by Nestle. Customer oriented business practices have assisted these brands in achieving
accolades and glory. On the contrary, Lasserre, (2017) is of the view that use of the organic
ingredients in the preparation of the baby milk and sustainability are the unique selling
proposition of Aptamil Toddler, enabling in the achievement of sustainable development.

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Stability of the national and local government would act assistance for the
organization to get a better placement in the Chinese market. Affordability of the customers
is an important criteria for planning the expansion of the baby milk product. Cultural beliefs,
values and attitudes towards the baby milk and its production is important for enhancing the
corporate social responsibility. Food Safety Standards are essential in terms of averting the
cases of complaints due to adulterations (Gao et al., 2016) Sustainable packaging can be
assistance in terms of contributing to the protection of the ecological biodiversity.
The new startups find it hard to fulfil the standards of operation in the food and
beverage industry. This aspect is advantageous for Aptamil Toddler to attain flexibility in
terms of enhancing the brand image. Disproportionate ratio of suppliers to buyers depicts the
low power of the suppliers. Therefore, manufacturing baby milk according to the customers’
needs, demands and requirements would be easier. Monopolistic nature of the market enables
the organization to influence the purchasing power of the clients and the customers. The
substitute products like cerelacs and others are quite expensive but in adequate quantities
(Shaw, 2015). Therefore, the switching costs are low.

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Screening of the market selection
Five stages of overseas market selection process
Fig: Five steps of market selection
(Source: Tsang & Yamanoi, 2016 )
For expanding to the foreign markets, the following five steps are crucial for
organisations like Aptamil Toddler. The primary stage is problem identification, which
comprises of detecting the decision makers, objective, possible courses of action,
consequences and actions. The second step is that of research design, where frameworks are
to be developed for gaining an insight into the issues, which needs to be researched. In this
step, the main frameworks are that of construct equivalence, measurement and graduation
equivalence, translation equivalence, scale and sampling equivalence (Mudambi & Puck,
2016). The third step involves collection of the necessary data through primary and secondary
methods. Primary data includes survey and interviews while secondary methods incorporate
data from journal articles, websites, case studies and others. In the process of collecting
secondary data, awareness need to be exposed towards the issues like inadequate data,
articles belonging to the exclusion criteria, inaccurate data, data not reliable and others. In

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comparison to this, biases and non-responsiveness are the main issues in the primary means
of data collection.
The fourth stage is that of analysing the collected data, which helps in deducing
relevant issues. The final step is to disseminate the results, which enhances the awareness
about the alternatives, which could have been applied for achieving the desired outcomes
(Rugman & Verbeke, 2017).
Problem identification Low market share for new baby milk
Research design Explorative
Collection of data Government websites, articles and case studies
on the sales growth of milk
Analysis and interpretation Statistical data
Preparation of the final report Finding suitable strategies of market expansion
Exploration would be the effective means for Aptamil Toddler in terms of selecting
the country to expand. In this context, statistical data would act assistance in analysing the
effectiveness of the selected market in terms of enhancing the sales revenue and the profit
margin. Referring to the websites and articles would also be beneficial in terms of gaining
authenticity towards the propositions. Analysis of the collected data would help the
organization to prepare final report, stating the expansion strategies (Mohr & Batsakis, 2018).
Reasons for choosing the country
Prior to the selection of the market, interrogative parameter needs to be attached
towards which market to enter and the ways to enter. The basis of the decision is on the
strategic objectives, resources, competencies and the competitors. In this context, mention
can also be made of the various approaches like incremental, simultaneous, and concentrated
and diversified which helps in attaining an efficient and effective entry into the foreign

