Scoping the International Marketplace for Yan Chim Kee Confectionery

This report provides a comprehensive analysis of international marketing strategies, focusing on the case of Yan Chim Kee, a Hong Kong-based confectionery company. The report begins with an introduction to international marketing, emphasizing the differences between international and local markets and the role of marketing in business strategies. It then examines the scope and key concepts of international marketing, including opportunities for market expansion and economies of scale. The rationale for international marketing is discussed, highlighting financial and operational benefits. The report explores various routes to market, such as standardization and differentiation, and outlines a process for evaluating and selecting international markets. It defines and evaluates different market entry strategies, including licensing, franchising, exporting, alliances, joint ventures, and outsourcing, with a focus on their advantages and disadvantages for Yan Chim Kee. Finally, the report offers conclusions and recommendations based on the analysis. The report provides a clear understanding of the challenges and opportunities involved in international marketing for a confectionery company.

International Marketing

Yam Chin Kee
Title: Scoping the International Market Place
Table of Contents
Introduction...........................................................................................................................................2
Brief of Company...................................................................................................................................2
International Marketing and Local Marketing.......................................................................................2
How marketing contributes to business strategies in an international context....................................3
Scope and Key concepts of International Marketing.........................................................................3
Rationale for an organization to market internationally....................................................................3
Routes to market a product and the route Yan Chim Kee can adopt................................................4
Entry to a selection of international markets and the key success factors............................................4
Criteria and selection process to evaluate which international market to enter...............................4
Define Market entry strategies with advantages and disadvantages................................................5
Conclusions and recommendations.......................................................................................................6
References........................................................................................................................................6

Introduction
International Marketing is the exploration of the markets in different countries other than the home
country for selling of products or services (Buckley, 2002). Various marketing principles are applied in
order to understand the market and make it an opportunity for higher market share for an
international organization.
However while exploring international markets, it is important to understand and analyse the
country risks and exchange rate risks is important for any multinational organization in order to
understand its impact on the performance of the company. Some of the factors may be positive and
help the company perform better, but other factors might be negative which might hinder the
competitiveness of the organization. For example a company which is exploring markets in another
country might get access to more number of customers but have to deal with price fluctuations in
the foreign country. Thus in such cases, strategic actions to deal with the situation would minimize
the impact and help the company to operate in the most efficient way.
Also as the world economy is expanding, we see more number of companies, expanding its
operations to other parts of the world for various reasons. Some can be for production while other
can be for distribution of products (Chen et al., 2017). Also the countries around the world are
supporting this activity through free trade programs and entering into trade treaties. Such boost
given by the countries and the motivational factors of bigger markets should be exploited by any
profit making organizations.
Brief of Company
The company which has been chosen here for analysis is one of the established organizations in
Hong Kong. It is called Yan Chim Kee and was established in the year 1915. The company deals in
products of confectionaries which include candies of different flavour. One of the famous products
of the company is coconut crunchy candy. This product is very famous among the children and
adults due to its flavour. This is also one of the traditional candies which is liked by the consumers of
Hong Kong. It is available in various colours and flavours according to local needs.
The company has maintained the quality of its products as it does not contain any artificial flavours
and colours (Forlani and Parthasarathy, 2003). These candies are made with natural ingredients like
coconut milk, liquid glucose and sugar.
International Marketing and Local Marketing
International market is different from the local market for a company like Yan Chim Kee Hong Kong
Ltd.
 Difference in external business environment- The markets in other countries are different
from the domestic country as it is affected by the external business environment of the
specific country. Thus factors like environmental, political, economic, technological, legal
contribute to the difference.
 Difference in tastes and preferences of customers- The buying behaviour of the consumers
in two different countries can have many variations based on the cultural, sociological,

psychological aspects (Gunay, 2008). This can lead to difference in tastes and preferences of
the consumers.
 Difference in risks faced by the company- Another important difference between the local
and international market is that there are certain risks like exchange rate risk and country
risk which is not present in local market.
How marketing contributes to business strategies in an
international context
Marketing plays a vital role in execution of business strategies in an international context. For a
company like Yam Chim Kee, the objectives of expansion in international market can be met through
application of various marketing strategies. The marketing strategies adopted by a company include
a set of plan based on marketing mix which will help attract customers towards a products. Thus
various elements of marketing mix like, price, place, people and promotion plays a vital role in
establishment of product in a new market. These elements of marketing mix determine how
customers would view and value the product. Through appropriate mix of important elements of the
market, the company can achieve various objective of Market penetration or market expansion.
Scope and Key concepts of International Marketing
The scope and the important aspects of international marketing which Yan Chim Kee can experience
are as follows:
 Opportunities for larger market
 Possibility of economies of scale (Whitwell, 2001)
 Improvement in the competitiveness
Rationale for an organization to market internationally
For an organization like Yan Chim Kee, the company should look forward to market its products
internationally for the following reasons:
 Improvement in financial performance- One of the biggest motive for any organization to
market its product internationally is that it helps in improving the financial performance of
the company (Maican and Orth, 2018). As the company gain access to new international
markets to sell its products and services, there is a direct positive impact on the revenue and
profits. This improves the overall worth of the company in the market and make it possible
to take further strategic investments.
 Improvement in operational performance- Another important motivation for organizations
to market its product internationally is that this process helps to improve the overall
efficiency of the business. As the number of goods and services produced expand, the
company can experience economies of scale and a considerable reduction in its cost of
production (Mayrhofer, 2004).

