International Marketing Plan: Expansion of Soft Drinks in China

This report provides an in-depth analysis of the international marketing plan for expanding "The best soft drinks" into the Chinese market. The report begins with an executive summary and an overview of the marketing environment, including a PEST analysis that examines political, economic, social, and technological factors impacting the expansion. A SWOT analysis then evaluates the company's internal strengths and weaknesses, alongside external opportunities and threats. The report details market segmentation, targeting health-conscious and young consumers, and proposes a market entry strategy, with a strong emphasis on wholly owned subsidiaries and franchising. Positioning the product as high-quality at lower prices is discussed. Finally, the report outlines marketing objectives, a comprehensive marketing strategy, covering segmentation, targeting, and the marketing mix. The conclusion summarizes key findings and recommendations. References are provided to support the analysis.

International Marketing
Research

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Executive Summary
In the competitive environment of today expanding in the new countries is possible only with
the help of effective marketing. This analyses the expansion of the “The best soft drinks” in
china. It is found that political and economic environment in China will support all kinds of
investments in the country. At the same time, technological and social environment has
changed considerably on which the firm will have to work upon. The internal environment of
the company is good just they will have to focus more on the technological aspects. Company
aims to segment youngsters and health conscious people for which they have positioned
themselves as company that supplies quality at lower prices. Company can use wholly owned
subsidiary as a strategy to expand in China. The product is of higher quality and the prices
they have set for it is one the lower side which is different from that of UK. They need to
promote products on the digital platforms.

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Contents
Introduction................................................................................................................................2
Marketing environment..............................................................................................................2
PEST analysis.........................................................................................................................2
SWOT analysis...........................................................................................................................3
Market segment..........................................................................................................................4
Market entry strategy.................................................................................................................5
Positioning..................................................................................................................................5
Marketing objectives..................................................................................................................5
Marketing strategy.....................................................................................................................6
Segmentation and targeting....................................................................................................6
The marketing mix.................................................................................................................7
Conclusion..................................................................................................................................7
REFERENCES...........................................................................................................................8
Introduction
Soft Drink market has become big and it has become one of the most profitable businesses in
the today’s time. There are many local and international firms emerging in many parts of the

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world. “The best soft drinks” is an international soft drinks company that has hired SME
which is expert in producing smoothies which is a fruit-and-yogurt-based beverage with high
quality flavours, nutritional content and a very different kind of packaging. They are targeting
people that are health conscious, up-market consumers and young. Till now “The best soft
drinks” markets these products in UK but now they aim to expand the business in China. This
report will access different aspects of the internal and external environment that will have
impact on this expansion and marketing plan.
Marketing environment
It is essential for “The best soft drinks” company to analyse both external factors that are
producing challenges for the business and the internal factors that will help in confronting
these challenges produced by external environment.
PEST analysis
For analysing the external environment, PEST analysis is one of the best tools that can be
used by the company to analyse the external environment.
Political: The political condition in China is highly stable and hence expansion plan will not
face much political challenges. There is an immense support by the Chinese government for
any kind of FDI (McDonald, 2018). This support is higher for the healthy lifestyle products.
At the same time there is political instability in some regions of Europe and the decision of
the UK government such as Brexit will have direct impact on the business of the company. In
such situation, it is essential for a company to find a market that is having stable political
environment. This is necessary for ensuring long term growth of the organisation. Improving
trade relations between China and UK will have a positive impact on this expansion.
Economic: The economic environment in China is highly positive as it is one of the fastest
developing economies in the world. The GDP of China is second biggest in the whole world
after USA. At the same time, per capita income of China is also high hence company can
easily achieve higher sales. Government is also supporting firms in terms of taxes and tariff
so that they do not face initial barriers in the expansion process (Lee, et al. 2016). With the
amount of investment done by China on its infrastructure, the growth of their economy is
going to be in multi-folds. This will make China as economy that can give higher benefits to
firms investing in it.