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markets. Incremental approach consists of fewer risks and provides enough opportunities for
learning new concepts. On the other hand, simultaneous entries have high operating risks but
is resource intensive (Shaw, 2015).
Concentrated approach indicates limitation in number of markets and reduction in
costs and operational risks. On the contrary, diversified approach spreads the exposure to
risks but expands the market knowledge in terms of the current trends. Based on the macro
and micro environment analysis of China, it can be said that there are higher prospects for
brands like Aptamil Toddler in achieving flexible growth and development. Modern
infrastructure, moderate risks, higher consumption are the factors, which makes China a
recommended option for the brand in terms of enhancing the market share in baby milk
product (Dong & Li, 2016).
Objectives
The mission statement of Aptamil organization relates to high quality nutrition for
ensuring the wellbeing of the infants. Based on this, the objective would be to increase the
market share in the production of new baby milk in tetra packs in the denominations of 51.
Justification
Specific Tetra packs of baby milk would act assistance in
preserving the nutrient value
Measurable Positive response by the clients and the
customers would reflect the measurability of the
objective
Achievable Increase in the sales revenue of new baby milk

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would make the objective achievable
Realistic Positive word of mouth advertising of the
Aptamil with Pronutra makes the objective
realistic
Time 1 year
Table: SMART goal for increasing the market share in the China by Aptamil Toddler
(Source: created by the author)
Alternative market entry strategies
Like other countries, China follows the parameters of demographic, geographic,
behavioural and psychographic for identifying the target segmentation.
 Geographic- the cities are divided into tier 1, tier 2 and tier 3, irrespective of coastal,
largely developed or any other area (Oh, Kim & Shin, 2019).
 Demographic- gender, age, income are the main factors for identifying the main
targets. The main focus is on income level of the clients and the customers.
 Psychographic and behavioural- Passionate towards the branded products with
specifications.
With the changing business requirements, the brand positioning strategies in China have
simultaneously changed. Medium quality brands are designated as premium and exclusive in
terms of offering quality products and services. Typical example of this lies in the brands like
Apple, BMW, Holiday INN and others. Low bargaining power of the buyers is one of the
aspects, which is assistance for the brands to establish their position in the competitive
ambience of the market (Xu, Zeng & Chen, 2018).
Differentiation and positioning strategy is crucial for achieving the expansion in an
efficient and effective manner. The steps in this aspect are identifying the set of

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differentiating competitive advantages, choosing the right competitive advantage, selecting
the overall positioning strategy and detecting positioning statement. In this, marketing mix
strategy proves to be effective in terms of assessing the effectiveness, appropriateness and
feasibility of the Aptamil with Pronutra in the market of China.
Market selection process
Differentiation would be one of the efficient means for Aptamil Toddler in terms of
entering into the markets of China. In this, the factors to be considered are costs of
adaptation, raw materials, convergence of tastes, technologies and others. Variations in the
requirements of the clients and the customers are also to be considered for adapting to the
market culture of China (Gao, Ren, Zhang & Sun, 2016). Affordability would be one of the
main criterions for detecting the target audience. Governmental interventions need to be
followed for achieving infrastructural development in terms of adding innovation into the
production process. Joint ventures in this context are apt for getting better placement than the
contemporary brands. The target audience is that of the children, who are deprived of the
mother’s milk. In this context, awareness is to be exposed towards the regulatory standards
related to the milk production in China like Food Safety Standards (Dong & Li, 2016).
Possible positioning for the target market
Baby milk product positioning is done on the basis of affordability and the amount of
calcium. The brands designated in this context are that of Vinamilk, Love in Farm, True
Milk, Table Cove and others, which are considered to be established brands in China.
Premium service is one of the other criterion for the detecting the positioning of the baby
milk product. Meadow Fresh is one of the other brands in this position mapping (refer to
appendix 1).

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Alternative generic strategies
Fig: Generic strategies of Micheal Porter
(Source: Pieterse, 2019)
All of the brands apply generic strategies for achieving higher competitive advantage
and sustainable development. This is also true for the brand Aptamil Toddler. As a matter of
specific, the organizations are provided with the options like cost leadership, differentiation,
focus and cost focus. In the current context, differentiation is the most applicable strategy.
This is because innovative processes for the production of Aptamil with Pronutra would lure
the customers in the threshold of China. Adopting new technologies and machines would be
effective in terms of developing the infrastructure. Ambler, Witzel and Xi, (2016) proposed
that this adoption is bound to boost the sales revenue and profit margin of the organization in
the Chinese market.
On the contrary, if the cost leadership strategy is adopted, the organization, Aptamil
Toddler needs to invest in modern technologies, which can adversely affect the operational