Routes to market a product and the route Yan Chim Kee can adopt
The different routes to international markets which a company can adopt are as follows:
Standardization- The company can follow the route of standardization through which it can use the
same marketing mix to market its product in different parts of the world. One of the researcher
Levitt (1983) has indicated that the use of standardised approach to marketing is one of the best
way. He argues that in a globalised environment as the consumers needs are integrating, this
approach can be effective to meet the demand of the global economy.
Differentiation- The company can follow the route of differentiation through which the company can
use different marketing mix for different markets. Based on the variety of international markets,
product, pricing, promotion and distribution differs as a standard marketing mix cannot be applied
to all markets. Many researches have been conducted to understand whether the same marketing
mix can be applied in various markets, but most have come to the conclusion that this is not the
effective way (Houman Andersen, 2005). As these countries and regions differ in many aspects, the
same marketing mix may not produce the marketing results as expected.
Entry to a selection of international markets and the
key success factors
Criteria and selection process to evaluate which international
market to enter
There are various stages which a company should follow in order to evaluate the international
markets. The important stages are as follows:
Stage 1- Identification of the country. In this stage the company should identify all the possible
options in various countries where it can successfully market its products. This is the initial stage and
hence the list of options would be big.
Stage 2- Preliminary Screening- At the preliminary screening stage, the markets identified would be
further researched to find the characteristics whether it is suitable or not. This would involve
analysing the external business factors and consumer behaviour.
Stage 3- In-depth Screening- At this stage further research would be conducted to find whether the
country is suitable for the company goals and objective.
Stage 4- Final selection – In this stage, final selection is done for the country which the company
wants to explore. This selection is entirely based on the research conducted.
Stage 5- Direct Experience- In this stage the company goes for test marketing to learn through
experience and develop strategies for marketing its products. The product is launched in a small
region to find the reaction of the consumers.
These stages would finally help the company find the best option.

Define Market entry strategies with advantages and disadvantages
Market entry strategy is the different market entry strategies which Yam Chin Kee can use are as
follows:
 Licencing- Licencing is one of the market entry strategies which Yan Chim Kee can adopt. In
this arrangement a licence is granted by a party to another party as an authorization to use
the materials or products to be sold. Similarly Yan Chim Kee can create license agreement
with one of the local companies in other country to sell its products in the local market. The
biggest advantage of this method is that it helps to provide extra revenue and fame through
market of the products in other countries (Paliwoda, 2013). The biggest disadvantage of this is
that other company gets to use the intellectual property and confidential information of the
business which can lead to various risks.
 Franchising- Under this strategy of entry into new markets, Yan Chim Kee can enter into
various franchising contracts under which is license other parties in different countries to sell
its products (Teagarden, 2015). This is similar to licencing, however the franchisee need to pay
a fee for using the intellectual property, procedures and brand image of the parent
company. The advantage of this method is that the parent company gets access to the
international markets and increase in revenues. The biggest disadvantage of this method is
that there is risk of poor quality of products. As the franchisee company is using the brand
name of the franchiser, the image of the franchiser is at stake if poor quality of products are
being sold.
 Exporting- Under this method of entry, the candies and other confectionary products of Yan
Chim Kee would be exported to various retailers in the foreign country. These retailers
would then sell the products to the final consumers in the local market (Roh, 2017). The
biggest advantage of using this method for Yan Chim Kee is that it would get access to the
markets in other countries without taking much business risks. The biggest disadvantage of
this method for the company is that it is not able to take feedback from the customers and
make strategic changes in the marketing mix.
 Alliance- Under this method of entry in foreign market for Yan Chim Kee is assisted by an
agreement between two business entities which agree to share a part of the business
process. For example the company can form an alliance with a local marketing company in
the foreign country to sell and market its products. Similarly the alliance can be created for
investment purpose where the local company in foreign country agrees to bear a part of
business risks and return through investment. The advantage of this method for Yan Chim
Kee would be lower business risk as the other party in alliance would be sharing the risk. The
biggest disadvantage of this method is that the returns are shared between both the parties
entering into arrangement.
 Joint Venture- Under this method of entry, Yan Chim Kee create a partnership with a local
company in the foreign country with ownership rights shared by both companies. Thus the
risk, return and governance is shared which is one of the advantages of this method. The
biggest disadvantage of this method is that there can be discrepancies over the governance
and policies between the two parties.
 Outsourcing- In this method of entry, Yan Chim Kee can outsource a part of the internal
activity of the company to a foreign entity (Special issue on international marketing, strategic

orientations and business success, 2010). This foreign entity in the foreign market is suited to
handle certain aspects of the market and can perform at a cost lower than if done by Yan
Chim Kee. Thus this form of entry provide opportunities to increase the efficiency of work by
outsourcing it to experts. The disadvantage is that the outsourced activity is difficult to
integrate in the entire business process.
Conclusions and recommendations
Based on the above analysis of the important factors and difference in the international market from
that in the local market, we can suggest the following strategic actions for Yan Chim Kee:
 The company should initially explore the markets in nearby countries as the buying
behaviour of the consumers would be similar due to cultural influence (Stähler, 2006).
 The company should identify the form of entry into various markets based on its objectives
and risk taking capabilities.
 The company should make risk management plan to deal with risks in international market
like country risk and exchange rate risks (Stähler and Upmann, 2008).
 The company should determine the motivation to undertake international business activity
and include them in the goals and objectives of the company.
 The company should conduct proper evaluation of the country before selecting the country
for expansion.
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