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Social: The society of China is changing as the people are moving towards western culture.
This country is known for its attachment with their own culture. This is also reflected in the
food habits but soft drinks market have also grown at much faster rate. This country has taken
out many people out of poverty hence there is a large market segment in china who can be
targeted. The decreasing unemployment is also a boost to purchasing power of the people.
People are also attracted towards the nutritional food that also provides the taste (Guo, Wei
Hao and Shang, 2011). This is an opportunity for the cited firm to expand in China. Chinese
society also has huge numbers of youth in its population which can act as a major segment
that can be targeted by the company.
Technology: China has been the leader in the technology use especially in terms of using
innovative technologies. Most of the industries in China have incorporated automation in the
major part of operations. Since these technologies are available at the lower cost hence the
company will not face problems in terms of investments. Only demerit in China is the fact
that they are using their own technological mediums rather than using global tools. For
example there is less use of Google and social media platforms like Facebook and others
rather they have their own tool which this company will have to adopt so as to increase their
reach in the market at much faster rate (Rajauria and Tiwari, 2017). It is essential that
company takes use of technological strategies that aims to improve the reach of the company
in the market.
SWOT analysis
In order to analyse the internal environment of the company, it is essential that company uses
appropriate tools for analysing it. The strengths and weaknesses of the company will help
them in confronting the challenges they are facing in the market.
Strengths
 This product is having higher nutritional value which is the major demand of the
people in today’s environment in china (Lam, et al. 2013).
 The packaging of the product is also unique which helps them in attracting customers.
 Company has earned a large amount of financial assets which it can utilise for doing
investments in China.

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 Larger support of the global soft drinks company which is having an effective supply
chain management will help in reaching to customers even in the rural regions of
China and hence maintain the demand and supply chain.
 The products of the company have superior value and high quality taste as products
are available in different flavours. This will help the firm in targeting larger numbers
of consumers in the market.
Weaknesses
 Company has been poor in utilisation of technology in the areas such as marketing
and production which can be dangerous in the technologically advanced markets like
China (Granato, et al. 2016).
 They do not have bigger brand name in the market which will not allow firms to
create a buzz when they will enter into the market.
 Company has not produced products in terms of quantity that they can expand in other
markets. The current production system is only capable of meeting the demands in the
UK market.
Opportunities
 “The best soft drinks” has the opportunity to grab the market that lies in the semi-
urban and rural areas of China along with urban areas as there are large amount of
people in these areas also that can be targeted (Rubini, Motta and Di Tommaso,
2013).
 Company has its opportunities in the digital market as today people are looking for
making the purchase through the digital mediums.
 Company also has opportunity to expand in the south-east Asia once they are able to
establish their market in China.
 This company also has scope in the increasing nutritional market in the China which
is big.
Threats
 Higher amount of competition in the Chinese market and it is estimated to increase in
the future.
 Degrading quality of farm products due to environmental changes are another major
threat that this company is facing.

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 There is huge cultural difference in UK and China and hence it will not be easier for
the firm to expand their market in Chinese market (Rajauria and Tiwari, 2018).
 Chinese people have huge attachments towards their own culture and hence they
prefer to drink fruit juices that are having cultural touch.
Market segment
Segmentation by this company is done on the basis of different variables and hence the
strategies should also be made by the company accordingly. As a part of segmentation
strategy company has targeted the people that are highly healthy conscious or are looking for
high quality fruit experience (Thorp, 2015). This kind of people are more in the youngster
hence they are also targeting this section of the market as their primary target segment. All
the strategies will be building around this segment only.
The Major competitors of the company in China include:
 Future cola: It is marketed by Hangzhou Wahaha Group.
 Huiyuan: It is sold under the name Juizee pop.
 Jianlibao: This Company specialises in selling of orange flavoured soft drink.
 Laoshan Cola: It is manufactured through waters from Mt. Laoshan situated in
Shandong province.
 Nongfu Spring Water: It is a spring water beverage.
 Smart: It will act as one of the biggest competitor of the cited firm as it is a brand of
Coca-Cola company that sells soft drinks of various fruit flavours like grape, coconut,
apple, watermelon, peach etc.
 Wang Lao Ji: It is a local company that is specialised in selling herbal drink.
Market entry strategy
It is understood as a strategy that is used by any company to enter into the market. The
strategy that will be on the basis of the resources they have and the type of business model
they want to achieve.
 Licensing: In this company can provide license to other company to sell their
products. Since they will have the understanding of the Chinese market hence they
will easily be able to sell the products in the market (Luttwak, 2012).