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costs. Focus strategy can be beneficial in terms of acquiring higher profits in the niche
marketing. As per the arguments of Hirst, Thompson and Bromley, (2015), this strategy
would be productive in terms of ensuring proper growth and development of the children,
who are deprived of the mother’s milk.
Recommendations
Market entry mode
Export based entry into the Chinese market would be beneficial for Aptamil Toddler
to achieve better placement. Within this, mention can be made of foreign direct investment,
which seems to be fruitful for increasing the market share. Strategic alliances would be an
added advantage for enhancing the supply chain network. Along with this, Crane et al.,
(2019) proposes that strategic alliances would cause the advent of technological revolution
with the collaboration of the other industries.
Target market
In the current context, the target market is the children, therefore, innovative policies
and programs are needed. For example, educational scholarships, tie up with the crèche,
lectures and seminars for the parents can be an effective means for expanding the customer
base. Noe et al., (2017) opines that adopting social media marketing would be fruitful in
terms of increasing the trafficking of the audience towards the brand image.
Positioning strategy
The positioning strategy of Aptamil Toddler would be based on the following points:
 Product characteristics- baby milk in tetra packs of denomination 51 and innovative
packaging
 Price- 5.40 AUS$
 Use/Application-
o Refrigeration upon opening the seal

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o Mixing the power with water for safe consumption
 Labels on the packs informing the parents of the nutritional value
 Product class- breakfast
 Symbols- teddy bears for attracting the children
 Competitors- Nestle, Danone, who focus on the food and beverages as a whole
Generic strategy
Differentiation would be an effective strategy for standing from the contemporary
brands. Adopting new machines for the production of baby milk would be effective in
standardizing the processes. In this process, Bowen et al., (2015) argues that awareness and
consciousness is needed towards the traditional values, which would preserve the brand
loyalty. Food Safety Standards is to be complied for ensuring the wellbeing of the customers,
especially the children. Using eco-friendly measures like that of solid waste management
would help Aptamil Toddler in preserving the ecological biodiversity. Offshore marketing
would be one of the means for surveying the areas of China to which the Tetra pack of
Aptamil with Pronutra can be exported (Hitt, Ireland & Hoskisson, 2016).

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References
Ambler, T., Witzel, M., & Xi, C. (2016). Doing business in China. Routledge.
Bowen, H. P., Baker, H. K., & Powell, G. E. (2015). Globalization and diversification
strategy: A managerial perspective. Scandinavian Journal of Management, 31(1), 25-
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Crane, A., Matten, D., Glozer, S., & Spence, L. (2019). Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press.
Dong, X., & Li, Z. (2016). Food safety issues in China: a case study of the dairy sector.
Journal of the Science of Food and Agriculture, 96(1), 346-352.
Fletcher, R., & Crawford, H. (2013). International marketing: an Asia-Pacific perspective.
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Gao, H., Ren, M., Zhang, J., & Sun, R. (2016). Network gatekeeping in SME exporters’
market entry in China. International Marketing Review, 33(2), 276-297.
Hirst, P., Thompson, G., & Bromley, S. (2015). Globalization in question. John Wiley &
Sons.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
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Knight, G. A., & Liesch, P. W. (2016). Internationalization: From incremental to born global.
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Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.

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Mohr, A., & Batsakis, G. (2018). Firm resources, cultural distance and simultaneous
international expansion in the retail sector. International Business Review, 27(1), 113-
124.
Mudambi, R., & Puck, J. (2016). A global value chain analysis of the ‘regional
strategy’perspective. Journal of Management Studies, 53(6), 1076-1093.
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management: Gaining a competitive advantage. New York, NY: McGraw-Hill
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Oh, C. H., Kim, M., & Shin, J. (2019). Paths and geographic scope of international expansion
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1.

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Appendices
Appendix 1
Fig: Position mapping for milk brands in China
(Source: Dong & Li, 2016)