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 Franchising: This is another beneficial market entry strategy that a company utilises.
In this strategy company will provide investors with their brand name and hence they
will able to market the product appropriately (Priyadarshini and Priyadarshini, 2018).
 Wholly owned subsidiary: Since the Chinese government is promoting new kinds of
investments in the country hence this can be an effective strategy that company can
use. In this, company will invest their own money to open their shops or subsidiaries
and hence marketing can be easily done by the firm (Cui and Jiang, 2010).
These three are the strategies that company for entering into the market of China. Since China
is accepting all kinds of investments hence there will not be many problems. But the most
effective strategies for entering into the market will be wholly owned subsidiary and
franchising. In the most part of China the use of wholly owned subsidiary will be beneficial
for the expanding into the market while the use of franchising can be beneficial in the sub-
urban areas. Wholly owned subsidiary strategy is beneficial as the company will not face
problems related to market failure due to partners in the market (Wilken and Sinclair, 2011).
At the same time, it will ensure that company applies all the strategies according to their own
needs and can train their employees as per their own set standards. In the remote areas where
the company will not be able to reach in the initial phase of expansion, use of franchising as
an expansion strategy is beneficial.
Positioning
It is crucial for the organisation to understand the way they in which they can best target their
customers. For this “The best soft drinks” can position itself as a company that is able to
deliver high quality fruit juices and ingredients. The company has put the prices towards
lower side so that they are able to attract youngsters from all the class (Wang and Song,
2011). They can use “A healthy drink for everyone” can be the positioning line they can use.
The best distinctive feature of the company will be its quality and the nutritional value they
add to their products in different flavours.
The positioning will not exactly be same that company has done in the UK market. This is
because the nature of the market differs in both the countries (Gerth, 2010). At the same time,
there is cultural and social difference in the people from both the nations. The difference in
the positioning will be in terms of prices as in UK they can place their products for slightly

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upper market as large numbers of people have good income in UK when compared with
China.
Marketing objectives
It is essential for the company to make marketing objectives that are SMART. These
objectives will help the company in moving in one direction and will allow the company to
concentrate on the activities that will help in achieving these objectives. This is essential for
improving the position of the company in the market.
 Specific: Company aims to acquire market share of 10% in the next two years.
 Measurable: Company wants to generate the profit in China by 5% in the years and
around 15% in the next year.
 Acceptable: This Company needs to open 50 units in different cities of China in the
first year of operation.
 Realistic: This Company aims to increase to brand presence in the online juice market
of China by 10 times in the next two years.
 Time-bound: All the recruitment and training process needs to be done in the first six
months of entering into the market.
Marketing strategy
Utilisation of marketing strategy in an appropriate manner will help the firm in achieving the
marketing objectives appropriately (Doyle and Bridgewater, 2012).
Segmentation and targeting
For segmenting and targeting the need to apply different variables that allow a company to
select the most appropriate target segment.
Types of Segmentation Segmentation Criteria Target segment
Geographic Region China
Density Urban, Sub-urban and rural
Demographic Age 16-60
Gender Male and female
Life-cycle Stage Married couples and
bachelors
Income Middle, High and Low

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Occupation Students, employees, owners
of firms
Behavioural Benefits sought Cost efficient people as well
as people that are health
conscious.
Degree of loyalty Switchers and hard-core
loyal
User Status Regular and potential healthy
drink and fruit juice lovers.
Personality Easygoing and careless
Psychographic Lifestyle Luxury class people,
Strugglers and Mainstreamer
individuals.
Social Class Higher and middle class
people.
The marketing mix
In order to make the best marketing plan it is essential that company utilises marketing mix
(Robson, et al. 2011). It enhances the efficiency of the whole marketing.
Product: The product of the company includes smoothies, fruit-and –yogurt-based beverages
in different flavours. The products are of high quality. These products have higher nutritional
value at the same time it is very healthy for the people who are health conscious. The
products are available in bottle with unique packaging. It is also available in different sizes
and in different types of bottles such as plastic and glass.
Price: In china the company needs to create a space for itself hence in the initial stage of the
expansion, company should select the lower prices (How, 2012). On the lower side they have
chosen the competitive pricing, this will help them in making edge over the rivals. This is
necessary for the growth of the company and will also help in expanding in the areas that are
not so much developed. This pricing will help the company in targeting a larger set of market
segment as the product will be in their reach.

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Place: This Company needs to open new stores in the market at the places that are crowded.
In different cities small stores will be opened. This company also needs to market it on the
online platforms so that brand awareness can be increased among the people of China
(Santos, et al. 2018).
Promotion: For promotions, company needs to focus on the digital marketing mediums
especially the use social media will be beneficial for targeting youngsters who are their
primary target segment (Gao, et al. 2019). Promotions should also be done through traditional
mediums as in the initial phase of expansion, creating larger brand visibility is highly
important.
Conclusion
From the above based report, it can be concluded that “The best soft drinks” is a global soft
drinks maker who wants to expand its product in China. They aim to target young people
who are highly health conscious and nutrition lover. The external environment of China is
good and will support such expansion. The internal environment of the company is also good
but they will have concentrate on using more advanced technologies in their operations. The
prices are on the lower side and for promotions company needs to promote the products on
the social media platforms. Wholly owned subsidiary is the best approach to enter into the
market.

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REFERENCES
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Granato, D., de Magalhães Carrapeiro, M., Fogliano, V. and van Ruth, S.M., 2016. Effects of
geographical origin, varietal and farming system on the chemical composition and functional
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business/. [Accessed on 04th April 2019]
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